By Paul Tooher
Median housing prices in the Chicago metro area are forecast to surge 29 percent by 2018, according to a new report issued by The Demand Institute, a non-advocacy, non-profit organization jointly operated by The Conference Board and Nielsen.
To produce its report, the Institute says it conducted an economic analysis of 2,200 cities, towns, and villages that are home to half the population of the U.S., coupled with in-depth interviews with the heads of 10,000 U.S. households.
The report found that a large proportion of the nation’s housing wealth is concentrated in a small proportion of American cities and towns. Of the 2,200 communities surveyed, the largest 10 percent of metro areas held 52 percent of the nation’s total housing wealth, while the smallest 40 percent held just 8 percent.
Nationally, the Institute forecasts that existing single-family median home prices will grow at an average annual rate of 2.1 percent between 2015 and 2018.
In Chicagoland, however, single-family median home prices are expected to climb 16 percent, from $175,000 to $202,000 between 2012 and 2015. Prices are expected to continue to climb, reaching $225,000 by 2018.
That’s the seventh greatest percentage increase among the 50 major metros surveyed by the Institute.
The Institute classifies Crystal Lake as a traditional suburb where the median home price has risen 18 percent since 2000 to $196,000, while median income has increased 3 percent to $69,000 over the same period.
According to the Institute, traditional suburbs are solid, middle-class communities that represent the cornerstone of American family life.
The Institute forecasts Memphis, Tenn., and Tampa-St. Petersburg, Fla., will see the sharpest increase in median home prices, up 33 percent by 2018. Other metro areas predicted to show the sharpest increase include Jacksonville, Fla., 32 percent; Milwaukee and St. Louis, both 30 percent; Baltimore and Detroit, both 29 percent; New Orleans, 27 percent and Pittsburgh, 26 percent.
The Washington, D.C., metro area is forecast to see the smallest percentage increase in housing prices during the same period at 7 percent, while Oklahoma City is expected to see a 10 percent increase.
Other metro areas with the smallest percentage increase in housing prices include Denver, 11 percent; Minneapolis, 12 percent; Phoenix, Cleveland Raleigh, N.C. and Los Angeles, all 13 percent, and Miami and Nashville, both 14 percent.
According to Zillow, the current median home value in Crystal Lake is $162,500 and the median rent price in Crystal Lake is $1,445, which is lower than the Chicago metro median of $1,500. Mortgage rates in St. Charles are approximately 4.157 percent for a 30-year-fixed loan.