CHICAGO, IL- Although home prices throughout most American cities continued to increase, Chicago's recovery remains somewhat slower than the national average of other metro areas, according to the S&P/Case-Shiller Home Price Indices, released yesterday by S&P Dow Jones Indices. Average home prices in the 20 cities studied increased 8.1% from January 2012 to January 2013, but Chicago's average only increased 3.3%, the smallest gain of any city except New York.
Other Midwestern cities included in the study were Detroit, Cleveland and Minneapolis. Both Detroit and Minneapolis posted double-digit gains. But the housing bust knocked the Motor City's prices into such a deep trough they had nowhere to go but up. Average home prices there increased 13.8% to slightly more than $80,000, still the lowest of all the cities. Minneapolis' average rose 12.1% and even Cleveland's mediocre 4.8% bested Chicago.
Still, from a national perspective, the numbers were quite positive. All 20 cities posted gains and Phoenix led the way at 23.2%.
"The two headline composites posted their highest year-over-year increases since summer 2006," says David Blitzer, chairman of the index committee at S&P Dow Jones Indices, in an announcement. "This marks the highest increase since the housing bubble burst.
"After more than two years of consecutive year-over-year declines, New York reversed trend and posted a positive return in January. The Southwest (Phoenix and Las Vegas) plus San Francisco posted the highest annual increases; they were also among the hardest hit by the housing bust. Atlanta and Dallas recorded their highest year-over-year gains.
"Economic data continues to support the housing recovery,” he continues. “Single-family home building permits and housing starts posted double-digit year-over-year increases in February 2013. Despite a slight uptick in foreclosure filings, numbers are still down 25% year-over-year. Steady employment and low borrowing rates pushed inventories down to their lowest post-recession levels."
Chicago's prices might not fully accelerate until the city works through its many foreclosures. According to RealtyTrac Inc.'s recent monthly U.S. Foreclosure Market Report, Illinois just posted the nation's third highest state foreclosure rate for the second month in a row despite the third straight month-over-month decrease in foreclosure activity.
For more information on the S&P/Case-Shiller Home Price Indices go to www.housingworks.com.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
