Chicago recovery rate slows but homeowner optimism remains strong
Recent reports on the Chicago housing market have been sending mixed signals. The Chicago Tribune recently cited a study by the Brookings Institution released September 18, which indicated that in the second quarter, the Chicago metropolitan area slowed its rate of economic recovery. While people considering real estate in Chicago may have to remain patient for the local recovery to gain momentum, other studies recently cited by the Chicago Tribune indicate that homeownership is still viewed as part of the American Dream.
The Brookings ranking was determined through the examination of unemployment rates, housing prices and output. Output is considered to be the total value of goods and services produced within a metro area. After compiling and analyzing the data for the 100 largest metros in the country, the Brookings Institution MetroMonitor study ranked Chicago as 47th on the list for overall economic performance in the second quarter. In the first quarter of 2012, Chicago was ranked two spots higher at the 45th position.
The Tribune explained that Brookings indicated the slowing in economic recovery was due largely to the muted employment growth and rate of output.
Looking at housing, the study indicated that housing markets across the nation "reached new lows," and 87 of the 100 markets examined were tied for the 14th position on the list. Chicago was among these 87 metro areas.
Another recent article in the Chicago Tribune detailed that across the nation homes have lost substantial value, with millions of homeowners with negative equity and widespread foreclosures. However, the Tribune also indicated that consumers are still embracing homeownership, citing a number of surveys that support this. One new survey cited by the Tribune is from ZipRealty, which showed that 94 percent of homeowners who purchased a home in 2008 still own their home today. The survey additionally revealed that 61 percent of those home buyers reported being either the same or better off financially than they were in 2008, with respect to their homeownership.
The Tribune explained that one reason homeowners continue to be optimistic is that many people entered the real estate market with the intention of living in their homes for at least seven years.
ZipRealty's CEO, Lanny Baker, said of the survey, "It's a stunning testament to the emotion of a home. This may be one of those seemingly surprising but common-sense reminders. Even if you're (including) the people with negative equity and they're still getting some satisfaction out of homeownership, that tells you how durable the concept is."