In a recent survey of 20 financial centers conducted by UBS, Chicago, Ill. is still an undervalued housing territory. Of the remaining cities on the list, 16 are considered either overvalued or at risk of a bubble and three of the cities are considered fair-valued. The 20 cities evaluated in the report, the UBS Global Real Estate Bubble Index, are:
- Hong Kong
- Munich
- Toronto
- Vancouver
- Amsterdam
- London
- Stockholm
- Paris
- San Francisco
- Frankfurt
- Sydney
- Los Angeles
- Zurich
- Tokyo
- Geneva
- New York
- Boston
- Singapore
- Milan
- Chicago
Milan, Boston, and Singapore were ranked as fair-valued cities. Hong Kong, Munich, Toronto, Vancouver, Amsterdam, and London were considered to be “bubble risks.”
What Sets Chicago Apart?
The fiscal values in Chicago have not helped with the real estate values. According to the U.S. Census Bureau, the city’s population has been slowly declining since 2000. Even this new report is unlikely to alter the city’s immediate housing market dynamic. Price-cutting in the metro area has occurred at increasing volumes since July of this year.
In an interview with Crain’s, real estate agent Niki Apostal said that Chicago buyers are not highly motivated. Fall typically heralds the start of price-cutting season, but in 2017 that season lasted five weeks. This year, the duration could be even longer. Taylor Marr, senior economist at Redfin, noted that the cost of homeownership in Chicago is on par with much hotter markets out west. Marr said that prices are going up fast, but the total cost of owning a home, including property taxes, continues to rise.
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