Another day, another report about the continuing decline in residential real estate prices -- but at least one tinged with the kind of optimism that comes when things aren't getting as bad as fast as before. According to the real estate web site Zillow.com, which tracks home sales prices and tries its Zillow best to estimate how much homes not on the market would fetch, the value of U.S. homes fell 12.1 percent in 2Q09 compared with 2Q08, just before the panic set in.

Zillow said that U.S. home values saw their 10th consecutive quarterly decline, with the aggregate average now standing at $186,500. The report covers 161 metropolitan areas and tries to assess the valuation of all homes, not only recent sales.

Zillow further noted that the percentage of underwater mortgages edged up in the second quarter. Currently, 23 percent of all owners of single-family homes with mortgages were underwater, the web site said, up from 22 percent in the first quarter.

It isn't news that commercial real estate investment sales haven't recovered from the Panic of 2008, so it is news when major properties trade hands. Early this week, San Francisco saw its first class A office transaction of the year when Tulsa-based Argonaut Private Equity Group acquired the 116,000-square-foot 250 Montgomery Street in the financial district.

Argonaut did so by buying the building's $40.8 million note from Realty Finance Corp. for reportedly about 25 percent of the building's replacement cost. The buyer doesn't only specialize in real estate, but it's out there with its war chest looking for property deals. Currently Argonaut manages about $3.5 billion of capital.

Big investment deals may be few and far between, but at a less expensive end of the real estate investment spectrum, there's still the hum of some activity in some property types, according to those involved in such deals. Moreover, that hum has been getting a little louder as the year has passed.

"Total closed transactions have been trending up among single-tenant retail investment sales," Michael J. Christie, president of Park Ridge, Ill.-based Investment Real Estate Services and a director of the National Retail Group of Marcus & Millicap, told CPN. "The dollar volume hasn't gone up as fast, however. It turns out that more smaller deals are getting done."

The interest in single-tenant retail properties, he added, is especially keen among all-cash and other private equity investors. "The main thing driving buyers to smaller deals is the debt market," he said. "Deals over $10 million and certainly over $20 million involve brain damage. But $5 million and under ­is comparatively easy. Not easy, but a lot easier than the bigger deals."

Among lenders involved in these kinds of single-tenant retail property investment deals, Christie said that community banks and smaller regional banks are the main players. "A lot of them were never really caught up in bad in real estate," he explained. "They know how to be careful, and it's seeing them through these difficult times."