Prudential Rubloff Properties, Wells Fargo: Inventory will push Chicago prices down 3-5 percent

Posting live from our seminar today...
As many believe, the "shadow" inventory issue will continue to add property inventory nationally. At the moment, 3 million properties are available nation wide and another 2 miilion should be added over the next year-and-a-half.

The natinally respected and leading Wells Fargo economist Dr. Scott Anderson expects prices in Chicago to decline another 3-5 percent. However, the Cook County numbers show the bulk of Chicago area foreclosures tend to bunch in a hand full of community areas. Cook county burbs will also contribute to that price decline trend.

Anecdotally, I see certain neighborhoods stabilizing depending on the housing type. While one bedroom condos for example may continue a sharper decline as fully leveraged owners see their 5 year arm mortgages re-setting, single family homes, multi-units and larger condos may do well if not bought at top market prices in 2006. Those properties in markets like Lincoln Park, Lincoln Square, parts of West Town, Northcenter and Lake View are in demand and clients are finding the inventory low in their budgets.