If the pattern of the last 3 years is any indication of the future we may see a new low in Chicago area home prices this spring. Case Shiller just came out with their September home price index for 20 metro areas and it shows single family home prices declining by 0.8% and condo prices declining by 0.3% in the Chicago area from the August numbers. These are the first price declines in 5 and 6 months respectively. The thing is that if you look at the long term trend you will see that in each of the past 3 years home prices in Chicago have started to turn down in September and then hit a new low in the March/ April time frame. If it happens again this spring we will be looking at a quadruple dip.
Just to be clear, this would appear to be a seasonal pattern but when looking at the official seasonally adjusted numbers from Case Shiller you still see a decline in September for single family homes but not really for condominiums.
To provide a bit more perspective, Chicago single family home prices are now at the level last seen in April 2002, having fallen a total of 29.7% from the peak in September 2006. September prices are down 5.0% in the last year. Meanwhile condominium prices are now back to June 2001 levels, having fallen a total of 28.5% from their peak in September 2007, and down 7.7% in the last year.
In commenting on the national picture David M. Blitzer, Chairman of the Index Committee at S&P Indices, sounded a cautionary note:
It is a bit disturbing that we saw three cities post new crisis lows. For the prior three or four months, only Las Vegas was weakening each month. Now Atlanta and Phoenix have fallen to new lows too. On a monthly basis, Atlanta actually posted a record low rate of -5.9% in September over August. The markets are fairly thin, and the relative lack of closed transactions might be exacerbating the downside.