Chicago Real Estate Market May Have Hit Bottom

The headline on a story that appeared on our site yesterday read, Is the Chicago Real Estate Industry Starting to Stabilize?
According to another real estate website, the answer is yes.
cartoon house smilingMedian home values across the country have risen on the Zillow Home Value Index for four straight months and have now marked the first annual increase since 2007. That was enough for Zillow officials to declare that U.S. home values have reached a bottom.
The metro Chicago real estate market isn’t doing as well — the area is still posting home prices 2.7 percent lower than they were last year — but our home values during the second quarter of this year increased 1.7 percent to a median price of $158,600, and that includes a hefty 1.5 percent drop in February.
From February through June, Chicago home values rose 2.2 percent. That big drop in the second month and the following upsurge was enough for Zillow folk to declare that, in February of 2012, the Chicago real estate market bottomed out.
Nationally, the median home value is $149,300, and Zillow Chief Economist Dr. Stan Humphries sees values increasing 1.1 percent by next year.
“After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values,” said Humphries. “The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.
“Of course, there is still some risk as we look down the foreclosure pipeline and see foreclosure starts picking up. This will translate into more homes on the market by the end of the year, but we think demand will rise to absorb that, particularly in markets where there are acute inventory shortages now. Looking forward, we expect home values to remain relatively flat as the market works through a backlog of foreclosures and high rates of negative equity.”
Well, flat is better than a spiral back down.