Last week’s release of the January Case Shiller home price indices by S&P Dow Jones CoreLogic showed renewed strength in home price appreciation across the nation. After losing just a little bit of steam in the last few months January registered a 19.2% gain from a year ago, up slightly from December’s 18.9% gain.
Home price appreciation in the Chicago metro area also increased, rising to a 6 month high of 12.5%. As Dennis Rodkin noted in Crain’s January was the 9th straight month of double digit appreciation, which was the longest streak since the late 80s. Unfortunately, that still left us 3rd from the bottom of the 20 metro areas tracked.
Condominiums in the Chicago area registered a 5.4% increase in home prices, which is the biggest increase in almost 7 years.
Craig J. Lazzara, Managing Director at S&P DJI, cautioned that we could see lower growth in prices soon:
The macroeconomic environment is evolving rapidly. Declining COVID cases and a resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices.
Case Shiller Chicago Area Home Price Index By Month
The graph below displays the actual index values by month for single family homes and condos along with a red trend line that I created using the pre-housing bubble index values. Single family homes rose by 0.6% from December while condo prices rose by 0.2% and that’s a time of the year when prices normally fall.
Of course that difference just serves to widen the gap between single family homes and condos. Single family home prices are now 2.9% above their bubble peak while condos are still 0.3% below their peak.
On the other hand it’s worth noting the tremendous progress we have made coming back from the depths of the crash in home prices. Single family home prices are now up 68.9% from that low while condo prices are up 65.0%. However, single family home prices still lag that trend line by 19.9%.
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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.