Sunday, July 21, 2019

Case-Shiller Housing Trends – Chicago, Detroit and Minneapolis

-- Intended for New Analysts and Researchers --

(Click on the image to enlarge)

The Detroit area housing market was severely impacted by the last recession; in fact, certain neighborhoods in the City lost over 60% of the value. Considering the City has been recovering from a fairly low value base, the overall growth looks better than its other Midwest counterparts. 

Obviously, the Chicago growth has been anemic. Worse yet, it has been flat-lining since Q4-2018, without any signs of green-shoots whatsoever. While the growth story of Minneapolis is, by no means, spectacular, it has nonetheless been inching up.   

Needless to say, the Chicago market has been totally unresponsive to the falling interest rates, while Detroit and Minneapolis have reacted quite positively. Given the low value base, Detroit is expected to react well to the much-anticipated rate cuts in Q3 and Q4-2019. If Chicago fails to react well to the coming rate cuts, it may start to trend down, with the first stop at the Nov-Dec, 2017 level, breaching which it may even retest the Jan-Feb, 2017 lows. In order to avoid this gloomy forecast, it needs to respond well to the forthcoming rate cuts. Since Minneapolis has reacted positively to the on-going falling interest rates, it is expected to do even better as the new round of rate cuts kick in.

These are seasonally-adjusted indices so the month-over-month comparison is fine. While using the seasonally unadjusted data, compare Mar-2019 with Mar-2018, etc. 

Disclaimer - The author is not advocating the Case Shiller indices listed here. Consult your Financial Planner for an appropriate asset allocation model and/or trading strategies for different markets, including housing.

Thank you.

Sid Som, MBA, MIM

President, Homequant, Inc.

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