U.S. home prices plunge 1.7% in Q1 - biggest drop in 17 years

"It would be an understatement to say that home selling conditions right now are challenging, throughout much of the nation, except the oil patch," Wang said. "We have a substantial inventory build, tough borrowing requirements from lenders, and an economy growing inadequately, so the outlook is not good for home sellers or home prices," Wang said. "One can easily foresee another 10-20% price decline in many regions of the country. If we can limit it to 10% we will be fortunate."

Wang said it's now "abundantly clear" that both federal housing legislation -- currently working its way through the U.S. Senate Banking Committee -- and a U.S. economic recovery "will be required for the housing market to turn around."

Democrats and Republicans reached tentative agreement on housing assistance legislation Wednesday, increasing the prospects that President Bush will sign the bill, The Washington Post reported Wednesday.

Meanwhile, Wang is hopeful that the U.S. economy can catch up to its politics. "Tax cuts and U.S. Federal Reserve market interventions have added a large amount of stimulus to the economy, so the best-case scenario has the economy starting to recover in the third quarter of this year," he said. "The sooner the economy recovers, the sooner the housing market will."