Chicago housing market may be moving in the right direction
A recent article in the Chicago Tribune revealed that new reports demonstrate the Chicago housing market has shown improvements in its efforts to stabilize, although it still is not on pace with the national housing recovery. People investigating homes for sale in Chicago can view these reports as positive reinforcement of the buyer's market, and could look to additional recent survey results in Crain's Chicago Business to determine which specific neighborhoods are faring better than others.
One of the reports found that in the second quarter of 2012, the percentage of homeowners underwater with their mortgages decreased from the first quarter, from 41.1 percent to 39.2 percent. The Tribune article revealed there are roughly 684,709 homes in the Chicago area for which homeowners owe more than the property is worth, which adds up to a total negative equity of $56.8 billion.
While the improvement should be noted, the national average for the percentage of homes that are underwater was at 30.9 percent in the second quarter. This means that Chicago is nearly 9 percent behind national recovery trends. The data also showed that 12 percent of Chicago homeowners are 90 days behind on their mortgage payment, while the national average of homeowners behind on payment stands at 9.2 percent, according to the Tribune.
In another recent report from Crain's Chicago Business, David Lee Matthews detailed the results from a survey of 65 large downtown condo buildings. The survey revealed that resale prices decreased by an average of 18 percent from 2008 to 2012 when analyzed on a square-foot basis.
Looking at individual neighborhoods in the downtown area, the survey indicated that the South Loop community experienced the largest decline in resale prices over the last four years, dropping by roughly 30 percent. Conversely, the Gold Coast neighborhood showed the smallest decline, at 11 percent.
Crain's Chicago Business explained, "The disparity makes sense considering the South Loop was the epicenter of the city's development boom - and its bust, as buyers failed to show up for many new projects after the market started falling in 2006. Overbuilding was less of a problem in the Gold Coast, an older wealthier neighborhood."