Distressed Properties Aside, Prices Are Improving in Chicago

October 03, 2012

The latest home prices report hints to Chicago new homes buyers that the market is still favorable, but it’s really in how you look at the numbers.

According to the CoreLogic Home Price Index released this week, U.S. home prices increased 4.6 percent in August of this year compared to August of last year, marking the biggest year-over-year increase since July of 2006. Prices were also up in month-over-month results, which means home prices have increased nationwide both annually and monthly for the sixth straight report.

Chicago new homes prices“Again this month prices rose on a year-over-year basis and our expectation is for that to continue in September based on our pending HPI forecast,” said Mark Fleming, chief economist for CoreLogic. “The housing markets gains are increasingly geographically diverse with only six states continuing to show declining prices.”

Unfortunately, Chicago is part of one of those states. In fact, Illinois ranked at No. 2 in the country for the greatest price depreciation in August, falling 2.3 percent. The only other market with an ever greater decline was Rhode Island, which was down 2.6 percent.

But those numbers include distressed properties, a big factor in how you look at the data. August prices in the Chicago area fell 1.7 percent from July and were 2.5 percent lower than they were a year ago. If we take out foreclosure and short sales from the August report, however, Chicago-area home prices actually increased 1 percent from July and 1.5 percent from last August.

“Sustained economic recovery in the U.S. requires a healthy housing market. You cannot have a healthy housing market without price stabilization and ultimately home price appreciation,” said Anand Nallathambi, president and CEO of CoreLogic.

“Improving pricing trends over the past few months and our forecast for continued gains in September bode well for a progressive rebound in the residential housing market.”

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