The S&P/Case-Schiller index, the closely watched barometer of home prices, showed prices in 20 major cities declined a record 15.3 percent in April, compared with April 2007 - essentially rolling prices back to 2004 levels. In a separate report from the Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae and Freddie Mac, said that in April, home prices in the U.S. fell to the same levels they were at in December 2005, erasing the gains from the last three years.

"There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline," said David M. Blitzer, chairman of the Index Committee at Standard & Poor's in a statement. "All 20 metro areas are now showing declines, with Charlotte, the last holdout during the 2007 and early 2008 period, now reporting an annual decline of 0.1 percent."

Upside of downturn
But Blitzer says one possible bright side to the annual figures is that eight cities, while still negative, showed some improvements over those reported last month. Boston, Chicago, Denver, Portland and Seattle showed slight increases from March to April. Prices in Dallas grew 1.1 percent for the month, while Cleveland saw an increase of 2.9 percent.

According to the housing report, Las Vegas and Miami have been the hardest hit, with 12-month declines of more than 26 percent. These two markets witnessed some of the fastest growth in the 2004 and 2005 housing boom, with annual housing-price increases about 53 percent and 32 percent, respectively. Phoenix was not far behind with a 25 percent decrease in home prices from April of 2007 to 2008.

Harvard outlook dreary
The East Bay Business Times reported on Tuesday a new study from Harvard University predicts housing woes will continue as the economy wavers from the sharp drop in home building, credit and stock market turmoil, and a slowdown in consumer spending.

The report, "The State of the Nation's Housing 2008," released earlier this week by the Joint Center for Housing Studies, a collaborative effort by Harvard's Kennedy School of Government and the Harvard Design School that researches housing in the U.S., said pressure of home prices will persist until the backlog of vacant homes is sold.

"Further price declines will not only increase the probability that mortgage defaults end in foreclosure but also put a tighter squeeze on consumer spending," the report stated.

Many economists argue the looming presence of a recession has scared potential buyers from investing in a new home. At least 1 million vacant or for-sale housing units were on the market in early 2008.

If the economic downturn proves to be mild, "the fundamentals of demand are likely to drive a strong rebound in housing once prices bottom out and the economy begins to recover," the report noted.

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