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Today's real estate metric seems to point toward trouble.

S&P Case Shiller posted its Home Price Indices this morning covering the 10 and 20 city markets it regularly measures. Unfortunately, the data seems to offer insight the market could choke on as economists mull over and pick through October's refuse.

Today's report covers the month of October (do you remember when?…)! Anyway, way back in October, prices improved at a less rapid rate when compared to ancient September. Prices were still lower than the prior year period, but less lower than in September. The 10-City Composite was off 6.4% when matched against last October (that's in 2008), while the 20-City measuring stick slipped 7.3%. Only seven of 20 metro regions posted month-to-month gains; that's a marked deterioration of the rate and breadth of improvement. Those seven cities include: Detroit, Los Angeles, Phoenix, Portland, San Diego (gosh I love it there), San Francisco and Seattle.

As we recall those lazy summer/early fall days (foggy as it may be), we know the pending expiration of the First-Time Homebuyer Tax Credit led a mass rush of Americans to enter into home purchase agreements in September, with a resulting counter-slippage in October. That seems to explain the change pricing here as well.

A representative of the measuring organization cautions in the press release against looking for a double-dip in pricing, since Fed policy is consistent and favorable now, versus a comparable period in the early '80s when a dramatic shift in Fed policy led prices to drop twice. We caution, though, that market anticipation of future inflation is intensifying, and market sentiment may matter as much or more than actual Fed policy, and may precede it.

For now, we expect the most important market takeaway will be that we appear en route toward year-over-year price stabilization. Still, the pace is slowing, and seems unreliable, especially if we remove the crutches of government stimulus. The latest extension of the homebuyer tax credit is set to expire in the first half of 2010.

Disclosure: No Positions

Source: S&P Case Shiller's Home Price Index Concerns Me