Home values in the Chicago area grew in September at the smallest annual rate of any month since the housing bust recovery began, according to the most-watched nationwide gauge.
The region’s single-family home values grew by 0.6 percent in September compared with the same month last year, according to the S&P CoreLogic Case-Shiller Indices. That is the lowest since the index for Chicago turned positive in November 2012 after five years of running negative.
In November 2012 prices grew by 0.8 percent, and between that time and September 2019, there were only two other months when year-over-year price growth was below 1 percent: August and September 2015, both at 0.9 percent.
The reasons for the shallow local growth include a falloff in home sales prompted by population loss, rising property taxes and the prospect of even further increases, and the 2017 federal tax reform’s reduction in state and local property tax deductions, leading to buyers paying less for homes.
(Crain’s story last week about home prices getting stronger in the suburbs was based on a different report. It was the Illinois Realtors report on October sales. Case Shiller uses a more complex data set, including repeat sales of the same property, and lags behind the trade association's data by a month.)
Home price growth has been shrinking fast this year in Chicago after spending most of 2018 in the range of 3 percent. The same has been happening nationwide, shrinking from the 6 percent range to the 3 percent range.
In September, home values nationwide grew by 3.2 percent year over year, according to the index. That’s essentially even with the previous month’s nationwide figure, 3.1 percent, while Chicago’s growth turned downward in September, from the previous month’s 1.4 percent.
"September’s report for the U.S. housing market is reassuring,” Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, said in prepared comments released with the data.
“After a long period of decelerating price increases, it’s notable that in September (the index) rose at a higher rate than in August. It is, of course, too soon to say whether this month marks an end to the deceleration or is merely a pause in the longer-term trend,” Lazzara said in the comments.
Of the 20 major U.S. cities the index tracks, only one ranked below Chicago: San Francisco, where home values declined by 0.7 percent in September. In the past several months, some of the cities that were showing double-digit price spikes in recent years have had much smaller growth. The index was negative for Seattle in July and August.
Chicago's home values in September were still about 12.5 percent below their 2006 peak, according to the index, while nationwide home values were 14.9 percent above their boom-years peak.
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November 26, 2019 at 10:44PM
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Home price growth shrinks to lowest since recovery began - Crain's Chicago Business
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