Case-Shiller: Chicago Price Drops Set Back-to-Back Records

It’s time once again for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI).

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. – December data is released in February).

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

December 2008
Month to Month: Down 3.0%
Year to Year: Down 14.3%
Change from Peak: Down 18.6% in 27 months

The following chart shows the Chicago 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 HPI was at or lower than it was in the latest data (December 2003).

chicago-case-shiller-peak_2008-12.png

According to the Case-Shiller index, as of December home prices in Chicago have “rewound” a full five years. December set another new record for largest month-to-month drop, erasing five months of previous price gains in a single month.

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:

case-shiller-redfin-markets_2008-12.png

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.

case-shiller-peak-declines_2008-12.png

Home price drops in Chicago continued to accelerate in December, as the pattern here begins to move more in line with the curve of the declines in San Diego and DC. It will be interesting to see if spring and summer 2009 bring a period of flat prices like we saw in 2008. If I were a home seller, I wouldn’t count on it.

*[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.]