A CB Richard Ellis real estate sign in Atlanta.
A CB Richard Ellis real estate sign in Atlanta. - 
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KAI RYSSDAL: This won't come as a surprise, but the people who build houses in this country are a bit depressed. The National Association of Home Builders announced its November index today. It's stuck at record lows. The group says a real estate turnaround is years away. The residential market has certainly been hurt by subprimes. Until now commercial real estate had seemed immune. But there's evidence today the credit crunch has spread.

Marketplace's Janet Babin reports from North Carolina Pubic Radio.

JANET BABIN: Moody's Investors Service says commercial real estate values fell 1.2 percent from August to September. That may not seem like a big drop, but commercial real estate prices were going strong, in some places flirting with record highs. The report also found that the number of broken deals in September reached a six year high. And Tad Philipp, with Moody's, says the swan dive isn't over yet for office and apartment buildings.

TAD PHILIPP: We expect to see a few more downward oriented reports from here.

BABIN: How far down?

PHILIPP: Well that's, you know, certainly the big question, and we're guessing for now, mid to high single digits.

The reversal could push some commercial property owners into default, just like it did for homeowners who ended up owing more than their property was worth. But economist Richard DeKaser, with National City Corporation, says we're not looking at another subprime debacle here.

RICHARD DeKASER: I would be reluctant to embrace this as the first sign of a major decline.

DeKaser says overall, commercial vacancy rates remain low, and rents are up. He's not ready to push the panic button just yet. But David Olson, with mortgage research firm Wholesale Access, says the new numbers show the subprime mess is spreading.

DAVID OLSON: We got big problems here. Everyone's going to be impacted. It's widening. We thought we could confine it to one sector but it's not being confined.

Olsen says commercial real estate values are pointing in the same direction as the housing market and auto industry -- down.

I'm Janet Babin for Marketplace.