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Chicago Area Home Prices Hit New Low in March

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Mary Ellen Podmolik

Regional Spotlight—(MCT)—Home prices in the Chicago area hit a new post-housing crisis low in March, falling to levels not seen locally since April 2000, according to the widely watched SandP/Case-Shiller home price index, released Tuesday.

With the most recent decline, average home prices in the Chicago area have fallen 39 percent since they peaked in September 2006, according to the index.

March home prices locally were down 2.5 percent from February and down 7.1 percent since March 2011. Of the 20 cities studied, 12 saw prices rise in March from February while seven saw declines and home prices in one city — Las Vegas — were flat.

Chicago-area condo prices in March, while down 5.1 percent on a year-over-year basis, were flat with February, meaning they continue to hover at fall 1999 levels.

Much of the pricing pressure was on homes that sold for less than $139,182, as the average selling prices for those properties in March fell 3.4 percent from February and were down 9 percent from a year ago and reflects the impact of distressed homes on the market. That puts the pricing environment for lower-priced homes akin to where it was in April 1995.

“A lot of the exotic mortgages, a lot of the questionable lending took place at the low end of the price scale,” said David Blitzer, chairman of SandP’s Indices’ index committee.

On a national level, home prices for the 20 metropolitan areas measured by the index were flat for the month and fell 2.6 percent from a year ago.

“We’re beginning to see more stability in the overall numbers,” Blitzer said. “The housing situation in the United States, while certainly not booming, is seeing some stability and possibly some gains going forward. Prices will be the last thing to go up.”

Yale University economists professor Robert Shiller cautioned against reading too much into the small improvements seen in the housing industry, because previous upticks that gave economists and the industry hope have fizzled.

Last week, the Illinois Association of Realtors reported strong sales of existing homes and condominiums in the Chicago area in April. Median home prices, which measure the point at which half the homes are sold for more and half for less, recorded the smallest year-over-year decrease, of 1.5 percent, in more than a year.

The SandP/Case-Shiller index of average home prices is calculated by comparing the sales prices of individual homes over time.

Separately, housing data firm CoreLogic reported Tuesday that delinquency and foreclosure rates in the Chicago area increased in March from a year ago. Some 10.64 percent of mortgages in the area were 90 days or more delinquent in March; that compares with 10.22 percent in March 2011.

Meanwhile, the national rate of mortgages that were seriously delinquent in March was 7.18 percent, an improvement from the 7.51 percent recorded a year ago.

Of those 10.64 percent of mortgages that were delinquent in the Chicago area, 6.31 percent of them were in some stage of the foreclosure process in March.

©2012 the Chicago Tribune
Distributed by MCT Information Services

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