Chicago homeowners who have been waiting for real estate values to bounce back to the levels they were at before the housing crash probably will continue to be frustrated in 2017, although a couple of hot neighborhoods are poised to see appreciation.
On average, home prices in the Chicago area will climb just 1.95 percent this year, according to economists with Realtor.com, the official website of the National Association of Realtors. That contrasts with a projected national average of 3.9 percent, and leaves Chicago far behind cities like Seattle and Denver, where home prices have recovered completely and hit new highs last year.
Nationally, home prices returned to 2006 levels in 2016, meaning the country’s housing market is back to its pre-crash health. But home values in the Chicago area remain about 19 percent below where they were before the crash, according to the S&P CoreLogic Case-Shiller home price index.
Chicago’s housing market will be the weakest of the country’s 100 largest metro areas in 2017, said economist Jonathan Smoke of Realtor.com.
Further, the Chicago area is one of the nation’s worst for homeowners in serious financial pain. About 12.2 percent of homeowners are underwater on their mortgages, meaning they owe more on the mortgage than the house is worth, according to CoreLogic. Among the nation’s largest cities, Chicago is less troubled than only Miami and Las Vegas, which were hotbeds of investor speculation in the housing mania that preceded the crash.
The cure is rising prices, but the Chicago area’s prices are moving so slowly the wait is long. People are holding on to their homes, waiting for a better day to sell if they have the luxury of waiting, according to real estate agents. If they must move for a job or sell due to an issue like a divorce, they must swallow hard and take what the depressed market will give them.
Based on recent trends, Geoffrey Hewings predicts it will take 1.2 to 2 more years for Chicago-area homes to reach their peak 2006 values again. As the director of the Regional Economics Applications Laboratory at the University of Illinois, he analyzes the area’s home sales and prices each month.
The problem, he and other analysts say, is the sluggish local economy.
Read more of this article by Gail MarksJarvis at http://trib.in/2izl7Ic