The S&P Case-Shiller Home Price Index, measuring housing prices in 20 representative cities across America, fell for the 30th straight month in January, bringing house prices down to 2003 levels.  And this time it actually set a record, falling 19% from January 2008.  "There are very few bright spots that one can see in the data," said David Blitzer, chairman of the index committee at Standard and Poor's.  "Most of the nation appears to remain on a downward path, with...nine of the MSAs (metropolitan statistical areas) falling more than 20% in the last year."  According to Mike Larson, a real estate analyst with Weiss Research, home prices won't start advancing until the overall economy picks up.

Home bargains galore

In total, prices have plunged 29.1% nationally since they peaked during the second quarter of 2006, but that of course doesn't figure in individual cities, where prices are more varied.  Dallas is the least affected at 4.9%, and Phoenix lost the most, at 48.5% from its peak.  All 20 index cities were in negative territory, but the biggest losers are Las Vegas, Miami, Phoenix, San Francisco, and San Diego -- each losing more than 40%.  The bad, and good, news is that the rate of decline has picked up recently.  As Mike Larson, a real estate analyst with Weiss Research says, ""Arguably, that's just what we need to drive up sales activity and reduce inventory."

Big boys ready to pounce

Morgan Stanley is one of several early bird institutional investors getting ready to snap up real estate bargains -- it's close to raising $6 billion for a new global property fund:  the Morgan Stanley Real Estate Fund VII Global.  "I think these new real estate funds will look for distressed opportunities and they think they can bargain with developers who mismanage the balance sheets or have liquidity issues," said Laure Wang, managing director of Asia Alternatives, a private equity fund of funds.  According to Paul Vosper, chief operating officer for real estate at Morgan Stanley's Alternative Investment Partners unit, the downturn in global property markets will create a period of strong returns.