Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Home prices near a double dip

By Les Christie, staff writer


NEW YORK (CNNMoney) -- January home prices fell for the sixth month in a row, edging closer to a double dip.

The S&P/Case-Shiller home price index covering 20 major markets fell 3.1% year-over-year, hovering near the market's bottom set in April 2009.

"January brings us weakening home prices with no real hope in sight for the near future," says David M. Blitzer, a spokesman for S&P.

The dismal report followed other negative housing market indicators recently. Sales of existing homes were off nearly 10% in February and new homes sales were at a record low.

"The housing market recession is not yet over," said Blitzer, "and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing."

Pat Newport, a housing market analyst for IHS Global Insight sees little prospect of a turnaround.

"There's just a lot of inventory glut out there," he said, "and that's why housing prices are dropping. The low prices help clear out the glut."

Anthony Sanders, director of Real Estate Entrepreneurship at George Mason University, pointed out that home prices have fallen despite extremely low interest rates, which have dramatically reduced monthly mortgage costs for buyers.

"If interest rates climb, that could be the tipping point into the double dip," he said.

Eighteen of the 20 markets covered by the survey recorded year-over-year price declines. Washington, D.C., reported the only substantial increase, up 3.6%, while San Diego edged 0.1% higher.

Prices fell 9.1% in Phoenix, compared with January, 2010, more than any of the other markets covered. Detroit dropped 8.1% and Minneapolis fell 7.6%.

Newport expects the price drops to continue most of the year, and says that it's only a matter of time before the market enters a double dip.

"I think prices will drop another 5% to 10%," he said. "The double dip will hit in the next couple of months."  To top of page


Overnight Avg Rate Latest Change Last Week
30 yr fixed3.43%3.42%
15 yr fixed2.69%2.69%
5/1 ARM2.93%2.96%
30 yr refi3.46%3.42%
15 yr refi2.73%2.68%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
  • Find Homes for sale
    Real estate and homes for sale on Trulia

  • Property Type
  • Find a home in: New York | Atlanta | Chicago | Los Angeles
  • Washington D.C | Houston | Philadelphia | More options
Index Last Change % Change
Dow 18,478.68 -92.17 -0.50%
Nasdaq 5,090.06 -10.10 -0.20%
S&P 500 2,164.92 -10.11 -0.46%
Treasuries 1.56 -0.01 -0.70%
Data as of 10:25am ET
Company Price Change % Change
Micron Technology In... 14.00 0.87 6.63%
Yahoo! Inc 38.60 -0.78 -1.98%
Chesapeake Energy Co... 5.17 -0.22 -4.17%
Bank of America Corp... 14.36 -0.02 -0.14%
Apple Inc 98.15 -0.51 -0.52%
Data as of 10:10am ET

Sections

HSBC banker arrested at JFK airport as he prepared to leave the country. He and former trader face federal charges they manipulated currency trades. More

New film 'Equity' is about to open in theaters. It's the first movie about ambitious women on Wall Street since the 1988 hit "Working Girl." More

If Marissa Mayer leaves when Verizon's deal is complete, she will have banked well north of $200 million. More