Mornin', Folks!
Looking in the online Wall Street Journal today, median home prices nationwide continued their slide in October. But that doesn't mean EVERY HOME, in EVERY NEIGHBORHOOD is falling in the same pattern.
As you may guess, national indices of home prices miss the mark - often, by a wide margin - as a means to predicting prices for individual homes, at the Local and Neighborhood Levels.
Take, for example, the highly-followed S & P/Case Shiller Index of relative home values. The index suggests a 15% drop in the composite home value within the Top 20 Metro Markets across the U.S. since the beginning of 2007. In the Chicago Metro Area, their Case Shiller index decline is less severe - roughly, 10%, but still significant.
Fannie Mae and Freddie Mac Government Statistics are somewhat more optimistic - but these don't count sub-prime loans in their formula, and may understate the overall average price declines.
But take a look at the following figures from several well-known Chicago Neighborhoods and a couple of Chicago Suburbs - and note not only the big differences within a local market area, but also the sizable difference from the National Averages or the Chicago Metro Area Index -
CHICAGO NEIGHBORHOOD/SUBURB MEDIAN PRICE CHANGE - SF, CONDOS, 2-4 UNIT BLDGS - OCT. 2007 - 0CT. 2008
CHICAGO LOOP (-32.5%)
CHICAGO NEAR NORTH/GOLD COAST (-6.4%)
CHICAGO HYDE PARK (-17.5%)
CHICAGO LINCOLN PARK +2.0%
CHICAGO LAKEVIEW +3.3%
CHICAGO LINCOLN SQUARE +3.1%
CHICAGO PORTAGE PARK (-16.9%)
CHICAGO SUBURB - NILES IL +4.2%
CHICAGO SUBURB - NAPERVILLE IL (-3.6%)
ALL STATISTICS COURTESY OF MIDWEST REAL ESTATE DATA LLC, THE MLS SERVING THE CHICAGO IL METRO AREA
Indeed, if you were to research Chicago Home Prices at the Metro Area Level, you might assume that the Chicago Market Median Home Price has fallen approximately 10% within the past 22 months.
The reality, however - many of our neighborhoods and suburbs have actually INCREASED in value, while others have had their median prices fall.
Few of these statistics, however, mirror the national or regional statistics, highlighting the fact real estate prices, in ANY market, are indeed determined at the smallest possible geography, at the neighborhood and street level. To take pricing to its logical extreme - only the negotiation between the buyer and the seller, for a specific piece of property, will determine what the property is actually worth.
See our post today @ BlogChicagoHomes.com for more, as well as a link to Carl Bialik's article in the November 20th edition of The Wall Street Journal.
DEAN & DEAN'S TEAM CHICAGO
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