The U.S. housing market remains vulnerable after prices plummeted in 2009, and even that might be an overly optimistic assessment, Yale University’s Prof. Robert Shiller said today in a conference call following the release of the latest S&P/Case-Shiller Home Price Index.

Home values around the U.S. at the end of 2010 are hovering around the lows they forged in 2009 after a sharp run-up that ended in 2006. In many cities, those lows have been tested in recent months, and some areas have seen home prices drop to levels not seen since 2000.

“In one word, I would say the market is vulnerable,” Shiller said. “I’m not a forecaster, but I could easily see the market going down substantially.”

Shiller said that whatever price strength the market mustered since its 2009 lows was largely linked to government intervention in the form of tax credits aimed at boosting demand for new homes.

Once those subsidies expired last summer, home values resumed their downward trend, exposing just how vulnerable the market really is.

“We’ll have to handle the withdrawal of government subsidy at some point,” Karl Case, founding partner of Fiserv Case Shiller Weiss, Inc., said during the teleconference. Even with historically low housing production, demand still hasn’t materialized, Case added.

“In the next census, we could actually come to find out we have millions of people fewer than we thought we had,” Case said, offering a possible explanation for the dearth of buyers. Case and Shiller have conjectured in past assessments of the housing sector that some potential homebuyers may have left the U.S. for jobs.

While emphasizing he isn’t in the forecasting business, Case said that in previous housing bubbles, prices have tended to bounce along the bottom after the boom-and-bust pattern has reared its head. He said that’s what could be in store for U.S. housing.

“Chances are we are at a bottom, but we can’t say that with any deal of confidence,” Case said. “This is a rocky bottom, which is discouraging.”

“But that’s not to say that we’ll go down another 30 percent. We could very well recover this year. It’s conceivable,” he said.

Head Winds Persist

Case’s carefully couched optimism wasn’t shared by others who took part in the conference call, including Shiller and David Blitzer, the chairman of S&P’s index committee.

“The market has been going down,” Blitzer said. “Prices fell from 2006 to 2009, and turned around coinciding with the tax credit, which is now gone.”

Blitzer argued that the housing market is still a number of head winds, some old and some new. Those include possible legislation on the table to reduce the role of Fannie Mae and Freddie Mac that could affect the housing market, hefty foreclosures and, more recently, oil prices going up.

And, importantly, the unemployment rate continues at more than 9 percent, a collection of challenges Blitzer amount to “nothing to be optimistic about.”

“As far as a double dip, we are not quite there yet, but the margin of comfort is very, very thin,” Blitzer said. “We are at a tremendous risk of seeing prices go lower.”

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