The average price of a home in Scotland now stands at £141,866 but is still £4,014 lower than it was a year ago.
Sales also declined in January as they fell by more than twice the usual seasonal rate.
Richard Sexton, director of e.surv chartered surveyors, said: “Six consecutive months of falling house prices in the second half of 2012 threatened to drag the Scottish housing market back into the depths it fell to after the 2008 financial crisis.
“Prices have fallen over £4,000 in the last year – and by much more if you take inflation into account.
“Thankfully, a £1,000 rise in prices during January has put the brakes on the slide, at least for now.”
The main issue affecting the Scottish market is weak mortgage lending as demand falls and supply remains tight.
The Scottish market is also struggling as ‘second steppers’ continue to be unable or unwilling to move up the ladder.
Recent figures released by the Bank of Scotland revealed that almost despite a large number of homeowners considering moving many face an increasing number of challenges.
Sexton said: “Second steppers in particular are content to sit tight and wait until the market begins to recover.
“And Scotland is more exposed to public sector cuts than England and Wales, which is stymieing demand in comparison to south of the border.
“On top of that criteria on mortgages are strict which is slamming the door on lots of would-be buyers.
“Although the Funding for Lending Scheme has helped reduce rates and encouraged banks to introduce a wider range of mortgages, borrowers still have to cross a high threshold in order to access them.”
However Sexton was keen to point out that there are some bright spots amid the gloom.
Sexton said: “There are first time buyers – historically the fulcrum of a healthy housing market – are finding it easier to get mortgages thanks to a wider choice of products: first-time buyer numbers reached their biggest annual figure in four years over the last 12 months.
“If that improvement can be sustained throughout 2013 the housing market should begin to gradually recover.
“And despite the economic travails, underlying demand remains relatively strong, which should help support house prices in the long term.”
