U.S. home values expected to lose $1.7 trillion in 2010

For a buyer looking to purchase a home with unwavering value, Boston, San Diego and Los Angeles are among the small number of cities to consider for relocation, according to a recent analysis by Zillow.com.

Of the 129 markets tracked by Zillow, less than a quarter saw any gains in home values during 2010. Boston, which gained $10.8 billion in home values this year, was the strongest market in the country.

Nationwide, residential home values have steadily plummeted since the market peaked in June 2006, losing over $9 trillion in value since then. The value lost exceeds the cost of a dozen Iraq wars, according to the report.

Zillow expects that homes will lose more than $1.7 trillion in value during 2010, 63 percent more than the $1 trillion loss sustained in 2009.

Zillow chief economist, Stan Humphries, said that although the beginning of 2010 was strong, a majority of values fell during the second half of the year, with residential homes losing $1 trillion between June and December. From January to June the housing market took a much smaller hit, losing $680 million.

Government intervention programs like the home buyer tax credit, which extended $8,000 to first time home buyers and $6,500 to repeat buyers looking to move, helped bolster the market during the first half of the year, Humphries said.

A recent study by RealtyTrac found that 25 percent of homes sold in the third quarter of 2010 were under foreclosure, shrinking the market values of many properties nationwide.
 

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