Case Shiller: Chicago Area Home Price Gains Still Anemic

Case Shiller: Chicago Area Home Price Gains Still Anemic

Well, at least the Chicago area is not in last place this month. However, S&P Dow Jones released their Case-Shiller Home Price Index for June today and it still shows the Chicago area lagging most of the rest of the country in terms of year over year home price gains. The Case Shiller Chicago index was up an anemic 3.2% over last year, which is the smallest year over year gain in 8 months. It also places us 3rd from the bottom relative to 19 other metro areas tracked by Case Shiller as shown in their graph below. And, just for perspective, the national average was 5.8%.

Condo prices were up 3.7% over last year - also an 8 month low. It's a great time to be raising property taxes.

One more thing...if you adjust for seasonal factors Chicago area home prices actually declined in June.

Meanwhile, check out Seattle which saw a 13.4% gain. I guess it helps to be the headquarter city of some of the country's most successful tech companies.

Case Shiller Year Over Year By Metro

Our graph below shows the history of the Chicago area's year over year home price gains and you can see that at least we've been in positive territory for quite a while now - 56 months to be exact.

Case Shiller Chicago Year Over YearDavid M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, provided a positive outlook for the housing market:

The trend of increasing home prices is continuing. Price increases are supported by a tight housing market. Both the number of homes for sale and the number of days a house is on the market have declined for four to five years. Currently the months-supply of existing homes for sale is low, at 4.2 months. In addition, housing starts remain below their pre-financial crisis peak as new home sales have not recovered as fast as existing home sales.

...the national unemployment rate is down, and the number of jobs created continues to grow at a robust pace, rising to close to 200,000 per month. Wages and salaries are increasing, maintaining a growth rate a bit ahead of inflation. Mortgage rates, up slightly since the end of 2016, are under 4%. Given current economic conditions and the tight housing market, an immediate reversal in home price trends appears unlikely.

Case Shiller Chicago Home Price Index By Month

We track the monthly Case Shiller Chicago home price indices in the graph below and you can see a clear seasonal pattern. June is still a month where prices generally rise and this year is no exception. Both single family home and condo prices rose by 0.9% from May.

While much of the rest of the country is surpassing their housing bubble peak - on average the nation is now 4.3% above it - Chicago area single family home prices are still 16.8% below it and condo prices are 9.5% below it. But we have made a dramatic recovery from the bottom with single family home prices up 36.5% and condo prices up 49.8%. Just to put those numbers in perspective though, the nation's single family home prices are up 43.7% on average from the bottom. So we're lagging by that metric also.

For a bit more historic perspective consider that single family home prices are still below where they were during the entire period from April 2004 - November 2008. Condo prices are still below their level from January 2005 - December 2008. In all fairness I could have just as easily written a headline that said "Highest home prices in almost 9 years".

If you look at the red trend line, that I developed from pre-bubble data, in the graph below you will see that we are still seriously lagging it and not really making up any lost ground. We are now 23.6% below where it suggests we might have been had the bubble not occurred.

Chicago Case Shiller Home Price Index Trend

#ChicagoHomePrices #CaseShiller

Gary Lucido is the President of Lucid Realty, the Chicago area's full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think he's the next Kurt Vonnegut you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.

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