Bottom? Zillow economist predicts 2012 – at best

Merced, California leads the nation for the biggest home value drop over the past five years, according to a recent Zillow study based on its home-value estimates and Zillow Home Value Index.

Six California cities were in the study’s top 10 for percentage of home value lost.

There will be many ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest,” says Stan Humphries, Zillow’s chief economist. “There are still hazards in the form of a full foreclosure pipeline, high negative equity, and fluctuations in demand.”

Merced posted a loss of 67 percent, followed by Modesto (63.5 percent) and Stockton (62.9 percent).

Zillow is a Seattle-based real estate marketplace with a database of more than 100 million homes.