Case-Shiller: Get Ready for a Long Winter for Home Prices

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. – September data is released in November).

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

Seventeen of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between August and September (vs. eleven from July to August): Only Washington DC, New York, and Portland rose. Atlanta fell the most in September, falling a whopping 5.9% in a single month.

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:

Chicago’s middle and high tiers fell in September, but the low tier actually gained a little ground. Month to month, the low tier was up 0.5%, the middle tier fell 0.9%, and the high tier decreased 0.5%.

In this next chart, I’ve visualized the month to month trends of all twenty Case-Shiller-tracked cities. Green and above the horizontal axis if they were increasing in the month charted, red and below the axis if they were decreasing. I’ve excluded 2000 through 2004 since they looked largely the same as 2005 (mostly green).

Just three months ago, all twenty cities saw month to month gains. Now only three have avoided falling into the red.

Read the rest of this entry »

Redfin Chicago Gets Personal

Big news, Chicago! We’re upgrading our service in the Windy City. Now, whenever you sign up to tour a home or meet an agent, the agent who negotiates your deal will also be the one who sees you through the whole process: They’ll meet you on the first tour, see the home and come to the closing table. The commission refund we offer buyers will, as a result, change from a flat 50% of our commission (with Redfin’s minimum $6,000 fee) to a range between 15% and 50%, depending on the price of the home, with no minimum fee.

Customers Love the Personal Service

We keep hearing how important it is to have an agent that’s 100% on your side, working for your best interest and not for a commission. With our new service in Chicago, you get that same level of service, using tools that keep you in the loop at every step. But now that agent can really get to know you and your needs along the way.

A 15-50% Refund

Our fee for selling a home is still 1.5% of the home price. But our refund for home-buyers will now depend on the list price of the home, so you’ll know up front exactly how much you’ll get back. For a $500,000 home in Chicago, the typical refund would be $3,188. Our website has all the details on the new commission refund. The estimated refund, based on the list price, will always be displayed on the listing page in the upper-right corner.

Since there is no longer a minimum with our new pricing plan in Chicago, your refund will actually be bigger on homes with list prices $287,000 and under, and more people will get a refund.

Existing Customers Are Eligible for Whichever Refund is More

If you’ve already contacted us to tour a home, talk to an agent or write an offer, you’re in luck! When you submit an offer by Feb. 1, 2012, we’ll either honor the old refund pricing, or give you the new pricing, depending on which gives you more money back.

This new level of service is limited to a few cities now, but it looks like it’s catching on. Turns out people love it when you combine full-service agents who aren’t paid on commission with transparency and access to the best information available about the homes and the agents.

A Redfin agent can show you how the whole process works, and give you insight on how the double dip is hitting your neighborhood. Check out the reviews of our Chicago-area agents and find the right agent for you.

Case-Shiller: Summer Softens for Chicago Home Prices

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. – August data is released in October).

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

Ten of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between July and August (vs. two from June to July): Phoenix and Las Vegas. Washington DC. saw the biggest increase this month, followed closely behind by Detroit and Chicago.

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 tiers rose again in August, with the low tier grabbing the biggest gain. Month to month, the low tier was up 2.7%, the middle tier rose 1.5%, and the high tier increased 1.0%.

Here’s a new chart for you. In this one, I’ve visualized the month to month trends of all twenty Case-Shiller-tracked cities. Green and above the horizontal axis if they were increasing in the month charted, red and below the axis if they were decreasing. I’ve excluded 2000 through 2004 since they looked largely the same as 2005 (mostly green).

The effects of 2009′s homebuyer tax credit are dramatically visible in this chart, as is the fairly strong spring we had this year, hitting 20 cities increasing for the first time since July 2005. However, the sudden drop-off of month-over-month gains in August’s data is interesting, since during a “normal” year we wouldn’t expect to see this many cities in the red until December or January. I think this indicates that there is still quite a bit of weakness in home prices.

Read the rest of this entry »

September Insider Report: Brr! It’s Still a Cold Market around Chicago

Greetings, Redfinnians!

This month we rolled out a new and improved version of our monthly insider report. “But where is it,” you ask. Ahh, well this new report is available via email-only, and was sent out to a group of registered users who have saved searches or favorites in select neighborhoods.

