Home prices rose 3.6% in the second quarter, but Fiserv economists expect prices to fall 7% nationwide by the end of next summer before stabilizing toward the end of 2011.
"Many of the metro areas that were fortunate enough to have a spring and summer bounce will experience double-digit declines," said chief economist David Stiff.
Markets in Nevada, Arizona, and the District of Columbia could experience double-digit declines of 11% to 13%. Florida could see a 9.4% dip, according Fiserv, which provides management and electronic commerce systems for the mortgage industry.
Stiff blames the downdraft on the home buyer tax credit, which "delayed the correction in home prices that is necessary to return housing affordability to its pre-bubble levels."
The forecast is based on Fiserv Case-Shiller house price indexes, which track price trends in 384 metro markets.
Home prices fell in the 70% of those metro markets in the second quarter, despite the 3.6% increase in prices nationwide.
Separately, Fannie Mae has reported that home prices declined by 1% in the third quarter. The GSE also estimated that prices are off 0.7% for the year based on preliminary data from purchase mortgage transactions that closed in October and November.
Freddie Mac reported that home prices fell 1.8% during the third quarter in its quarterly securities filing.
