The S&P/Case Shiller index released yesterday, September 29 is a major indicator of national and regional home price movement. The new values for August displays the 6th consecutive month of improvment in home prices across the country from a low point in February/March. In our region, it is the 3rd consecutive month of improvment for the greater Chicagoland area.
In July, our median home values increased by 2.6%, the largest increase since the average began to decline in October of 2006. This point to further stabilization of our national and regional real estate market and gives hope to the notion that the biggest decline in home values in decades is approaching an end.
Current home values are at similar levels than they were in March 2003 and are currently approximatly 24% off the high average value reached in October 2006. This is an overall improvement from the low point of 28% reached in March of this year.
The current government tax incentive is continuing to bring out buyers this fall and should contine to improve home sales and values in our region and across the country. The only wrench in the works is the still-high national rate of foreclosures plaguing our country. This and the winter season has the possibility of putting a dent in recovering home values. If the rate of foreclosure begins to falter and decline howeve, this could accelerate the rate of home value recovery and effectively signal and end to the housing slump we’ve been in for the past 3-4 years.