Builders have practically given up on San Diego County's housing market -- at least for now. Two reports released Tuesday showed the local real estate market still mired in a painful recession with prices falling and construction down.

Last month, San Diego builders requested permits to build 88 units, the lowest number on record going back to 1988, according to a report by the Construction Industry Research Board. Over a 20-year period, builders had requested, on average, permits to build 1,000 units per month across the county.

"This is just terrible," said Alan Gin, an economist with the University of San Diego. "I hope that's a bottom, because you can't go much lower than that."

The number of permits requested last month was down 72 percent from the 317 units a year ago. And last year's numbers were 61 percent below the permits pulled in 2007.

Also released Tuesday, the Standard & Poor's Case-Shiller Home Price Index showed that prices fell 2 percent from November to December and were down 25 percent from the same time a year ago.

For the third straight month, high-priced homes, defined by the index as more than $436,953, declined the most.

That represents a reversal in trends. Low-priced homes, defined by the index as less than $296,097, have led the county's 39 percent decline from a November 2005 peak.

The upper crust of the market will continue to fall at a steeper clip because of a crush in payment adjustments on "Alt-A" mortgages -- loan products often given to borrowers with stronger credit scores but little down payments, said Brian Yui, chief executive officer of HouseRebate.com, a San Diego real estate brokerage.

"You're going to see more foreclosures in the Carmel Valleys and Del Mars of the world," Yui said. "The high end has been virtually untouched. Now what's happening is these Alt-A loans are … going to readjust to levels homeowners can't pay."

Still, the high end has fallen at a much slower rate than cheaper properties since the peak. From 2005, the low end has tumbled 48 percent and the high end has fallen 30 percent, according to the index.

Those price drops need to turn into price gains before builders get back into construction, one of the region's largest sources of jobs, said Nathan Moeder, principal for the London Group, a San Diego real estate consulting firm.

Buyers have spurned new homes in favor of low-priced foreclosures, driving sales in Escondido and Oceanside to twice the levels in 2008 and pushing new home sales down to record lows.

"Right now, there's no reason to build new homes because there's no profit," Moeder said.

Last month's record low building permit number came after the worst year for building permits on record, going back to 1967, according to the construction research board.

Even though prices fell for the 30th straight month, the rate of depreciation slowed in the latest Case-Shiller report. The 25 percent drop from prices a year ago was less than the 26 percent year-over-year decline reported last month.

While a slowing in depreciation would be the first step in a housing recovery, Tuesday's report was not a definitive sign that the region's market was on the mend.

In December 2007, regional home prices dove a record 3.4 percent. Therefore, anything less than a record-breaking monthly drop would have produced slowing depreciation.

Still, USD economist Gin said there might be some hope for homeowners in the latest report.

"It feels like we might be in a sort of slowing glide into the bottom at this point," Gin said. "We've still got problems, but we've got the stimulus package, and then, maybe, combined with low interest rates, we might see the market stabilize."

Contact staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com. Read his blog, "On the Realside," at bizblogs.nctimes.com.