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USA Report - Midwest Edition

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Discovery Reports

Chicago home prices are rising

PUBLISHED : Monday, 29 February, 2016, 5:50pm
UPDATED : Monday, 29 February, 2016, 5:50pm

Chicago is the third-largest city in the United States, and its property market has been heating up in recent times, news reports say.

According to Redfin, a local publication, Chicago's housing market has been buoyant, with home sale prices rising 7.9 per cent in January compared to the corresponding period last year. This has happened despite the worst start to equity markets since early January.

Redfin says the number of home sales during the same period rose 3.4 per cent with a total of 3,152 transactions, but the inventory - the actual number of houses on the market - has seen less than 1 per cent growth since January last year.

With more buyers making competitive offers on the same limited number of available properties, it is easy to see why home prices have trended upwards in Chicago. Another factor may be that only high-quality stock is selling in certain areas, while lesser-quality homes languish on the market.

While the citywide average data paints a broad picture of Chicago's home sale market, the Redfin report also highlighted a number of neighbourhoods as notable trend-setters and outliers.

Property analysts quoted in news reports say the largest year-to-year mover was the Tri-Taylor area, which saw an unprecedented jump of 91.1 per cent in median home sale prices, which was attributed largely to new single-family construction such as the Eco Square project.

Another residential area, Edgewater, fared second-best with an increase of 37.9 per cent. While the city's average home sale price was US$224,500, Chicago's most expensive neighbourhood was Bucktown.

According to property listings websites, some single-family home prices in Chicago are now back at the level seen in May 2003, having fallen 22.6 per cent from the peak in September 2006. The index is running 24.7 per cent below the trend line, but that gap may never close, since inflation is not what it used to be. Meanwhile, condominium prices in January were unchanged from October last year.

Homebuyers from China and other parts of Asia are also rushing to Chicagobecause of the thriving arts and culture scene that exists in the city. Then there is the sharp rivalry between the Cubs and the White Sox before baseball season starts.

Although the winters can test anyone's resolve, Chicago summers are among the best in the world, with things to do every weekend, outdoor festivals, and Lake Michigan on your doorstep.

It won't be long before Chicago makes you feel right at home.