RealEstateEconomyWatch.com

Home prices officially reached the long feared double dip in January as prices of single-family homes in 20 major cities fell for a sixth straight month, according to the authoritative S&P/Case-Shiller home price index released Tuesday by Standard & Poor’s.

As of January 2011, average home prices across the United States are back to the levels where they were in the summer of 2003. Measured from their peaks in June/July 2006 through January 2011, the peak-to-current decline for the 10-City Composite and 20-City Composite is now -31.7 percent and -31.8 percent respectively. 

Prices have fallen 3.1 percent in the past year.  The 10-City Composite dropped 2.0 percent and the 20-City Composite fell 3.1 percent from their January 2010 levels.  The same 11 cities that had posted recent index level lows in December 2010, posted even lower in January. San Diego and Washington D.C. were the only two markets to record positive year-over-year changes. 

However, the double dip is not quite complete.  Case-Shiller’s 10-City Composite is still 2.8 percent above and the 20-City is 1.1 percent above their respective April 2009 lows, but both series have moved closer to a confirmed double-dip over the past six months.

“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “With this month’s data, we find the same 11 MSAs posting new recent index lows. The 10-City and 20-City Composites continue to decline month-over-month and have posted monthly declines for six consecutive months now.

“These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, 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. A few months ago we defined a double-dip for home prices as seeing the 10- and 20-City Composites set new post-peak lows. The 10-City Composite is still 2.8 percent above and the 20-City is 1.1 percent above their respective April 2009 lows, but both series have moved closer to a confirmed double-dip for six consecutive months. At this point we are not too far off, and that is what many analysts are seeing with sales, starts and inventory data too,” said Blitzer.