A couple of days ago I did my monthly post on the Case Shiller home price index and how slowly Chicago area home prices have been rising – especially when compared to the rest of the nation. The Chicago real estate market has been appreciating at the second to the lowest rate among the 20 largest metro areas tracked by Case Shiller. It’s a very sad story – at least for Chicagoland homeowners. Maybe not so sad for people looking to buy – or people moving here from other parts of the country.
The graph below puts the Chicago area’s home price history going back to 1987 into perspective using the Case Shiller index values. I’ve compared the Chicago index values to the national average and also the 10 city composite index, which includes the largest cities. The way the index works is that they arbitrarily set all the cities to a value of 100 in January 2000 and then track it backwards and forwards.
If you look at the graph carefully you’ll notice a few things. First, all 3 indices were “at the same place” back in the spring of 1993. All that means is that they appreciated by the same total amount between then and January 2000. Prior to that spring Chicago home prices were appreciating faster than either the national average or the 10 city composite.
But after January 2000 the 10 city composite pulled ahead of the Chicago area and never looked back. It rose much higher during the bubble than Chicago did but even when it crashed it never came back down to Chicago levels. Today that index is a whopping 59% higher than Chicago and still rising faster than Chicago!
The national average tracked along with the Chicago area until the spring of 2003 but then it also pulled ahead. Today it’s 42% higher than Chicago.
There are all kinds of theories floating around about why the Chicago housing market is lagging the rest of the nation so severely: crime, the local government financial problems, schools, insufficient job growth, and plenty of capacity to build new housing.
Boy, we could really use Amazon here and the data suggests that Amazon employees would find our housing stock to be an exceptional value. In fact, according to a recent study that Zillow did the Chicago real estate market would see one of the smallest impacts on rents from an Amazon invasion compared to the other contenders.
#ChicagoHomePrices #CaseShiller #AmazonInChicago
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.