With Tuesday's release of the Case Shiller index showing another drop in Chicago home prices I thought I would take a closer look at what lies in store for 2012. According to the Case Shiller folks there's normally a bit of seasonality in Chicago home prices with the September Case Shiller index about 3% above average and the March index about 3% below average. These peaks and valleys correspond to the summer sizzle and the winter doldrums in the housing market. So between now and March, if all else remains equal, you can expect home prices to fall an additional 5.5% (based upon the Case Shiller seasonal factors), which would put home prices just a tad below the lows reached last April.
However, the March Case Shiller index is really an average of closings in the months of January, February, and March and those probably went under contract in the months of December, January, and February. So we should see a low point in Chicago home prices in the January timeframe - since January is right in the middle of that 3 month average.
Of course, this all depends upon "all else remaining equal" since the die was cast for the October index. Since then home inventories have tightened quite a bit and that could be putting upward pressure on home prices. In addition, the employment picture could be better and spur more buying.
Then again the employment picture could be even worse.
If you are interested we maintain a page of on our Web site that contains this home price data along with numerous other Chicago real estate market data all in one place. Actually, even if you are not interested we still maintain this page.