As the Mississippi River flooded many cities along its banks and citizens downstream braced for the worst, the harsh realities of the real estate market in the past few years were made abundantly clear by a new report from Zillow. Home prices in 10 U.S. cities — all in Florida and California, save for one — dropped up to 69{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c} in a mere five years. Perhaps more sobering, prices have fallen for the past 57 months. The defaults caused by declining home prices led Fannie Mae to ask for an additional $8.5 billion from the government.

Even so, “cautiously optimistic” is how Fannie Mae describes American’s feelings towards housing. According to a survey, home prices, the economy and personal finances are the bright spots, countered by rising household expenses.

The amount of time for a foreclosure to be completed has increased in recent months. For a little color, in 2007, the process took just over 151 days on average. Today, it is closer to 400 days. Interestingly, 10 states, including the Sunshine and Golden states again, accounted for 70{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c} of foreclosure activity last month. In related news, a new settlement proposal by the five largest mortgage servicers, including Bank of America and JPMorgan Chase, may fund principal reductions for distressed borrowers. More to come…

On a lighter note, if two Dutch brothers have it their way, New York City’s housing projects will soon be a lot more colorful. Curbed NY reports that the artists, who have painted shanty towns of Brazil, have big plans for the Big Apple. What do you think: artistic wonder or eyesore?

The school district is a major determining factor for many people as they search for a home. As such, proximity to a highly-ranked school can drive up an area’s home prices dramatically. After analyzing over 17,000 cities, Forbes released a list of the cities and towns where the housing dollar goes furthest in terms of education. Topping the list is Falmouth, Maine.

Ending this week on a “grass is greener” note, literally. Check out organic lawn-care tips from The Daily Green.