Report Suggests Home Prices Could Fall Some More

To be sure, there are some tempting real estate bargains out there. But the latest data suggests there could be some even better bargains, at least in some markets, for buyers who show some patience.

U.S. home prices declined in December for the fifth month in a row, according to a report by CoreLogic, a information, analytics and business services.

More than five percent decline

According to the CoreLogic Home Price Index (HPI), national home prices, including distressed sales, declined by 5.46 percent in December 2010 compared to December 2009 and declined by 4.39 percent in November 2010 compared to November 2009.

When you disregard distress sales, the results aren't a whole lot more promising. Year-over-year prices declined by 2.31 percent in December 2010 compared to December 2009 and declined by 2.81 in November 2010 compared to November 2009.

Distressed sales include short sales and real estate owned (REO) transactions.

The picture provided by the annual data for 2010 is also less scary. It shows home prices stabilized with the average annual HPI index showing no change relative to 2009. That compares to a 12.7 percent decline between 2008 and 2009.

Big declines may be over

"The stabilization in annual prices follows double-digit declines in 2008 and 2009 and is a sign that the largest declines are over," CoreLogic said in a release.

According to Mark Fleming, chief economist with CoreLogic, 2010 was a year of ups and downs as a result of the improvements brought on by the tax credits followed by the declines that occurred when they expired.

"It was a bumpy ride which ended with a net gain/loss of zero," Fleming said. "Despite the continued monthly decline in home prices and year-over-year depreciation, we're encouraged that on an annual basis we're unchanged relative to a year ago. Excess supply continues to drive prices downward, but the silver lining is that the rate of decline is decelerating."

More to go

Meanwhile, the Wall Street Journal reports that most housing economists and analysts it has interviewed expect about five to 10 percent decline in prices before the housing market reaches its bottom, perhaps late this year or early next year.

USA Today reports that "under water" mortgages - cases where the mortgage is more than the house is worth - remain a huge problem in some of the nation's hardest hit housing markets. It's report shows 71 percent of homes in Clark County (Las Vegas) Nevada are underwater. In comparison, only 6.5 percent of homeowners in Shawnee County (Topeka) Kansas are underwater.