North Shore Suburban Prices Up 7%-9% In The Last Year

An upward trend in home prices continues despite concerns of higher interest rates. On average single family homes in Chicago’s north suburban market have climbed substantially in the past year averaging a +9% change. Attached homes such as condominiums and townhomes also show a substantial price increase of +7% within the same time frame. This represents a slight decrease in the rate of appreciation for freestanding homes over the pace set in the prior year, but an increase in the rate of appreciation for condominiums and townhomes. (See the charts below). Two interesting factors surface here that may predict a trend for the coming months. Those include the increase in the overall numbers of properties available as new listings with a corresponding increase in the average marketing times. While closed sales of condominiums and townhomes kept close pace with the numbers of sales in 2004, single family homes closed sales dropped by nearly 10% over 2004. A larger inventory of properties to select from coupled with longer market times may lead to a slowing of the appreciation rate in the last quarter of 2005. If additionally impacted by higher mortgage rates, this could be a trend for the coming year.

By clicking on the images, you will see a full chart.

The north suburban market continues to be an area that builders, developers and investors select for new home construction. Redevelopment of existing neighborhoods where older, smaller homes are disappearing in favor of much larger new homes continues to be extremely popular. For a more accurate assessment of property value changes, it is important to consider the fact that new construction pricing, especially in areas where there had previously been little, will tend to artificially raise the average prices for areas in which this is now prevalent. For more detail on how this works or for specific information on your town or neighborhood, please contact me and I can email additional information for your area.