We’ll be expanding the report to include more neighborhoods every month, so if you want to make sure you get it when it comes to your ‘hood, just make sure you’re signed up for our newsletters (check the “Redfin Announcements” box in your Account Settings), and save a favorite home or a search. That’s it, you’re signed up!

Here on the blog we will continue posting the “lite” version of our monthly report, including our Redfin Heat Index, the heat map, and the hottest / coldest neighborhoods for the foreseeable future. So, let’s get into it.

First up is our national Redfin Heat Index* ranking table at right. Although Chicago’s Heat Index fell a couple points from last month, the city actually moved up the list just a tad. As home price losses taper off, Chicago’s moved from #15 in August to #14 in September, trading places with Las Vegas.

Washington DC continues to be the hottest market in the nation, while Long Island is still pulling up the rear with falling prices and a dramatic 11.1 months of supply. Yikes!

Next up, let’s have a look at an update to our interactive Redfin Heat Index map broken down by zip code, based on September data. Note that we only calculate the Redfin Heat Index for zip codes with at least 20 sales in September 2011 and September 2010, and as we head into the winter that means more and more zip codes will be grey with “not enough data.”

All righty, that’s it for this month. Stay tuned as our new and improved local Insider Report makes its way to your neighborhood.

As usual, you can download our comprehensive spreadsheet and dig into the data for yourself. Inside you’ll find county, city, and neighborhood information galore. You can also liven up the place by posting a comment below.

• MOS = Months of Supply: End of Month Inventory / Closed Sales in the Month
• $YOY = Year-over-year change in the median price per square foot.
• Heat Index = ((MOS – 6.0) * 7) + (($YOY – 5%) * 2) + 75

Wrapping Up a So-So Summer

Greetings Redfinnians,

The end of the summer in Chicago has been a mixed bag. While many would-be purchasers are sitting on the sidelines, waiting to see a bottom, others see opportunity. As Chicago agent Greg Whelan notes: “Investors are purchasing one property after another.”

Inventory Languishing Through Summer

Regardless of motive, most buyers have the same desires; good homes, in good locations, at great prices. Since few homes fit all three criteria, when one of these rarities comes on the market, it normally garners multiple offers. Meanwhile, most inventory languishes.

Low Appraisals Hamper Sales

In recent months, Chicago Redfin agents have noticed a trend regarding low appraisals. More and more deals haven’t been “appraising out” and when this occurs, the buyers and sellers are forced into an awkward position.

Appraisals are an important piece of the financing process, as lenders must cap their mortgages based on the value established by the appraiser. Although the buyer is often protected with an appraisal contingency (the appraised value must equal at least the agreed-upon purchase price,) many buyers negotiate with the seller to keep the deal together. This often means a concession by both parties.

Jim Carollo, a northwest suburban Chicago agent, has had two deals fail to appraise out this summer. In one case, the property appraised for $110,000 below the agreed-upon price (or about 10% off.) The seller dropped his price to save the transaction so our buyer came out well in this circumstance.

Several other Redfin agents have similar stories to tell, although in some instances, the outcomes weren’t as positive. At this stage of the transaction, a buyer has normally already paid for an inspection, appraisal, and an attorney so it can be painful to start all over, especially if it’s his or her dream home. Interestingly, some buyers view the appraisal process as a safety net that prevents overpaying for a property.

Why are so many properties not appraising out? Most observers agree that the lending standards pendulum has swung too far in the restrictive direction. Before the real estate crash, many appraisers were considered too soft and could be relied upon to bring in high appraisals, right where the developers, realtors and lenders wanted them. These ambitious appraisals played a big part in helping create the housing bubble.

In 2009, Freddie Mac, Fannie Mae, and FHA banned realtors and lenders from selecting the appraisers on deals, hoping to limit conflicts of interest created through existing relationships. AMCs (Appraisal Management Companies) sprang up to be intermediaries between the appraisers and lenders (the ones who order the appraisals today.) This so called “appraiser independence” has brought many positives, especially increased confidence in the appraisal process. It has also introduced some challenges. Many believe these low appraisals come from inexperienced appraisers working in unfamiliar neighborhoods.

