Integrated Asset Services LLC (IAS), a leader in default management and residential collateral valuations, has released the latest IAS360 House Price Index (HPI). Based on the timeliest and most granular data available in the industry, the index for national house prices fell 0.7 percent in December. Save for a brief rally across the summer, the leading benchmark for U.S. housing was down nearly all of 2009. Finishing with five straight down periods, the IAS360 was off 5.3 percent for the 12-month stretch. This relatively modest decline follows an 11.7 percent decline in 2008. "Now more than 22 percent down from its high-water mark set in July 2007, the index has dropped to a level last seen in mid-2004," said Dave McCarthy, president and CEO of Integrated Asset Services. “There’s something to be said for the fact that the decline has at least slowed, but I still think the risk of continued weakening in house prices nationally is considerable.” Of immediate concern is the approaching end to several major government initiatives for the housing market, not the least of which is the first-time homebuyer tax credit, which expires June 30, 2010. While the incentive will likely result in additional sales through the first half of the year, McCarthy fears the program will wind down just as a new wave of distressed properties enter the marketplace. The combination of events could result in a pronounced “double dip” in home prices. “The potential for another wave of distressed property coming to market remains very high,” says McCarthy. “While the government's mortgage modification program may have slowed the number of foreclosed properties coming to market, its near complete failure is likely to result in a whole new wave of distressed activity down the road.” On the positive side, the South census region continued its streak of gains with another 2.3 percent gain. With huge price declines having dramatically improved housing affordability, states across the region posted positive results, with Alabama and Georgia both jumping by more than 10 percent. The Northeast, meanwhile, fell for the fourth month in a row, losing another 1.7 percent in December. The West, too lost ground for the month, slipping one percent, but the Midwest turned in the worst performance by far, dropping an outsized 4.2 percent. Steady declines in the region have swept prices back to levels seen in late 2003. The IAS360 uses “next-generation” trending methodology to identify market trends earlier than any other index. IAS data includes non-conforming, bank-owned, and conventional sales transactions segmented by property type in addition to those insured by the FHA and VA. The IAS360 also considers REO transactions along with arms-length transactions. The index is published weeks earlier than competing HPIs and refreshes historical trends as new data becomes available. The IAS360 is designed to report changes when they happen for the most accurate and useful view of the U.S. housing market. For more information, visit www.iasreo.com.