San Diego County home prices kept going up in October.

Prices rose a slight 0.4 percent in October from September, reflecting the fall flurry of home-buying activity fueled significantly by fallen prices and government incentives, according to the latest Standard & Poor’s/Case-Shiller home price index, released this morning.

It was the sixth straight monthly rise for the index. (The fifth, according to a seasonally adjusted version. More on that in a minute, but first you can refresh your memory on that head-scratcher this summer when one version said prices rose and the other said prices fell.)

It’s somewhat unusual for the housing market to show gains in October, when in a normal year home-buying activity tapers off into the holidays and picks up again in the spring.

Indeed, a version of the index that is adjusted to reflect those normal seasonal trends showed an even larger monthly gain of 1.1 percent. That underscores the impact of frenzy-inducing programs like the federal government’s first-time homebuyer tax credit, which had been set to expire at the end of November but has been extended through April.

The index calculates home price changes on single-family detached homes that have sold at least once before.

Though prices have regained some lost ground in recent months, the overall price level was 37.9 percent lower in October than it was the price peak in November 2005.

Still, October’s prices were 55.4 percent higher than their level in January 2000.

Broken into tiers, prices across the board showed increases from September to October, the seasonally adjusted version of the index indicated:

  • Low tier (under $290,244): Up 2.1 percent from September
  • Middle tier ($290,244 to $445,540): Up 1.1 percent from September
  • High tier (over $445,540): Up 0.8 percent from September

In September, the high tier actually decreased in price, marking “the first drop in any of the index tiers since the price bounce began in early 2009,” our friend Rich Toscano wrote.

The Case-Shiller index takes results like these for 20 metropolitan areas nationwide and compiles them for a national snapshot. October’s numbers indicated a slowdown in what appeared in the spring and summer to be a turnaround for the market.

This time, San Diego was one of just seven of the 20 markets to see month-to-month gains.

A statement from David Blitzer, Standard & Poor’s index committee chairman, underscored how tough the data are to read:

All in all, this report should be described as flat. … Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip.

Blitzer said the only time that has happened was in the early 1980s, but current Federal Reserve policy is much more stable and consistent. And he said the rising numbers of homes sold each month indicates the market is working through its inventory.

At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010.

— KELLY BENNETT

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