Home prices showed slower drop in Feb.

February data released yesterday showed local prices down less than 1 percent from the previous month, the smallest such decline since 2007. Prices were off 22.9 percent from a year earlier, compared with a record 26.7 percent drop recorded last October.

An index of 20 major cities showed prices were down 18.6 percent from a year earlier, the first time since January 2007 it didn't show a record decline.

But market watchers caution against breaking out the champagne and celebrating an impending rise in prices.

“No way on God's green earth,” said Louis Galuppo, a real estate attorney and director of residential real estate at the Burnham-Moores Center for Real Estate at the University of San Diego. “There's a difference between pricing starting to go up and the market starting to find stability.”

The Case-Shiller report showed San Diego prices falling for the 33rd straight month, bringing them to the lowest level since July 2002 and off 41.4 percent from the peak set in November 2005.

Case-Shiller tracks price changes over time on single-family homes that change hands more than once. San Diego went from an index value of 100 in January 2000 to a peak of 250.34 and now stands at 146.82, meaning prices are still up 46.8 percent from 2000.