Reports released Tuesday show no signs that the housing market is slowing its tumble - much less recovering.

San Diego County home prices in the third quarter took the biggest fall ever in one index's history, and economists predicted the foreclosure crisis will eat $1.5 billion of the county's economy next year.

Standard & Poor's Case-Shiller home price index, started in 1987, reported Tuesday that prices for San Diego County fell a record 9.6 percent in the third quarter compared to the previous year. And homes cheaper than $475,000 fared even worse, their prices dropping by 15.8 percent over the last year.

"We are in a home price decline," said Maureen Maitland, an analyst and vice president for Standard and Poor's. "And given the momentum, and after looking for turnarounds anywhere and not seeing them, it doesn't look like we are going to turn around any time soon."

While Case-Shiller looks at the resale of existing homes, the new home market is also suffering a severe slump, with national building permits for new homes falling 6.6 percent over the last year and hitting a 14-year low, according to Hanley Wood Market Intelligence, a Washington D.C.-based market research group.

Locally, the drop in building permits dwarfs the national decline, falling about 35 percent through October when compared with the same period from last year.

Meanwhile, the U.S. Conference of Mayors issued a report out of Detroit saying the housing crisis will take a $1.5 billion chunk out of the county's economy next year. But the report said, and other experts agreed, that the local economy will continue to grow.

Some analysts are worried the housing market fallout could lead to a national recession.

"It seems like people are just waiting for the next bit of negative news to come along and then the market drops another 200 points," said Jonathan Dienhart, director of published research for Hanley Wood's Costa Mesa office.

Alan Gin, an economist at the University of San Diego, puts the chance of a national recession at 35 percent.

"The stock market is down, gas prices are up and we're hearing about these foreclosures, and it's feeding itself in that people hear the news and don't feel like spending money," Gin said.

But he said San Diego has a diversified economy that should continue to grow even in the face of a national recession, because its health care system will benefit with jobs and technologies to serve an aging population.

Also, he said, local tourism should remain as strong during a recession as during a growing economy.

"If the economy is doing well internationally, people are going to fly in from around the world. And if the economy is not doing well, people will not travel as much, and we'll get people driving down from Los Angeles," he said.

Many analysts agree that a recession will stall any chance of a housing market recovery. Even without a recession, Standard & Poor's economists are forecasting that the nation is not even halfway through the fall of home prices.

Maitland said Standard & Poor's economists believe home prices will continue to decline for another year, bottoming out next September with an 11 percent decline in national home prices since its peak in mid-2006.

National home prices have decreased by 4.5 percent over the last year, compared to San Diego's 9.6 percent.

Only five metro areas - Atlanta; Charlotte, N.C.; Dallas; Portland, Ore.; and Seattle - experienced an increase in prices, but S&P noted that the pace of their increases is decelerating. Tampa, Fla., and Miami led the index with the biggest year-over-year declines at 11.1 percent and 10 percent, respectively. It also showed drops in Los Angeles of 7 percent and Las Vegas of 9 percent.

The Case-Shiller index compares single-family home sale prices with the same home's previous sale price.

San Diego's superheated housing market, with low volume and high desirability, has made its price fluctuations more volatile, analysts said. Local home prices have dropped 11 percent since their peak in November 2005.

Analysts said the resale market needs to recover before the new home market can get off the ground because homeowners need to be able to sell their old homes to buy new ones.

"Permits are a reflection of supply, so (the drop) indicates that builders are pulling back on construction until they see that buyers are there," Hanley Wood's Dienhart said.

Lower-priced homes have faced steeper declines, in part because many of those homes are farther inland. An overextended market built inland, but the homes there now retain little desirability.

Also, those homes attract buyers with lower credit ratings - people who are now having trouble securing mortgages as banks have tightened their credit standards, Dienhart said.

"It definitely seems to be the trend … that the lower end of the market is being hit hard by the credit crunch," he said.

The National Association of Realtors reported last week that home prices have actually increased. The association uses median home prices, which are more susceptible to becoming top-loaded with an influx of million-dollar homes.

- The Associated Press contributed to this report. Contact staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com.