Moody's Economy.com Sees Further Drop in Home Prices

House prices could drop by another nine percentage points before prices bottom in the second quarter of 2010 and it might take a full decade before prices climb back to their 2006 peak, according to Moody's Economy.com. Overall house prices will fall by 40% before bottoming next year, Moody's Economy.com economist Celia Chen said. So far, house prices have declined by 31% based on the Standard & Poor's/Case-Shiller house price index. "For many reasons, the rebound will be disproportionately small compared to the decline. It will take more than a decade to complete recovery from the 40% peak-to-trough decline in national house prices," Ms. Chen says in a recent article in Moody's Resi Landscape. In hard-hit states like Florida and California, prices "will only re-gain their pre-bust peak in the early 2030s," the article says.