CHICAGO—Last month, according to the S&P/Case-Shiller US National Home Price Index, the Chicago metropolitan area recorded a 10.9% year-over-year gain in its home prices, the biggest jump since December 1988. And yesterday, the S&P Dow Jones Indices published the new index showing that Chicago-area year-over-year prices increased by 11.0%. This was, however, still below S&P's 20-city composite of 13.7%. Furthermore, between October and November prices in Chicago declined 1.2%, the worst of any city in the study.
“Beginning June 2012, we saw a steady rise in year-over-year increases,” says David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. Furthermore, “November continued that trend with another strong month although the rate of increase slowed. Looking at the year-over-year returns, the Sun Belt continues to push ahead with Atlanta, Las Vegas, Los Angeles, Miami, Phoenix, San Diego, San Francisco and Tampa taking eight of the top nine spots.”
“Detroit continues to recover but remains the only city with prices below its 2000 level,” he adds. Year-over-year prices in the city rose 17.3%. The S&P index also includes Midwest cities like Cleveland and Minneapolis. As reported in GlobeSt.com, the Cleveland housing market has struggled for quite some time. Its prices only increased 6.0% over the year, the lowest boost in any S&P city except New York. Minneapolis, however, where prices increased 10.5%, has kept its steady pace.
“Home prices continue to rise despite last May's jump in mortgage interest rates,” says Blitzer. “Mortgage applications for purchase were up in recent weeks confirming home builders' optimism shown by the NAHB survey. Combined with low inflation–1.5% in 2013–home owners are enjoying real appreciation and rising equity values. While housing will make further contributions to the economy in 2014, the pace of price gains is likely to slow during the year.”
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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.
