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Zillow: Homes Gain $1.3T in Value in 2012

After five years of cumulative losses, home values will finally post their first annual gain, according to data from ""Zillow"":http://www.zillow.com/.

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To find the cumulative gain for all of 2012, Zillow calculated the different between cumulative home values at the end of 2011 and projected cumulative home values at the end of 2012.

The calculations show homes are expected to gain $1.3 trillion in cumulative value for 2012, the largest gain since 2005 and the first annual increase since 2006, Zillow reported.

In 2006, homes increased their value by $483 billion, but then declined from 2007 to 2011, with the largest drop in 2008, when homes lost more than $3.2 trillion in value, according to Zillow.

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Zillow expects the year-end total to reach $23.7 trillion, which is a 6 percent increase from last year's total. In 2011, the cumulative loss in home values was $792 billion compared to 2010.

""After a sluggish 2011, the housing market really turned a corner in 2012, as historic affordability and sustained investor interest helped keep demand at a boil,"" said Dr. Stan Humphries, Zillow's chief economist.

Zillow also analyzed home values in 177 metro areas and found 135 saw cumulative gains in 2012.

Out of the 30 largest metros Zillow observed, all but Philadelphia saw an annual gain in cumulative home values. The largest metros with the biggest gains include three California cities: Los Angeles ($122.1 billion), San Francisco ($93.3 billion), San Jose ($54.7 billion). Others noted for significant gains were Phoenix ($52 billion) and Miami-Fort Lauderdale ($47.5 billion).

Zillow anticipates a good year for 2013 as well.

""We expect value gains to continue into 2013. As home values rise, and more homeowners are freed from negative equity, we can expect a continued slow transition to a more normal housing environment driven by local market fundamentals and conditions,"" Humphries said.

About Author: Esther Cho

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