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September 1st, 2019 by Marco Santarelli
How is The Chicago Real Estate Market 2019?
If you are looking at buying a house in Chicago as a potential investment opportunity, you must read till the end. Home prices in the Chicago real estate market are predicted to rise at a steady pace throughout 2019. So you might want to consider making your purchase sooner rather than later, to avoid higher housing costs down the road.
Chicago is the third largest metropolitan area in the U.S, almost three million in Chicago and another ten million in the surrounding metro area. Chicago has a large population, diverse economy, and a stable market. It is home to 32 Fortune 500 companies. It has high private sector employment.
And due to a number of factors, Chicago Real Estate Market is one of the best rental real estate markets in the US. Is Chicago going to be one of the hottest real estate markets for investors in 2019? Let’s take a deep look at the latest Chicago housing market trends to come to a conclusion.
Chicago Real Estate Market Forecasts 2019 & 2020
The real estate data from Zillow shows that the median home value in Chicago is $226,500. Chicago home values have declined -0.4% over the past year and Zillow’s Chicago real estate market prediction is that the prices will fall -1.5% within the next year. The median list price per square foot in Chicago is $251, which is higher than the Chicago-Naperville-Elgin Metro average of $169.
The median price of homes currently listed in Chicago is $339,000 while the median price of homes that sold is $278,600. The median rent price in Chicago is $1,800, which is higher than the Chicago-Naperville-Elgin Metro median of $1,750.
Here is the Chicago real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of -1.5% till July 2020.
Chicago Housing Market Forecast 2019 – 2021
The Chicago housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Chicago housing market trend prediction for Chicago is 84%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Chicago is 84% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Chicago, IL Real Estate Market Forecast.
Chicago Real Estate Market Trends
Let us find out how is Chicago real estate market doing in 2019. According to Trulia, Chicago real estate market trends indicate an increase of $5,000 (2%) in median home sales and a -1% drop in median rent per month over the past year. The average price per square foot for this same period rose to $239, up from $230.
Trulia has 12,689 resale and new homes for sale in Chicago, IL including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
The median sales price for homes in Chicago for May 1 to Jul 31 was $285,000 based on 6,347 home sales. Average price per square foot for Chicago was $239, an increase of 4% compared to the same period last year. The median rent per month for apartments in Chicago for Jul 6 to Aug 6 was $1,750.
As per the real estate company named Redfin, the Chicago housing market is somewhat competitive. Homes in Chicago receive 1 offers on average and sell in around 85 days. The average sale price of a home in Chicago was $286K last month, down 1.4% since last year.
The average sale price per square foot in Chicago is $197, down 2.0% since last year. Homes typically receive 1 offer. Homes in the Chicago housing market sell for about 3% below list price and go pending in around 85 days. Hot Homes for sale in Chicago, IL can sell for around list price and go pending in around 37 days.
Chicago Housing Market Statistics
There are 18,037 homes for sale in Chicago, IL on Realtor.com. 1,158 of which were newly listed within the last week. Additionally, there are 8,004 Chicago rental properties for sale with a range of $100 to $45K per month. According to Realtor.com, in July 2019, the housing market in Chicago, IL was a balanced market, which means there was a healthy balance of buyers and sellers in the market.
In July 2019, the median list price of homes in Chicago, IL was $339.9K, trending up 4.6% year-over-year. The median listing price per square foot was $235. The median sale price was $297.5K. On average, homes in Chicago, IL sell after 66 days on the market. The trend for median days on market in Chicago, IL is flat since last month, and slightly down since last year.
The median list price in Chicago is $359,000 on Movoto.com. The median list price in Chicago went down 2% from August to September. Chicago’s home resale inventories is 9,275, which increased 1 percent since August 2019. The median list price per square foot in Chicago is $249. August 2019 was $255. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in September.
Chicago, IL Single Family And Multi-Family Homes
Following the housing market decline in 2007, single family rental homes became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.
Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
As per the data from the real estate company called Neigborhoodscout.com, the median house price in Chicago is $265,071, which is well above the national average. Large apartment complexes or high rise apartments are the single most common housing type in Chicago, accounting for 40.94% of the city’s housing units.
Other types of housing that are prevalent in Chicago include duplexes, homes converted to apartments, single-family detached homes and a few row houses.
One or two bedroom units are chiefly found in the large apartment complexes or high rise apartments of Chicago. Chicago has a mixture of owner-occupied and renter-occupied housing.
Currently, there are 3,608 single family homes for sale in Chicago, IL on Zillow. Additionally, there are 482 single family homes for rent in Chicago, IL. Under potential listings, there are about 284 Foreclosed and 2,450 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Chicago, IL Foreclosures And Bank Owned Homes 2019
As per the Chicago foreclosure data by Zillow, the percent of delinquent mortgages in Chicago is 1.3%, which is higher than the national value of 1.1%.
With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth.
The percent of Chicago homeowners underwater on their mortgage is 21.4%, which is higher than Chicago-Naperville-Elgin Metro at 13.5%.
