When I woke up this morning, I found a market update email with a link to the @Properties Market Report in my inbox, compliments of Member Steve McEwen. Here's what it said:
Neighborhood by Neighborhood,
Block by Block
The Tribune reports that on the Near North Side, median home prices were up 9.35% last year and in Uptown prices rose 5.93%.
But if you've picked up a newspaper, turned on the TV or surfed the 'net in the past few weeks, you've inevitably seen negative news about the nationwide drop in home prices from S&P/Case-Shiller Home Price index — a monthly index that reports the change in average home prices year-over-year.
Fortunately, this macro view of the U.S. housing market is of little value to sellers in Chicago. The S&P/Case-Shiller Index and other national indices don't know the market in your neighborhood or on your block. No one knows your market as well as your local @properties agent.
For more information on how the market is faring in Chicago, view the @properties Market Report.
Steve is highlighting some really important points that often get lost in the daily media blitz we're all enduring these days.
Reports like the Case-Shiller are hugely important tools, but it is SO important to understand what data they are based on and what their numbers represent. The Case Shiller index is meant to be a broad composite that tracks the relative changes in value of existing (not new) single-family home stock in a given metro area or nationally. The Case Shiller data includes only transactions related to existing single family homes that have sold at least twice and they seek to control-out things like price increases due to renovations and upgrades, etc.
The Case Shiller is a really useful index for summarizing the general, aggregated price trends for existing single family homes in large geographic areas. It is a rotten tool if you want to understand what might be happening in a local market or neighborhood as a buyer, seller, or agent.
As for Chicago, here are the recent numbers from Case Shiller:
For November 2008, they show a 2.8% decline from the previous month and a 12.5% decline from the previous year. Of course that is NOT what is happening in every neighborhood or at every price point.
As an approximation of Chicago's luxury market, our ILHM Luxury Market Report looks at trends in active listings
across just the 10 most expensive zips (by median price). Here is the
trend for List Price in these top 10 zips:
The Tribune shows an even more granular break-down by neighborhood (across all price points) with about a dozen neighborhoods showing year-over-year price increases:
Of course what matters to buyers and seller is what is happening in THEIR neighborhood at THEIR price point, and when you provide that information to them you are delivering real value.
We talk a lot about the importance of a good market report. It's one of the most powerful tools that agents can use to effectively communicate their expertise and effectively position themselves. It is particularly important in today's climate.
