Single family house prices in Cook County experienced their seventh consecutive positive quarter in the second quarter 2014. Unlike in recent quarters, countywide price increases were led by strong price growth in suburban Cook County. Once again, during the most recent quarter, house prices saw their largest gains in areas heavily hit by foreclosure during the housing crisis, yet these neighborhoods continue to significantly lag other, less distressed parts of the county.
Key Trends from Second Quarter 2014:
For the first time since early in the housing recovery, single family house prices grew faster in suburban Cook County than in the City of Chicago. Figure 1 shows long-term price trends in Cook County and tracks house prices in the City of Chicago and in suburban Cook County separately. It illustrates steady recent house price increases countywide. House prices in Cook County increased nearly 17 percent compared to price levels in the second quarter of 2013. Both the City of Chicago and suburban Cook County experienced similar year-over-year price increases of nearly 17 percent. However, comparing the first and second quarters of 2014, price levels increased by just three percent in the city while increasing nearly seven percent in suburban Cook County. This is the first time since the first quarter of 2013 that prices in the suburbs had stronger price growth than the city. However, prices in the city are further along in their recovery. Single family home prices in the city are roughly 24 percent off previous peak levels and at pre-crash levels last seen in the third quarter of 2003. Prices in suburban Cook County are nearly 27 percent off previous peak levels and at fourth quarter 2002 levels. See Figure 2 for recent Cook County price trend data.
Figure 1. Price Trend for Single Family Homes from Q1 1997 to Q2 2014
Figure 2. Change in Prices of Single Family Homes from Q1 1997 to Q2 2014
Neighborhoods hardest hit by foreclosure saw large, recent price increases, while stronger markets with low levels of foreclosure distress continue to lead the recovery with consistent and stable price gains. Figure 3 shows areas in Cook County segmented by the degree to which they have been impacted by foreclosure throughout the housing crisis. Figure 4 shows long-term price trends for areas with low, moderate, and high levels of foreclosure. Figure 4 shows that while all areas continued to see improving price levels, high foreclosure areas saw the most significant recent gains. In these areas, prices increased by nearly 30 percent year over year. This is compared to areas with the lowest levels of foreclosure distress, where prices increased roughly 11 percent year over year. Quarterly price growth slowed substantially for highly distressed areas, however. Between the fourth quarter of 2013 and the first quarter of 2014, prices in high foreclosure areas increased by 10 percent, but between the first and second quarters of 2014, prices increased by just over two percent.
Figure 3. Share of Residential Parcels with At Least One Foreclosure Filing by Cook County Census Tract, 2005 to 2012.
Figure 4. Price Trend for Single Family Homes in Cook County by Neighborhood Foreclosure-Distress Level, Q1 1997 to Q3 2014
Figure 5. Price Change for Single Family Homes in Cook County by Neighborhood Foreclosure-Distress Level, Q1 1997 to Q2 2014
Despite significant year-over-year increases in single family house prices in the most foreclosure- distressed areas of the county, prices well below 2000-levels indicate a continued long road to recovery. While recent trends in house prices in highly foreclosure-distressed neighborhoods are a positive sign, long-term price trends remain weak in these neighborhoods. In these areas, house prices are nearly 54 percent below previous peak levels and just over 21 percent below levels observed in 2000. Conversely, long-term price trends countywide are 29 percent above levels observed in 2000. In the strongest markets with more limited foreclosure activity, price levels in the second quarter of 2014 were just over 48 percent above levels observed in 2000. Single family home prices in these stronger markets are over 9 percent below levels observed at the peak of the housing market in the first quarter of 2007. See Figure 5 for recent price trend data by neighborhood-foreclosure level.
Key Findings:
Data from the second quarter 2014 show the Cook County single family housing market continuing its recovery. Other key findings include:
- For the first time in over a year, countywide price growth was led by suburban Cook County as opposed to the City of Chicago.
- Although both the city and suburban market continue to show positive price trends, suburban Cook County single family homes experienced a larger price increase from the first to the second quarter of 2014.
- Single family house prices in the City of Chicago are still farther along in their recovery than those in suburban Cook County.
- Despite significant improvement, price-levels in the most foreclosure-distressed neighborhoods of Cook County are almost 54 percent below peak levels and remain below levels recorded by the index since 1997 – far behind the region as a whole.
About the Index
The Second Quarter 2014 IHS Cook County House Price Index is calculated from data on single family properties with repeat sales from the first quarter of 1997 through the second quarter of 2014. This release of the Index focuses on quarterly price changes for single family homes and tracks the variation in price changes between areas that have experienced different levels of concentrated foreclosure activity throughout the housing crisis.
Neighborhood foreclosure levels are determined by the share of residential parcels that have had at least one foreclosure filing between 2005 and 2012. Areas with low levels of foreclosure distress are neighborhoods where less than 10 percent of all residential parcels have had at least one foreclosure filing between 2005 and 2012. Areas with moderate levels of foreclosure distress are those where between 10 and 24.9 percent of all residential parcels have been directly impacted by foreclosure. In areas with high levels of foreclosure activity, more than 25 percent of residential parcels have had at least one foreclosure filing between 2005 and 2012.
For a detailed description of how the IHS Cook County House Price Index is calculated, click here. For each release of the Index, tabular data is available for download. The numbers reported here are seasonally adjusted. For access to all downloadable materials, click the download link at the bottom of the page.