There are currently 6,122 properties in Chicago, IL that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 6,637. In July 2019, the number of properties that received a foreclosure filing in Chicago, IL was 2% lower than the previous month and 22% lower than the same time last year.
Best Places To Buy Chicago Rentals
If you are looking to buy Chicago rentals, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Chicago real estate and you should be able flip it for a lump sum profit.
When looking to invest in Chicago real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Chicago investment property should be low. The neighborhoods in Chicago must be safe to live in and should have a low crime rate.
The neighborhoods should be close to basic amenities, public services and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. There are 518 elementary schools, 479 middle schools, 180 high schools and 446 private & charter schools. There are 81 neighborhoods in Chicago.
Some of the best neighborhoods in Chicago, Illinois are Near North Side, Lakeview and Lincoln Park. Lincoln Park has a median listing price of $649.9K, making it the most expensive neighborhood. Auburn Gresham is the most affordable neighborhood in Chicago, with a median listing price of $177.9K.
Here are the best neighborhoods to invest in Chicago rentals because they have the highest appreciation rates (List by Neigborhoodscout.com).
Should You Invest In Chicago Rental Real Estate?
Now that you know where Chicago is, you probably want to know why we’re recommending it to real estate investors. Is it worth buying a house in Chicago, IL? Investing in real estate is touted as a great way to become wealthy.
Many real estate investors have asked themselves if buying a rental property in Chicago is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Chicago housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for Chicago but we have collected ten evidence based positive things for those who are keen to invest in the Chicago rentals in 2019.
Investing in Chicago rentals will fetch you good returns in the long term as the home prices in Chicago have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Chicago real estate market which can help investors who are keen to buy an investment property in this city.
1. Rental Demand In Chicago Is High And So Are Rents
What makes Chicago such a hot market for rental real estate? Over 50% of the population rents. The large population of renters means that rental income for properties is far better than you’d see if you invested elsewhere in the country.
Schaumberg reported slowing sales simply due to tight supply according due to data from the Chicago Association of Realtors; this drives many people forming new households or moving into the area to rent at whatever the market will bear.
2. Luxury Rentals Are a Profitable Niche in Chicago
Many people know that there are solid blue-collar areas with high rents, but it isn’t just the working class that rents townhomes and condos. According to Crain’s, the number of upper income households in Cook County that rent has nearly doubled over the past ten years.
The Institute for Housing Studies at DePaul University found that the number of rental households among those earning at least $132,000 a year nearly doubled, while those earning $80,000 to $132,000 saw the number of renting households increase by just over 50%.
Chicago has a booming supply of high end rentals, especially luxury apartments in downtown.
3. Chicago Home Prices Are Reasonable
Because households at all income levels choose to rent instead of buy, they are reducing demand for houses for sale, slowing the rise in home prices. This also explains why housing prices haven’t skyrocketed despite limited supply. Chicago’s inventory of homes for sale is very tight.
Both attached and detached single family home inventory has been declining since 2012. At the end of 2017, potential buyers in Chicago had about five thousand fewer properties on the market to select from than if they’d been shopping at the end of 2016.
This contributed to homes closing five days faster than the year before. If you start shopping for rental real estate, you could find something and rent it out.
4. Chicago Home Prices Are Appreciating
Chicago’s real estate market has been one of the slowest to recover since the housing bubble burst at the start of the Great Recession. Home prices were 19% below their pre-crash levels in 2017, and they aren’t expected to hit peak values until 2020.
This means that the Chicago real estate market is likely going to continue its slow, upward market trend. Trulia expects prices to grow about 2.5% in 2018. Trends in Chicago show a 1% year-over-year rise in median sales price and a 3% rise in median rent per month.
5. Rehabbed Homes Are Readily Available
Chicago is seeing a surge in fully renovated single family homes. The Chicago Association of Realtors’ data found that most of the strong suburbs are on the south side of Chicago, and this is where many homes are being rehabbed and sold.
Calumet Heights is in this category; a quarter of properties sold were either rehabbed or candidates for rehabilitation. These properties are ideal for investors who want to buy a property to rent out.
6. Job Growth Keeps People Coming
Chicago is not only home to a number of corporate headquarters; there has been a recent trend of companies moving their headquarters to Chicago as well. The steady increase in jobs has contributed to a slow but steady increase in rents.
Many businesses are attracted by Chicago’s labor pool, the largest in the nation. As these businesses move into the area and attract relocating professionals, many are forced to rent because they can’t find houses fast enough in the areas they want to live or simply choose to rent upon relocation in one of the luxury apartments downtown.
7. Churn Keeps People Renting
Chicago’s unemployment rate has gone up while dropping in other cities as jobs shift from Chicago to the suburbs. This economic uncertainty keeps many who can afford to buy a home renting. It also keeps the rental market itself strong, since many want to remain free to follow their jobs as required.
8. Trump’s Tax Plan Makes Many Reluctant to Buy – Unless It Is a Rental
Uncertainty about the deductibility of hefty property tax bills is making many reluctant to buy a home, though this is less of an issue for a real estate investor who will rent out the property. Chicago and its suburbs have some of the highest property taxes in the nations.
