U.S. homes are expected to lose more than $681 billion in value during 2011—and while that sounds like a staggering figure, it is 35% less than the $1.1 trillion lost in 2010, Zillow Real Estate Market Reports said.

Most of the year’s loss in value was in the first half of 2011, with homes depreciating by $454 billion. In the second half, that slowed to $227 billion, Zillow said.

Regionally, only nine out of 128 housing markets showed gains in 2011, with the biggest increase of $3.5 billion occurring in New Orleans. Next up, with a gain of $2.7 billion, was Pittsburgh.

The biggest losers? Los Angeles (down $75.5 billion), New York (down $44.8 billion) and Chicago (down $41.7 billion).

“While homeowners suffered through another year of steep losses, the good news is that homes are losing value at a substantially slower pace as the market works its way towards the bottom,” said Zillow Chief Economist Stan Humphries.

That doesn’t mean we are out of the woods, Humphries added: “When we look ahead to next year, the unabsorbed pool of housing supply, dragging levels of consumer confidence, high unemployment and negative equity will continue to put downward pressure on the housing market, pushing our expectation for a potential recovery into late 2012 or early 2013.”

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