'Supply Suggests House Price Declines to Continue'

The decline in house prices has much further to go because there are so many houses up for sale and more foreclosures are coming on the market, according to David Berson, chief economist at PMI Mortgage Insurance Co. "If we are fortunate, prices are perhaps two-thirds of the way through their decline," Mr. Berson told a joint meeting of Hispanic and Asian Realtors in Washington. "But there is a risk prices are only half way," he said. The former Fannie Mae chief economist said he is "optimistic by nature" and thinks the decline is closer to two-thirds done. He says home sales are already in the process of stabilizing but the decline in home prices will continue into 2010 and before turning up. "In 2010, the average price gain will be zero," Mr. Berson said. "That is good news given the double-digit declines that we have seen over the past two years."