Actually, that's understating things a bit: The 6.1 percent decline in local housing prices was the biggest monthly drop recorded anywhere in the 21-year history of the Standard & Poor's Case-Shiller index [WSJ story] [WSJ table] [Case-Shiller release/PDF].  Detroit (-4.9 percent) and New York City (-2.5 percent) also registered record drops for those markets.

That brings the local real estate market's year-over-year loss in value to 23.3 percent, the sixth-largest drop in Case-Shiller's 20-city index after Phoenix (-36 percent), Las Vegas (-31.2 percent), San Francisco (30.1 percent), Miami (-28.7 percent), and Detroit (-25.7 percent). Aside from Detroit, a special case by dint of the full-on employment depression there, all the others are in California or the Sun Belt, hothouses of real estate speculation.

I phoned David Blitzer, the chairman of Standard & Poor's index committee, to ask if he had any notion why the Minneapolis/St. Paul metro took such a huge single-month hit."Not specifically, no," he said. "We were struck by the number as well, so we went back and did some additional checking of the numbers. And they are correct.

"My sense--and this is more on a national basis, but it affects a lot of places--is that there are two things. One is that foreclosures have increased quite substantially since early this year. And with foreclosures, there's increased sales pressure, increased selling, a lot of activity--but at lower prices.

"The other thing that seems to be happening is that we see much more damage from the recession as opposed to strictly subprime mortgages. I've looked at national delinquency rates for subprime mortgages, Alt-A mortgages, and prime mortgages. While the subprime delinquency rate is much higher, the prime mortgage delinquency rate is rising--and if anything, may have risen faster in the last couple of months than the subprime rate. What that suggests is that there are a lot of people who didn't live in the Sunbelt, where most of the subprime mortage [trouble] is concentrated, and took out mortgages that were reasonable mortgages. But unfortunately, with the recession there's been a lot of job loss and a lot of economic and financial difficulty. That leads to some forced sales and some increases in foreclosure.

"That may be what we're seeing. In terms of Minneapolis, we discussed these things internally yesterday at some length, and nobody came up with a sense of [why]--was there a major industry or a major employer in Minneapolis that's been hard hit, something like that? We didn't come up with any explanations that anyone could give any credence to. In Detroit, I know what the story is. It's the auto industry. In Minneapolis it's not clear."

"I wish I could give you a single theory, or an idea. But unfortunately I can't."