The August Case Shiller home price index must have been hotly anticipated because their Web site was unresponsive until about 8:20 this morning. When I finally got the data it showed a continuing rise in Chicago home prices but at a slower rate than recent months. Single family home prices rose 0.6% from July while condo prices rose 1.6%. An increase in August is fairly typical but even after adjusting for seasonality these are still increases. As you can see in the graph below prices have recovered quite a bit from the record low in March, with both single family home prices and condo prices up 14.28%. Yeah, they were that close.
But then prices always start to fall again around September/ October as we move into the slower season.
Single family home prices are back to the levels of February/ March 2002, while condo prices are at the levels of January 2001. In total, since the housing bubble burst, single family home prices have fallen a total of 30.3% and condo prices have fallen a total of 30.9%. But that leaves single family home prices well below their long term trend line by almost 24%.
As the graph below shows, on a year over year basis single family home prices continue to flirt with actually turning higher for the first time in more than 5 years. I had actually hoped it would happen this month but it looks like we will have to wait a bit longer. For August single family home prices were down by 1.6% compared to last year, a bit more of a year over year drop than July. And, while condo prices continue to experience larger year over year price decreases than single family homes at least the magnitude of the price drops are diminishing, with August also down 1.6% from last year.
Chicago was one of only 3 cities out of the 20 tracked by Case Shiller that continued to show year over year price drops.
Commenting on the national home price picture David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said:
The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market. News on home prices confirms other good news about housing. Single family housing starts are 43% ahead of last year’s pace, existing and new home sales are also up, the inventory of homes for sale continues to drop and consumer mortgage default rates are reaching new lows. Further consumer confidence continues to rise. Even as we end the seasonally strong home buying period, the statistics are positive. For the fifth time in a row, both Composites had monthly gains. Home prices in Seattle fell modestly in August, but other than that the 20 cities have also seen home prices generally improve since April.”