Chicago Housing Market Trends for 2023
We'll discuss the latest trends and projections for the Chicago housing market. Is the Chicago-area housing market vulnerable to a recession? The housing market in Illinois and Chicago experienced a significant slowdown in January 2023. According to data released by Illinois REALTORS®, statewide home sales (including single-family homes and condominiums) in January 2023 were 35.3 percent lower than the previous year, with only 6,723 homes sold compared to 10,385 in January 2022. The monthly median price of $234,000 in January 2023 was 1.5 percent less than $237,500 the year before.
Winter slowdown
“It’s typical to see fewer transactions during the winter, and January was no exception for the Illinois housing market,” said Michael Gobber, Illinois REALTORS® 2023 President and designated managing broker-partner, Century 21 Affiliated in Westchester. However, both buyers and sellers still have opportunities to capitalize on the low number of homes for sale. Sellers currently have less competition with inventory still being at a low level, while buyers can take advantage of a less frenzied market compared to the last two years.
Increase in median home prices
In the nine-county Chicago Metro Area, January 2023 home sales (single-family and condominiums) totaled 4,420 homes sold, down 38.8 percent from January 2022 sales of 7,222 homes. The monthly median price of $287,000 in January 2023 was 0.7 percent higher than $285,000 the year before. Similarly, the median price of a home in the city of Chicago in January 2023 was $297,500, down 4.0 percent compared to January 2022 when it was $310,000.
Market forecast
“The housing market is currently experiencing its usual winter slowdown,” said Dr. Daniel McMillen, head of the Stuart Handler Department of Real Estate (SHDRE) at the University of Illinois at Chicago College of Business Administration. “Median prices are similar to their levels at this time last year in both the Chicago area and the rest of Illinois. Our forecasts indicate that prices and sales will increase over the next three months throughout the state.”
ALSO READ: Illinois Housing Market Forecast
In conclusion, the Illinois and Chicago housing market experienced a significant slowdown in January 2023. Winter typically sees fewer transactions, but with a low number of homes for sale, both buyers and sellers still have opportunities to capitalize on the current market. Median prices are similar to their levels at this time last year, but market forecasts indicate an increase in both prices and sales over the next three months. It will be interesting to see how the market evolves in the coming months.
The latest regional housing forecast presented to the Illinois REALTORS from UIC Stuart Handler Department of Real Estate indicates a negative annual growth for the state as a whole. On the other hand, all MSAs are forecasted to experience positive changes in the First Quarter of 2023: Bloomington-Normal (7.0%), Champaign-Urbana (5.4%), Chicago PMSA (0.4%), Davenport-Moline-Rock Island (4.5%), Decatur (0.5%), Kankakee (1.4%), Metro-East (5.3%), Peoria-Pekin (0.3%), Rockford (11.5%), and Springfield (5.9%). (source)

Is Chicago a Buyer's or Sellers' Market?
The following Chicago housing market trends are based on single-family, condo, and townhome properties listed for sale on realtor.com. Land, multi-unit, and other property types are excluded. This data is provided as an informational resource only. Chicago is a balanced's market, which means that the supply and demand of homes are about the same.
Chicago was a buyer's market in January 2023, which means that the supply of homes is greater than the demand for homes. On average, homes in Chicago, IL sell after 73 days on the market. The trend for median days on market in Chicago, IL has gone up since last month, and slightly down since last year. A balanced market typically has a total sales-to-total listings ratio between 0.12 and 0.2.
In January 2023, the median list price of homes in Chicago, IL was $330K, trending flat year over year. It seems like the housing boom is losing steam in Chicago due to rising interest rates. The median price per square foot for listings was $232. The median price of a home sold was $295K.
The sale-to-List Price Ratio was almost 97.83%, which shows that homes sold 2.17% below the asking price on average. Chicago has 78 distinct neighborhoods. As the most expensive neighborhood, Lincoln Park boasts a median listing price of $664.5K. A median listing price of $157K in West Englewood makes it the most affordable neighborhood in the city.
Chicago Rent Prices 2023
The Zumper Chicago Metro Area Report analyzed active listings last month across the metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Illinois one bedroom median rent was $1,289 last month. Oak Park was the most expensive city with one bedroom priced at $1,930 while East Chicago was the most affordable city with rent at $630.
The Fastest Growing Cities For Rents in Chicago Metro Area (Y/Y%)
- Oak Park had the fastest growing rent, up 34% since this time last year.
- Michigan City saw rent climb 26%, making it the second fastest growing.
- Chicago was third with rent increasing 17%.
The Fastest Growing Cities For Rents in Chicago Metro Area (M/M%)
- Oak Park had the largest monthly rental growth rate, up 6%.
- Joliet was second with rent climbing 5.3%.
- Arlington Heights was third with rent rising 3.8% last month.

