Case Shiller: Chicago Area 7 Year Record Home Price Growth Doesn’t Cut It
today at 11:22 am
S&P Dow Jones released the April CoreLogic Case-Shiller home price indices this morning showing that Chicago area single family home prices continue to soar. The 9.9% gain from last year is the highest appreciation in exactly 7 years and the 102nd consecutive month of annual gains. Condo prices in the area grew at a much weaker 2.3%. The price appreciation history of both housing types is graphed below and you can see that 9.9% is near the top end of the historic range.
So what’s not to like? It’s the same old story. The Chicago area is still in last place among the 20 metro areas tracked – the only metro stuck in the single digits. Price appreciation for the nation averaged 14.6% with Phoenix growing at 22.3% despite the fact that it will probably hit 187 degrees there this summer and they will run out of water. Even second to last place Minneapolis, with all their turmoil, advanced 11.3%. As I’ve pointed out before if you plan on moving to another city you’re falling further and further behind.
Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI, tried to put the data in historic perspective:
April’s performance was truly extraordinary. The 14.6% gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. Housing prices in all 20 cities rose; price gains in all 20 cities accelerated; price gains in all 20 cities were in the top quartile of historical performance. In 15 cities, price gains were in top decile. Five cities –Charlotte,Cleveland,Dallas,Denver, andSeattle– joined the National Composite in recording their all-time highest 12-month gains.
We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. April’s data continue to be consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing…
I bolded that one sentence above because I wanted to highlight the fact that, while the Chicago area hits a 7 year high in home price appreciation, the rest of the country is hitting a 30 year high.
Case Shiller Chicago Area Home Price Index By Month
The monthly indices are graphed below going back to 1987 and I’ve also added a red trend line which was based upon single family home price appreciation before the housing bubble screwed things up. April single family home prices rose by 1.9% from March while condo prices rose 1.1%.
We’re definitely getting within spitting distance of the bubble peak, the Chicago area being one of the few metro areas that hasn’t reached it yet (actually I haven’t checked lately and it’s possible we are now the only one). Single family home prices are 4.9% short and condo prices are 3.6% short. But that means that, on average, people who bought a single family home from October 2005 – December 2007 are underwater and condo owners who bought between November 2005 – February 2008 are underwater.
The gap with the red trend line is much more pronounced of course. We are falling short by 24.0%.
Perhaps a more positive picture emerges when we look at how far we’ve recovered from the bottom of the housing market crash. Single family homes prices have risen 56.0% while condo prices have gained 59.5%.
#ChicagoHomePrices #CaseShiller #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.