Chicago-area home prices hit 11-year low

(Crain's) — A closely watched index of local home prices fell in January for the fifth straight month, hitting its lowest level in 11 years, a sign that the Chicago-area residential market has yet to hit bottom.

The Standard & Poor's Case-Shiller index of Chicago-area single-family home prices fell 1.9 percent from December to January and was down 6.6 percent from the year-earlier level, according to a report released Tuesday.

The local price level fell in January below the previous low of the current downturn in April 2011. The index is down 36 percent from its peak in September 2006 and is at the same level as in January 2001.

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The Chicago area was among the 16 of 19 cities tracked by Standard & Poor's where prices fell in January. A 20-city composite price index was down 0.8 percent from December and 3.8 percent from the year-earlier level, according to the report.

“Falling prices are not so much a reflection of market health, but rather the result of banks disposing of distressed assets by offering low prices to cash buyers,” Gary Painter, an economist at the University of Southern California's Lusk Center for Real Estate, said in a statement. “As these distressed properties are taken off the market, that trend will end. When employment and rents increase at the local level, more buyers will see the value of entering the single-family market. If the economy continues moving in this direction, it is likely we have seen the bottom and are moving toward recovery.”