Not to diminish the tragedy in Memphis but a ton of homes are underwater in Chicago too. Zillow came out with their first quarter report yesterday and they are claiming that almost 46% of area homes are underwater at this point – i.e. the homeowners owe more money than the home is worth. Now don’t go believing this number from Zillow because it’s based on their notoriously inaccurate home valuations. In fact, for the 4th quarter of 2010 they claimed that 39% of area homes were underwater while the more trustworthy (in my opinion) numbers from CoreLogic showed “only” 25.4% of Chicago area homes underwater. CoreLogic’s 1st quarter numbers won’t be available yet for another month, which is why I can’t report them. However, what is significant is that Zillow, using a presumably consistent methodology, is showing a significant increase in this percentage.
This increase in homeowners with negative equity is entirely believable simply because the latest Chicago home price data from CoreLogic is showing continuing declines in home prices during the month of March. Normally I look to the Case Shiller home price index but CoreLogic uses a similar methodology and releases their data 3 weeks earlier. Unfortunately, CoreLogic only reports year over year numbers and most people want to know what the current trend is. So I went back and compared the two data sets and I believe I can use the CoreLogic data in combination with the Case Shiller data to give us an idea of what is going on right now.
And the answer is that it looks to me like single family home prices continued to fall in Chicago by at least 2% while condo prices fell by maybe 3 – 5%. We’ll have a better sense in 3 weeks. But the fact that home prices are still falling this far into the “recovery” is a bit perplexing – to me at least.