YOUR HOME'S VALUE - It's a Local Matter!
NATIONAL, METRO-AREA INDICES MISS THE MARK IN PREDICTING THE VALUE ON AN INDIVIDUAL HOME!
The noted S & P/Case Shiller Index of relative home values indicates over a 15% drop in the composite home value within the Top 20 Metro Markets across the U.S. since the beginning of 2007. In the Chicago Metro Area, their Case Shiller index decline is less severe - roughly, 10%, but still significant.
Fannie Mae and Freddie Mac Government Statistics are somewhat more optimistic - but these don't count sub-prime loans in their formula, and may understate the overall average price declines.
As we all know, however, all Real Estate is sold at the local level - in neighborhoods, and on streets within neighborhoods, that may vary greatly from the national averages.
Take a look at the following figures from several well-known Chicago Neighborhoods and a couple of Chicago Suburbs - and note not only the big differences within a local market area, but also the sizable difference from the National Averages or the Chicago Metro Area Index -
CHICAGO NEIGHBORHOOD OR SUBURB MEDIAN PRICE CHANGE, SF,
CONDOS, 2-4 UNIT BLDGS -
OCT. 2007 - 0CT. 2008
CHICAGO LOOP (-32.5%)
CHICAGO NEAR NORTH/GOLD COAST (-6.4%)
CHICAGO HYDE PARK (-17.5%)
CHICAGO LINCOLN PARK +2.0%
CHICAGO LAKEVIEW +3.3%
CHICAGO LINCOLN SQUARE +3.1%
CHICAGO PORTAGE PARK (-16.9%)
CHICAGO SUBURB - NILES IL +4.2%
CHICAGO SUBURB - NAPERVILLE IL (-3.6%)
ALL STATISTICS COURTESY OF MIDWEST REAL ESTATE DATA LLC, THE MLS SERVING THE CHICAGO IL METRO AREA
Indeed, if you were to research Chicago Home Prices at the Metro Area Level, you might assume that the Chicago Market Median Home Price has fallen approximately 10% within the past 22 months.
The reality, however - many of our neighborhoods and suburbs have actually INCREASED in value, while others have had their median prices fall.
Few of these statistics, however, mirror the national or regional statistics, highlighting the fact real estate prices, in ANY market, are indeed determined at the smallest possible geography, at the neighborhood and street level. To take pricing to its logical extreme - only the negotiation between the buyer and the seller, for a specific piece of property, will determine what the property is actually worth.
Read more in Carl Bialik's article in the November 20th edition of The Wall Street Journal.
DEAN MOSS & DEAN'S TEAM CHICAGO
