Chicago-area home prices end 2011 down 6.5 percent

(Crain's) — A closely watched index of local home prices fell in December for the fourth straight month, with Chicago-area prices ending a seesaw year 6.5 percent lower than they were at the end of the 2010.

The Standard & Poor's Case-Shiller index of Chicago-area single-family home prices fell 2.0 percent from November to December and was down 6.5 percent from the year-earlier level, according to a report released Tuesday.

The index fell 3.4 percent in November from October. Before the recent decreases, local prices rose for four consecutive months compared with the previous month.

Chicago posted the second-largest November-to-December drop in the 20 metro areas in the report. The December price level was close to the Chicago area's lowest since the housing downturn began; the lowest was in April 2011.

And local real estate experts don't expect prices to come back until next year, in part because a surge of foreclosures is expected to push down prices.

Premium content: No revival on home front

The Chicago area was one of 19 of 20 cities tracked by Standard & Poor's where prices fell in December; a 20-city composite price index was down 1.1 percent from October and 4.0 percent from the year-earlier level, according to the report. The 20- and 10-city indexes and the U.S. national index hit new lows, Standard & Poor's said.

“In terms of prices, the housing market ended 2011 on a very disappointing note,” David M. Blitzer, chairman of the index committee at S&P Indices, said in a statement.

“While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended,” he said in the statement.

The Chicago-area price index ended 2011 is down about 35% from its peak in September 2006.