Chicago Housing Market Forecast 2023-2024
The Chicago housing market is shaping up to continue the trend of the last few years as one of the hottest markets in the United States. It is also one of the hottest real estate markets for investing in rental properties. What are the Chicago real estate market predictions for 2023? NeighborhoodScout.com's data shows that over the last ten years, the Chicago annual appreciation rate has been averaging 5.37%.
The cumulative appreciation rate over the ten years has been 68.79%. Over the last twelve months, from 2021 Q2 – 2022 Q2, Chicago's appreciation rate has been 9.59%, which is lower than appreciation rates in most communities in America. Between 2022 Q1 – 2022 Q2, the house appreciation rates in Chicago were at 2.59%, which equates to an annual appreciation rate of 10.78%.
Let us look at the price trends recorded by Zillow over the past year. The real estate market in the Chicago-Naperville-Elgin area has been thriving, with a steady increase in home values over the past year. According to the recently released report by Zillow, the average home value in the area is $286,792, which is up 4.5% over the past year. This is great news for homeowners who are looking to sell, and for buyers who are looking for investment opportunities.
Here are some key takeaways from the report:
– 1-year Value Change: +4.5%
– 1-year Market Forecast: -0.8%
– Median sale-to-list ratio (December 31, 2022): 0.988
– Percent of sales over list price (December 31, 2022): 28.7%
– Percent of sales under list price (December 31, 2022): 56.8%
– Median days to pending (January 31, 2023): 27
These metrics provide valuable insights for homeowners, buyers, and real estate professionals. For example, the median sale-to-list ratio suggests that homes in the area are selling at a premium, and the high percentage of sales over list price indicates that there is strong demand from buyers.
Market Overview and Forecast
The 1-year market forecast of -0.8% for Chicago suggests that the housing market in the area is expected to experience a slight decline over the next year. This may be due to factors such as an increase in interest rates or a decrease in demand from buyers. However, it's important to note that the 1-year value change of +4.5% indicates that home values in Chicago have increased over the past year, which suggests that the market is still relatively strong.
The median sale-to-list ratio of 0.988 suggests that homes in Chicago are selling close to their list price, while the high percentage of sales over list price at 28.7% indicates that some homes are selling above the asking price due to strong buyer demand. The percentage of sales under list price at 56.8% suggests that there are still opportunities for buyers to find deals on homes in the area.
The median days to pending at 27 days indicates that homes in Chicago are selling relatively quickly, which is another indicator of a strong seller's market. Overall, these metrics suggest that the housing market in Chicago is still relatively strong despite the forecasted decline. Zillow's data and research can help you make informed decisions about the Illinois and Chicago housing market in 2023.

According to the market forecast presented by Stuart Handler from the Department of Real Estate at the University of Illinois Chicago, both Illinois and the Chicago PMSA are expected to experience median price growth throughout 2023, although the growth range is expected to be lower and narrower compared to 2022.
The gains on a year-over-year basis will range from -1.0% to 4.3% for Illinois and 0.5% to 5.8% for the Chicago PMSA. By December 2023, the median price of homes is expected to be $257,700 in Illinois and $312,900 in the Chicago PMSA, which is 3.5% and 5.6% higher, respectively, on an annual basis.
Additionally, the REAL HPI (Jan 2008=1) is forecast to experience a growth rate between 0% and 4.7% for Illinois and 3.5% to 7.7% for the Chicago PMSA. The REAL HPI takes housing characteristics into account and constructs comparable “baskets” of homes for each month.
In terms of sales, the forecast indicates mixed trends in growth rates in 2023 for both Illinois and the Chicago PMSA. The annual growth in monthly sales is expected to range from -23.1% to 25.7% for Illinois, with negative growth in the first half of the year. The comparative range for the Chicago PMSA is from -29.6% to 4.8%, with negative growth in most months. When excluding foreclosed sales from all sales, the forecast for regular sales indicates a growth range of -28.8% to 30.8% for the Chicago PMSA.
Chicago Real Estate Investment Overview
Is Chicago a Good Place Real Estate 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 forecast for answers on why to put resources into this market. Chicago is a strong renter market. Over 50% of the population rents in this city. Chicago is the 6th most walkable city in the nation. Chicago metro area has a population of approximately 8,865,000, a 0.03% increase from 2019. It is the most populous city in the U.S. state of Illinois, and the third-most-populous city in the United States.
Chicago has a mixture of owner-occupied and renter-occupied housing units. According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom large apartment complexes are the most common housing units in Chicago. Other types of housing that are prevalent in Chicago include single-family detached homes, duplexes, rowhouses, and homes converted to apartments. Single-family detached homes account for roughly 25.98% of Chicago's housing units.
