Home prices drop in Chicago (or plummet, depending where you are)

The latest installment (PDF) of the Case-Shiller Home Price Index was released earlier today, and the data shows the aftermath of the housing crash continues to ripple through communities across the Chicago area in the form of lower housing prices.


Single-family home prices in greater Chicago ticked down just less than half a point in the index's measuring system in April, and homes are down nearly 9 percent since the same time last year.

 

It's the lowest level for home values here, according to the index, in more than a decade, Crain's reports today. The area joins Boston, Charlotte, Detroit, Las Vegas, Miami and Tampa as the seven largest metro regions where home values dropped in April. Thirteen other areas saw at least slight increases this spring, though the annual rates are down in 19 out of the 20 regions tracked by Case-Schiller.

 

The macro view of home prices can obscure, however, the even more precipitous drops in some city neighborhoods.

 

Take Englewood, on Chicago's South Side. Earlier this week Chicago magazine's Whet Moser wrote about researching home prices in Englewood through the real estate Web site Redfin, which provides price histories of properties. The results were "shocking," Moser wrote, with some properties in the neighborhood losing nearly all of their value. There was the home sold for $185,000 in 2005 that went for $14,900 in 2009, a nearly 92 percent decrease in price. A four-bedroom Bishop Street house that cost a buyer $124,000 four years ago is selling for $9,900 today, a drop of 92 percent.

 

I used the Redfin price history to check in on home prices on the West Side of the city, starting from 4924 W. Gladys, a property I wrote about earlier this year. The structure was sold for $200,000 at the end of 2006, and was in foreclosure by the following June, becoming one of several blighted homes on the street, a threat to the security of the block, neighbors said. Earlier this year, the City of Chicago finally demolished it.

 

Redfin now lists homes worth as much as $250,000 near 4924 W. Gladys Street. But there are also nearby properties on the market for as little $27,900.

 

Finding solutions to the foreclosure crisis is a critical part to slowing the drop-off in home prices here, experts say; a home that goes into foreclosures loses 27 percent of its value, a report published last summer found, and properties within 250 feet of the foreclosure lose on average 1 percent of their value. Three foreclosure-related bills -- HB 1108, HB 1108, and HB 1810 -- that came up this past session in Springfield, however, didn't make it through the Illinois General Assembly. We'll follow up on that trifecta of legislation in an upcoming post.

-- Micah Maidenberg

Photo courtesy of Flickr user neur0tica.

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  • For people who don't own homes, the drop-off in values is an opportunity, not a crisis. It doesn't serve anyone for houses to become decrepit enough to require teardowns, obviously.

    But a real adjustment in value could open up the housing market to median-income buyers who were priced out by the bubble and who still may find current "crisis" prices too high.

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