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Great News on the Housing Front

April 27, 2010

Well, it is official. Home values are getting better. According to the S&P/Case-Shiller 20-city index, home prices moved up 0.6% year-over-year, with nine of the 20 cities in the index showing gains. Much of this was likely fueled by the Homebuyer’s Tax Credit, but psychology is a major variable in any recovery. If you believe, as many economists do, that people are generally driven by fear and greed then there is a good chance that this recovery could continue as the greed to get the best deal on a property is replaced by the fear of lost opportunities to get a good deal.

Chicago faired fairly in the report. While our metro area is still showing decreasing prices at -3.0%, it was far from the bottom of the barrel. Additionally, historical data shows that areas hardest hit by a contraction usually emerge the soonest. Coastal cities, which had reached unsustainable values before the crash, performed best. The good news for current shoppers is that this is the canary in the coalmine. It gives them a unique advantage of knowing that increases could be around the corner in our market and that good deals are still to be had.

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