U.S. homes are set to lose more than $1.7 trillion in value during 2010, bringing the total value lost since the market peaked in June 2006 to $9 trillion, which surpassed the cost of 12 Iraq wars, a report said.
The report from online real estate information company Zillow also warned of more such losses in the first part of the next year.
From 2001 to the end of September 2010, the war in Iraq has cost $750.8 billion, according to a September report by the Congressional Research Service.
The loss for the full year is 63 percent more than the $1 trillion lost in 2009, the Zillow report said. The bulk of the total value lost during 2010 was in the second half of the year.
For the first six months of the year, the housing market lost $680 billion. From June to December, Zillow projects residential home value losses will top $1 trillion.
It's a testament to the nearly irresistible force of the overall market correction that government incentives can only temporarily hold back the tide, and that the market will ultimately find its natural equilibrium of supply and demand, said Zillow Chief Economist Stan Humphries.
Unfortunately, with foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief, said Humphries.
Demand for housing continues to fall, weighed down by a high unemployment rate as well as the expiration of government tax credits.
The report showed 31 of the 129 markets tracked by Zillow showed gains in total home values during 2010. Among those were the Boston metropolitan statistical area, which gained $10.8 billion in value, and the San Diego MSA, which gained $10.2 billion.
Among the losers, New York MSA lost $103.7 billion in value, while Chicago Ill. MSA lost $48 billion.