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The besieged housing market has even further to fall before home prices really hit rock bottom.

According to Fiserv, a financial analytics company, home values are expected to fall another 3.6% by next June, pushing them to a new low of 35% below the peak reached in early 2006 and marking a triple dip in prices.

Should home values meet Fiserv’s expectations, it would make it the third (and lowest) trough for home prices since the housing bubble burst.Several factors will be working against the housing market in the upcoming months, including an increase in foreclosure activity and sustained high unemployment, explained David Stiff, Fiserv’s chief economist.

The first post-bubble bottom was hit in 2009, when prices fell to 31% below peak. The First-Time Homebuyer Credit helped perk prices up by mid-2010, but by the time the credit expired, prices fell again.

In the second dip, which was reached last winter, prices were down 33%before staging a mild rally that was artificially spurred as banks slowed the processing of foreclosures following the robo-signing scandal, which found that loan servicers were rapidly signing foreclosures without properly vetting them.

Now that the scandal is mostly resolved, lenders are speeding more cases through the foreclosure pipeline and back onto the market, weighing on home prices even further.

Earlier this month, RealtyTrac reported the first quarterly increase in foreclosure filings in three quarters. Even more discouraging: new default notices were up 14%.

There’s also a “shadow inventory” of homes in foreclosure that have yet to go back onto the market.

The specter that those foreclosed homes could flood the market at any time and drive prices significantly lower is a huge concern, said Mark Dotzour, an economist for Texas A&M University. “That’s the elephant in the room,” he said, noting that there are 6 million home currently in shadow inventory.

Biggest Losers

Many of the regions that will be hardest hit were already beaten up during the previous two dips.

Naples, Fla., for example, is expected to take the biggest hit of any metro area, a price drop of another 18.9% by the end of next June, according to Fiserv. Home prices in the area have already fallen 61% from the peak.

Other cities expected to be hit hard include the not-so-lucky Las Vegas, which is expected to see home prices fall another 15.9% for a total loss of 66%; Riverside, Calif., is projected to fall another 14.8% (for a total decline of 61%); Miami is expected to decline by 13.2% (total loss: 57%), and Salinas, Calif. could drop by another 13% (for a total loss of 66%).

There will be some winners, however, led by Madera, Calif. and Carson City, Nev., which will each gain 15.5%. That’s some consolation for hard-hit residents: The average home in each of these metro areas has lost more than half its value.

Other metro areas Fiserv expects to recover nicely are Yuma, Ariz. (up 9.5%), Yuba City, Calif. (9.2%) and Farmington, N.M. (8.3%).

Slow Recovery Ahead

Even after the housing market begins its comeback in mid-2012, the recovery is predicted to be modest at best. Nationwide, Fiserv is projecting that home prices will climb just 2.4% between June 2012 and June 2013.

A few individual metro areas will do better, with 31 of the 385 markets Fiserv monitors expected to pile up double-digit gains. Another 71 markets are expected to post increases of 5% or better.

Many of the markets that will record the biggest increases are vacation or retirement communities that had taken some of the biggest hits during the bust.

The biggest “winner” will be Ocala, Fla., with a 22.4% spike for the 12 months ending June 30, 2013. Ocala was one of the hardest hit communities in the U.S. over the past several years, with home prices falling some 50%.

Others anticipated gainers will be Napa, Calif., which Fiserv projects will improve by 20.9% over that same period; Panama City, Fla. (an estimated 18.2% jump) and Bremerton, Wash. and Carson City, Nev. (both expected to see home prices climb 17.9%).

Some cities will continue to fade, however. Fort Lauderdale, Fla.’s forecast is for a 9.2% drop through next June and another 6.7% the 12 months after that. Its neighbor, Miami, will endure 13.5% and 5.2% declines, respectively.

Original Article Courtesy Yahoo Finance

The question is always, what are home prices doing? And specifically, what are they doing around me? A report released several days ago by the National Association of Realtors stated that: Strong gains in existing-home sales were the predominant pattern in most states during the fourth quarter of 200. The report does show some gains in CA home prices, but what about specifically Sacramento home prices? As always with raw home price statistics, I had to dig deeper(and besides, the N.A.R.’s advice has seemed, at times, “unbiased”. For one, they were predicting home price increases well into 2007,  ground zero for the subprime meltdown.)

First, a quick refresher. As reported by Dataquick, Sacramento home prices in December posted a minor 0.42% gain, year over year. For all of 2009, according to the Sacramento Bee, Sacramento home prices slipped 18.46% compared to 2008. For the 4th quarter of 2009, Dataquick does not, unfortunately, release quarterly data for Sacramento metro home prices. However, all indications point to a small price increase- for example, the number of new housing starts has been increasing(housing starts are just a counter for new housing developments). Remember that housing data lags about 60-90 days which is why we are only now getting 4th quarter 2009 home price statistics. As more data comes in about Sacramento home prices we will post it here.

**Update- According to Bloomberg.com, Sacramento home prices fell 37% in 4th quarter 2009.

These positive signs of Sacrameno home prices can be attributed to a few things.

1. The bank. Banks are much more willing to work out deals with in-trouble home owners, whether through a short sale or loan modification.
2. The inventory. Every granted loan modification or approved short sale means one less foreclosure that will hit the market in [probably] terrible condition and at a ‘overbid-me’ list price.
3. The money. Dramatic action by the Fed purchasing trillions of dollars worth of mortgage backed securities has put an artificial lid on rates, leaving them at 4-5.5% all last year.
4. The law. Changes were made to California’s foreclosure process last year, doubling the time courts took to issue a foreclosure. Additionally, bankruptcy judges were granted the unprecedented ability to ‘cram-down’ or modify debtor’s mortgages.

So are we in the clear? We are still bullish on Sacramento home prices and the status of the entire west coast. Here’s the issues facing home prices:

1. The iceburg. Data issued years ago shows a potential new wave of ARM resets from Alt-A loans, hitting right now. The potential for additional foreclosures and inventory is troubling.
2. The money. As mentioned, rates are artificially low. What happens when the Fed removes the lid? Analysts predict sharp jumps in mortgage rates if inflation rises. Additionally, credit score requirements for loans have increased and loan programs continue to be cut back. These changes lower qualifying home prices and remove buyers from the market.
3. The law. There are concerns that the first time homebuyer credit simply advanced demand, or pushed people forward that were planning on buying anyway. Economists are concerned home prices could be a false positive.

This is all speculation of course. And what happens to Sacramento home prices in the area that you live will vary. The real factor is the median price range your home is in. As the lower end has already had massive declines from the peak, if further decreases in home prices happen, there will be some protection. For example, some higher priced/exclusive communities in CA have had very small price declines only.