Home prices near a double dip

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."