Case-Shiller: Chicago Home Prices Post Record Drop

I apologize again for the multi-week radio silence here. We’ve revamped our data delivery to be able to better streamline the whole process, and from now on there will be a regular schedule of in-depth data in this space. For now though, it’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI).

For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – November data is released in January).

Here are the basic Case-Shiller stats for the Chicago area* as of November:

November 2008
Month to Month: Down 2.8%
Year to Year: Down 12.5%
Change from Peak: Down 16.1% in 26 months

The following chart shows the Chicago HPI scaled such that the September 2006 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the Chicago HPI was at or lower than it was in the latest data (May 2004).

Last month’s drop in Chicago’s Case-Shiller HPI was far more dramatic than what we have seen throughout most of 2008. The 2.8% drop was Chicago’s largest since the peak, as was the 12.5% year-over-year drop. Last year prices had a few months of sharp declines through the winter, and it looks like similar declines are getting started a little earlier in 2008.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare Chicago’s performance to other areas across the country:

And here’s one more chart, in which I have lined up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

Chicago’s price declines continues to come in somewhat slower than most other markets relative to their respective peaks. Unfortunately for home sellers, the price drops only look like they are accelerating in recent months, putting to rest any hope of a market bottom in 2008 or early 2009.

*[Case-Shiller defines Chicago as the entire Chicago-Naperville-Joliet, IL Metropolitan Division, which includes all of the following counties: Cook IL, DeKalb IL, Du Page IL, Grundy IL, Kane IL, Kendal IL, McHenry IL, and Will IL.]