The median price forecast indicates moderate annual growth in both Illinois and the Chicago PMSA for November, December and January. In Illinois, the median price is forecast to rise by 5.8% in November, 7.4% in December and 4.3% in January. For the Chicago PMSA, the comparable figures are 7.7% in November, 9.5% in December and 8.3% in January. (Reference: Forecast for November 2015 report table.)
As a complement to the median housing price index (HPI), the REAL HPI (4) also forecasts moderate growth for Illinois and the Chicago PMSA. In Illinois, the REAL HPI (Jan 2008=1) is forecast to rise by 6.8% in November, 9.0% in December and 3.2% in January. The comparable figures for the Chicago PMSA are 5.8% in November, 8.1% in December and 3.4% in January. REAL HPI takes housing characteristics into account and constructs comparable “baskets” of homes for each month. (Reference: Housing Price Index)
The sales forecast for November, December, 2015 and January 2016 suggests negative and positive growth respectively on the monthly and yearly basis. Annually for Illinois, the three-month average forecasts point to a change between 4.1% and 4.8%; for the Chicago PMSA, the change will range from 5.4% to 6.3%. On a monthly basis, the three-month average sales are forecast to decrease by 12.0%-14.0% for Illinois and 11.6%-13.6% for the Chicago PMSA. (Reference: Forecast for November 2015 report table)
The pending home sales index (5) is a leading indicator based on contract signings. This October, homes put under contract were more than last year but less than last month. The pending home sales index is 135.5 (2008=100) in Illinois, down 12.7% from last month and up 1.1% from a year ago. In the Chicago PMSA, the comparable figure is 159.1, down 9.6% from a month ago and 7.1% from a year ago. (Reference: Illinois and Chicago PMSA Pending Home Sales Index figure)
In October 2015, 2,189 houses were newly filed for foreclosure in the Chicago PMSA (down 37.7% and up 29.6% respectively from a year and a month ago). 1,476 foreclosures were completed (6) (down 52.9% and 7.0% respectively from a year and a month ago). As of October 2015, there are 36,079 homes at some stage of foreclosure — the foreclosure inventory. The average inventory change rates (7) were 1.3% in the past 6 months, 0.9% in the last 12 months and -2.0% in the last 24 months. Given the 24-month rate of change, the foreclosure inventory would return to the pre-bubble levels (8) by November 2020.
According to the positive 6-month rate and almost unchanged 12-month rate, the inventory would increase (Reference: Chicago PMSA Foreclosure Activity and Inventory figures).
4 REAL HPI was developed by Esteban Lopez and Minshu Du. Contact us for further details.
5 The base level (100) of pending home sales is the average pending home sales of year 2008.
6 Including estimated foreclosure completions that are missing in the data.
7 The range of months used for calculating the average change rates are modified from the 6/12/24 months’ scenarios to 3/6/9 months’ scenarios since Aug 2014.
8 Average foreclosure inventory from 1997-2005 Housing Forecast October 2015 5
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