Prices of single-family homes declined in 20 metropolitan areas by 0.2 percent from January to February, according to the S&P/Case Shiller composite index released today. This decrease places the current composite index of 139.7 just slightly above the 2009 year low of 139.26. The current average home price is in line with the cost of homes in summer 2003.

The index also notes that, compared to last year, the cost of homes across the country has fallen an average of 3.3 percent.

In Chicago, the decrease in home prices year over year is even greater, and this is the third consecutive month that home prices have fallen in Chicago. Case-Shiller reports a 2.2 percent decline from January to February 2011 and a 7.6 percent decline from February 2010 to February 2011, making Chicago one of the hardest hit metropolitan areas in the country. The only cities that experienced an even worse drop in home prices since February 2010 are Minneapolis with a 8.3 percent decline, and Phoenix with a 8.4 percent drop.

The chairman of the Index Committee at S&P Indices, David Blitzer, attributes the continuing decrease in home sales to weakening prices, and disappointing trends in sales and construction.

The S&P/Case-Shiller index is based on a three-month average.

“Illinois home sales were up 40 percent in March 2011 from February 2011, and were up 9.7 percent over March 2009. It is important to compare the first half of 2011 against the first half of 2009 when there was not a accelerated sales rush to beat the tax credit deadline of April 30, 2010,” says Sheryl Grider Whitehurst, president of the Illinois Association of Realtors. “As predicted, the median home price index has declined. This is attributed to the continued impact from distressed property sales and the fact that more than one-third of homes sold in March closed under $100,000 and 69 percent under $200,000.”

Now, Whitehurst stresses, it is important to move inventory. “It is important that sellers price their property competitively and have it in great condition for showings,” she says. “Market conditions are optimal for buyers. It is rare that they have the opportunity to purchase at low interest rates and lowered home prices. This combination makes affordability at an all-time high.”