The preliminary September labor statistics for the Chicago metro area show that employment is back on the decline after several months of improvement. 367,000 jobs have been lost since the peak in July, 2007 and 217,000 jobs have been lost in just the last 12 months. That’s a lot of potential homebuyers.
We are now down to levels last seen in May, 2003 and December, 2002. Coincidentally the Case Shiller home price index is also currently at May, 2003 levels. In addition, employment is also lower than it was 10 years ago, so Chicago has its own lost decade.
This definitely undermines my theory that Chicago housing prices have bottomed but I’m going to stick with that thesis for the time being until I see a change in the Case Shiller index.