The S&P/Case-Shiller Home Price Indices for October, released Tuesday, continued their nine-month run of year-over-year improvement. However, in an indicator some see as ominous, both the 10-City and 20-City Composite Indices were flat with September, halting a five-month string of sequential improvement.

The 10-City and 20-City Composite Home Price Indices were down 6.4% and 7.3%, from October, 2008, an improvement from the year-over-year numbers in September, which were down 8.5% and 9.4%, respectively. All 20 metro areas also showed improvement in the annual rates of decline compared to September.

The October indices put home prices in the 20 measured metros at Fall, 2003 levels.

"The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains," said David M.Blitzer, chairman of the index committee at S&P. "All in all, this report should be described as flat."

Blitzer warned against reading too much into the report. "Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today. Further, sales of existing homes--those included in the SŒP/Case-Shiller Home Price Indices--have been very strong in recent months, working off the inventories of houses for sale."

He also noted, however, that housing starts remain weak, a new wave of foreclosures may be looming and government housing stimulus programs will expire in the second half of 2010.

As of October, from the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through October 2009 are -29.8% and -29.0%, respectively.

Seven metros, most in the West, reported positive monthly returns for October, led by Phoenix (up 1.3% sequentionally but down 18.1% year-over-year); San Francisco (up 2.2% and down 2.6% respectively; San Diego (up 0.4% and down 2.4%); Los Angeles (up 0.3% and down 6.3%); Seattle (up 0.2% and down 12.4%); Detroit (up 0.2% and down 15.1%); and Portland (up 0.1% and down 9.9%). New York was flat sequentially and down 7.7% from last October.

Las Vegas continued its string of declines with a drop of 0.1% from September, putting it 26.6% behind last October, the worst annual performance among all the metros. Home prices in that market are now down 55.4% from peak and approaching parity with January of 2000. Tampa posted the largest month-to-month drop (-1.6%) and is 15.2% behind last October.Atlanta lost 1% from September and is 8.1% below October, 2008. Chicago also dropped a full percentage point from September and is 10.1% behind on an annual comparison.

Among the remaining metros, sequential and annual declines were: Boston, -0.6% and -2.8%; Charlotte, -0.7% and 7%; Cleveland, -0.7% and -3.5%; Dallas, -0.6% and -0.6%; Denver, -0.4% and -0.1%; Miami, -0.4% and -14%; Minneapolis, -0.5% and -8.4%; and Washington, -0.4% and -2.8%.