Chicago sets record for home price plunge

Home prices in the Chicago-to-Joliet region plunged about 10 percent, the most ever calculated by the Standard & Poor's Case-Shiller Home Price Indices and released Tuesday.

Nationwide, home prices spiraled down about 14 percent, another record. Data was from March, compared to March 2007, the S&P report said.

But the Illinois Association of Realtors disputed the S&P numbers and said its own report shows home prices in the Chicago area actually rose 1.2 percent during the same period.

"Some economists have called the Case-Shiller Price Indices the Rich Man's Home Indices," said Realtor's spokeswoman Mary Schaefer. "They just focus on the high-end homes and not the median-priced homes."

S&P's index showed Tuesday that both Chicago and nationwide figures were the worst since the inception of its indices in 1988.

Each group defines the Chicago market slightly differently. The Realtors look at the city of Chicago with the surrounding counties, while S&P targets that region and also includes the Joliet area.

In addition, the Realtors study nationwide focuses on 150 cities, while S&P's study targets 10 to 20 cities for the indices.

"The market, in Chicago as well as nationwide, is coming to grips with the fact that prices can't go up forever," said S&P spokeswoman Maureen Maitland.

The S&P report said the numbers for many cities were grim. Nineteen of the top 20 metro areas reported annual declines. Six of them are at rates that exceed -20 percent.

Las Vegas was the weakest market with an annual decline of 25 percent. Others were Miami at -24.6 percent and Phoenix at -23 percent.

Charlotte, N.C. was the only market that showed 0.8 percent appreciation, S&P said.

The S&P report is a good indicator, but it doesn't take into consideration that some areas are stable or appreciating, said Marve Stockert, executive director of Lombard-based Illinois Association of Mortgage Professionals.

"Elmhurst and Lombard, I believe, are still holding their own," said Stockert. "But the South Side of Chicago or the Lake Shore area and new projects in the extreme western suburbs are having a tough time."

Stockert said a major factor involves the changes in underwriting loans. Income and appraisals are more closely watched by lenders.

"Appraisals, especially, are being scrutinized more so than I've ever seen in 30 years," Stockert said. "After all, the lenders are trying to protect themselves."

Stockert also said the Chicago area has up to 18 months of inventory of homes backlogged.

"If you're a buyer, you could just about name your price," Stockert said. "But if you're the seller, you'll have to decide just how badly you want to sell that house."