Another bad piece of news came out for the housing market last week, as the Standard & Poor's/Case -Shiller 20-City Housing Index was off 18% this October from the previous year. The drop represents the largest decline in single-family home prices since the index's inception in 2000.
"The bear market continues; home prices are back to their March, 2004 levels," said David M. Blitzer, Chairman of the Index Committee at Standard & Poor's.
The Case-Shiller report confirms that the collapse of the housing market continues to plague the U.S. economy. As home sales slow and inventories rise, sellers will need to brace themselves for this new year, when most analysts and economists expect things will get worse before they get better.
There is a silver lining for qualified homebuyers: with interest rates at historic lows, those with good credit, the ability to pay a mortgage and cash to put down will be poised to take advantage of the price declines to seek out some of the best deals.
Jackie DeAngelis is a writer and producer at CNBC. Previously she worked as a financial analyst at Oaktree Capital Mgmt. Jackie earned her J.D. from Rutgers Law School in 2008 and her B.A. in Asian Studies from Cornell University in 2002