NEW YORK - February 20, 2011 - While some officials – wearing rose-colored lenses – think the U.S. economy at large appears to be gathering steam, one key area remains mired in the muck of the Second Great Depression.

That sector, of course, is real estate. For much of the last year, housing has been in the grips of a long, painful process of hitting bottom; imagine an anchor bouncing jarringly along an ocean floor and you'll get the idea.

This week brings three signals on the state of the market. The fundamentals remain grim, with a glut of supply paired with moribund demand, leading to lower prices.

First the bad news. Real estate prices will probably fall further still. On Tuesday, the much-watched Standard & Poor’s/Case-Shiller index of home prices will release data for December on major cities; it will also reveal nationwide figures for the fourth quarter of 2010.

Nobody believes those figures will show a rise in prices. Paul Dales, senior U.S. economist at Capital Economics thinks that nationwide, prices probably declined 1.5% in the three months to December, the second consecutive quarterly decline. If true, that would bring home values one step closer to the trough they hit in early 2009 – or a so-called “double dip.”