WASHINGTON - The recovery in real estate slowed dramatically over the past few months, according to a survey of 500 federal examiners and liquidators that was conducted by the Federal Deposit Insurance Corp.

Although real estate markets generally have been in recovery since spring, the survey showed that fewer and fewer of the field regulators see continuing improvement.

Index Declines

The FDIC's national index for real estate market performance dropped to 57 in the latest report - covering August through October - from 63 in the June-August period.

A score over 50 indicates that a majority in the survey see real estate markets strengthening in their regions.

While the indicator remained Positive, the reading of 57 matched that of October 1991, the low point since the FDIC began the surveys in April 1991. The latest score was also well below the high of 72 recorded last May.

The FDIC said last Wednesday that more respondents noted "no change" in either residential or commercial markets than in any of the seven previous quarterly surveys.

The examiners in the survey represent several federal agencies and work in all areas of the country.

Weakest Region Is West

The West continues to be the softest real estate market. At a score of 49. It was the only region below the 50 threshold. The western index - encompassing 13 states, including California, Arizona, and Colorado - has slipped 22 points from its high of 71 in May.

"You can see California was a drag this time on the national total." said James Freund, the FDIC researcher in charge of the study.

Nationwide, 40% of the examiners and liquidators said housing markets are improving and 14% said they are deteriorating. In California, only 4% saw residential markets rebounding, while 56% said they were worsening.

Strength in the South

The South continues to appear strongest. Its overall score of 66 topped the nation, though this was down from the May 1992 peak of 79.

The Midwest index was 56, down from 72 in May, and the Northeast index was 53, down from 65.

Residential real estate continued to outperform commercial, but the improvement in residential property values slacked off, too, the FDIC reported.

The residential index was 63 in the latest survey, compared with 69 in August and 81 in May. Again, the South reported the highest index, at 71, and the West was lowest. at 52.

Commercial Slump

The commercial index slipped to 51 from 53 in August and 58 in May. Two-thirds of the respondents reported no change in commercial real estate; only 5% said commercial real estate had begun to recover in their areas.

The South, at 58, turned in the highest commercial index. In this category, the Northeast was worst at 44, one point below the West.

About 85% of the federal regulators said oversupply is plaguing their local commercial real estate markets - virtually unchanged since the summer of 1991.

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