Chicago’s Case-Shiller Index Numbers
The Case-Shiller Index numbers were out yesterday. Some posters already have commented about them but in case you haven’t seen them:
Chicago saw prices drop 2 percent in February compared with January, and 8.5 percent in the past year, according to the index. Nonetheless, Chicago housing prices are up 53 percent from January 2000.
These numbers are for the Chicago Metro Area (not just the city.)
“Nonetheless, Chicago housing prices are up 53 percent from January 2000.”
That works out to a 6.6% annualized appreciation rate. It’s really not so out of whack with historical rates of appreciation, at least not when compared to appreciation rates on the east and west coasts.
Peter,
Thats about double the historic rate. Even if not crazy if you believe the long-term rate of 3.5% holds true that means that prices need to fall 14% from where they are today for this to hold.
But even if they fell 14% only, would even that be closely competitive with rents? Not in this environment.
I am curious to see what happens to all those owners of 700-800K 2 flats in Lincoln Square, Lakeview, North center ect that bring in $1200/unit
“oh but owner occupiers are differnet” right?
Chicago was probably undervalued circa 2000, and is still a bit overvalued now. My gut still tells me the “true” value will settle somewhere around the 2003/2004 level, depending on the neighborhood (with more marginal neighborhoods settling to earlier values).
Nonetheless, Chicago housing prices are up 53 percent from January 2000.
Did we see Miami or San Diego-like gains? No.
But we have a long way to drop.
Chicago real estate will flop, big-time — particularly in the oversaturated condo market. Perhaps it won’t be as spectacular a collapse as southern Florida or southern Cali, but it won’t be pretty.