Moody's Sees Potential Housing Market 'Crash'.

WASHINGTON -- The downturn in the housing market is in "full swing," according to Moody's Economy.com, with nearly 20 metropolitan areas set to "crash" over the next 24 months.

In one of the most pessimistic forecasts by a major forecasting firm, Moody's expects some markets will suffer double-digit price declines. If Moody's is correct, that means equity on homes purchased in the past few years could be wiped out or go negative.

Economy.com's outlook report, "Housing at the Tipping Point," predicts housing prices in Cape Coral, Fla., will take the biggest hit - off 18.6% from its peak in the fourth quarter of 2005, until it bottoms out in the second quarter of next year.

The biggest price declines will occur along the southwest coast of Florida, metro areas in Arizona and Nevada, nine California markets, throughout the Washington, D.C., area, and in and around Detroit.

The "odds are high that national house prices will decline in 2007, the first decline in nominal house prices since the Great Depression," the company says in a new report.

Most of the price declines will occur in the coastal states, and nearly 100 metro areas will experience a "measurable" decline in housing prices, the company predicts. However, Economy.com chief economist Mark Zandi noted that although some markets will crash, the national market will not, unless ...