Saturday, June 07, 2008

It's the end of the boom as we know it, and I feel fine

At the Happy Village tavern, a neighbor confessed he's watching the real estate market from the sidelines, waiting to buy at the market's low point. From that barstool perch, the parade may already be passing him by.

The sales pace in West Town is indeed off 30 percent from last year. Yet property values have risen 3 percent, according to the Chicago Tribune's Market Pulse analysis of property transfers.

West Town's median price of $400,000 is up 20 percent in five years. The sales numbers pace 2003 levels. Prices increased this year in 24 of the city's 77 census areas, including nearly all lakeshore communities.

The Illinois Association of Realtors' Chicago area statistics show values down 3 percent overall — hardly a free fall. Condo prices were up by a greater percentage. The typical sales commission wouldn't cover the difference between the median-priced condo and midpriced home.

The overall picture masks some sad individual cases, as this week's foreclosure report suggests. So-called sub-prime loans have fallen down the rabbit hole, and many families with them. In the first three months of the year, foreclosures started on 6.35 percent of adjustable loans in that higher-risk category, nearly triple the overall rate.

Foreclosures ran apace in only seven states, however, with the Great Lakes trouble spots (Michigan, Ohio and Indiana) starting to shore up. It could get worse. It could get better. Or, as the regional gaps suggest, it's all about location. Many neighborhoods will stubbornly hold their own as bystanders await their collapse.

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