Regular readers know that I’ve been writing for a long time about house prices — and I’ve been writing for well over a year about the inevitability of continued price declines. As I discussed at length here, the homebuyer tax credits successfully stopped the slide in house prices — and even produced slight increases in many markets — by pulling demand forward, but they did not address the obvious weaknesses in the housing market. It’s those weaknesses, compounded by other concerns, that we’re experiencing now.

As is noted in the NY Times article “Home Prices Slip in Most U.S. Cities, Case-Shiller Index Shows”:

To accelerate the process [toward recovery], the Obama administration offered a carrot for new buyers: a tax credit. The credit did its job, causing hundreds of thousands of buyers to accelerate their purchases in the fall of 2009 and the spring of 2010. But the credit did not lay the groundwork for a permanent rebound.

“Every place is pretty much getting hit a second time for essentially the same reasons,” said Andrew LePage, an analyst with DataQuick Information Systems. “Slow economic recovery, little job growth, still-tight credit, no more government stimulus, a pervasive and gnawing sense that prices could fall more, too few people getting jobs and too many worrying about losing the one they have.”

Those Case-Shiller numbers are B.A.D., with apparently accelerating home price declines in many parts of the country. Take a look at this post on Calculated Risk. Inflation-adjusted home values are down to 2000 levels, but seem poised to fall considerably more, given the high levels of inventory and the high rates of foreclosure. Those inventory levels might even be higher than currently understood, since it appears that the National Association of Realtors’ model for estimating home sales might have been overestimating sales nationally by more than 10%. More on that at the above link to Calculated Risk.

Many national analysts have been predicting price declines in 2011 in the 5-10% range (a range that I’ve long been leaning toward), but the picture looks darker by the month. In the above article, Case and Shiller give their own predictions about where we’re headed:

Robert Shiller and Karl Case, the economists who developed the index, said in a conference call that they held different opinions about where the market was headed.

Mr. Case said he thought the housing market was at “a rocky bottom with a down trend.” That made him the optimistic one.

Mr. Shiller, noting the unrest in the Middle East, a large backlog of foreclosed houses, the uncertain future of the mortgage holding companies Fannie Mae and Freddie Mac and proposals to reduce the mortgage tax deduction, saw “a substantial risk” of declines of “15 percent, 20 percent, 25 percent.”

If you’re interested in the full Case-Shiller report, go here.

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