Real Estate Recovery?

June 18, 2013 5:30:35 AM PDT
Stan Humphries, Chief Economist for Zillow, visits ABC7 Chicago with a roundup of how Chicago's housing market fairs.

Metro Chicago Real Estate Statistics:

Topline stats: Metro home values are down 38.2% from the peak in January 2007 and are now $161,000. Home values bottomed in Q1 2012 and have gone up 1.4% since then.
- Metro Chicago home values are nearly unchanged in the past year: Home values have been fluttering and roughly flat over the past year. They are currently down 0.2% year-over-year
- Rents are rising: The median rent for the metro area is up 3.9% year-over-year due to increased demand for rental housing.

Negative Equity
-More than one-third of metro area homeowners have negative equity: 36.1% of homeowners with a mortgage in the metro area owe more than their home is worth (have negative equity)
-Half of homeowners with a mortgage are unable to sell and buy another home: The "effective negative equity rate", or, the percent of homeowners that do not have enough equity in their home to sell and buy a new home is 51.6%
-Homeowners are deeply underwater: The average amount homeowners are underwater in the Chicago metro is -$80,768 or -48.8%.

Major City Highlights
- City of Chicago- Down 3.2% year-over-year (Apr. 2012-Apr. 2013), down 3.9% quarter-over-quarter (Feb.-Apr.)
- Aurora- Up 4.8% year-over-year, up 4.2% quarter-over-quarter
- Naperville- Up 7.5% year-over-year, up 1.7% quarter-over-quarter
- Elgin- Up 5.1% year-over-year, up 3.2% quarter-over-quarter

Split identity: Generally speaking, the more expensive the city is to own a home in, the better it is doing right now.
- All but one city with a Zillow Home Value Index (median home value) of $264,000 or greater are seeing annual home appreciation.
- In the vast majority of cities with a Zillow Home Value Index of $175,000 or less, home values are depreciating annually.

What about the future?
- Metro-level forecast: Home values are forecasted to appreciate by 0.4% through April 2014
- Should you rent or buy? If you plan on living in a home for at least 2.8 years, buying the home may be a better financial decision than renting the home. For most cities within the metro, this ranges from 2-4 years.

zillow.com


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