Home prices in Chicagoland are growing, albeit at a slow rate.
Creative Commons: Codo, http://commons.wikimedia.org/wiki/File:Frozen_Chicago_River.jpg
Chicagoland home prices posted lukewarm numbers in the latest Case-Shiller Home Price Indices, which looked at data from Dec. 2014 to Jan. 2015.
From December to January, Chicagoland prices were down 0.2 percent, and from Jan. 2014, they were up 2.5 percent; though the monthly decline was both expected and nationally consistent (given the typical winterly declines in home prices), the yearly increase was the the third weakest in the nation, with only Minneapolis and New York posting slower increases.
Though such numbers do not seem encouraging on the surface, there are two important things to consider: one, that 2.5-percent increase is up from Dec. 2014’s 1.3-percent yearly increase, which is the largest jump in the nation; and two, we could gauge January’s numbers as a sign of tranquility, that while other markets near overheating, Chicagoland’s market is progressing calmly and respectfully.
National Holding Pattern
Based on the Case-Shiller’s national findings, it appears that overall home prices are beyond their glory days in 2013, and have now settled into a consistent pattern of growth:
- The 10- and 20-City Composites, which measure price growth in the nation’s largest metro areas, were up 4.4 and 4.6 percent year-over-year; both increases are marginally up from December.
- The National index, which covers all nine U.S. census divisions, was up 4.5 percent year-over-year (compared with 4.6 percent in December).
- Meanwhile, the 10- and 20-City Composites were both flat month-to-month, and the National index was actually down 0.1 percent from December to January.
Blitzer – “Housing Market Faces Some Difficulties”
David M. Blitzer, the managing director and chairman of the Index Committee for S&P Dow Jones Indices, said that a number of market forces have been behind the home price gains
“The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices” Blitzer said, adding that even with home prices up, housing is not yet out of the woods.
“Despite price gains,” he continued, “the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback. Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak. Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession.”