Case-Shiller: Low Tier Home Prices Take a Massive Tumble

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website. For a more detailed explanation of how the Case-Shiller Home Price Index 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:

Eighteen of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between February and March (one less than the previous month). Washington DC saw a 0.9% increase while Seattle eeked out a 0.1% bump.

Here’s a look at the latest local tiered data, back through 2000:

And here’s a closer look at the recent changes, with the vertical and horizontal axes zoomed in to show just the last year:

All three of Chicago’s price tiers took a hit in March, but the low tier took a serious whacking. Month to month, the low tier was down 9.9%, the middle tier fell 2.2%, and the high tier decreased 2.0%.

Read the rest of this entry »

Help Us Write a Home Selling Guide, Get a T-Shirt

Today, we’re officially launching the remaining sections of our Home Buying Guide. This is something we’ve been working on for a long, long time, and it feels good to get it out the door.

That’s not to say we won’t continue trying to make the guide an even better resource for home buyers; we’ll be tweaking, polishing, adding to, and editing this thing until the next ice age. If you have suggestions, comments, or questions about any of our HBG content, please leave a comment here, or on any page of the guide itself.

But we are starting to gear up for our next big guide project — the Redfin Home Seller’s Guide. We’ll be packing it full of useful information, with a heavier emphasis on interactive features, quizzes, graphics, illustrations, and other goodies.

Here’s where you come in: if you’re selling a home, what’s the stuff that keeps you up at night? What can’t you find good information about? What’s confusing? What’s frustrating? What do you wish you’d known three months ago?

Finally, if you’d like to be involved in providing customer feedback on preview versions of the guide as it’s developed, just drop a comment here and let us know. We’d love your input, and if we choose you to be in our customer feedback group, we’ll send you a free Redfin T-shirt.

Learn About Mortgage Paperwork

If you’re just starting to look for a home, you may be a little confused by the paperwork involved with getting a mortgage. Wouldn’t it be great if someone could give you a line-by-line explanation of the forms you’ll be dealing with during the home-buying process?

We thought so too. That’s why we’ve created annotated versions of some common mortgage documents. Specifically, we’ve marked up the Good Faith Estimate and HUD-1, as well as a standard loan application.

We’ve collected these documents here. Just pick the document you want to review and click the yellow info-points to bring up more information about every item.

These interactive loan documents are just a small part of our online Home Buying Guide. We’re adding several new sections to the guide in the next couple of weeks; we’ll let you know when it all goes live.

The Wheels Are Spinning, but the Market Can’t Seem to Get a Grip (April Insider)

Redfin’s monthly Chicago Real Estate Insider Report draws from our proprietary database of information on homes for sale and that just sold, along with insight from our agents to get a sense of what’s going on in the market right now. If you’d like to receive the report via email, just sign up.

Greetings Chicago Redfinnians!

As we approach the peak selling season in the Chicago area, inventory is up across the board compared to the previous month — as well as compared to the previous year. But even though inventory is surging, closed sales aren’t keeping pace.

A Boom in Inventory, but a Whimper in Sales

We expect strong inventory numbers in spring; the warmer weather prompts sellers to get their homes on the market, and the buyers start to get more serious about their shopping. At least, that’s the story most years.

Change in # of Houses for Sale on April 30th 2011

We can see from the chart above that sellers are indeed entering the market in greater numbers, but overall closed sales are up only slightly from last month, and are down across the board compared to April 2010.

Why? We believe that last year’s tax credit prompted many buyers to purchase sooner than they otherwise might have. Many of the homes that normally would have sold this spring were snapped up last year to take advantage of the expiring tax credit; in other words, we “used up” a lot of 2011′s buyers in 2010.

Change in # of Houses That Sold in April 2011

On the bright side, Chicago Agent Dario Medina has seen evidence that the market is getting much busier. He’s witnessed the change first-hand, and his observations have been backed up by the other agents he interacts with. “I’ve seen more offers and more multiple-offer scenarios,” says Dario. “On my own listings, sellers have noticed the increased traffic and have become a bit more confident. We’ve held firm on a few negotiations and the buyers have ended up coming in higher than we initially expected.”

Stories of sellers successfully holding their ground have been rare in the past few years; it’s been much more common for buyers to have the upper hand in negotiations. But before sellers throw themselves a victory party, it’s important to remember that not everyone should expect these results.

“There seem to be two types of inventory out there right now,” observes North Shore Redfin agent Dave Yocum, “stale homes that are either over-priced or show poorly — which everyone’s taking a pass on — and new listings that are priced right and show well. The second type is getting snapped up quickly.”

Investors Jumping Back In

Another change is the increased interest from investors. Greg Whelan, a Chicago Redfin Agent, has “taken on more clients looking to purchase properties for investment, not just owner-occupant buyers.”

Personally, I’ve recently seen long-time property owners diving in head-first and picking up buildings like they’re Monopoly pieces. It’s understandable, given the market’s 32.8% decline from peak prices. At some point (although it’s anyone’s guess as to how soon that point will arrive) home values will begin to swing back in the other direction.

Change in Median Price of Houses That Sold in April 2011

Buyers Going Green

As an interesting side note, Northwest Suburban Redfin Agent Carie Cox has seen an increase in the number of buyers specifically seeking ‘green’ homes. For those putting homes on the market, going green when possible may be one way to gain an advantage over the competition.

Want to know what’s happening in your neighborhood? Download our comprehensive spreadsheet and dig into the data for yourself! Inside you’ll find county, city, and neighborhood information galore. To learn more about how we calculate these numbers, check out our methodology page. You can also liven up the place by posting a comment below.

Best,

Mark Reitman
Chicago Market Manager