A fourth indicator of the nationwide decline in home values this morning joined the National Association of Realtors, S&P/Case-Shiller and the federal Office of Housing Enterprise Oversight Global Insight in reporting a steep drop in single-family home prices during the first quarter.

Global Insight, the economic forecasting firm based in Waltham, Mass., in partnership with National City Corporation, the Cleveland based holding company which owns banks, on Monday morning reported that median single-family home prices fell at a 6.7% annualized rate during the first quarter of this year, marking the third consecutive quarter of declines.Nationwide, 262 markets of 330 in the study experienced declines, accounting for 84% of all housing units and 89% of real estate value.

The 330 markets in the study represent 78% of all housing units and 93% of all related real estate value in the U.S., making this study, which is now in its third year, the most comprehensive of its kind. The valuation data are extrapolated from U.S. Census Bureau and OFHEO statistics and compared with economic data including household population density, mortgage interest rates, relative income levels and characteristics unique to the history of each metro area.

The study reported that median prices are now down 3.1% from a year ago and 3.6% from the second-quarter-of-2007 peak. In its explanation of methodology, Global Insight points out that "housing markets tend to adjust very gradually and price declines, when they occur, have historically averaged 18 quarters in duration."

California, Florida and Michigan posted the steepest losses in the study and contained 45 of the 50 worst performing metro areas. Merced, Ca. leads all markets in the current downturn with a 38% correction in house values over the past eight quarters, followed by Stockton at 36%; Modesto at 35%; Santa Barbara and Yuba City at 32%; Salinas at 31% Sacramento at 30%; San Diego, Oxnard and Santa Rosa at 26%; Fresno at 25%; and Oakland, Santa Ana, Napa and Riverside, all at 24%.

Among Florida markets, the correction leader in the first quarter was Cape Coral/Ft.Myers with a 28% correction over the past nine quarters, followed by Punta Gorda at 27%; Sarasota at 26%; Port St. Lucie and Vero Beach at 25%; Palm Bay/Melbourne at 23%; and West Palm Beach at 21%.

Leading the Michigan market correction was Detroit, at 21%; followed by Ann Arbor and Warren at 20%; Flint at 19%; and Saginaw at 15%.

This study, called "House Prices in America," goes a step further than the other home-price indicators in predicting where home prices remain overvalued and are likely to decline in the future, defined as markets that are overvalued by 35% or more. The number of such markets was down to eight from a peak of 53 in 2006. The markets included Atlantic City, N.J.; Bend, Or.; Longview, Wa.; Wenatchee, Wa.; Ocean City, N.J.; Bellingham, Wa.; Portland, Or.; and St. George, Ut.

Markets that have reverted to fair valuations from overvalued include the Northeast, coastal California and Florida.

"The housing market will take some time to recover as consumers are constrained not only by tighter credit standards, but rising costs in other areas of the economy," said Jeannine Cataldi, senior economist and manager of Global Insight's Regional Real Estate Service . "There is also excess supply that needs to be absorbed, plus the rate of foreclosures entering the market needs to slow before housing can begin to pull out of its current downward trend."

Taking a brigther view was James Diffley, group managing director of Global Insight's Regional Services Group, who said, "The large price adjustments we have seen are precisely what was required before we could begin to talk of recovery."

Learn more about markets featured in this article: Los Angeles, CA.