The latest Case-Shiller is full with yet more signs of price declines, but how accurate of a measure is it?

Home values in Chicago declined again in Standard & Poor’s latest Case-Shiller report, falling 1.9 percent from December to January and 6.6 percent from January 2011, reaching new post-bubble lows.

The index on a whole, which measures the 10 and 20 largest metropolitan areas via composites, did not fair much better. The 10-city composite showed an annual decline of 3.9 percent, and the 20-city composite, the more widely cited of the two, showed a 3.8 percent decline. Of the 20 cities measured, only Miami, Phoenix and Washington DC experienced monthly gains, and only Denver, Detroit and Phoenix were positive from last year.

David M. Blitzer, the chairman of the Index Committee at S&P Indices, said the home values defied recent economic news, which had been positive.

“Despite some positive economic signs, home prices continued to drop,” Blitzer said. “The 10- and 20- City Composites and eight cities – Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa – made new lows.”

“Seven of the cities were down by 1.0 percent or more over the month,” Blitzer continued.  “With the new lows, both Composites are now 34.4 percent off their relative 2006 peaks.”

As dire as the Case-Shiller’s data seems, though, Bill McBride at Calculated Risk does make an important distinction – the data is for January, not March, and as such should not be compared with economic developments of the last two or three weeks.

“[T]he January Case-Shiller house price index … is actually a three month average for house sales recorded in November, December and January,” he wrote. “But remember that the purchase agreement for a house that closed in November was probably signed in September or early October. So some portion of the Case-Shiller index will be for contract prices six or even seven months ago!”

Because of that delay, the Case-Shiller is often a dated projection for the current economic climate, and that realization will be particularly important for the next couple months, when the next Case-Shiller indices, which will measure home values for February and March, will likely show declines as other positive economic data is released.