Flashback: How Far Will Housing Prices Fall?

Do you remember this entry from 7 weeks ago? I said that housing prices had 27% more to fall. Last month, Luke and I wrote "...as of July 2008 housing prices more to fall in order to reach the real value they had for several years prior to the boom" and that the fall would be about 30% relative to the PPI.

Today the Case-Shiller index for September 2008 was released, and its value fell 3% from the previous month and 25% from the prior year.

Chicago housing prices have fallen much less over the past couple of months: the Case-Shiller Chicago index has fallen only 2.7% over the last 6 months. Slow rates of Chicago decline are expected because Chicago prices were closer to construction costs, although the rates are so slow that it makes me wonder whether Chicago will ever get back to 1999 levels of (housing price)/(construction cost).