Real Estate 2011: Home Prices

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Five years into the steady decline of Chicago-area home prices, the gloom is pervasive. It’s evident in the faded signs hanging on long-unsold foreclosures, in the half-empty condo towers with their swaths of darkened windows, and here in the columns of Chicago’s annual real-estate charts, which were prepared with information provided by Midwest Real Estate Data (MRED).

Study these pages closely, however, and a few bright spots emerge. About 20 percent of the 77 neighborhoods and 211 towns on the charts—which track home sales between July 1, 2010, and June 30, 2011—saw increases in their average home sale prices when compared with last year. (Only 10 percent of the communities on the October 2010 charts experienced a gain.) There’s no perceptible pattern to these upticks: Annual increases occurred in areas with high, middle, and low incomes; on the city’s North and South Sides; and in suburbs both near to and far from the city.

They are the lucky ones. In more than three-quarters of the neighborhoods and towns, home prices were down from 2010. (The percentage of communities with increases and the percentage with decreases don’t add up to 100 percent because some communities had no sales, others had too few to make an accurate comparison, and some experienced no change.) Overall, according to data from the Standard & Poor’s/Case-Shiller Home Price Indices, home prices in the Chicago area are down about 33 percent from their September 2006 peak.

Possibly the most disturbing revelation on the charts is the fact that about one in six communities—15.6 percent—had an average sale price below what it had in 1994, the earliest year for which MRED has comprehensive records. (In October 2010, 11 percent of the region showed prices below the 1994 level.) The majority of the communities below the 1994 mark are moderate-income areas, such as the towns Harvey, Burnham, and North Chicago and the city neighborhoods West Englewood, Englewood, and West Garfield Park. Many of them were hit hard by the foreclosure crisis; their plummeting sale prices reflect the bargain resales of bank-owned properties, even though those sales were slowed for much of the past year by moratoriums on foreclosures.

As prices have dropped, more families have had to stay in place; in some cases they can’t afford to sell their home for less than they owe on the mortgage, and in others they are unable to move because they can’t sell their current home. That’s borne out on the charts, where more than 80 percent of the communities saw fewer homes sold than a year ago.

Those are just a few of the high- and lowlights. During the next few weeks, I will continue to explore the data in the Wednesday “Housing Bulletin” of my thrice-weekly blog at chicagomag.com/dealestate.

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