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S&P, Redfin reports show Chicago housing market not cooling as fast as others

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The strongest indication comes from this morning’s release of the S&P CoreLogic Case-Shiller index. Chicago-area single-family home prices rose 12.9% in July from a year earlier, according to the index. This is the eighth consecutive month of growth of 12% or more.

More important is Chicago’s ranking in the list of 20 major US cities tracked by the index. Among them, Chicago’s home price growth was his 14th largest. This is his highest since April 2017. Almost every month for the last three years, Chicago has ranked between his 18th and 20th.

If Chicago’s inflation rate stabilizes at 12% or higher, but its relative position on the list of 20 cities rises significantly, other cities will collapse and slide down the list. It shows that you are falling.

For example, in San Francisco, the Index showed house prices rose 10.8% year-over-year in July. At this time last year, prices in the city were up 22%, more than double that of him. Portland home prices rose 11.7% in July and 19.5% year-over-year in July 2021.

As the irrational exuberance that underpinned these markets faded, their prices fell below Chicago’s rate of appreciation. In the July 2021 index, Chicago home prices rose 13.3%, placing him at the bottom of the Big 20.

Nationwide, house prices rose 15.8% in July from a year ago. Just one month ago, the index showed an 18.1% price increase across the country.

“The difference of 2.3 percentage points between these two monthly gains is the biggest slowdown in the index’s history,” said Craig Lazzara, managing director of S&P DJI. In Chicago, he dropped by 4 percentage points in 10 minutes from June to July.

Case-Shiller’s data is two months behind, and a lot has happened since July, including a 1% rise in interest rates. (from 5.30% on July 28th to 6.29% on September 22nd). The Chicago market certainly could fall later.

Another sign of strength in the Chicago-area housing market is Redfin, an online real estate marketplace. The northern suburbs of Lake County, Illinois/Kenosha County, Wisconsin are the slowest-cooling metropolitan areas in the country. Redfin this morning, The Chicago area is the third slowest.

Redfin’s study evaluated metrics such as markdowns, percentage of asking price paid by buyers, and sales velocity across 100 metropolitan areas in the United States. The survey period is from February to August this year.

Redfin Chief Economist Sheharyar Bokhari said in a prepared comment, “During the pandemic’s home-buying boom, housing has certainly gotten more expensive, but it’s still affordable compared to other parts of the country. ‘ said.

“They are slowly feeling the effects of economic headwinds such as inflation and rate hikes by the Federal Reserve because relatively affordable housing prices are attractive to home hunters looking for deals.” Bokari said in a comment. It means there isn’t much room to fall. These markets do not have great volatility. “

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