House prices declined 4.9% during the 12-month period from September 2006 to September 2007, according to the Standard & Poor's/Case-Shiller housing price index, which covers 20 metropolitan areas."Most of the metro areas continue to show declining or decelerating returns on both an annual and monthly basis," said Robert Shiller, chief economist at MacroMarkets LLC. Only five of the 20 metro areas -- Atlanta; Charlotte, N.C.; Dallas; Portland, Ore.; and Seattle -- posted positive price increases, but they are all under 5%. Mr. Shiller told reporters that a futures index based on the S&P/C-S HPI 10-city index is predicting that house prices will decline by over 5% next year, and he thinks that is a "reasonable" estimate. "We are in the aftermath of the biggest housing boom in history," which was fueled by unprecedented speculation on residential properties, Mr. Shiller said. He sees a greater-than-50% chance of a recession due to declining housing starts, falling house prices, rising foreclosures, and problems in the financial markets. Further information on the index can be found online at http://www.homeprice.standardandpoors.com.

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