Commercial real estate values in the United States have sunk to their lowest level in seven years, with properties now carrying price tags not seen since 2002. And although they’re still falling, data from Moody’s Investors Service shows that the rate of depreciation has notably slowed.

“The pace of declines has tapered off since the large drops measured in April and May,” commented Nick Levidy, Moody’s managing director. Levidy cautioned though that further declines are still expected.

According to the latest Moody’s/REAL Commercial Property Price Indices (CPPI) released this week, commercial real estate prices fell 1.5 percent in October, as a result of dwindling demand for apartment buildings, as well as office and retail space.

U.S. commercial property values are now down 36.4 percent from a year ago, and 43.7 percent from the peak in prices two years ago.

Moody’s said in a research note that commercial real estate transactions have been holding steady at reduced volumes throughout 2009, with a small increase recorded in October.

During the month there were 407 sales, the second highest monthly total for 2009, and a dollar volume of $5.4 billion, the highest for the year.

The firm singled out poor performance in New York’s commercial real estate sector over the past year as the culprit dragging down the eastern office market overall. New York offices saw the largest annual price declines among the three metro-level office indices in the CPPI. Office prices in New York have fallen 38.1 percent over the past four quarters, pulling values in the East down 37.3 percent annually.

Commercial real estate prices are showing their worst performance in the South, where three of the four property types in the CPPI recorded annual declines greater than 30 percent. Apartments in the South saw prices being cut in half over the past year.

Southern California properties saw relatively mild price declines with no property type measuring an annual decline above 30 percent.

On the opposite coast, prices of Florida apartments have been falling for the past three years. This year, they plummeted 46.1 percent, Moody’s reports.

Moody’s/REAL Commercial Property Indices are based on the repeat sales of the same properties across the United States at different points in time. Moody’s says this approach provides maximum transparency and circumvents the distortions that can occur with other commercial property value measurements such as appraisals or average prices.