Over the last 12 months, home prices captured in the S&P/Case-Shiller Index dropped for the first time in 16 years, according to a survey published today.

The index is considered by many economists to be the most reliable, as it takes data from the Office of Federal Housing Enterprise Oversight and compares sales and refinanced loans on the same homes, year after year. That means the 5.97 percent drop in San Diego prices year-over-year is comprised of price changes on the exact same homes as were logged last year. (Click for more San Diego data.)

Money magazine reported the index’s findings:

The S&P/Case-Shiller national home price index revealed that in 13 of 20 metro areas surveyed, home prices fell an average of 1.4 percent in the 12 months ended March 31, with half of that decline, 0.7 percent, coming in the first quarter.

And investors use the index to bet on future housing trends. Most investors purchasing shares of the “futures” on the Chicago Mercantile Exchange seem to believe the downturn will continue, Money reported:

This product is fairly new with trading started about a year ago and is thinly traded. It also tilts a bit negatively because more traders seem to be using it as a hedge against falling home prices than as an investment.

Still, the futures trading has been reasonably accurate in predicting price changes (they’ve been down all year) and the latest trading reveals that investors are betting prices will continue to decline. The 10-city futures average has prices falling 3.9 percent in the 12 months through February 2008.

In the current survey, San Diego came in behind Detroit, which saw price drops of 8.4 percent over the year.

KELLY BENNETT

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