CHICAGO HOME PRICE INDEX DECLINES NEARLY 10% SINCE AUGUST 2007 - Latest Case-Shiller Index!
CHICAGO METRO AREA HOME PRICE FLAT - JULY-AUGUST, 2008!
While an important Home Sale Price Index posted record declines across the U.S. between August 2007 and this August 2008, as well as an improving 1.0% drop between July and August of this year, prices in and around Chicago fared considerably better.
The latest S & P/Case-Shiller Home Price Index studies average home price levels in 20 of the largest Metro Markets nationally. The index compares current prices to a January 2000 base level, and calculates change in that index month-to-month. August 2008 is the latest for which this index data is available.
In aggregate, the 20 Top U.S. Metro Areas showed an index drop of 16.6% within the past year, and a 1.0% drop between July and August of this year. Here in the Chicago Area, the index fell a comparatively low 9.8% year to year. It currently stands at 149.53 - in other words, theoretically, a house selling for $100,000 in January 2000, would sell for $149,530 today.
The 20-Market Case-Shiller Index has been declining for 20 consecutive months. For the fifth straight month, every region analyzed showed a year-to-year index decline. Only two of the 20 studied Metro Areas showed index improvement between July and August - Cleveland, with a 1.1% price gain, and Boston, with a month-to-month gain of 0.1%.
Metro Areas declining the most between July and August 2008 were San Francisco, with a 3.5% month-to-month index decline, followed by Phoenix, Las Vegas, and San Diego - each of these markets had price index declines exceeding 2%.
Year to year, Dallas TX and Charlotte NC showed the slowest index decline - respectively, 2.7% and 2.8%.
The latest Case-Shiller Data come on the heals of improving sales of both new and resale homes, with data released over the last few days indicating new home sales improved nationally 2.7% during September, and U.S. Resales improving 1.4% during the same month. Experts suggest that quickly-tumbling prices on many homes are beginning to attract bargain hunters now.
However, high inventories of homes-for-sale remain, with a bloated 15-month inventory level here in the North and Northwest Side of Chicago Neighborhoods we serve frequently. Here in Chicago, and elsewhere across the U.S., credit remains tight, mortgage approval standards very stringent, and the threat of job losses and high rates of unemployment very real to many.
Interest rates remain high for now - although the continued lowering of the Fed Funds Rate may have a positive impact for some, especially those who consider an adjustable-rate loan tied to this benchmark. The Federal Reserve Board is expected to trim the Fed Funds Rate another 1/2 percent when it concludes its meeting tomorrow, from its current 1.5% level, to 1.0%.
Read Donna Kardos' story in today's Wall Street Journal for more info. Here's a graph and chart of the August 2008 S & P/Case-Shiller Index for the Top 20 U.S. Metro Areas.
DEAN MOSS & DEAN'S TEAM CHICAGO