Around 12% of Chicago area homes have a tax bill of more than $10,000 a year. Yet that’s better than some of the most expensive real estate markets in the country. For example, in New York, more than 20% of homes have a property tax bill that high. In Orange County, California, more than half would.
This means that limits or the loss of property tax deductions won’t hurt Chicago as badly as it would California or New York, and if it does have an impact, it will mostly be at the higher end of the Chicago real estate market.
9. You Can Find Hot Single Family Markets with Rapid Appreciation
Home prices in the Chicago area are low compared to regional income. Yet economic uncertainty and shifts in the employment market are leaving many who want to live in a single family home unable to afford to buy one. This is causing many to rent single family homes instead.
Crain’s April real estate report found that the hottest markets for detached single family homes were in Calumet Heights, Gage Park and West Ridge. However, home prices are low compared to rents almost everywhere in the Chicago metropolitan area.
10. There Are Opportunities in Chicago Multi-Family Housing, Too
The workforce in Chicago is shifting from high paying but slow-to-no growth manufacturing jobs to lower paying and less stable retail, business services and healthcare jobs.
This is causing many who would have been able to afford a middle class home to rent apartments instead. Crain’s April real estate report stated that the hottest Chicago markets for condos and townhomes were Grand Boulevard, Kenwood and Lincoln Square.
Chicago Real Estate Investment
Maybe you have done a bit of real estate investing in Chicago, IL but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good Chicago real estate investment opportunity would be a key to your success. in If you invest wisely in Chicago real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the Chicago investment property is, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in Chicago, you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Chicago, IL. In Chicago, arts and culture abound at top institutions like The Art Institute. Although the winters can test anyone’s resolve, Chicago summers are among the best in the world, with things to do every weekend, outdoor festivals, and Lake Michigan at your doorstep.
Chicago has an incredibly deep pool of potential renters at all levels of the market. A number of factors guarantee that they’re not going to turn into new home buyers any time soon. Chicago real estate market is a prime market for investors who would like to buy where the ROI is going to be high and likely to improve over time. It won’t be long before Chicago makes you feel right at home.
Chicago Investment Properties For Sale ⇐ Click Here
Buying an investment property is different from buying an owner-occupied home. Our Chicago rentals designed to make money, which means you must look at it solely as an income producing entity just like any other business. These are “Turnkey Cash Flow Investment Properties” located in some of the best neighborhoods of Chicago.
Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor is your ability to find great real estate investments.
According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Chicago real estate in 2019. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2019
Apart from the Chicago real estate market, you can also invest in the housing market of Minneapolis, MN. Minneapolis offers an ideal mix of a strong job market, affordable real estate, large rental market and limited housing supply.
These factors will drive up property values and rental rates growing at a healthy clip for years. The Minneapolis real estate market is affordable compared to a number of booming rental markets across the country. However, the fact remains that the rental market in Minneapolis is growing.
Many would-be home buyers cannot afford to buy their first home, so they have to rent. Students who stay to work compete with economic migrants and the children of locals. Compounding the matter are the Millennials who watched parents lose homes in the 2007 housing bust and choose to rent though they could afford a home.
Houses in Minnesota face an average 1.19% property tax rate. This is very close to the national average of 1.21%. Wisconsin’s tax rate is in this same range, but their higher average property values mean they pay far more in property taxes than those in the cheaper Minneapolis real estate market.
Another hot market to choose is the Austin houing market 2019. With Austin, Texas, becoming a more diverse city every year, there are plenty of opportunities to take advantage of – from buying new homes to different investing options in the Austin real estate market.
Austin is a leader across the country with jobs and when you combine that with home prices not as drastically increasing, you’ll get a real estate market that many others envy.
Homes in Austin are 23% cheaper than the national average. It may be the second most expensive housing market in the state with a median home price of around $350,000, but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment.
For example, studio apartments rent for around $780 in Austin versus the $700 national average, while an Austin 1 bedroom apartment rents for almost a $1000 though the national average is $825 a month. A three bedroom apartment in Austin rents for $1500-$1600 while the national average is closer to $1400 a month.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Crain’s April real estate report
Upper household rental rates
Housing inventory numbers
2016 to 2017 housing inventory decline data
Home price appreciation data
Labor pool stats https://www.homeunion.com/real-estate-investment-locations/chicago-illinois/
Trulia price appreciation data
Trump’s Tax Plan Makes Many Reluctant to Buy
Workforce shift from high wage manufacturing to retail driving demand for apartments and rented single family homes
Market Data, Trends and Statistics https://www.zillow.com/chicago-il/home-values https://www.littlebighomes.com/real-estate-chicago.html https://www.trulia.com/real_estate/Chicago-Illinois https://www.redfin.com/city/29470/IL/Chicago/housing-market https://www.realtor.com/realestateandhomes-search/Chicago_IL/overview https://www.movoto.com/chicago-il/market-trends https://www.realtytrac.com/statsandtrends/il/cook-county/chicago
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