by Calculated Risk on 9/19/2007 04:38:00 PM

From CNN Money: Double-digit home price drops coming

According to an analysis conducted by Moody's Economy.com, declines will exceed 10 percent in 86 of the 379 largest housing markets. And 290 of the cities will experience price drops of 1 percent or more.

The survey attempted to identify the high and low points of housing prices in each of the markets, some of which started declining from their peak in the third quarter of 2005. All are median prices for single-family houses.

Nationally, Moody's is projecting an average price decline of 7.7 percent. That's a jump from the 6.6 percent total price drop that the company was forecasting in June and more than twice that of last October's forecast of a 3.6 percent price decrease.

See story for Moody's price forecast for top 100 cities.

Here are the top ten by forecasted price declines:

Rank	Area	State	Peak	Bottom	Peak to bottom home price decline
1	Stockton	CA	06Q1	08Q4	-25.0
2	Palm Bay-Melbourne-Titusville	FL	06Q1	08Q4	-24.9
3	Sarasota-Bradenton-Venice	FL	06Q1	08Q3	-24.8
4	Reno-Sparks	NV	06Q1	09Q1	-22.4
5	Modesto	CA	06Q2	08Q3	-22.3
6	Detroit-Livonia-Dearborn	MI	05Q3	09Q1	-21.3
7	Fresno	CA	06Q2	09Q1	-20.0
8	Oxnard-Thousand Oaks-Ventura	CA	06Q2	08Q3	-19.2
9	Sacramento--Arden-Arcade--Roseville	CA	06Q1	08Q4	-19.1
10	Las Vegas-Paradise	NV	06Q2	08Q4	-18.7

Look at the price bottoms; Moody's is mostly forecasting the price bottoms to happen in late 2008. That would make this one of the shortest duration housing busts with similar price declines in history. Historically declines of this magnitude have taken 5 to 7 years because house prices are sticky.

My guess is prices will decline further than Moody's is expecting, and the duration of the bust will be longer.