No news can sometimes be good news. According to the December Home Price Index, recently released by analytic firm CoreLogic, 2010 shows home prices stabilized with the average annual HPI index showing no change relative to 2009.

Month over month, however, home prices were still down in December, with prices declining by 5.46 percent from November. This was the fifth straight month of declines.

Home prices were also down in some unexpected areas. While declines in home values were expected in previous boom areas, such as California and Florida, declines have now been surfacing in some new, unlikely cities.

A recent article in the New York Times highlighted the affects of this down market on such areas as Seattle, Minneapolis, and Miami.

According to Zillow.com, Seattle is down about 31 percent from its mid-2007 peak, and could see another 10 percent dip on the horizon. Stan Humphries, the chief economist for Zillow, sees a 5 to 7 percent decline in the rest of the nation's future.

He says, If these declines are sustained, as we expect to happen in many markets, the result will be a “double dip ” in home values, defined as two periods of sustained declines in home values separated by a brief period of stabilization or recovery.

It's not all gloom and doom. Some states are seeing positive appreciation. Corelogic reports that excluding distressed sales, the five states with the highest appreciation were: Hawaii (+6.15 percent), North Dakota (+6.03 percent), West Virginia (+3.53 percent), New York (+3.27 percent), and District of Columbia (+2.64 percent).

The Obama Administrations recent call for an orderly transition from the current form of the secondary mortgage market also has some experts breathing a welcome sigh of relief. The National Association of Realtors reports that they believe we cannot have a restoration of the former secondary mortgage market with entities that took private profits while pushing losses onto the taxpayer. The new system must involve some government presence, outside of FHA, USDA, and the Department of Veterans Affairs, to ensure a continued flow of capital to housing markets during economic downturns when large lenders flee the housing market.

NAR President Ron Phipps reports, NAR believes that the size of the government's participation in housing finance should decrease if the market is to function properly. NAR's economists estimate that a retreat of capital from the housing market will negatively impact the economy; because for every 1,000 home sales, 500 jobs are created for the country.

Improvements are also being seen in the 55+ housing market, a market that was stalled in the second half of last year.

Recent reports from the National Association of Home Builders (NAHB) indicate that builders are more confident now that the slump has ended.

The normal course of purchasing a new home in anticipation of or upon entering retirement has been interrupted by the fall in Baby Boomers' house values and reduction in their home equity, said NAHB Chief Economist David Crowe. Boomers are finding that the market for their current home remains soft and potential buyers cannot qualify for affordable mortgages. Even those with the ability to buy a new home are finding a limited selection, as builders cannot get loans to build homes.

However, for a little leaven in the loaf, expected sales (six months into the future) dropped five points on the Housing Index scale.