As Chicago nears the end of 2020, one of this year’s defining economic hallmarks was the sustained continuation of real estate price rises. According to last week’s email announcement from industry price monitor CoreLogic, U.S. price advances were more pronounced than had been foreseen by nearly anyone a year ago. Through the end of October, year-over-year, annual average housing prices rose by 7.3%.
These returns are studied by industry professionals—including Chicago real estate brokers—not only for comparison with recent local sales results, but as indicators of what to expect going forward. The details in CoreLogic’s “HPI Forecast” are just that—predictions—well-informed estimates rather than certainties. Based on U.S. public records and a selection of real estate databases, this latest prediction anticipates that home price growth will gradually slow over the coming 12 months.
Since that would moderate “the fastest annual acceleration since April 2014,” most Chicago real estate watchers would be pleased to see it come to pass. Still, for anyone with less than a steel-trap memory, that “April 2014” date could have them scratching their head, trying to recall what was going on in the spring of 2014 that surpassed this latest 7+% price growth spurt?
A look back reminds us of a few reasons (here quoted from a Trulia ‘Commentary and Analysis’ published at the time):
- The most substantial asking price increases came from areas that had sustained the steepest price declines during the housing bust.
- Asking prices were rising 9.0% year-over-year.
- Sharp price increases also corresponded with areas where construction starts were lagging—some registering “less than half of normal” activity.
Other details were echoes of the housing bust and the steep recovery from it.
If this latest prediction of moderately slowing price increases is on-target, Chicago’s real estate picture will fall in line with longer-term trends—and what appears to be a more typical stable growth profile.
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