Though the housing downturn is straining many people, this might actually be good news for buyers -- particularly those looking for a vacation home, condo or a home in the center of the country, some experts say.

Home prices fell 4.5% from a year earlier in the third quarter, marking their sharpest decline in the 20 years since Standard & Poor's began tracking prices through its S&P/Case-Shiller® Home Price Index.

All 20 of the top metro areas tracked by the index saw declines in September over August, including the five metro areas that still have positive annual growth rates (Atlanta, Charlotte, N.C., Dallas, Portland, Ore., and Seattle).

Tampa and Miami saw the greatest year-over-year home-price declines at 11.1% and 10%, respectively. Detroit and San Diego followed with a 9.6% decline each and Las Vegas had a 9.0% drop, its lowest recorded annual decline to date.

"It is a great time to seriously think about the attractive prices," says Lawrence Yun, chief economist for the National Association of Realtors. "Home prices are lower than they were last year, and people can possibly negotiate for an even lower price."

The national median existing-home price for all housing types was $211,700 in September, down 4.2% from September 2006 when the median was $220,900, according to the NAR.

Excess inventory has contributed to the home-price declines. In fact, there are about 5 million homes currently up for sale in the U.S.. Some of the inventory buildup is due to the rise of people defaulting on mortgage loans and tighter restrictions on who can afford a loan, as well as overbuilding in many markets.

One reason potential buyers may want to act quickly: Historically, when home prices fall, they don't fall for long, says David Blitzer, chairman of the S&P Index Committee.

"If we go back to 1990, 1991 and 1992 and prices were falling, the reverse came very fast and very suddenly," Blitzer says. S&P data show that by the second quarter of 1993, prices were again rising.

Although Blitzer says no one knows for sure when exactly housing prices will make a positive turnaround, there is some indication that the time period might be shorter than it was in the 1990s.

For one, the job market is actually still fairly strong today and the jobless rate low, contrasting with the rising unemployment rate in the early 1990s. NAR forecasts that home prices will be on the rise again before the end of 2008.

Tom Lawler of Thomas Lawler Economic & Housing Consulting in Vienna, Va., is one of many market watchers, however, who aren't calling for a turnaround in housing prices anytime soon. If they're right, it might be better to wait before buying, to get an even better deal on prices.

"Home prices will continue to decline through most if not all of 2008, especially in those areas where speculative demand and easy credit fueled a surge in home prices relative to incomes that exceeded any previous housing boom," says Lawler.

"Many potential home sellers in those areas are still listing their homes at unrealistically high prices, and as a result, home sales have plunged and unsold inventories have continued to increase."

That does not mean, however, that there aren't good opportunities out there right now for buyers to negotiate prices massively below the list price, he says, especially for buyers with a hefty down payment and stellar credit.

S&P/Case-Shiller U.S. Home Price Index

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People willing to hold properties for a long time could be well served by starting to look at potential purchases now, because over the long term home appreciation usually pays off. Even when prices were, in the third quarter of 1992, below their levels of the third quarter of 1990, they were up from the same period five years earlier. And despite the recent declines in the market, which began in the third quarter of 2006, according to the Case-Schiller data, national home prices are up 80.5% over the first quarter of 2001.

"Investors should have a three- to five-year minimum hold period in mind," says Kraig Kast, CEO of Atherton Trust, a Redwood Shores, Calif., outfit that provides financial planning services for real estate investors. He adds that, "It is best to buy an investment home beginning near the end of the first quarter of 2008. Our economists project interest rates will still be at historic lows, and mortgage lending will loosen up a bit."

Yun maintains that Florida, for one, is a strong long-term prospect. "It is down currently, but for those with a long holding period, Florida is a great buy," he says. Also, investors who know how to research metro areas for job-growth trends, taxes, new building permits, housing affordability index, etc., might be able to figure out where the long-term potential is and invest there, some say.

"It is a great time to purchase investment properties everywhere in middle America from the Appalachian Mountains to the Rocky Mountains" due to income flow and low home prices, says Yun.

The beleaguered condo sector also might be returning to a point at which it makes sense for potential investors. Metro area condominium and cooperative prices, covering 59 metro areas, show the national median existing condo price was $226,900 for the third quarter, up 2.0% from $222,500 for the third quarter of 2006.

"We have seen stronger investment in the condo sector vs. the single-family. Investors favor condo properties because of less upkeep," says Yun.

For example, Sandpearl Residences condominiums in Clearwater, Fla., has not had to cut its prices in recent months because buyers who can afford to pay cash keep coming, says Steve McAuliffe, vice president of sales and marketing for JMC Communities, the developer for Sandpearl. But the property is offering some incentives, such as an option to buy units complete with furnishings that are offered at a discount. Of 117 units on the compound, about 10% are left for sale.

So for second-home buyers, particularly those who aren't in need of a mortgage to purchase their vacation home, it may be worth the time in the next few months to consider a purchase.

Sheree R. Curry is a freelance journalist who writes primarily about real estate, management best practices and personal finance. She lives in the Minneapolis/St. Paul area. Learn more about her at her Web site, www.currymedia.com