I quit practicing law in June of 1979 to go full-time into the business of rehabbing and converting rentals to condos in Chicago and Albuquerque.
Having worked my way through the crash that quickly ensued, and having watched the current crash in some detail, I’ve consistently thought that the early 80s downturn was worse than this one in Chicago.
The Research Institute for Housing America just issued a report (pdf) that appears to confirm my impressions.
From 1980 to 2006, according to the report, the year of Chicago’s worst 3-year decline in real housing prices was 1982, at which point prices had declined by 27% in the metro area.
Since 2006 the list of cities with the largest 3-year real price declines is headed by Stockton, CA, where prices declined by a stunning 75%. At the bottom of the list, with a 3-year price decline of 27%, is Tampa – St Petersburg – Clearwater. Chicago didn’t make this latter list, indicating a decline of less than 27%.
I suspect, but don’t have the numbers to back it up (to my knowledge they don’t exist), that the current decline isn’t as severe as the previous one, in part because the most recent Chicago bubble wasn’t as explosive as the one in the late 70s, in part because mortgage rates today are radically lower than they were in the early 80s, and the government has recently intervened far more extensively in housing markets.