Dean Baker has looked at a lot of housing numbers as co-director of the Center for Economic and Policy Research, a Washington, D.C.-based organization that studies economic and social issues. But when he saw the 22.1 percent decline in U.S. Housing prices during the first quarter of 2008, he had to look far in the past to find something similar.

"It's not comparable to anything we've seen since the Great Depression," Baker said in a press conference call on June 24.

From April 2007 to April 2008, U.S. housing prices declined 15.3 percent, according to the The S&P/Case-Shiller Home Price Indices, which measure the residential housing market by tracking changes in the value of the residential real estate market. That's a $4 trillion loss in one year, according to Baker.

Once hot cities, such as Phoenix, Miami, San Diego, Los Angeles, and even San Francisco continue to show "very rapid rates of price decline," Baker said. And it could get worse. "In some of these markets, the price declines may be accelerating," Baker said.

That presents a pretty gloomy picture for the future. "I don't see us coming to an end of this period of pricing declines anytime soon," Baker said. "The best you could hope for would be a slower rate of price decline."

Nationally, Baker sees a number of hurdles for the housing industry to cross before the rate of decline can begin to slow, especially with interest rates rising well above 6 percent. "The Fed won't raise rates because of inflation," Baker said.

Unemployment is also rising and that's causing huge problems as well. "As the economy weakens further, there will be a feedback to the housing market," Baker said. "As people lose jobs, they lose homes."

Baker suspects these defaults may cause unexpected stress on the two government-sponsored entities carrying both the multifamily and single-family markets right now. "Given the rate of defaults and foreclosures, it's hard for me to believe that Fannie Mae and Freddie Mac won't continue to be stressed over the year," he said.

That could lead to issues down the road for the two GSEs, which are also providing much of the liquidity buoying the rental side of the multifamily market."They are going to take a big hit," Baker said. "There's a real concern that they will have to tighten up -- if not this year, then next year."

There is a silver lining from Baker's gloom-and-doom predictions -- and it comes from an unlikely place. For starters, Seattle, Portland, Dallas (because of the oil industry), and Cleveland are showing moderate for-sale housing price increases, while the price declines in Denver and Chicago have leveled off, according to Case-Shiller.

But the surprising news is Cleveland, one of the poster children for the foreclosure crisis. The city actually saw home prices increase 2.9 percent from March to April 2008, according to Case-Shiller. Baker thinks this is a great long-term sign with national repercussions.

"The data here is suggesting that perhaps what's going on in Cleveland is that it has found a bottom," Baker said. "It's a pretty bleak picture, but it suggests that it is a bottom for these markets. We don't have to worry about price spiraling down indefinitely."