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.]