Housing prices in the Near West Side, Logan Square and a handful of other popular areas north of downtown are now well above their pre-crash peaks, but most of the city and the suburbs are still clawing their way back from the depths of the devastating crash, according to a new report.
Many areas in the southern part of the city still have average prices more than 45 percent below their 2006 peaks, although they are slowly beginning to recover, according to the analysis of year-end 2016 single-family home prices released Wednesday by Geoff Smith, executive director of the DePaul Institute for Housing Studies. The only areas that have recovered fully are the Near West Side, Logan Square, Lincoln Square/North Center and Lakeview/Lincoln Park.
Even among the suburbs that typically have been in demand, the recovery is not complete 10 years after the start of the housing crash. Housing prices in the Evanston/Skokie area are still down 17.7 percent from the 2006 peak, while Palatine/Barrington is down 14.9 percent, Oak Park/Cicero is down 18.6 percent, Winnetka/Northbrook is down 8.4 percent, and Schaumburg is down 9.6 percent.
The median home price in the Cook County suburbs is still down 18.6 percent from the housing peak. The median home price in the city remains 23.4 percent lower, the institute's Cook County House Price Index found.
"The market in general is not normal," said Smith, who examines single-family housing values in submarkets of the city and suburbs as part of the report, which is updated every six months. "The crash put a lot of people in a frustrating position."
Many homeowners in the city and suburbs are still waiting for homes to reach the prices they paid or to reach the level that was assumed to be the value when they refinanced mortgages and took on more debt, he said.
The problem is slow population growth in this region, he said. "We need more people to create demand for houses."
Although a separate analysis by the Illinois Realtors recently found that overall the median price of homes in the nine-county metro area had recovered from the crash, Smith's analysis only of Cook County drills down into specific areas and shows vast differences in the recovery.
West Town/Near West Side, for example, has completely recovered from the crash and at the end of 2016 had prices 9.6 percent above the peak hit in 2006. Yet Bridgeport/Brighton Park is still down 29.8 percent from the peak despite growing popularity and a 52.3 percent surge in prices since hitting bottom. During the last year, prices climbed slightly over 9 percent in both the West Town and Bridgeport areas. Both areas also have seen prices climb about 50 percent since the bottom of the housing crash.
Bridgeport was hit hard in the crash because in 2004 and 2005 it had attracted a lot of speculation; especially from investors using subprime loans, Smith said. Loans went into default and property values plunged.
The encouraging finding, Smith said, is that even the hardest-hit areas now appear to have hit bottom and are showing signs of recovery. For example, South Chicago/West Pullman had one of the largest increases in prices over the last year — a 13.2 percent increase. That was the same surge as in Logan Square/Avondale.
Yet the contrast between the two areas is great. Logan Square, which has become an established popular housing and entertainment area, has had a 72.8 percent surge in prices since it hit bottom after the crash. South Chicago/West Pullman is up just 30 percent from the bottom, but it has begun to attract investors speculating that the large area that was once the site of a U.S. Steel mill will be developed, Smith said.
The most dramatic increase was in Humboldt Park/Garfield Park, where prices have climbed 92.7 percent since hitting bottom and 20.7 percent in the last year. Like other areas experiencing a resurgence, it is near areas that already have become strong and has easy transit access to downtown. Yet even with its powerful surge, the prices in the Humboldt Park area are still down 44.7 percent from the peak.
The two areas that remain the farthest behind in recovering are Chicago Heights/Park Forest and Calumet City/Harvey. Both had prices climb about 6 percent in the last year, but prices are more than 40 percent below the 2006 peaks.
Although the suburbs are much further along than distressed areas of the city in recovering, Smith said many have had relatively weak recoveries. In the last year, prices have climbed less than 2 percent in Orland Park/Lemont, Arlington Heights/Wheeling and Winnetka/Northbrook. Prices also have been appreciating relatively slowly in Hoffman Estates/Streamwood, La Grange/Burbank, Mount Prospect/Elk Grove Village and Palatine/Barrington.
