If you thought home prices were bottoming out, you may be wrong. Some say they’re expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.  Experts say price declines are coming because the foreclosure crisis is not over.

Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm.

In Las Vegas, prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%.  Home values in the nation’s second largest city, Los Angeles, have fallen 25.7% since July 2008 to a median of $311,100, according to NAR. They are expected to climb in 2011.

The S&P/Case-Shiller Home Price Indices measures the residential housing market, tracking changes in the value of the residential real estate market in 20 metropolitan regions across the United States. Case-Shiller has given hope that most housing markets may have already stabilized because the composite index of 20 cities rose in May, June and July of 2009.

However, the tax credit for first-time home buyers helped support prices during the three months of Case-Shiller gains. The credit is set to expire on November 30, 2009.  By the end of November, the credit will have been used by 1.8 million homebuyers.  Many of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors (NAR).  HUD is allowing buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file  their 2009 income taxes to receive a refund.  These funds can be used for certain down payment and closing costs expenses.

Experts are watching to see if there will be a high failure rate for option ARM loans that were issued to customers so they could buy homes in bubble markets, such as California and Florida. In those areas, prices for even modest homes had skyrocketed.

If you have any questions, feel free to contact me, and I will be happy to help you with all of your real estate needs.