Case-Shiller: Chicago Home Prices Heading for Another Flat Summer?

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, plus seasonally adjusted and tiered price data, 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. – April data is released in June).

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

April 2009
Month to Month: Down 0.03%
Year to Year: Down 18.7%
Change from Peak: Down 27.5% in 31 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).

It looks like we may be starting a repeat of last year’s performance, when prices around Chicago more or less flattened from March through July.

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:

To recap, we have seen the following interventions in recent months meant to boost the housing market:

• $8k first-time buyer tax credit
• 4.5% – 5% mortgage rates
• various moratoriums on foreclosures
• numerous federal programs encouraging loan workouts

The apparent result of this host of actions has been a flattening to very slight upticks seen in the chart above, in a month that is historically one of the strongest of the year for the real estate market. I guess you can color me underwhelmed.

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.

I don’t know where the bottom is for Chicago area home prices, and unfortunately April’s flattening pattern certainly doesn’t point us to a clear answer on that question. It looks like we’ll have to wait until the fall to see if price drops are done yet in Chicago.

*[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.]

June 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, 102 had price-reduced ratios of fifty percent or more.

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

Of the 161 neighborhoods we ranked in the Chicago area this month, 48 had a price-reduced ratio of fifty percent or more. Unlike many other markets Redfin serves, there was no apparent correlation between prices and number of price reductions in a neighborhood.

The general trend in Chicago looks to be more or less holding steady with the number of price reductions, however every city and neighborhood is of course different. Some may be getting softer while others get tighter. Download the full spreadsheet to check where your neighborhood came in.

Biggest Discounts June Update

Let’s check in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the chart below, we have taken all sales data from last month in the Chicago area and sorted it by city/town. 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 areas 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 areas with the largest overall discount:

The overall discount moved up just a bit in June from our previous update in April, rising to 6.2% from 6.1%. The southside city of Harvey topped this month’s list for the largest discounts, with buyers getting a whopping 14% off the final list price.

Here are the ten areas with the smallest discounts:

No area had an average sale price higher than the average list. The closest any place came was Burbank, where buyers only got 1.8% off the final list price.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 4,938 sales we tracked in the 1-month period, 1,156 homes (23%!) sold for 10% or more off the asking price, while 321 homes sold for 5% or more above the asking price.

Redfin By The Numbers, May Edition: Redfin’s Agents Are In The Top 3% For The Chicago Area

Redfin agents Mark Reitman and Greg Whelan are in the top 3% of agents who represented home-buyers for Cook, DuPage and Lake Counties in May. Mark worked on 6 deals that closed totaling $2,015,900 and 3 of Greg’s deals closed worth $1,414,500.

Mark and Greg are experts on what’s going on in the real estate market right now because they’re actively working with clients and closing deals.

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 May from our Chicago clients:

• 18 clients responded to our customer-satisfaction survey and posted a review online, up from 5 in April.
• All 18 of those clients, or 100%, would recommend Redfin to a friend, up from 80% in April.

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.

More People Are Out Touring Homes

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

• Redfin clients toured 588 homes in May, up from the 431 homes toured in April.
• Our clients made 24 signed offers on homes, up from 22 in April.
• Our Chicago agents were busy working on these offers:

o Mark Reitman: 15
o Greg Whelan: 9

• 3 of these offers, or 14%, were on bank-owned foreclosures, up from 5% in April.

We had a great home-buying class in May. Seven people came to 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 42 Days To Close On A Home

In May, it took our Chicago clients 1 day less to close on their homes than it did in April:

• For our clients who bought re-sales, the average time from initial agreement on terms to the close of the deal was 42 days, down slightly from 43 days in April.
• All of our clients successfully financed their homes, the same as in April.
• 2 of our clients’ deals failed the home inspection, up from 0 in April.
• Of our closed deals, excluding short sales, the average discount off list price for homes sold was 1.40%, down from 6.11% in April.

Look For Our June Report

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

Countrywide Tops Chicago Area Lending For Q1

Mortgage Data Web sent me an email today with the top mortgage lenders in the Chicago Area for January through March of this year. I broke out the purchases from the re-fi’s to give you a sense of who the top players in each category are if you’re looking either to buy or re-fi.