Home prices in Chicago dropped to their lowest level since 2001. That's according to the latest Standard and Poor's Case-Shiller Index of home prices.
Values in the Chicago metro area fell almost 8 percent compared with one year earlier.
Economist Diane Swonk with Mesirow Financial says last year's homebuyer tax credit may have done more harm than good.
"It also pulled a lot of that demand to first-time buyers ahead and unfortunately the idea was that it would bridge a period until the market firmed. Instead, it seemed to exacerbate the second downturn in housing because it didn't allow the market to fully clear," Swonk said.
In Case-Shiller's composite of 20 major metro areas, Chicago tied for third in the steepest drop in home prices over the last year. Swonk says foreclosures will continue to weigh on Chicago home prices as banks unload their inventories. She says it will likely take years before the housing market returns to normal.
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