Chicago area home sale prices are down close to 11 percent over a year ago, according to statistics released last week by Standard & Poor's Case Shiller index.

That number is far less painful than in many other metropolitan areas, and if you factored out short sales and foreclosures, the decline would be less.

"There are still two processes going on here," Karl Case noted at a recent seminar. "The auction market -- foreclosures -- and the traditional seller putting house on the market."

The research team thought about removing foreclosing properties from their data, because they are skewing the traditional sales numbers, he said. They decided not to do that because the data tracks specific homes over long periods of time, and to take them out of one point in time would also skew the data. If they were used in the compilations when prices were on the way up, they should still be there on the way down.

Many of those foreclosing homes have been coming from the bottom third of home prices, where there were some large price gains in some markets.

At any rate, it's complicated, and the point to take away from this is that if you are putting your house on the market in a traditional way -- that is, you are not getting foreclosed upon -- then that 11 percent drop only sort-of pertains to you. And if you are a buyer, you may not be able to expect 11 percent price drops across the board. Many foreclosed properties are in a different (read: worse) condition than homes put on the market voluntarily, so if the home you like is in pristine condition, don't expect huge concessions from the sellers. If they are working with a good agent, they probably already have come down.

How much devaluation can you expect? While most of our metropolitan area is declining in value, there are a few areas where prices are inching upward. If you are entering the market as a buyer or a seller, you need to do real research and not base your price expectations on what a friend of a friend told a guy at work. Examine sub-regional market data, talk to the professionals, look very carefully at comps (comparable properties) and be prepared for disagreement and rejection.

"Do not automatically view a community and its 10 percent or 20 percent decline in mean sales price and assume that that rate of decline is what is taking place throughout the town," says appraising consultant Chip Wagner of Headrick-Wagner Consulting. "There are sub-markets within the broad marketplace that are doing better, and others that are doing worse."

At this point in time, for sellers my sense is it is a good year to work with a Realtor, and not try to sell by owner. Buyers are extraordinarily cautious -- as they should be -- and the extra professionalism of using a Realtor-developed price point may help.

However, be sure to choose your agent with extreme care. Even if you start with personal referrals, ask about how many actual closings they have had in the last six months. That may indicate that they are realistic about pricing.

Increasingly I am hearing about Realtors who will actually reject sellers if they don't seem willing to move their price expectations into 2009. If you are still thinking pie in the sky, either wipe that whipped cream off your face or don't waste everyone's time.