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U.S. home prices went negative in March for the first time in 15 years. Home price gains have now officially reversed course: The latest reading from the S&P/Case-Shiller U.S. National Home Price Index showed prices down 1.4 percent from year-ago levels and 0.7% from Q4 2006. This is the first time that the national price index has fallen into negative territory since 1990-1991.

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S&P Case home indices

“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,” says Robert J. Shiller, Chief Economist at MacroMarkets LLC. “The National Index was yielding solid returns as recently as a year ago. Q1 2006 growth rates were up 11.5% vs. Q1 2005, a sharp contrast to the returns we are seeing today.”

Home prices are in an out-and-out free fall in certain markets: prices in Detroit are down 8.4 percent over year-ago levels, as that market continues to see a population exodus. Prices are also down sharply in San Diego (-6.0%), Boston (-4.9%) and Washington, D.C. (-4.8%). Certain markets remain strong: Seattle prices are up 10.0% over year ago levels, and crept up a health 0.9% in March. Charlotte is also hot, with prices up 7.4% on an annualized basis and 0.9% on a month-to-month basis. But the net trend is not pretty, and the chart … well, that speaks for itself.

Source: Want To Catch a Falling Knife? Buy Into the American Dream