Pre-Bubble Housing Prices: Buyers in 'Driver's Seat'

Feb. 10, 2011 — -- Home buyers take notice: U.S. home values posted their largest decline in the quarter ended Dec. 31 in two years, some returning to prices not seen since before the housing bubble.

And some housing market economists are saying prices have not hit bottom yet.

According to the real estate website Zillow.com, U.S. home values fell 2.6 percent in the fourth quarter of 2010 to a median value of $175,200.

Of the largest 25 metropolitan areas covered by Zillow, the highest median was in San Francisco, at $485,700, despite a quarterly decrease of 4.1 percent in that region. Of the 25, Detroit had the lowest median, at $73,200, a 7.5 percent decrease in that area.

Zillow attributed the overall decline, in part, to the waning effect of homebuyer tax credit stimulus.

Amy Bohutinsky, vice president of marketing at Zillow.com, said with home values and mortgage rates remaining near-record lows, the next six to 18 months may be a good time to buy, depending on the market and if you plan to hold onto a home for five to seven years.

"Buyers are in the driver's seat right now in most markets," said Bohutinsky. "Nationally, prices have reset to 2003 levels."