Sue Fox, @Properties. Direct 773.816.1788
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At last, housing prices will finally hit bottom and begin to increase in 2012, according to a group of 54 economists surveyed by the Wall Street Journal.
The increase will be slight, probably less than 2.5% a year — not enough to keep up with inflation, the economists said. Yet the rebound will still be a welcome relief for homeowners across the country, who saw prices slip again this year. The economists predicted that home prices, as tracked by the Federal Housing Finance Administration, will fall 2.7% in 2011.
In Chicago, we’ve seen home prices drop about 5% this year, according to the most recent data from the Case-Shiller home price index. Prices started to recover here over the summer, only to dip ever so slightly (less than 1%) between August and September.
What’s next for the Chicago market? With interest rates at record lows — local lenders like Guaranteed Rate are now offering 30-year fixed mortgages at 3.85% — it’s still a stunningly cheap time to buy a home. But unemployment remains stubbornly high in the Chicago-Joliet-Naperville area, a factor that is likely to keep a lid on home prices. Even though Illinois led the nation in job growth in October, unemployment jumped from 8.8% a year ago to 9.7% in the Chicago area.
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