What’s Really Going On With Prices In “Prime” Neighborhoods?

It’s not easy figuring out what is going on with home prices in Chicago’s individual neighborhoods. The Case-Shiller data, which I believe provides the best insights into home price trends, is not typically available at the neighborhood level and, as I have often pointed out, I think median price data is worthless. Therefore, on an ongoing basis we track months of home inventory and days on the market as proxies for what is going on. The belief is that if inventory and days on the market are rising prices are soon to fall.

Unfortunately, the only way to really tell what is going on is to painstakingly examine individual sales and see if the price trend is up or down. I’ve been meaning to do this for a while but in response to a recent debate on Cribchatter I decided to get off my butt and actually do the analysis. I looked at condo sales in Lincoln Park over the last 30 days, where the previous sale had occurred in the last 6 years. I picked Lincoln Park because there has been some evidence that Lincoln Park has been immune to the home price declines and I looked at condos because there are more of those sold than single family homes. Also single family homes in Lincoln Park are more likely to have been renovated from the previous sale.

Well, here’s what I found:

Lower sale prices are highlighted in red and the data is sorted by the date of the previous sale in order to highlight the pattern. Basically we are seeing price declines in the last 3 years, which is similar to what we are seeing in the Case-Shiller numbers for Chicago as a whole. I guess Lincoln Park is not immune after all.