If prominent housing economist Ken Rosen of Berkeley is right in his prediction, the US housing values will lose another 6-7% in 2009. Housing prices nationwide fell 11.1% in 2008 (BusinessWeek).

According to BusinessWeek:

Rosen, a professor at the University of California at Berkeley, told the Associated Press that the decline in housing prices is only about three-quarters complete, and the cumulative slump could reach 24% this year. To offset such a plunge, Rosen is proposing a foreclosure moratorium to help stabilize the economy. He said as many as 8 million homes could go into foreclosure in the next three years without government action, the AP reported. “I worry about the cumulative decline of all the job losses leading to a second wave of foreclosures. So we have to stop this downward spiral,” Rosen said.

The U.S. unemployment rate climbed to 7.2% in December, before all the job cuts that were announced so far this year. Although investors are grabbing up bargains (the sale of existing homes rose 6.5% in December) this is being countered by new home sales dropping to the lowest level on record.

However provisions in the economic stimulus package could prop up demand in the form of a tax credit for home buyers or a foreclosure moratorium as Rosen suggests.

Many economists are refraining from making predictions because there is no telling what may happen in the coming months and multiple factors make trying to time the market almost impossible. For many home owners, the only option is to just grit their teeth and wait out the storm.

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