S&P Dow Jones Indices just released the Case Shiller home price indices for October and it looks like the Chicago area is almost in last place among major metro areas for home price appreciation in the last year. It looks like only Cleveland is doing worse.
The Case Shiller Chicago home price index for single family homes is now sitting with a paltry 1.9% year over year gain. That’s lower than Chicago’s historic average and also the lowest year over year gain in almost 2 years – 23 months to be exact. Condo prices are only up 1.1% in the last year, which is also the lowest level in 24 months.
It’s really surprising to me that we’re not doing better because homes are still selling relatively quickly and it’s not like we have a ton of inventory on the market.
The Case Shiller Chicago index was down 1.0% for both single family homes and condos. Declines at this time of the year are normal though. It’s just that this year’s decline is bigger than last year’s decline.
The current price level for single family homes roughly corresponds to where we were in January 2009 and also April/ May 2003. Condo prices are back to where they were in January 2010 and also February 2003. We’re still waiting for people who bought 10 years ago to be back to where they started.
So, how are we doing with respect to the housing bubble? Single family home prices are still down 23.0% from the peak, though they have recovered 26.4% from the bottom. Condo prices are down 19.7% but have recovered by 33%. And we’re still lagging that long term trend line by 22%. We don’t seem to be closing that gap lately.
Despite the fact that the national year over year price rises are still declining the S&P Dow Jones Index folks found some reason to be optimistic about the housing market, citing the increasing number of metro areas that are experiencing annual increases in home prices. David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices claimed that “After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015.” Seems like a bit of a stretch to me.
#CaseShiller #Realestate #HomePrices
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