Confidence is returning to the beleaguered US residential property market with even more published price indices giving good news for the real estate sector.

Analysts are now talking in terms of property prices bottoming out after two reports tracking property prices in major markets continue to show double-digit annual price declines.

After 16 consecutive months of record annual declines that began in October 2007, year on year price declines appear to have peaked in January 2009.

Both the latest annual comparisons from Standard & Poor's 20 City and 10 City composite reports give hope that a recovery could be in sight. They show that the pace of price decline has slowed for the fourth month in a row.

The 20 City Composite index, for example, showed prices down by 17.1% in May compared to a year ago. The annual decline in April was 18.1% and now appears to have peaked at 19% in January. Looking at individual markets, all but three metro areas in the 20 City Composite saw smaller year-over-year price declines than in April.

Although month-to-month price changes are a less reliable measure than annual price changes, the 10 City and 20 City reports showed prices increasing from April to May, the first month-over-month increase since the summer of 2006. In the broader index, 13 of 20 markets showed positive returns from April to May.

Dallas and Denver have reported three consecutive months of positive returns, while Atlanta, Boston, Cleveland, San Francisco and Washington, D.C., have had two consecutive months of positive returns.

'To put it in perspective, this is the first time we have seen broad increases in home prices in 34 months. This could be an indication that home price declines are finally stabilizing,' said David Blitzer, chairman of the committee that oversees the index for Standard & Poor's.

But Blitzer indicated that a recovery is still some way off.  'We likely do have a way to go before we see sustained home price appreciation,' he added.

Overall the analysis is that annual price trends remain relatively sombre. The 20 City Composite is down 32.3% from its peak in the second quarter of 2006, and home prices across the US are back to mid-2003 levels.

The reports also show that Phoenix and Las Vegas are the worst hit cities with prices down 54.5% and 53.4% respectively. Other markets hitting new lows were Los Angelese, Miami, Seattle and Tampa.