Chicago has been one of the hottest real estate markets in the country for many years. In the past ten years, the annual Chicago real estate appreciation rate has amounted to 4.88%, according to NeighborhoodScout.com. Chicago metropolitan area or Chicagoland is an area that includes the city of Chicago and its suburbs. So if you buy a Chicago real estate investment to use as a rental property, you could benefit in this market.
Although the recent population loss has been a concern for real estate investors, Chicago is still the most populous city in the Midwestern United States. About three million people live in Chicago and another ten million in the surrounding metro area. Chicago MSA is the third-largest metropolitan area in the U.S. It has a large population, a diverse economy, and a stable market. It is home to 32 Fortune 500 companies, with very high private sector employment.
Chicago's 58 million domestic and international visitors in 2018 made it the second most visited city in the nation, as compared with New York City's 65 million visitors in 2018. These are just some of the highlights that make Chicago a great place to live and invest in real estate. The list can go on and on. Chicago is also a major world financial center, having the second-largest central business district in the United States.
Top Reasons To Invest In The Chicago Real Estate Market? | |
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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.
Chicago Rental Market Is Very Strong
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. 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 downtown. 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 last year's April report found that the hottest areas 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.
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 last year's April report stated that the hottest Chicago markets for condos and townhomes were Grand Boulevard, Kenwood, and Lincoln Square.
Chicago Rental Prices Trends
As of February 26, 2023, the average rent for a 1-bedroom apartment in Chicago, IL is currently $1,750. This is a 7% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Chicago decreased by -4% to $1,295. The average rent for a 1-bedroom apartment decreased by -7% to $1,750, and the average rent for a 2-bedroom apartment decreased by -3% to $2,095.
- Two-bedroom apartment rents average $2,095 (an 11% increase from last year).
- Three-bedroom apartment rents average $2,450 (an 11% increase from last year).
- Four-bedroom apartment rents average $2,750 (a 6% increase from last year).
53% of the households in Chicago, IL are renter-occupied while 48% are owner-occupied. The most expensive neighborhoods in Chicago are River West, Streeterville, and River North. Some of the most affordable neighborhoods in Chicago are South Shore, where the average rent can go for $950/month, Woodlawn, where the average rent can go for $995/month, and Rogers Park, where the average rent can go for $1,250/month.
On the other hand, the most expensive neighborhoods in Chicago are Near North Side, where the average rent can go for $2,436/month, Loop, where the average rent can go for $2,250/month, and West Town, where the average rent can go for $2,050/month. According to the report, the most popular neighborhoods in Chicago are Near North Side, where there are 1,350 listings, followed by Lakeview, where there are 968 listings, and Loop, where there are 678 listings.
Chicago Real Estate 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 the 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.
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 yet. This means that the Chicago real estate market is likely going to continue its slow, upward market trend.
Chicago 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.
Chicago's Job Growth Keeps People Coming
Chicago is not only home to several 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 in or simply choose to rent upon relocation in one of the luxury apartments downtown.
The Chicago metropolitan area is made up of four metropolitan divisions—separately identifiable employment centers within the larger metropolitan area. The current economic uncertainty and inflation keep 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.
Where to Invest in Chicago Real Estate Market?
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. Several factors guarantee that they’re not going to turn into new home buyers any time soon.
Chicago real estate market is a prime destination 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. Good cash flow from Chicago rental property 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 the best investment property in Chicago in a growing neighborhood would be key to your success.
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 the housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Chicago might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods.
There are 76 neighborhoods in Chicago. Lincoln Park has a median listing price of $649.9K, making it the most expensive neighborhood. Auburn Gresham is the most affordable neighborhood, with a median listing price of $189.9K (on Realtor.com).
Some of the popular neighborhoods in Chicago, Illinois are Near North Side, Lakeview, West Town, Andersonville, South Loop, Bronzeville, Norridge, Logan Square, Old Town, Wicker Park, Bridgeport, Irving Park, Norwood Park, Bucktown, West Loop, and Hyde Park.
Chicago's North Side is the city's most densely populated residential section. For $200,000 price, you can purchase properties with one or two bedrooms and one or two baths. Chicago's West Side is home to the University of Illinois at Chicago. With a $200,000 budget, you can buy condos that typically offer one to two bedrooms and one or two baths.
You can buy Chicago investment properties in the Pilsen neighborhood. Pilsen is a great area for those who want a diverse portfolio of investment properties without having to run all over the city. Pilsen is located on Chicago’s Lower West Side. It features a mix of condos, apartment buildings, and single-family homes. The area is suburban enough to attract families. Its schools are a C+, which is close to the Chicago average. Parks and other amenities explain why Niche.com gave the area a B- for families.
CHECK OUT → Some Good Neighborhoods in Chicago Where You Can Buy Investment Properties.
