Home prices fell 4.5 percent in the third quarter from the same period in 2006 according to the Standard & Poor's S&P/Case-Shiller home price index, which was released Tuesday morning. The slide is the sharpest annual decline since Standard & Poor's began the nationwide housing index in 1987. The report also reveals declines in 15 of 20 metro markets in September from the previous year.

Only Atlanta, Charlotte, N.C., Dallas, Portland, Ore., and Seattle showed an increase in prices while Tampa, Fla., topped the index with the lowest year-over-year decline at 11.1 percent. Tampa was followed by Miami (-10 percent), San Diego (-9.6 percent), Detroit (-9.6 percent), Las Vegas (-9 percent), Phoenix (-8.8 percent), and Los Angeles (-7 percent).

The Standard & Poor's/Case-Schiller quarterly index tracks prices of existing single-family homes across the nation compared with a year earlier.

Robert J. Shiller, a Yale University economist and one of the creators of the index, says the nearly across the board declines are significant for two reasons. "First, the third-quarter decline, at 1.7 percent, was the largest quarterly decline in the index's 21-year history. And, second, the year-over-year decline posted its second consecutive record low at -4.5 percent."

"Consistent with prior 2007 reports, there is no real positive news in today's data. Most of the metro areas continue to show declining or decelerating returns on both an annual and monthly basis," Shiller adds. "All 20 metro areas were in decline in September over August. Even the five metro areas that still have positive annual growth rates -- Atlanta, Charlotte, Dallas, Portland and Seattle -- show continued deceleration in returns."

In a Tuesday conference call Shiller described the current state of the housing sector as unprecedented, calling it "a remarkable phenomenon."

"There has been no episode like this since 1890," Shiller says. "The only comparable episode was right after World War II, actually from 1942 to 1947... . The question is, what is it going to do next?"

With home prices continuing to plunge, Shiller says the housing market could get much worse and there is a strong chance that a recession will occur.

"We are in the aftermath of the biggest housing boom in history," Shiller explains, "and, even though a lot of people's models don't reflect [the problems], I think there's a significant chance of recession, over 50 percent."

Click here to download a spreadsheet of the third quarter HPI.

Learn more about markets featured in this article: Atlanta, GA.