Chicago-area home prices rise: report

From the Crain's Chicago Business Newsroom August 31 11:15:00, 2007 By Alby Gallun

(Crain’s) — Prices of homes in the Chicago area continued to rise through the first half of the year, albeit at a slower rate, according to a government report released Thursday.

An index of single-family home prices here rose 3.7% in the 12 months ending June 30, after rising 9.1% in the year-earlier period, according to the report from the Office of Federal Housing Enterprise Oversight (OFHEO). Chicago’s rate of appreciation ranks it 139 among 287 U.S. metropolitan areas that OFHEO tracks.

Home prices in the past year have flattened out or fallen in some areas amid rising mortgage rates, tighter lending standards and growing pessimism among buyers. OFHEO’s national price index rose 3.2% in the 12 months ending June 30, the lowest annual price increase in a decade. The index rose just 0.1% in the quarter.

“House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates, and weakening buyer sentiment,” OFHEO Director James B. Lockhart said in a news release. “Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom.”
Ofheo tracks average prices based on repeat purchases or refinancings of the same single-family homes. Because Ofheo analyzes data from Fannie Mae and Freddie Mac, the data covers only properties that have mortgages up to $417,000, the limit on loans the government-chartered firms will buy.

Wenatchee, Wash., had the highest annual rate of appreciation in the country, 23.6%, followed by Provo-Orem, Utah, at 18.2%.

Merced, Calif., led price decliners, with an 8.7% year-over-year drop, followed by the Santa Barbara, Calif., area, with an 8.1% decrease.

Chicago-area home prices edged up 0.3% in the second quarter, and rose 45.0% in the five years ended June 30, according to the Ofheo report.