CoreLogic predictably shows home prices falling in September — but how much more?

I’ve been writing for ages about the inevitability of continued declines in home prices. Today’s release of CoreLogic’s Home Price Index pretty much confirms that that trend has arrived.

CoreLogic’s HPI is not seasonally adjusted, and we’ve now hit the slower season when prices are traditionally under pressure. We’re also well over a year beyond the expiration of the last homebuyer tax credits, a well-intentioned but completely misguided policy that has dragged out the housing crisis.

According to CoreLogic, which is along with Case-Shiller one of the most watched indices:

CoreLogic® (NYSE: CLGX), a leading provider of information, analytics and business services, today released its September Home Price Index (HPI®) which shows that home prices in the U.S. decreased 1.1 percent on a month-over-month basis, the second consecutive monthly decline. According to the CoreLogic HPI, national home prices, including distressed sales, also declined by 4.1 percent in September 2011 compared to September 2010. This follows a decline of 4.4 percent* in August 2011 compared to August 2010. Excluding distressed sales, year-over-year prices declined by 1.1 percent in September 2011 compared to September 2010 and by 2.2* percent in August 2011 compared to August 2010. Distressed sales include short sales and real estate owned (REO) transactions.

On a year-over-year basis, Georgia home prices in September were down 7.2% compared to a year ago including distressed sales. Excluding distressed sales, Georgia home prices fell 3.6% in September 2011 from September 2010.

We’ll continue to see home prices struggle — and probably fall — at least until the spring buying season gets rolling. As Calculated Risk notes here, we’re still a few percentage points above the lowest home price levels from March 2011, but it was entirely predictable that a not-seasonally-adjusted index would register gains over the summer — and declines now.

How much more will they drop? With listed inventory decreasing and with the economy slowly adding jobs, maybe just a little. Or we could still see a significant downturn. September’s numbers suggest the latter is more likely than the former.

Here’s an updated graph from Calculated Risk: