US Homeowners Lost $5.9 Trillion Since 2006 Peak, Zillow Says
Dec. 9 (Bloomberg) -- U.S. homeowners have lost about $5.9trillion in value since the housing market peak in March 2006 asmounting foreclosures and the recession weighed on prices,according to Zillow.com.
Almost half a billion dollars was wiped out this yearthrough Nov. 30, as the market headed for a third straightannual decline. New foreclosures and higher mortgage rates in2010 may hinder a rebound, the property data service said todayin a statement.
“A phenomenal amount of wealth has been erased since thehousing bust,” Stan Humphries, chief economist for Seattle-based Zillow, said yesterday in an interview. “For manyhouseholds, most of their wealth is tied up in real estate.”
The net worth of U.S. households at the end of June fell 19percent from two years earlier to $53.1 trillion, according toFederal Reserve data. Employers have cut more than 7.2 millionjobs since the start of the recession in December 2007.Unemployment was 10 percent in November as payrolls declined by11,000, the Labor Department said last week.
LaVonna Gottschall paid $260,000 for her Merced,California, home in September 2007. She put down more than halfthe price and financed the rest with a 30-year fixed loan.Today, houses in her neighborhood are worth 59 percent less,according to Zillow.
“I almost wiped out all my savings,” Gottschall, 64, aretired insurance-company clerical worker, said yesterday in aninterview. “I did the right thing. I didn’t get in over myhead. Now I’m living month to month.”
Foreclosure Filings
The slowing of property declines because of a governmenttax credit for first-time buyers and record-low mortgage rateswill be tested as more foreclosures reach the market andborrowing costs rise, Humphries said.
Home foreclosure filings surpassed 300,000 for an eighthstraight month in October, according to RealtyTrac Inc. Moredefaults and job losses “loom over any nascent housingrecovery,” James Saccacio, chief executive officer of theIrvine, California-based seller of default data, said Nov. 12.
The value of U.S. housing today is about $24.7 trillion,down 19 percent from the market peak, according to Zillow. Homesdeclined $489 billion in the first 11 months of the year.
Merced had the biggest percentage loss in house value fromJanuary through November with an estimated 37 percent decline,according to Zillow. Las Vegas was second at 25 percent. Theloss was 21 percent in Fort Myers, Florida; 17 percent inStockton, California; and 16 percent in Orlando, Florida.
10 Biggest Drops
Values dropped 16 percent in Bakersfield, California, andAnderson, South Carolina, and Phoenix; and 15 percent in Naples,Florida, and Modesto, California, rounding out the 10 biggestdeclines, Zillow said.
Los Angeles had the biggest dollar loss with an estimated$60.8 billion wiped out, Zillow said. Chicago followed with adecrease of $49.6 billion, New York was third at $49 billion,Miami-Fort Lauderdale was fourth at $45.9 billion and Phoenixfifth at $45.1 billion.
Boston had the biggest dollar gain, at $23.3 billion,according to Zillow. Increases were estimated at $12.4 billionin Providence, Rhode Island; $10.7 billion in Denver; $7.6billion in Atlanta; and $4.7 billion in Rochester, New York.
Gottschall’s house on a cul-de-sac in Merced has threebedrooms, two bathrooms and a gray-tiled roof. She bought it tobe “more comfortable,” and now regrets that she didn’t waitanother year before purchasing.
The median home price in Gottschall’s ZIP code sunk to$95,800 in October, the latest Zillow data show.
To contact the reporter on this story:Dan Levy in San Francisco at dlevy13@bloomberg.net.
Last Updated: December 9, 2009 00:01 ESTSource: Bloomberg
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