NEW YORK (CNNMoney.com) -- Home prices fell just 2.5% during the last three months of 2009 compared with the fourth quarter of 2008, according to a closely watched gauge of home price movement. That was a big improvement over the past three years.
National prices peaked during the second quarter of 2006, according to the S&P/Case-Shiller Home Price Index, then dropped a total of 32% before bottoming out during the first quarter of 2009.
Since then, price declines have eased.
"As measured by prices, the housing market is definitely in better shape than it was this time last year, as the pace of deterioration has stabilized for now, said David Blitzer, chairman of the Index Committee at Standard & Poor's. "However, the rate of improvement seen during the summer of 2009 has not been sustained."
The index did rise 1.6% on a seasonally adjusted basis during the fourth quarter compared to the previous three months. That is the third consecutive quarter of increases.
Robert Shiller, the Yale economist who co-founded the index, characterized the turnaround as one of the most dramatic ever. Prices fell 11% between November 2008 and April 2009, and then rose 8% in the subsequent six months.
He cautioned against expecting that rebound to continue, comparing that performance with the market during the 1991 recession when prices fell 5% in six months followed by a 2% rise over the next six.
"What happened next then was practically no movement for the next 10 years," said Shiller.
S&P reports the national statistics quarterly and an index of 20 cities monthly. The 20-city index inched down in December, falling 0.2% compared with November. Only four cities showed improvement.
The metro area that recorded the biggest month-over-month loss for December was Chicago, down 1.6%. It completed 2009 down 7.2% year-over-year.
Los Angeles gained 1% in December, compared with a month earlier, more than any of the other 20 cities in the index. Prices there were flat year-over-year.
In Las Vegas, prices rose 0.2% -- the first monthly gain for that city in three years. Vegas was still down 20.6% year-over-year in December.
"It's about time for Las Vegas to come back," said Shiller, adding, "It's possible that Las Vegas could go through another volatile period."
Shiller was not, however, eager to offer much in the way of prognostications. "Trends now are very ambiguous," he said. "We are in very uncertain times."
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