After a decade of volatility, national home prices rose a steady 4 to 5 percent in 2015. Unfortunately, that was not the case in the Chicago market, where single family home prices rose by a meager 1.3 percent—the lowest among 20 major cities tracked by a leading housing index.
Crain’s Chicago Business real estate reporter Dennis Rodkin joins us to talk about the local housing market, national trends and a few updates on some celebrity-owned real estate in the area.
Neighborhoods doing well in the local market include Avondale and areas along Milwaukee Avenue, Rodkin said on "Chicago Tonight."
"Everything from where Milwaukee starts downtown all the way out to Old Irving Park. One of the questions will be, does it continue over the course of the years, out to, say, Jefferson Park? But: Wicker Park, Bucktown, all of those neighborhoods are pushing energy farther north because they're getting too expensive, and they're getting crowded."
Humboldt Park is also seeing growth, according Rodkin, as are neighborhoods along the 606 trail.
"Just today I had a story about a developer who says that he can now sell houses at about twice the price that he could before the 606 opened. People are coming farther west. It's not just the 606 – it's also that in those affluent neighborhoods, the housing market is healing, so [people] are having to move farther west because [they] can't afford Wicker Park, Bucktown, so [they'll] check out Humboldt Park. Anywhere you're near an entrance – especially – to the 606, you have seen an uptick of some sort, whether it's in rent or for sale."
Areas south of Madison and some near south suburbs such as Harvey and South Chicago Heights are not doing as well, said Rodkin.
"The South and West Side neighborhoods that we think of as lower-middle class, many are still suffering with a big burden of foreclosures and some of the other systemic problems we know about; the violence and things like that. The housing market is attached to that in a direct way."
Hover over the points in the image below to discover the home price index over a 15-year period.
Chicago’s stalled growth
High rates of unemployment, especially in African-American neighborhoods, have also contributed to the lag in growth in Chicago, Rodkin said during a phone interview earlier on Tuesday. In these neighborhoods, median home prices are lower than they were at the turn of the century.
Chicago ranks fifth in the nation for sales of distressed (foreclosed and short sale) homes and second in the nation for the number of underwater homes (when more is owed on a home than what it’s worth).
“We’re continuing to pay the price for having a large inventory of foreclosures,” he said.
Another contributing factor is migration from the Prairie State. Two recent studies ranked Illinois as one of the top three states most moved from in 2015. Only New York topped Illinois, according to the U.S. Census Bureau, which stated Illinois lost 22,194 residents between July 1, 2014 and July 1, 2015.
The 39th annual United National Movers study ranked Illinois as the No. 3 most moved-from state, trailing New Jersey and New York.
Below, track population movements across the country from 1978-2015 via the interactive map.