Pain might be ending for Chicago’s lowest Case-Shiller tier

One thing to watch in the Case-Shiller home price index is the tiered breakout. S&P assigns each pair in the paired-sale analysis to the top, middle, or bottom third of pairs, based on each home’s first selling price. A separate index is constructed based on high, middle, or lower-value homes.

The low tier has had a punishing four years. At its lowest point in the index, the overall Chicago region had fallen 37%, from 171.20 in March 2007 to 107.7 in March 2012. The low tier also hit a high in March 2007, of 186.87. It had fallen 55% to 83.44 in January 2011. As the accompanying chart shows, the low tier continued to fall sharply even after the overall region appeared to have settled around something of a bottom.

In the last few months (which are published on a two month lag), the index has turned slightly upward. There have been two-month periods where the index rose slightly, only to resume plummeting for many months afterward. So this is not a guarantee. But it might, might be possible that the pain is over for the lowest tier.

More on city-wide house prices and volume can be found at Lakeshore Analytics.

Jeff Baird is a real estate valuation consultant based in Chicago. He founded Lakeshore Analytics to bring comprehensive, understandable housing data and analysis to Chicago-area readers. The site features a blog with free market news and charts, summary data on 20 top neighborhoods, and quarterly data subscriptions.

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