The glimmer of hope offered in last week's housing reports (FHFA HPI, and existing and new home sales) was short-lived.

Today, S&P/Case-Shiller HPI for January reported in  a press release new record annual declines of 19.4% for the 10-City Composite and 19.0% for the 20-City Composite. 

For the month of January, home prices were down 2.5% and 2.8%, respectively, compared with negative 2.3% and negative 2.6% in December.    prices are back to late 2003 levels.  It also said from the peak in 2Q06 home prices have fallen 30.2% on the 10-City and 29.1% on the 20-City, according to the press release,

All metropolitan areas in the survey declined in January with Phoenix recording the largest decline at 5.5%, followed by Minneapolis at negative 4.7% and Chicago at negative 4.6%. 

Metro areas with the lowest declines month to month were Charlotte and New York — both at -1.2%. Year-over year, Phoenix, Las Vegas and San Francisco have experienced price declines of over 30%; Los Angeles, Miami and San Diego are between 25% and 30%. Dallas has recorded the lowest loss at negative 4.1%. 

David Blitzer, chairman of the Index committee at S&P stated: "There are very few bright spots that one can see in the data. Most of the nation appears to remain on a downward path."

Deutsche Bank Securities analysts released an update on its outlook for home prices for the 100 largest MSAs.  And there is nothing encouraging in their outlook either at this time as their model predicts a further 16.5% nationwide decline in home prices over the next two years. 

"This equates to a peak-to-trough decline of 39.6% — versus our peak-to-trough assumption of 32% back in the September 2008 outlook," Deutsche said. 

They noted that based on affordability, most MSAs are fundamentally considered fairly valued or under valued. 

"However, negative home price momentum, the impact of excess distressed inventory, and the continued deterioration in labor markets are likely to hamper any real recovery," Deutsche analysts said. Until these issues are resolved, analysts believe prices will continue to decline and "over correct".

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