Greg describes some of the inconsistencies he’s seen: “In one deal the appraiser used a sold property in Belmont Cragin (on Central) for a home in Logan Square (east of Kedzie). In another Lincoln Park deal, the appraiser compared our extra wide small lot home (36’ X 68’) in Racine to a narrow (19’ wide) attached rowhome located one block west of Ashland.”

In both cases, the parties in the deal agreed that the appraiser was off base and they were able to challenge the appraisal. This seems to happen less frequently lately, but it still happens.

Pricing For Today’s Market

Patrick Lusk, a Western Suburban Redfin agent, observes that: “Many potential buyers are looking at the last sale price as a main pricing evaluation tool, regardless of the situation surrounding the previous transaction, or the history of upgrades since. As a result, many sellers (and buyers) are missing out on quality opportunities.”

The takeaway? Base your offer strategy on the home’s condition and value in today’s market.

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.

Case-Shiller: Summer is Kind to Chicago Home Prices

Before we get going with this month’s Case-Shiller post, I’d like to apologize for the lack of an update last month. Long story short, this particular duty slipped through the cracks while I was out on leave. We heard from a number of readers who were lamenting the missing post. Rest assured, we have heard you and it will not happen again!

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. – July data is released in September).

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

Only two of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between June and July (vs. none from May to June): Phoenix and Las Vegas. Weirdly, Detroit saw the biggest increase, followed by Minneapolis.

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 tiers saw a sizeable boost in July, with the middle tier leading the pack. Month to month, the low tier was up 1.7%, the middle tier rose 2.2%, and the high tier increased 1.3%.

Read the rest of this entry »

Three Redfin Agents Rank in the Top 20 Chicago Buyers Agents

Case-Shiller: Spring Continues for Chicago Home Prices

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. – May data is released in July).

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

Only three of the twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between April and May (down from 7 in April and 18 in March). Boston ousted DC for the biggest increase, gaining 2.7% on the month. Only Tampa, Las Vegas, and Detroit continued to fall.

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:

Chicago’s high tier appears to be benefiting the most from this spring’s bounce, while the low tier barely inched up. Month to month, the low tier was up 0.4%, the middle tier rose 1.1%, and the high tier increased 1.7%.

Read the rest of this entry »

Android!!!!

In case you missed it over on the corporate blog, Redfin has just launched our Android app!

(And there was much rejoicing.)

Android fans have been very, very vocal about wanting their own Redfin app, and thanks to the hard work of a crack team of engineers, the day has arrived.

Go find out more! Go! Go you crazy kids! Be free!

Photo courtesy Stéfan via Flickr.

Sweetly Dig Into Redfin’s Local Stats

I hope everyone had a great holiday weekend. I spent mine lying on the couch, mewling like a sick kitten, but that’s neither here nor there.

I was a Redfin addict before I was an employee, and sometimes I forget that there’s a lot of stuff on our site that not everybody knows about. Some of these are big things, like the fact that we’re a real live brokerage with real live agents. Others are a bit nittier and grittier, like the sheer number of different ways we try to slice and dice data to share with anyone who wants it.

Example: Our Chicago neighborhoods and zip codes page (or see other nearby cities). This page doesn’t get an awful lot of traffic, but it should, because it’s just obscenely useful. It basically shows you the median list price, median price per square foot, sale-to-list percentage, and number of homes for sale in the entire local area, broken down both by neighborhood name and by zip code.

You can also sort this information by any of the above columns; if you want to see every neighborhood sorted by sale-to-list percentage, just click on that column header and the data will re-sort.

And if you click on any of the neighborhood names or zip codes, we’ll show you another page with information specific to that area, including:

• New homes for sale
• Upcoming open houses
• Price-reduced homes
• Recently-sold homes
• Most expensive homes
• Least expensive homes
• And most popular (on Redfin) homes

This neighborhood/zip code profile page also gives you trend charts and graphs that you can customize and even import to your own website or blog,  links to related forums posts, comparisons with other nearby areas, and profiles of area schools.

If you haven’t seen these pages, you should check them out. And if you’re already using them, you should drop us a line below to let us know what you think of them. Ideas and suggestions are always welcome! (Cruel, cutting remarks are not particularly welcome, but are taken with a stiff upper lip.)