Case-Shiller: Home Prices Dipped Across the Board in October

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. – October data is released in December).

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

October 2010
Month to Month: Down 2.0%
Year to Year: Down 6.5%
Prices at this level in: June 2002
Peak month: September 2006
Change from Peak: Down 27.5% in 49 months
Low Tier: Under $172,202
Mid Tier: $172,202 to $291,424
Hi Tier: Over $291,424

All twenty metro areas tracked by Case-Shiller saw a decrease in their HPI between September and October (vs. 18 August to September). Only four markets posted year-over-year gains: San Francisco, San Diego, Los Angeles, and Washington DC.

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

Chi-Case-Shiller-Tiers_2010-10

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

Chi-Case-Shiller-Tiers_2010-10

The low tier in Chicago continues to lose ground faster than the other two tiers. Month to month, the low tier was down 3.0%, the middle tier fell 1.4%, and the high tier decreased 1.8%.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:

Case-Shiller-Redfin-Markets_2010-10

Here’s our peak decline 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_2010-10

Here’s the flip side of the peak decline chart—a graph since January 2009, indexed to January 2009 = 100%:

Case-Shiller-2009-Bounce_2010-10

With the post tax credit home price double dip now in full effect across the board, I think it’s about time to retire this last chart.

Methodology: The Case-Shiller index tracks price changes in sets of homes of similar size and style to better determine changes in what people are willing to pay for the same home over time. If data is available from an earlier transaction for the same home, the two sales are paired and treated as a “repeat sale.” Repeat sales that are too far apart, sales between family members, lot splits, remodels, and property type changes (e.g. from single-family to condos) are excluded from the calculations. All remaining repeat sales are totaled together and weighted based on the time between each sale, then the data for the most recent three months is averaged together to create a given month’s index value (i.e. – September’s index represents the average of the data from July through September).

The three price tiers plotted in the charts below simply represent the top, middle, and bottom third of all sales, based on the initial sale price. In other words, if there were 3,000 sales in the three-month period, 1,000 of them would be in the low tier, 1,000 in the middle tier, and 1,000 in the high tier, by definition.

*[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.]

  • http://sheynkman.tumblr.com Kirill Sheynkman

    It’s never about how much time you spend working or how hard… it’s about how much you get done and what you accomplish. And though the two are often thought to be closely correlated, I really don’t think the correlation is that strong. Working 14 hours and getting tons done is not nearly as impressive as working 4 hours, getting tons done, and heading home. The latter is impressive. The former is just a “Potemkin Village” set up to impress, not unlike the sleeping bag in the office.

    • http://blog.redfin.com/ GlennKelman

      Love the Soviet-era references Kirill, and agree with you in the main but not everyone can get tons done in four hours…

  • susi

    Indeed. There’s a night and day difference in my little 11 month old pre-nap and post-nap. The adult parallel is watching someone’s energy and productivity unravel as the invisible, yet-to-be-diagnosed cold or stomach bug takes ahold. The creeping crud can turn Benjamin Franklin into the Terminator in a matter of hours. Thank goodness for progress and corporate culture for real people. Now you go home to take a long nap and drink some orange juice. before the darkness spreads. Gone are the days of leaving the lantern on.

  • http://www.HomeSellingStrategist.com Clare Michael

    You could play it like our President does it and keep offices at 62 degrees. Burrrrr. That would keep me awake.

  • http://www.mn-houses.com/shoreview.php Shoreview MN Homes for Sale

    What a great article! I can relate with the working until I can’t stay awake any longer, and then get a few hours of sleep only to regret my late night marathon session the evening before…but the cycle will live on until we all force ourselves to define our limits. Having kids will force us to define these limits quickly!

  • http://morechicagohomes.com Eric M.

    Great analysis! That sure looks like a double-dip to me. I can't imagine Nov and Dec numbers will be any better. Maybe I should hold off investing in more Chicago real estate and check into Las Vegas.