Case Shiller: Chicago Area Home Prices Left In Dust Of Other Cities

Case Shiller: Chicago Area Home Prices Left In Dust Of Other Cities

Yeah, the Case Shiller Chicago area home price index for single family homes continues to show advancement from the previous year and this has been the routine now for 57 straight months. So that’s the good news. However, compared to other cities, we are not doing so well – still – as evidenced by this morning’s release of the Case Shiller Home Price Index for July.

You see…the reason I’m whining about this is that, although Chicago area home prices were up 3.3% in July from last year, 18 out of 20 metro areas showed stronger home price growth. We dropped to last place in a tie with Washington DC. And at the national level home prices were up 5.9%.

The highest ranking city on the list is still Seattle, which realized 13.5% home price appreciation in the last year. I’m sure that Amazon is no small part of the impetus behind that locomotive. I just hope the folks there are paying close attention to home prices across the nation as they consider locations for their second headquarters. The fact that Chicago area home prices have lagged the increases across the nation makes our housing a better bargain. Of course, wherever they go they are likely to goose home prices and wouldn’t that be nice here?

Meanwhile, condo prices in the Chicago area showed slightly stronger year over year growth at 3.9%.

Case Shiller Chicago Year Over YearHowever, David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices did sound a cautionary note on the national picture for home prices:

While home prices continue to rise, other housing indicators may be leveling off. Sales of both new and existing homes have slipped since last March. The Builders Sentiment Index published by the National Association of Home Builders also leveled off after March. Automobiles are the second largest consumer purchase most people make after houses. Auto sales peaked last November and have been flat to slightly lower since. The housing market will face two contradicting challenges during the rest of 2017 and into 2018. First, rebuilding following hurricanes across Texas, Florida and other parts of the south will lead to further supply pressures. Second, the Fed’s recent move to shrink its balance sheet could push mortgage rates upward.

Case Shiller Chicago Home Price Index By Month

Chicago area single family home prices were up 0.7% in July from June while condo prices were up 0.4%. This is all captured in the graph below where I track the Case Shiller Chicago home price indices for single family homes and condos by month along with a trend line that I established based upon the pre-bubble years.

As you can see in the graph, unlike much of the country, we still have not fully recovered to the peak bubble level of 11 years ago. Single family home prices are still 16.2% below that level and condo prices are 9.1% below that level. Unfortunately, at the rate we’re going it could still be several more years before we catch up. And to further put this in historic perspective, single family home prices are still below the entire period from May 2004 – November 2008 and condo prices are still below the entire period from March 2005 – December 2008.

And there is one other fly in the ointment. If you extend my trendline it would put us well past the bubble peak by now. Some would question the validity of doing that in our current low inflation environment but the rest of the country seems to be on a trajectory like that. Anyway, we are now 23.2% below that trendline with little sign of closing the gap any time soon.

But at least we’ve recovered substantially from the bottom. Single family home prices are up by 37.5% and condo prices are up by 50.5%. So if you bought at the bottom you’re sitting pretty right now.

Case Shiller Chicago

#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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