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posted: 12/3/2013 2:16 PM

Chicago sees sharp rise in home prices in October

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  • A measure of U.S. home prices rose only modestly in October, adding to signs that prices have stabilized after big gains earlier this year. However, the Chicago area was among those that continued to show a substantial gain.

      A measure of U.S. home prices rose only modestly in October, adding to signs that prices have stabilized after big gains earlier this year. However, the Chicago area was among those that continued to show a substantial gain.
    ASSOCIATED PRESS

 
Associated Press

WASHINGTON -- A measure of U.S. home prices rose only modestly in October, adding to signs that prices have stabilized after experiencing big gains earlier this year

Real estate data provider CoreLogic said Tuesday that prices increased 0.2 percent in October from September. That's up from a 0.1 percent gain in September. But it is down sharply from a 0.9 percent increase in August.

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But some areas bucked the trend. The biggest increase came in Riverside, Calif., with 24.1 percent, followed by Los Angeles (22.1 percent), Atlanta (16.4 percent), Phoenix (15.9 percent) and Chicago (12.3 percent).

Home prices are still about 17 percent below the peak reached in April 2006, according to CoreLogic.

One reason for the slowdown is that the figures aren't adjusted for seasonal patterns. Prices usually decline in the fall and winter, when sales slow.

Still, large gains during the previous months, along with higher mortgage rates, may be pricing some buyers out of the market.

Home prices have risen 12.5 percent from a year ago. The increase could encourage more sellers to put their homes on the market, easing a shortage of homes for sale.

Only 1.88 million homes were on the market at the end of October, down 2.1 percent from the previous month and the fewest since March.

The shortage of inventory has affected sales. Home re-sales fell in October for a second straight month to a seasonally adjusted annual pace of 5.12 million, the lowest since June, according to the National Association of Realtors. That pace is still 6 percent higher than it was a year earlier. But it's below the roughly 5.5 million sold each year in healthier markets.

Some sales were delayed in October due to the 16-day partial government shutdown, the Realtors' group said. The shutdown prevented the IRS from verifying incomes, a critical part of the mortgage-approval process. Those sales may have been pushed into November or December.

But a measure of signed contracts to buy homes fell for a fifth straight month in October. That points to weaker final sales in the coming months. Final sales typically occur one to two months after contracts are signed.

According to CoreLogic, prices rose in October from the previous year in all states except New Mexico. The biggest gains were in Nevada (25.9 percent), California (22.4 percent), Georgia (14.2 percent), Michigan (14.1 percent) and Arizona (14 percent).

Ninety-six of the 100 largest metro areas reported price gains from the previous year. That's down from September, when all 100 cities reported gains.

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