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


Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.50%4.33%
15 yr fixed3.89%3.75%
5/1 ARM4.34%4.15%
30 yr refi4.49%4.29%
15 yr refi3.86%3.72%
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 24,052.33 28.20 0.12%
Nasdaq 7,002.04 -5.31 -0.08%
S&P 500 2,635.65 1.09 0.04%
Treasuries 3.03 0.05 1.58%
Data as of 2:39pm ET
Company Price Change % Change
General Electric Co 14.03 -0.65 -4.43%
Advanced Micro Devic... 9.79 -0.30 -2.97%
Bank of America Corp... 30.15 -0.04 -0.13%
Micron Technology In... 47.40 0.29 0.62%
Comcast Corp 33.83 0.48 1.44%
Data as of 2:23pm ET

Sections

When Snapchat changed its app a few months ago, users ? including Kylie Jenner ? revolted. Snap is making changes again, and they have Wall Street nervous. More

US regulators are close to slapping Wells Fargo with a $1 billion fine for forcing customers into car insurance and charging mortgage borrowers unfair fees. More

No one knows when the next bear market will start. So it's futile to base your investment strategy on what amounts to speculation. More