Humboldt Park is another good neighborhood to buy investment properties in Chicago. The home prices in Humboldt Park peaked in 2006 but fell dramatically during the Great Recession. Home prices here hit a record low in 2012. Humboldt’s housing prices are on the rise again, though they remain below their 2006 peak. The average home price is around 300,000 dollars, while rents are around 1700 dollars a month. The area is notable for the number of foreclosed and distressed properties available to investors, and this helps pull the average rental rate down.
Highest Appreciating Chicago Neighborhoods Since 2000 (By Neighborhoodscout.com)
- W Wabansia Ave / N Whipple St
- W Cortland St / N Mozart St
- W Wabansia Ave / N Francisco Ave
- Humboldt Park Northeast
- Logan Square East
- Palmer Square East
- Palmer Square
- Logan Square West
- Logan Square Northwest
- W Cortland St / N Albany Ave
Illinois is in the midwestern United States. Surrounding states are Wisconsin to the north, Iowa and Missouri to the west, Kentucky to the south, and Indiana to the east. Illinois also borders Michigan, but only via a northeastern water boundary in Lake Michigan.
Apart from the Chicago real estate market, you can also invest in the housing market of Indianapolis. The median sales price in Indiana saw a year-over-year increase of 9.7 percent to $170,000. Not surprising is the fact that Indianapolis house prices are also on the rise in the year 2020. Demand is still outpacing the supply, the new construction is slow, and competition for quality homes remains tough.
Like most cities nationwide, Indianapolis has experienced real estate appreciation over the last couple of years. The real estate appreciation rate in Indianapolis in the last quarter was around 0.81%, which amounts to an annual rate of 3.3%. However, it is quite unclear whether the rate of appreciation would remain steady or not due to the short-term effects of the ongoing pandemic.
Economic uncertainty might hold back sales volume for a short period in 2020. Most housing analysts expect Indianapolis house prices to remain flat or drop by a small fraction for the remainder of the year 2020.
If you head towards the west of Illinois, you should consider investing in Kansas City, MO. There is probably no hotter market right now than Kansas City, Missouri. A large, prosperous, self-sufficient, and culturally rich city, it is no wonder why it has seen a continuous rise in its employment, directly impacting the local real estate.
The Kansas City real estate market is very hot and in many ways the envy of housing pundits on both coasts. It is the largest city in the U.S. state of Missouri, famous for its distinct barbeque cuisine and jazz heritage. Also nicknamed the City of Fountains, Kansas City is now emerging as a growing market for real estate investments. High demand and low inventory are driving up both home prices and the speed of home sales in the Kansas City Housing Market.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Chicago.
Consult with one of the investment counselors who can help build you a custom portfolio of Chicago turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Chicago.
Not just limited to Chicago or Illinois but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Chicago turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Let us know which real estate markets in the United States you consider best for real estate investing!
Remember, caveat emptor still applies when buying a property anywhere. Some of 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, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
REFERENCES
Market Prices, Trends & Forecasts
https://www.illinoisrealtors.org/marketstats/
https://www.zillow.com/chicago-il/home-values
https://www.illinoisrealtors.org/wp-content/uploads/2021/11/Annual_forecast_2022.pdf
https://www.neighborhoodscout.com/il/chicago/real-estate
https://www.realtor.com/realestateandhomes-search/Chicago_IL/overview
https://www.forbes.com/sites/ingowinzer/2016/05/25/should-you-invest-in-chicago-real-estate/#64c07e3c2ad1
http://www.chicagobusiness.com/realestate/20171221/CRED0701/171229976/2018-real-estate-forecast-foggy-lukewarm
Housing Price Forecasts Illinois and Chicago PMSA, August 2020
https://www.illinoisrealtors.org/wp-content/uploads/2020/08/Forecasts_August_2020.pdf
Upper household rental rates
http://www.chicagobusiness.com/realestate/20180411/CRED0701/180419970/more-upper-income-households-renting-in-chicago-area
Housing inventory numbers
http://www.chicagonow.com/getting-real/2018/04/chicago-real-estate-market-worst-home-sales-decline-in-20-months/
2016 to 2017 housing inventory decline data
http://www.chicagotribune.com/business/ct-biz-chicago-home-sales-supply-20180124-story.html
Labor pool stats
https://www.homeunion.com/real-estate-investment-locations/chicago-illinois/
Trump’s Tax Plan Makes Many Reluctant to Buy
http://www.chicagobusiness.com/realestate/20171221/CRED0701/171229976/2018-real-estate-forecast-foggy-lukewarm
Foreclosures
https://www.realtytrac.com/statsandtrends/il/cook-county/chicago/
Crain’s April real estate report
http://www.chicagobusiness.com/realestate/20180419/CRED0701/180419837/heres-where-the-real-estate-market-has-been-hottest-in-2018