The new Case-Shiller U.S. National Home Price Index numbers show what happens when a skydiver pulls the rip cord:

Q1 2009 = -19%, Q2 2009 = -15%, Q3 2009 = -8.7% and Q4 2009 = -2.5% (YoY)

S&P/Case-Shiller Composite 10: Nov = 158.49  Dec = 158.18
S&P/Case-Shiller Composite 20: Nov = 146.28   Dec = 145.90

This monthly data includes prices for 20 individual cities, and two composite indices (10 cities and 20 cities).

Granted the data measures price changes for single family homes in December, a particularly sluggish month all-around. But it’s been nearly a year since the Home Affordable Modification Program (HAMP) was launched (March 2009) to help struggling homeowners modify their loans.

And despite slowing price declines for 2009 and falling delinquency rates, some economists predict that with ever-growing inventories of foreclosed properties and the new category of “redefaults,” the housing market will continue to eat its young.
According to a recent S& P report, the “shadow inventory” of delinquent loans and REO (bank-owned) properties are likely to keep housing prices constrained for some time, perhaps up to three years:

“S&P estimates the inventory to equal a 33-month supply of homes. Analysts added the estimate is actually conservative, as they did not assume homes not showing signs of distress would default and push the overhang of supply even further.

According to the S&P report, homes are falling into serious delinquency faster than REO transactions are closing. The total balance of seriously delinquent loans reached well over $400bn through November 2009, while the balance of REO properties reached its peak in September 2008 and declined to $50bn. On average, $14.5bn of seriously delinquent loans or REO property liquidates each month. According to the report, it will take 29 months to clear this supply of homes…”

Here are the charts from S&P:

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