Housing is Local (Except when it's National).
The NAR is reporting a recordslump in home prices.

Fourth-quarter report from National Association of Realtors shows largest price drop on record as markets with price declines now outpace those with gains.

Prices slumped 2.7 percent in the fourth quarter compared to the fourth quarter a year earlier, according to the report from the National Association of Realtors (NAR). That's the biggest year-over-year drop on record and follows a 1.0 percent year-over-year decline in the third quarter.

In addition, 73 metropolitan areas reported a decline in the fourth quarter, compared to a year earlier. That outpaced the 71 that saw a gain. It was both a record number and percentage of markets showing a decline in the group's quarterly report. Five markets saw prices unchanged.

The most recent median prices are down even more: 3.4 percent since hitting record highs in the second quarter. Almost three-quarters of the markets, reported on by the group, saw declines in median prices over the past six months, with eight reporting double-digit declines.

But the weakness in prices wasn't restricted to those kinds of markets. Springfield, Illinois, reported a 16.2 percent drop in the fourth quarter compared to the third quarter, the biggest decline during that time frame, along with a 10.4 percent decline compared to a year earlier.

Still, the trade group statement said it believed that the worst was over for the drop in prices.

"Examination of data within the quarter shows home prices stabilizing toward the end," said a statement from David Lereah, the NAR's chief economist. "When we get the figures for this spring, I expect to see a discernable improvement in both sales and prices."

Here is a chart of nationwide prices.

Click here for the latest home prices in 149 markets tracked for the fourth quarter of 2006.

"Examination of data within the quarter shows home prices stabilizing toward the end," said a statement from David Lereah, the NAR's chief economist. "When we get the figures for this spring, I expect to see a discernable improvement in both sales and prices."

David Lereah is a paid cheerleader. On that basis I expect to see David Lereah cheerleading regardless of what the facts are. As for me, I will take the other side of the bet: I expect to see an economy heading into recession, with increasing foreclosures, more distress auctions, more bankruptcies, and weakening prices. One of us will be right and one of us wrong. I will say in advance that at some point there will be a fake rally of sorts, from what level I do not know but my inclinations are that such a rally will occur after a deeper slump than this one. The foreclosure party has really just started.