Earlier this week Dow Jones S&P CoreLogic came out with their July home price indices, which indicated a further slow down in the nation’s home price appreciation. While year over year home price appreciation for the entire nation remained unchanged from June at 3.2% the 10 metro area composite index dropped to a 1.6% annual rate from 1.9% while the 20 metro area composite dropped to a 2.0% rate from 2.2%.
That puts much of the nation in the same ballpark as the Chicago area’s 1.6% rate, up slightly from 1.5% for June. As you can see in the graph below Chicago’s annual appreciation rate has been drifting down now for several years, though we just recorded our 81st consecutive month of year over year gains in home prices. Chicago is still only in the top 80% of the 20 cities tracked.
However, the story for the Chicago area’s condo/ townhome market is a bit bleaker after recording the lowest annual appreciation rate in 81 months at 0.7%.
Interestingly, we keep hearing about pent up demand for a short housing supply but it certainly isn’t being reflected in prices.
Case Shiller Chicago Area Home Price Index By Month
My historic graph below reflects the monthly values of the Case Shiller home price index for the Chicago area. July single family home prices rose 0.4% from Jun while condo prices actually declined by 0.1%.
At the rate we’re going we’re unlikely to catch up to the bubble peak any time soon. Currently single family home prices are still 12.8% below that peak and condo prices fall short by 6.2%. In addition, single family home prices are lower than they were during the entire period from October 2004 – September 2008 – i.e. the average home bought 15 years ago is still not in positive territory. Condos are lower than they were during the July 2005 – October 2008 period.
It’s also a bit disappointing that Chicago area home price appreciation doesn’t seem to be anywhere close to where it was historically. Check out the red trendline in the graph below, which I constructed based on the pre-bubble appreciation for single family homes. Notice how we keep falling further and further behind that line. As of now our home prices lag it by 25.7%.
The better news is that we’ve had a decent recovery from the bottom with single family home prices up 43.1% and condo prices up 55.3% from those dismal days.
#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.