Why are property values still dropping? What is driving this still? I have seen reports saying the properties are still dropping. How much further will it go?

Great question. Unfortunately due to the fact that there are so many defaulted mortgages it is causing a huge wave of short sales and foreclosures where houses are being sold for far less then what they are worth. This essentially sets the market prices at a lower margin. Its tough to say how much further it will go as a lot of the trends in the real estate market are dictated by our overall economy specifically unemployment. The only way that home values will begin to appreciate again is when the abundance of housing inventory starts drying up and the demand for people to buy homes becomes greater than the supply. In my opinion the states that have seen the largest drops in real estate prices will essentially recover quicker. This is mainly because people will flourish to these areas due to lower home prices and the ability to be able to live comfortably. This will eat up the gross amount of inventory causing the market to turn around.

One reason would be because of all of the forclosures and short sales. As for how much further values will drop that is hard to say reports had said that we had alreay hit bottom and here we are home values are still going down...

The laws of supply and demand dictate that if there is excess supply then prices will go lower until demand comes in line. Add to this fact that pent up demand from people who'd like to eventually sell when the market turns around and then add in the foreclosures that are being stalled due to legal issues plus the number of bank owned properties that is growing daily and supply is far and away outstripping demand...oh, and the employment picture is not conducive to employment and economic stability that might create demand for houses in the form of those who feel good enough to buy a house.