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CHICAGO HOME PRICE TREND ENCOURAGING - But, Nationwide, Home Prices Continue to Face Downward Pressure!

CONTINUED HIGH UNEMPLOYMENT, GLUT OF FORECLOSURES TWO OF THE REASONS WHY!

Encouraging news for Chicago Home Sellers?  Perhaps!

According to The PMI Group, a major provider of Private Mortgage Insurance for low-down-payment loans, the Chicago Metro Area is "most improved" among the 50 Top U.S. Metro Areas during the Fourth Quarter, 2009.

The story reported by Mary Umberger of The Chicago Tribune found that the Chicago Area was one of 356 Metropolitan Statistical Areas, out of a total of 384, showing declining "risk scores," as defined by the Mortgage Insurance provider.

Risk scores from PMI Group measure the likelihood that median house prices will continue to decline in the coming two years.  A Risk Score of 50 or less suggests a heightened chance for median home price increases in the near future.  In the Fourth Quarter, 2009, Chicago had a favorable index of 47.6, indicating greater chances for a home price turnaround here.  The Chicago Index was as high as 60.8 during the Third Quarter of last year..

One bellwether on a nationwide level involves major U.S. Loan Guarantor and Investor Freddie Mac.  The now-government agency has asked the Fed for more bailout money, expecting its giant revenue shortfall to expand, not shrink.  They expect U.S. Home Prices still have further to decline.

They pin their expectation of continued home price softness on four factors -

  1. The expiration of the Tax Credit for First Time and Select Repeat Homebuyers, as of April 30th.
  2. Still-climbing foreclosures - real estate owned by banks, adding to market oversupply.
  3. Predicted modest increases in mortgage interest rates.
  4. High unemployment across the U.S., and in many major Metro Areas, which they do not expect to moderate anytime soon.

Although the Chicago Area did not have huge price run ups during the Real Estate Boom of a few years ago, the Chicago Market is in considerable oversupply (especially of new homes and condos in some Chicago Neighborhoods and Suburbs), and Chicago Unemployment Rates are higher than the national average.

DEAN MOSS & DEAN'S TEAM CHICAGO

Posted: Sunday, May 23, 2010 2:33 PM by Dean's Team

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