HOME PRICES DOWN NATIONALLY - But Chicago Fares Better Than Many Markets!
CHICAGO PRICE INDEX DOWN 8.5% SINCE FEBRUARY, 2007, WHILE NATIONAL INDEX DOWN 12.5%!
Usually, at the end of April, the vibrant Spring Real Estate Market is in full swing, in Chicago and elsewhere across the country. In many areas of the country, however, extremely high levels of inventory exist. Combined with increasingly-stringent loan underwriting rules, as well as a near-doubling of foreclosure filings nationally since last year, average home prices in virtually every U.S. Metro Market are falling.
Many experts view the Standard & Poors Case-Shiller Home Price Index as a key predictor of average home prices. The report for February, 2008 was just released yesterday indicates that 17 of the largest Metro Areas across the country had declining prices year-to-year - with Las Vegas NV and Miami FL leading the pack.
Only Charlotte NC posted an annual indexed price gain - 1.5% - but even Charlotte's gain has slowed considerably over the last several months, according to the index.
Here in the Chicago Metro Area, the February, 2008 Home Price Index stood at 153.33, versus 167.49 one year earlier. The January index pegged the Chicago Market at an index of 156.42. (The seven year old Case-Shiller index compares current prices in relationship to their 100.00 base level, in January, 2000. Years prior to 2000 are less than the 100.00 base level).
Across the county, one in every 194 homes fell into foreclosure during the First Quarter, 2008 - the seventh straight quarter of increased foreclosure activity.
The State of Nevada, led by the Las Vegas Metro Market, had the highest rate of foreclosures. According to RealtyTrac, Inc, which tracks foreclosures and short sales nationally, one in 54 Las Vegas households have received a foreclosure notice within the last 12 months. One local Las Vegas real estate agent estimates half of all homes sold there are in some stage of foreclosure.
"Month-to-month, it gets consistently worse," said David Blitzer, Chairman of the Index Committee at S&P, noting that February also marked the sixth straight month that all 20 cities experienced declines. "There is no sign of a bottom."
Buyers with strong credit and large down payments are looking to invest in distressed properties, most available at a very attractive price. However, lenders are being very stringent on their loan approval practices, and many potential buyers of these properties simply do not qualify for them.
The housing crisis across the country, combined with ever-climbing prices for fuel and food, has generally increased pessimism that the housing market will face a quick turnaround, and many home buyers are sitting on the sidelines, unable or not willing to buy in this environment. Many home sellers are delaying there selling decision as well, fearing low sales prices, and a contentious closing process.
Here in Chicago, the weaker-than-normal Spring market is one indication that the Chicago Real Estate Market may have some time to go before it recovers.
Read J.W. Elphinstone's story in yesterday's Chicago Tribune, as well as, yesterday's article in Forbes Online, for more info and relevant links.
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