Then & Now: Pre vs. Post Recession Suburban Values (Chicago: sales, renting)

[mwj119]

https://www.chicagomag.com/images/20...e07_Charts.pdf

The numbers are almost hard to comprehend. It's amazing to see the jump in values between 1994 & 2007. It must have been a darn good time to be a homeowner in Chicagoland and beyond.

Equally amazing is just how hard the area has struggled post recession. I'll take Northbrook as an example: The average sale price in 2007 was $760k. Now? The median sold price is $450k. Barrington went from $722k to $455. Lake Forest from $1.4M to $802k. Evanston from $601k to $301k. Naperville $511k to $347k. Hinsdale $1.1M to $790k.

So, did this area's home values simply inflate well beyond it's ceiling between 1994 and 2007? Or is the State, as the naysayers have been telling us, really on a steep decline? Are folks better off renting as another recession looms in the next few years?

Other areas of the country, as mentioned in many other posts, saw the same increases between 1994 and 2007. Yet, they've seen another jump of 50-60-70-100+% since 2007/pre-recession highs.

That begs the question- Has any area of the country declined like this in recent memory? Is there any other area struggling like this?

[damba]

I think it’s important to take some of this in context before re-hashing the big crash effects on local RE.

You are mentioning popular areas with great schools and amenities. Although the values are lower than they were in many cases, these areas are still not full of struggling households. Look at the horrible hollowing out in the south suburbs for a real disaster in that regard.

If anything, the drop in prices in some of the more popular established suburbs allowed people to enter the Chicago area workforce and enjoy a more comfortable lifestyle than they would in areas that recovered faster, like DC, Seattle or SF

[Hiruko]

Originally Posted by mwj119

That begs the question- Has any area of the country declined like this in recent memory? Is there any other area struggling like this?

The era of white flight was a time of steep price declines in certain areas throughout the country. Many smaller towns, oil boom-type, areas have experienced steep runups and subsequent steep declines in the past century. However, this sort of broad-based decline in a major and otherwise stable metropolitan area is unique. I think some of your numbers lack nuance (most analyses show that Evanston is at or just a touch under peak home values, for example). I think our suburban market will stay soft or soften further in the next few years. I was at a home today that sold for $2.2 million a decade ago, but is currently listed for $1 million in Lake Forest. Despite its broad-base, I think that there is still a mix. Some markets are doing relatively well and others are particularly cold.

[deeman7]

This isn't a Chicago issue, this is related to the housing bubble and the market level-setting.

[Hiruko]

Originally Posted by deeman7

This isn't a Chicago issue, this is related to the housing bubble and the market level-setting.

The way these numbers are presented could also be representative of a slower luxury market rather than an overall decline in values or sales.

[Vosges]

Originally Posted by mwj119

Equally amazing is just how hard the area has struggled post recession. I'll take Northbrook as an example: The average sale price in 2007 was $760k. Now? The median sold price is $450k. Barrington went from $722k to $455. Lake Forest from $1.4M to $802k. Evanston from $601k to $301k. Naperville $511k to $347k. Hinsdale $1.1M to $790k.

Out of curiosity, where did you get the now numbers? Maybe I missed something in the Chicago mag article.

[Suburbanmom76]

Originally Posted by Vosges

Out of curiosity, where did you get the now numbers? Maybe I missed something in the Chicago mag article.

Unless it's a typo, it looks like the OP is comparing average 2007 sale prices with median current sale prices. Average prices will be higher than median prices in most of these markets because a handful of luxury houses will way increase the average. So it would be more useful to compare averages to averages, or medians with medians.

[mwj119]

Originally Posted by Vosges

Out of curiosity, where did you get the now numbers? Maybe I missed something in the Chicago mag article.

I utilized Realtor/Zillow analytics current data sets. I could not find a current/2018 snapshot in Chicago Magazine, so it's the best I could do.

Someone mentioned average vs. median.. While I agree that it can skew the numbers, it should never skew the numbers enough to negate the delta.

[mwj119]

Median sales prices every year starting in 2000. And, it does show that the decrease in values between now and peak 07/08 are still major, but vary more in certain markets.

Median sale price July 2007 vs. Today:
Northbrook circa Jul '07 was $611k, and now sits at $445k.
Barrington was $675k, and now sits at $455k.
Oak Brook was $835k, and now sits at $433k.

There is a lot of variation by season/month, but the end results are still rough.

[Di3s3l_Pow3r]

Overall Chicago became more affordable + property taxes has a big role

If you take a look at LA, Seattle, Portland, Denver ... even Boise ... Chicago is a bargain

For goodness sake, people were moving to Texas, Arizona for retirement due to lower property values. and now is more expensive than here