Case-Shiller: 1.5 Years of Price Gains Erased From Dec. to Mar.

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, hit the S&P/Case-Shiller website.

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. – March data is released in May).

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

March 2009
Month to Month: Down 3.1%
Year to Year: Down 18.6%
Change from Peak: Down 27.4% in 30 months

The following chart shows the Chicago area 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 area HPI was at or lower than it was in the latest data (June 2002).

Chicago’s climb from 2002 through late 2006 was remarkably steady, averaging 0.7% increases each month for over four years. That means that when home prices fall 3.1% in a single month, it can easily wipe out multiple months of price increases, as has happened here since December. The last three months of price drops have erased a year and a half of previous price gains from 2002-2003.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare the Chicago area’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.

While some markets have been experiencing a softening of the real estate price declines, that does not appear to be showing up in the Chicago data just yet. Granted, March’s 3.1% drop was smaller than the 4.6% and 3.4% declines seen in January and February, but it was still the largest one-month drop of the eight Case-Shiller tracked markets that Redfin serves.

*[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.]

Redfin By The Numbers, April Edition: More People Making Offers

Let’s look at our brokerage stats in Chicago to see how what our clients are doing right now reflects what’s happening in the market.

Our Clients Love Our Fanatical Service

We survey every client and track every transaction in a central customer database. For the surveys we received in April from our Chicago clients:

• 5 clients responded to our customer-satisfaction survey and posted a review online, the same number from March.
• 4 of those clients, or 80%, would recommend Redfin to a friend, down from 100% in March.

In these surveys, Redfin asks customers to rate the likelihood that they would recommend Redfin to a friend on a 0-to-10 scale. Customers who rated 6 or higher count as people who would recommend Redfin to a friend.

Offers Are Up

In April, our Chicago clients were busy seeing homes and making offers:

• Redfin clients toured 431 homes in April, down slightly from the 434 homes toured in March.
• Our clients made 22 signed offers on homes, up from 16 in March.
• Our Chicago agents were busy working on these signed offers:

o Greg Whelan: 16 offers
o Mark Reitman: 6 offers

• 1 of these offers was on a bank-owned foreclosure, down from 2 in March.

We had 26 people come to our April home-buying class at the Goose Island Brewpub in Chicago to learn about the home-buying process and meet our agents. You can check out the slide deck from that class.

It’s Taking 43 Days To Close On A Home

In April, it took our Chicago clients 5 days longer to close on their homes than it did in March:

• For our clients who bought re-sales, the average time from initial agreement on terms to the close of the deal was 43 days, up from 38 days in March.
• All of our clients successfully financed their homes, the same as in March.
• All of our client’s deals passed the home inspection; 2 failed the inspection in March.
• Of our closed deals, excluding short sales, the average discount off list price for homes sold was 6.11%, up from 3.48% in March.

“In the last few weeks, closing on a home is taking longer because loans are spending more time in underwriting as banks are much more cautious about lending,” says Redfin Chicago agent Greg Whelan. “Our clients aren’t having problems getting financing; we’re just having to wait for banks to approve the loan.”

Look For Our May Report

We’ll be back next month with our analysis of the May numbers. Let us know what you’d like to see in that report.