As 2011 comes to a close, Zillow anticipates home value declines for the year will total more than $681 billion. The rate of depreciation, however, is slowing.

The $681 billion decline this year is 35 percent less than last year’s $1.1 trillion drop in value.

Additionally, much of this year’s decline occurred during the first half of the year. Values declined $454 billion in the first six months of 2011, and by the end of the second half of the year, values are expected to wan another $227 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.

“Compared to last year when we saw sharp declines following the expiration of the homebuyer tax credits, this year we saw some organic improvement in home values, in terms of a slowed depreciation rate which resulted in a smaller total value loss for the year,” Humphries said.

Nine of the 128 markets Zillow tracked experienced increasing home values over the year.

The largest gain was seen in the New Orleans area, where home values rose $3.5 billion. The Pittsburgh metropolitan statistical area (MSA) followed with a $2.7 billion upsurge.

In terms of dollar value, the greatest decline was seen in the Los Angeles MSA, where home values declined $75.5 billion.

New York ranked second with a $44.8 billion drop in value, and Chicago followed with a $41.7 billion decrease.