CHICAGO—According to the S&P/Case-Shiller US National Home Price Index published in January, the Chicago metropolitan area recorded a 1.2% decline in home prices between October and November, the worst of any city in the study. This week, however, S&P Dow Jones Indices published the new index showing that prices declined by 0.5% over the following month. It was not the worst record among the nation's largest cities, but it was still significantly above the average US decline of 0.1%.
Still, even with the cold weather decline in month-to-month prices, the Chicago region now regularly records the biggest jumps in year-over-year prices since the 1980s. Last month, the index showed that Chicago-area year-over-year prices increased by 11.0%, and this week that number stood at 11.3%. This was, however, still below S&P's 20-city composite of 13.4%.
“The S&P/Case-Shiller Home Price Index ended its best year since 2005,” says David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices. “However, gains are slowing from month-to-month and the strongest part of the recovery in home values may be over.”
The S&P index also includes Midwest cities like Cleveland, Detroit and Minneapolis. The job market in Cleveland has not kept pace with the rest of the nation and its housing market has followed suit. Its housing prices only increased 4.5% in the past year, the worst record among the studied cities. Furthermore, its month-to-month prices declined 1.2%, which also places it at the bottom. Detroit is the only city that has prices below its 2000 level, but there prices have sunk so low that even the colder weather left the month-to-month prices flat.
“Recent economic reports suggest a bleaker picture for housing,” Blitzer adds. “Existing home sales fell 5.1% in January from December to the slowest pace in over a year. Permits for new residential construction and housing starts were both down and below expectations.”
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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.
