Case-Shiller: Chicago Price Drops Set Back-to-Back Records

It’s time once again 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. – December data is released in February).

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

December 2008
Month to Month: Down 3.0%
Year to Year: Down 14.3%
Change from Peak: Down 18.6% in 27 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 (December 2003).

According to the Case-Shiller index, as of December home prices in Chicago have “rewound” a full five years. December set another new record for largest month-to-month drop, erasing five months of previous price gains in a single month.

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 our final chart, in which we line 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.

Home price drops in Chicago continued to accelerate in December, as the pattern here begins to move more in line with the curve of the declines in San Diego and DC. It will be interesting to see if spring and summer 2009 bring a period of flat prices like we saw in 2008. If I were a home seller, I wouldn’t count on it.

*[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.]

February City/Neighborhood Price Reductions

Let’s take our monthly look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days. Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

For those that are interested, I have uploaded the full data set in Excel format here. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

First up are the top ten cities with the most price-reduced listings:

Of the 229 cities/towns we ranked in the Chicago area this month, 131 (57%) had price-reduced ratios of fifty percent or more. Only Huntley carried over from last month’s top ten to this month.

Getting a little more granular, let’s look at the top ten Chicago area neighborhoods for price reductions:

Of the 101 neighborhoods we ranked in Chicago area this month, only 23 (23%) had a price-reduced ratio of fifty percent or more. On the neighborhood level, slightly more of the top ten list remained the same, with West Side, Old Town, Roscoe Village, and East Side Aurora all continuing to rank highly.

At the neighborhood level, there is definitely some consistency in the number of homes seeing price reductions. If finding a good deal on a home is important to you, these neighborhoods might be a good place to start, as higher ratios of reduced-price homes indicate sellers that need to sell and are willing to lower the price to do so.

Meet Redfin’s Partner Agents in South Cook County

Our customers keep asking us, “When are you coming to my area?” Well, the wait is over for folks in South Cook County. Redfin is now partnering with agents in outlying areas beyond our local agent Mark Reitman’s reach to bring our values of fanatical service, data-driven performance and better value to your neighborhood.

Many Applied, Few Were Chosen

We put our partners through the ringer by conducting interviews and requiring at least three customer referrals; the average Chicago area partner has completed over 660 deals. All of our partner agents have embraced Redfin’s transparency ideal: you see every transaction and every customer review, good and bad. Just like with Redfin’s own agents, there’s no obligation. In addition to getting great service, you’ll also save money — usually around $1,000-$2,000.

Learn more about our partner agent program by reading Redfin CEO Glenn Kelman’s blog post.

If you’re an agent and you’d like to become a Redfin partner, please get in touch.

Sign up to be notified when we come to your area because in the next three months, Redfin will be adding partner agents in Will County.

Partner Agents Serving South Cook County

	Adam Serving South Cook County Homes Closed: 375+ Experience: 28 years
	Judy Serving South Cook County Homes Closed: 500+ Experience: 25 years
	Paul Serving South Cook County Homes Closed: 1107+ Experience: 13 years

Biggest Discounts February Update

Let’s have an update on where buyers are currently getting the biggest discount off the asking price. Our goal in sharing this data is to help potential buyers to know which neighborhoods are softer in terms of sale price discounts off list price, to better equip you when making an offer, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from the last two months in Redfin’s Chicago coverage area and sorted it by zip code. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any zips with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

Here are the top ten zip codes with the largest overall discount:

Over in 60644, some relatively inexpensive homes are selling at the largest discounts in the Chicago area. The overall discount for the Chicago area came in at 3.8% this month.

Here are the ten zip codes with the smallest discounts:

Of the 2,158 sales we tracked in the 2-month period, 183 homes sold for 20% or more off the asking price, while 398 homes sold for more than asking, with many of those located in just four zip codes.