Closely check out the graph below of year over year home price changes according to the Case Shiller Chicago area index and you'll see how scary it's getting here. This morning's release from S&P Dow Jones CoreLogic of the September data painted a pretty bleak picture for the area with single family home prices rising by only 0.6% from last year and condo prices rising by only 0.3%. Last month the rise in condo prices hit an 82 month low but this month single family home prices hit an 83 month low - that's pretty close to 7 years. Given the trend how long will it be before prices actually start falling here?
To give you a bit more perspective consider that the Chicago metro area fell in the rankings of the top 20 metro area. We are now second from the bottom of the list, ahead of only San Francisco. Single family home prices for the nation as a whole rose 3.2% from last year and for the top 20 metro areas it was 2.1%. So the Chicago area is clearly lagging the rest of the nation.
Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices, commented on the relative strength of the rest of the nation.
After a long period of decelerating price increases, it’s notable that in September both the national and 20-city composite indices rose at a higher rate than in August, while the 10-city index’s September rise matched its August performance. It is, of course, too soon to say whether this month marks an end to the deceleration or is merely a pause in the longer-term trend.
At a regional level, Phoenix retains the top spot for the fourth consecutive month with September’s 6.0% year-over-year gain. The Southeast region was also strong, as Charlotte, Tampa, and Atlanta all rose at greater than a 4.0% clip.
Case Shiller Chicago Area Home Price Index By Month
As September marks the beginning of the seasonal downturn in home prices, single family home prices in the Chicago area fell by 0.7% from August while condo prices fell by 0.2%. The monthly values of the area index are plotted below and you can clearly see the seasonal pattern.
That graph also contains a red trendline that I created based upon the pre-bubble trend in single family home prices. As you can clearly see once area home prices started crashing the trendline left us in its dust. We now fall short of that line by 26.8%.
We also fall short of the bubble peak in home prices with single family home prices shy by 13.5% and condo prices shy by 6.6%. In fact, single family home prices are still lower than they were during the entire period from September 2004 - October 2008 and condo prices are still lower than they were from July 2005 - October 2008.
But at least we can pat ourselves on the back for having recovered from the bottom with single family home prices having risen 41.9% and condo prices having risen 54.6%.
#CaseShiller #ChicagoHomePrices #HomePrices
Gary Lucido is the President of Lucid Realty, the Chicago area's full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider's view of the seamy underbelly of the real estate industry 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.