Home Prices Fall-First Time in 16 Years!

Home prices fall 1.4 percent over last year
Prices of single-family homes edge down in 1st quarter for 1st time since 1991; Detroit and San Diego lead declines.

May 29 2007: 10:10 AM EDT
NEW YORK (Reuters) -- Prices of existing U.S. single-family homes fell in the first quarter from a year earlier for the first time since 1991, the Standard & Poor's/Case Shiller national home price index reported on Tuesday.
The quarterly index dropped 0.7 percent from the fourth quarter of 2006 and was down 1.4 percent from the first quarter of 2006.
"The fall of the national index into negative territory, after more than 15 years of positive annual growth, is a reaffirmation of the pullback in the U.S. residential real estate market," Robert J. Shiller, chief economist at MacroMarkets LLC, said in a release.
"The national index was yielding solid returns as recently as a year ago," he added. "First quarter 2006 growth rates were up 11.5 percent versus Q1 2005, a sharp contrast to the returns we are seeing today."
House prices in March fell in 13 of the 20 metro areas covered by the index, S&P said in the release.
The composite month-over-month index of 20 metropolitan areas fell 0.3 percent to 200.89 in March from February and was down 1.4 percent from March 2006.
S&P said its composite month-over-month of 10 metropolitan areas dropped 0.4 percent in March to 219.54, or a 1.9 percent year-over-year decline.
Detroit and San Diego posted the biggest annual declines of 8.4 percent and 6.0 percent, respectively.
Phoenix and Las Vegas have seen the largest price slides from their peaks. In September 2005, Phoenix showed a 49.3 percent growth rate and Las Vegas jumped 53.2 percent in September 2004. Those cities in March had respective price drops of 3 percent an 1.6 percent.
Sluggish home sales have hit the nation's largest homebuilders such as Centex (Charts, Fortune 500), Pulte (Charts, Fortune 500) and Hovnanian (Charts, Fortune 500).