This morning we got the May CoreLogic Case Shiller home price indices for the top 20 metro areas that they follow. What they show is that the nation’s single family home prices rose 16.6% over the previous 12 month period. That’s an all time record for the country. The Case Shiller Chicago area index rose by 11.1%, which is the 103rd consecutive month of gains and slightly more than a 7 year record but, nevertheless, we still remain in last place.

You know who’s in first place? Phoenix with 25.9% growth! WTH. Do you know they had 34 days last year above 110 degrees? Yeah, dry heat my ass. And speaking of dry…where are they going to get their water? I think they are in like a 15 year drought.

As I’ve mentioned before this is a problem if you are planning on moving out of the area because the house you are moving into will likely cost more than the house you sell here. Sad.

But back to Chicago with all that Lake Michigan water. Check out the graph below which shows the year over year growth history. Condos are not appreciating nearly as much as single family homes – only 2.7% over the previous year.

Chicago area single family home prices have shown annual gains for 103 consecutive months

Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI, remarked:

The 16.6% gain is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. As was the case last month, five cities – Charlotte, Cleveland, Dallas, Denver, and Seattle – joined the National Composite in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quartile of historical performance; in 17 cities, price gains were in top decile.

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. May’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. More time and data will be required to analyze this question.

Note that Craig always requires more time and data.

Case Shiller Chicago Area Home Price Index By Month

I’ve plotted the monthly indices below going back to 1987 along with a red trend line for single family homes based on pre-bubble data. Single family home prices rose 1.8% from April while condo prices rose 1.1%.

What’s finally getting interesting in that graph is that we are getting close to those bubble peaks. Single family home prices are only off by 3.2% while condo prices are off by only 2.6%. No surprise that most of the rest of the country already surpassed those peaks. From a historical perspective single family home prices are currently below the period from December 2005 – October 2007 and condo prices are below where they were from March 2006 – December 2007.

If you compare where we are to the red trend line you’ll also see just how far off we are from where we “could have been”. That’s a 22.8% gap. On the other hand you can compare where we are from the bottom. Single family prices have jumped 58.8% and condo prices are jumped 61.2%.

The Chicago real estate market is finally getting close to catching up to bubble peak prices.

#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.