The Case Shiller Chicago home price index is sure starting to look pretty tired these days, despite the fact that Chicago home prices are still advancing. Well home prices always advance at this time of the year. It's just a question of how fast they advance relative to previous years.
S&P Dow Jones Indices just released their May Case Shiller indices for 20 metro areas that include Chicago and on a year over year basis Chicago still pretty much remains in the middle of the pack with an 8.5% increase in single family home prices over last year and a 12.2% increase in condominium prices over last year. The graph below puts these numbers in a historical context for Chicago that shows they are still very high when compared to the long term history but they have fallen off quite a bit in the last few months and appear to be dropping rapidly. The graph peaked 2 months ago with the March data - 11.5% for single family homes and 18.5% for condos/ townhomes.
Chicago home inventory remains very tight and market times low so you would expect continued upward pressure on prices.
The absolute levels of the Case Shiller Chicago home price index are graphed below along with the long term red trend line and you can see the clear seasonal pattern along with the recent upward drift. As the summer numbers come in we should see a new high for recent years.
From April single family home prices rose by 1.6% and condo prices rose by 2.0%. Those numbers correspond to the index values back in February 2003 and then again in February 2009 for single family homes and January 2003 and January 2010 for condominiums. Those are the cohorts that just now, on average, are back to where they bought into the housing market.
Relative to the bottom of the market single family home prices are up 24.5% but they have still lost 24.1% of their value from the bubble peak. Condos and townhomes are up 32.5% but are down 19.9% from the peak. And then I like to compare home prices to the long term trend line against which we are trailing by a lot - 22%.
David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, commented on the slowdown in home price gains at the national level and the housing market in general:
Home prices rose at their slowest pace since February of last year...Housing has been turning in mixed economic numbers in the last few months. Prices and sales of existing homes have shown improvement while construction and sales of new homes continue to lag. At the same time, the broader economy and especially employment are showing larger improvements and substantial gains.
Of course, as I have been noting here, sales of existing homes in Chicago have also been losing steam recently - I believe because of a lack of good inventory.
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