Don't shoot the messenger.

Moody's Economy.com is where you want to target your brickbats if you've already grown weary of doom and gloom reports about the real estate market.

The economic, financial, and industry researcher has just released the gloomiest report yet and in the process, recalls the Dark Ages of the national economy.

"Housing at the Tipping Point - The Outlook for the U.S. Residential Real Estate Market" says the nation's housing market will slip like it hasn't slipped since the Great Depression, with home price declines in 2007 approaching 20 percent in some areas where the word "crash" could replace "soft landing."

The West Chester, PA-based firm says, nationwide, the median sales price for an existing home will decline in 2007 by only 3.6 percent, but that would be the first full-year decline in home prices since the 1930s' Great Depression era.

Other reports have already revealed those unsustainable double-digit home price increases of the last half decade have begun to crumble and when the smoke clears, many home prices on the coast will be cold toast, says Economy.com.

The report continues, adding, more than 100 of the nation's 379 metropolitan areas, accounting for nearly half the nation's single-family housing stock, reveal a significant probability of experiencing price declines by the fall of 2007.

"The highest probability of price declines is in metro areas throughout California, and in and around New York City. Probabilities are nearly as high in the rest of the Northeast Corridor, many Florida metro areas, and in sundry areas in the Midwest and Mountain West," according to the report's summary.

Declines are less likely or expected to be much less severe in Texas, most of the Southeast, the Farm Belt and the Pacific Northwest.

The greatest annual decline will visit sunny Cape Coral, FL, where home prices are forecast to decline 18.6 percent from the peak price. Other large home price declines will come from Reno, NV (17.2 percent); Merced, CA (16.1 percent); Stockton, CA (15.7 percent); Sarasota, FL (14 percent); Naples, FL (13.8 percent); Tucson, AZ (13.4 percent); Las Vegas, NV (12.9 percent); Chico, CA (12.6 percent) and Fresno, CA (12.5 percent), with another 11 metros suffering double-digit, home price declines.

Economy.com says the findings are based on measures of housing market imbalances that have historically led changes in house prices -- housing affordability (or the lack thereof), non-housing related employment growth, the physical supply and demand balance, and a measure of house price over-valuation/under-valuation.

Experts are already debating Economy.com's forecast with the fervor of a global warming debate, but Economy.com is sticking with it's story -- the heat on the housing market is off.

"New and existing home sales and single family housing construction are sliding, inventories of unsold homes are surging to new record highs, and house prices are falling in an increasing number of areas. Housing's problems began just over a year ago when activity peaked, but have increased substantially in recent months. The bright optimism of home buyers, builders and lenders has abruptly devolved into increasingly dark pessimism."

Swiftly fleeing speculators, exiting investors and tighter money in the adjustable rate mortgage market are the primary factors currently squeezing the market, which Economy.com says is wringing out in a "generally orderly" fashion, "characterized best as a correction and not a crash."

The housing market's currently paced unraveling could come with a sharper ripping sound should jobs, consumer spending (spurred in the past five years by a growth in home equity wealth), and financing wither.

Published: October 5, 2006

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.