Home prices in the Chicago metropolitan area increased at a slower pace, in part, because of the state’s continued population losses.
Other U.S. cities had slight slowdowns in the growth of home values, but Chicago, like all of Illinois, has been dealing with a problem that some cities aren’t. People are leaving.
Home prices across the nation grew by 3.4 percent in May. While they’re still becoming more valuable, May marked the 14th consecutive month of slowing growth. That’s according to CoreLogic’s analysis of S&P data on May home values.
CoreLogic’s Deputy Chief Economist Ralph McLaughlin said he expected the slowdown to turn around in the coming months.
“We do expect this cooling streak to come to an end or even reverse over the next two or three months,” he said.
Home values in the Chicago area increased by 1.6 percent in May, half the national growth rate and the lowest since September 2015. The only other metropolitan areas that saw slower growth were Seattle, San Francisco and San Diego.
McLaughlin said the main reason wasn’t interest rates or issues other cities are facing. Rather, he said it was the continued loss of population in Chicago and the rest of the state.
“That is naturally going to reduce demand,” he said. “It’s very hard for prices to grow any faster than inflation if there are more people leaving than moving into Chicago.”
Illinois’ population declined by 45,000 the 12 months that ended in July 2018; 24,000 of that was from Chicago, according to Census population estimates.
Las Vegas (6.4%), Phoenix (5.7%) and Tampa, Florida (5.1%) accounted for the highest year-over-year price increases. Seattle saw home prices fall by 1.2 percent year-over-year. This is the first metropolitan area measured by the Case-Shiller Index that had decreased since December 2012, the report said. McLaughlin said the drop is likely more of a correction of inflated prices in the Seattle market.