Why did the Chicago residential real estate market slow down sooner in Chicago? (Humboldt: days on market, house prices)

[ajolotl]

I just checked and the highest listed non multi-unit in Englewood now is on 73rd and Wood -- 245K. Not that anyone will buy it for that, but if that's the highest asking price than it gives a sense at how unrealistic the number quoted above is.

There are many multi-units priced well above that, even over $1M.

[Moonpies]

So, as a potential buyer, who would rather buy than rent in the Chicago area, what am I to do? The Case-Shiller index indicates that as of December 2008, the Chicago market has declined by 18.6 percent from the peak, which was reached in September 2006.

If January 2000 is the base year, with an index value of 100, and the peak is September 2006 with an index value of 168, and the Index stood at 137 as of December 2008, implying that the market is now down to just 37 percent over the 2000 value, isn't the market ready for a turnaround? Assuming a 3% annual price appreciation on housing, shouldn't house prices be about 30 percent higher today than they were in 2000? So, when the index hits something around 130 or lower, it is at equilbrium? (I know I'm making a lot of assumptions here...)

[Johnny Northside]

Real estate is local, more local than "Chicago" and whatever Case-Shiller can report. Some neighborhoods/suburbs have held up on price much better than others due to a variety of factors, including quality of housing stock; wealth/job security of current residents; percentage of foreclosures within the area AND the top feeder markets; and the perception that an area has "turned the corner" in some key factor such as gentrification/crime vs. an area that missed getting over the hump. You'll need to look closely at your target neighborhood/area to see if equilibrium has happened there. Since the overall Case-Shiller number is so close to 130, there are likely some places that it HAS reached that point already -- but they may be the ones at most risk to go even further down.

[MovingIL]

Actual sales numbers are still in free-fall in Chicago...in many neighborhoods, including the top ones. Which, too me, would indicate that more price declines are on the horizon.

[lincolnparker]

I believe Chicago has over 16 months of supply. And equlibrium means 6 months supply. So in general, long way to go. Different pockets of neighborhoods vary contingent on demand.

[oakparkdude]

Don't forget, markets tend to overshoot going up and undershoot going down. Just because we may have reached equilibrium doesn't mean prices can't fall further.

[Avengerfire]

I hope prices keep falling. The last 10-15 years were all b.s. in housing prices.

[fairmarketvalue]

Originally Posted by Avengerfire

I hope prices keep falling. The last 10-15 years were all b.s. in housing prices.

WOW, just a little bitter? 10-15 years were all BS? WOW, Seems like hundreds of thousands lived quite well through all the BS. I guess those that didn't would say that. To hope prices keep falling is really selfish and self serving. How about just wishing everyone would fall ill with a fatal disease? Anyone who thinks RE has been BS for that long must not be able to buy a house, for reasons other than "too expensive".

[Avengerfire]

I hope the prices keep falling.

Nice assumptions on your end.

You do not know me from jack.

If you do not think housing prices have been inflated in Chicago for at least a decade you must be one of the people that belong behind bars.

[Humboldt1]

Avengerfire,

House prices in Chicago may have been inflated over the past 5 years, not 10 as interest rates did not get artificially low until the past few years.

House prices did not begin to heat up until after 2000.

FMV,

I still think house prices in Chicago and DuPage County are headed down for the next year or so.

Way too much inventory out there and more foreclosures coming on the market. Once inventory gets below 6 months look for prices to stabilize.

On a side note, I attended Dupage County Hispanic Chamber meeting tonight. They had 100 people show. I was impressed. These are the same guys that publish Splendor and Dinero magazines. You should check them out, particularly as a business owner in dupage.