Case Shiller: Chicago Area 32+ Year Record Home Price Growth Still Lags Nation

Case Shiller: Chicago Area 32+ Year Record Home Price Growth Still Lags Nation
Chicago's 32+ year record home price growth still falls short
of the rest of the nation

It seems that it doesn’t matter how high Chicago area home prices rise it’s never good enough. I used the Case Shiller Chicago area home price index released this morning by S&P Dow Jones CoreLogic to update my home price appreciation graph below. As you can see single family home price appreciation over the last year hit the highest level in more than 32 years – 13.3% to be exact. The only problem is that still sucked relative to the rest of the country.

The June Case Shiller home price indices showed an 18.6% increase in home prices for the nation over the last 12 months with the Chicago area in last place yet again. Even second to last place Minneapolis had a 13.8% gain while home prices in Phoenix rose 29.3%!

You get a similar story by looking at the FHFA data, which was updated recently through the second quarter of 2021 for 100 metro areas. Using a similar methodology to Case Shiller they get a 17.4% rise in the nation’s home prices and a 13.4% rise in home prices for the Chicago area, which places us 91st out of the 100 metros. Very sad.

Meanwhile, Chicago area condo prices are seriously lagging single family home prices with only 3.8% appreciation in the last year. Hell, it was higher than that 7 months ago.

Case Shiller Chicago Year Over Year

Chicago area single family home prices have shown annual gains for 104 consecutive months

Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI, put these extraordinary results in perspective:

In June, all 20 cities rose, and all 20 gained more in the 12 months ended in June than they had gained in the 12 months ended in May. Home prices in 19 of our 20 cities (all but Chicago) now stand at all-time highs, as do the National Composite and both the 10- and 20-City indices.

June’s 18.6% price gain for the National Composite is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data….

We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. June’s data are consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.

Case Shiller Chicago Area Home Price Index By Month

The graph below shows single family home and condo prices for the Chicago area going back to 1987. I also included a red trend line that I constructed from pre-bubble single family data. Single family home prices rose 1.9% in June from May and condo prices rose 1.0%. With single family home prices recently outpacing condo prices, single family prices have once again pulled ahead of condos.

You might not be able to tell from the graph but we are getting damn close to hitting the all time high in home prices during the bubble. As Craig Lazzara mentioned, Chicago is the only metro area that hasn’t yet fully recovered from the housing crash. Single family home prices are still down by 1.2% and condo prices are down by 1.4%. Maybe next month?

At this point single family prices are still lower than they were during the bubble period of May 2006 – March 2007 and condo prices are still lower than the June 2006 – November 2007 period. In addition, single family home prices are lagging that trend line by 21.5%, although you can clearly see that we’ve closed that gap quite a bit this year.

Nevertheless, we’ve immensely recovered with single family prices surging 62.1% from the bottom and condo prices bouncing back 63.1%.

Case Shiller Chicago

The Chicago real estate market is finally getting close to catching up to bubble peak prices.

#ChicagoHomePrices #CaseShiller #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.

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