The Housing Predictor released an update today to its list of the Worst 25 Market Forecasts, which is traditionally issued at the beginning of each year. The Housing Predictor made this update because their worst 25 markets are experiencing increasingly rapid deflation as foreclosures remain at epidemic levels.

Eleven states' markets are included in the worst 25: California, Florida, Ohio, Indiana, Nevada, Michigan, Oregan, Georgia, Delaware, Massachusetts, and Arizona. California, which experienced double-digit housing inflation in the majority of the state, is now experiencing the pain of tumbling home prices in almost every market statewide. Price deflation nearly equals that of the late 1980s when the savings and loan crisis gripped the nation. No other single state has placed more markets on the list.

According to Housing Predictor, the ailing national economy, to an enormous extent was caused by the housing market crisis, triggered by Wall Street hedge funds coupled with mortgage companies and banks developing a series of new financial instruments to sell mortgages at all time record rates.

As the crisis worsens, Congress has been unable to finalize a major bill to aid the increasing number of homeowners facing the threat of foreclosure. A handful of programs have assisted slightly more than 600,000 homeowners, but without more substantial maneuvers by lawmakers the crisis is only expected to worsen. According to Housing Predictor, more than 2.5 million homes have been foreclosed already. Another 3.1 million properties are forecast by Housing Predictor to be foreclosed through 2011 unless major Congressional action is taken. Carrie Bay