Why aren’t Chicago home values rising faster?
I’m a big promoter of Chicago: I think it’s a world-class city filled with great restaurants, entertainment options and neighborhoods.
But it’s hard to deny that the city’s housing market today is a bit weak.
Just look at this recent story in Crain’s Chicago Business that does a great highlighting just how sluggish housing prices here have been when compared to other major cities.
The story points to numbers from the S&P CoreLogic Case-Shiller Indices showing that last year home prices in Chicago rose just 2.6 percent. That’s lower than the national average of 6.3 percent and is also last among the 20 largest cities in the United States.
The Crain’s story points out, too, that the Chicago market also has the most underwater homes in the country. A home is considered underwater when its owners owe more on their mortgage than what their home is worth.
So, why is this? The Crain’s story points to three big issues. First, Chicago’s employment growth has been sluggish, meaning so has wage growth. Secondly, the Chicago market is losing population, something that lessens demand for homes and pushes down prices.
Finally, property taxes are high here. That, too, is dissuading some from buying a condo or single-family home in the Chicago market
As long as demand for homes here is on the wane, don’t expect housing values to increase at a quicker pace.
Now, the good news is that home values are rising in the Chicago market. They’re just not rising as fast as homeowners might like. The market is also a bit friendlier to buyers today. Homes here are more affordable to more buyers than they have been in the past. That’s a definite positive if you are looking for a condo or single-family home in Chicago.
But if you’re selling? You need to work with a REALTOR® who knows your neighborhood well, one who can help you prepare your home for showings and market it to the most potential buyers possible. Taking this step can help you get the best price for your Chicago home, even in a market where values are not rising quickly enough.