The housing market is still mired in price declines during the third quarter. Prices declined in 80% of metro areas. Of the 153 metro areas surveyed, 123 still saw price declines, while 30 saw price increases. Overall, the national median price has fallen 11.2% from last year.

Let's look at specific towns and cities with the highest price declines and the highest price increases:

• Fort Myers, Florida tops the list with a 40% decline. Median home prices were $98,000.00
• Las Vegas, Nevada saw a 35% decline. Median home prices were $138,500.00
• On the up side, Cumberland Maryland saw a price increase of 19% Median home prices rose to $122,100.00
• Davenport, Iowa was next with a 14% increase. Median home prices were $115,600.00.

Sales of existing U.S. homes fell more than forecast in December 2007, contributing to the largest yearly slump in housing in more than 20 years.

Purchases declined 2.2% to a seasonally-adjusted annualized rate of 4.89 million, the National Association of Realtors announced Thursday. Analysts had expected the annualized rate to fall to just 4.95 million.

Further, sales for 2007 declined 12.8%, the largest drop since 1982. There were 5,652,000 existing-home sales in 2007, the fifth highest year on record, but still 12.8% below the 6,478,000 transactions recorded in 2006.

Trying to see bright side

Economist Steve Affinito told BloggingStocks Thursday he's trying to see the bright side to the housing sector's slump, but it's hard to do so.

"Let's try to see a silver lining here, if we can. Housing had really robust sales growth for about four years, so the 2008 stat is facing really difficult comparisons, year-to-year," Affinito said. "That said, there's no denying that the housing sector is in slow-motion mode, with large inventories."