We'll discuss the latest trends and projections for the Chicago housing market. The Chicago housing market has experienced a decline in home sales and a decrease in median home prices, reflecting the broader trends seen in the real estate industry. However, despite these challenges, there are still opportunities for both buyers and sellers. Let's take a closer look at the current state of the Chicago housing market.
Chicago Housing Market Report & Trends
The Chicago housing market, as of September 2023, experienced notable shifts in home sales and median prices. This report delves into the latest statistics, shedding light on the state of the housing market in the Windy City and its surrounding areas.
In September 2023, the number of statewide home sales in Illinois faced a significant drop. The total statewide home sales, which include single-family homes and condominiums, amounted to 11,483, marking a 17.4 percent decrease from the 13,900 homes sold in September 2022.
Simultaneously, the median home price in Illinois saw a substantial increase. The median price in September 2023 was $270,000, indicating a 6.5 percent rise compared to the previous year when it stood at $253,594.
Chicago Metro Area Housing Data
The Chicago Metro Area, comprising nine counties, also witnessed a downturn in home sales. In September 2023, a total of 7,608 homes were sold, reflecting an 18.6 percent decline from the 9,345 homes sold in September 2022.
The median home price in the Chicago Metro Area in September 2023 was $325,000, signifying a 6.6 percent increase from the previous year's median price of $305,000.
The city of Chicago itself saw a notable year-over-year decrease in home sales. In September 2023, 1,830 homes were sold, marking an 11.3 percent drop from the 2,064 homes sold in September 2022.
The median home price in the city of Chicago in September 2023 was $324,450, showing a modest 1.4 percent increase when compared to September 2022's median price of $320,000.
These statistics suggest that the Chicago housing market is currently experiencing a decline in home sales, particularly in the city of Chicago and the broader Chicago Metro Area. However, the median home prices are on the rise, indicating that the real estate market remains competitive.
Is it a Good Time to Buy a House in Chicago?
Considering the current market conditions, potential homebuyers should weigh their options carefully. The decrease in home sales might indicate less competition in the market, potentially allowing buyers to negotiate better deals. However, the increasing median prices could pose a challenge.
Before making a decision, it's crucial to consult with a local real estate expert who can provide personalized insights based on your specific circumstances and preferences.
Are Housing Prices Going Down in Chicago?
While the number of home sales has decreased, the median home prices are, in fact, rising in Chicago and its metropolitan area. Therefore, housing prices are not declining at the moment. Buyers should be prepared for a market with higher median prices and explore their options accordingly.
In summary, the Chicago housing market is currently characterized by lower sales and higher prices, making it essential for potential buyers to thoroughly research and seek professional guidance when considering a real estate investment in the region.
ALSO READ: Illinois Housing Market Forecast
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. In the state of Illinois, the median rent for a one-bedroom apartment was $1,337 in the previous month, as per the Zumper report.
The Most Expensive Cities
Oak Park claimed the title of the most expensive city for renting, with one-bedroom apartments priced at $2,140.
Chicago secured the second position, where the rent for one-bedroom units averaged $2,100.
Lombard followed closely as the third most expensive city, with rents averaging $2,060 for one-bedroom apartments.
The Least Expensive Cities
Gary was the most affordable city for renters, with one-bedroom apartments priced at just $780.
Michigan City ranked second among the least expensive cities, with one-bedroom rent at $950.
Waukegan was the third least expensive city, where one-bedroom apartments had an average rent of $970.
The Fastest Growing Rents (Year-over-Year)
Oak Park experienced the most significant year-over-year rent growth, with a staggering 39.9% increase since the same time last year.
Lombard emerged as the second fastest-growing city in terms of rents, witnessing a 20.5% increase.
Chicago took the third spot, with a year-over-year rent growth of 15.4%.
The Fastest Growing Rents (Month-over-Month)
Lombard led in monthly rental growth, with a substantial 4.6% increase in rents.
Gary followed closely as the second fastest-growing city in terms of monthly rents, with a 4% climb.
Oak Park rounded out the top three, with a 1.4% increase in rents over the past 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?
According to the market forecast presented by Stuart Handler from the Department of Real Estate at the University of Illinois Chicago, the sales forecast for August, September, and October suggests a decrease on a yearly and monthly basis for both Illinois and the Chicago PMSA.
Annually for Illinois, the three-month average forecasts point to a decrease in the range of -13.5% to -18.2%; the comparable figures for the Chicago PMSA are a decrease in the range of -18.4% to -24.9%. On a monthly basis, three-month average sales are forecast to decrease in the range of -3.3% to -4.5% for Illinois and decrease in the range of -6.7% to -9.0% for the Chicago PMSA.
The median price forecast indicates positive annual growth for August, September, and October in Illinois and the Chicago PMSA. In Illinois, the median price is forecast to be higher by 7.1% in August, 7.0% in September, and 7.9% in October relative to the same time last year. For the Chicago PMSA, the comparable figures are 6.8% in August, 5.9% in September, and 6.6% in October.
Chicago Housing Market Forecast by Zillow
The average Chicago-Naperville-Elgin home value is $306,012, up 2.4% over the past year and goes to pending in around 8 days. (Data through August 31, 2023).
Key Metrics:
1-year Market Forecast (August 31, 2023): This metric indicates a 2.6% projected change in the Chicago housing market over the next year, as of August 31, 2023. It offers insight into the expected direction of property values in the coming year.
Median sale to list ratio (July 31, 2023): The median sale to list ratio, recorded as 1.000 as of July 31, 2023, signifies that, on average, homes in the Chicago area are selling for their listed price. This metric is valuable for understanding the balance between listing prices and actual sale prices.
Percent of sales over list price (July 31, 2023): As of July 31, 2023, 50.4% of home sales in Chicago exceeded their list prices. This percentage indicates a competitive market where many buyers are willing to pay more than the initial asking price for properties.
Percent of sales under list price (July 31, 2023): In contrast, 35.4% of home sales in Chicago as of July 31, 2023, were transacted below the listed price. This metric suggests that while some properties sell above their list price, a significant portion still sell for less.
Median days to pending (August 31, 2023): The median time it takes for a property to go under contract or become “pending” is 8 days, as of August 31, 2023. This is an essential metric for understanding the pace of the housing market, indicating that properties are selling relatively quickly.
These metrics provide insights into the current state and future trends of the Chicago housing market, helping both buyers and sellers make informed decisions.
Is Chicago a Good Place for Real Estate Investment?
Population Growth and Trends
Chicago, known for its diverse neighborhoods and rich history, has been experiencing steady population growth over the years. The city's population growth is driven by factors such as employment opportunities, higher education institutions, and cultural attractions. The diverse demographic makeup of Chicago provides a broad tenant pool for real estate investors, making it an attractive market.
- Diverse Demographics: Chicago's diverse population ensures a wide range of tenant preferences and needs, reducing the risk of high vacancy rates.
- Steady Growth: The city's population growth indicates a consistent demand for housing, especially in well-located neighborhoods.
Rehabbed Homes Fix and Flip Opportunities
Chicago's real estate market offers lucrative opportunities for fix and flip investors. Many older properties in desirable neighborhoods are prime candidates for rehabilitation and resale. This segment of the market can yield significant profits for investors with the right skills and resources.
- Older Properties: Chicago has a substantial inventory of older homes that can be acquired at competitive prices and then renovated for profit.
- Increasing Demand: Renovated homes in sought-after neighborhoods are in high demand, allowing for premium pricing.
Economy and Jobs
The strength of the local economy plays a crucial role in real estate market stability. Chicago's diverse economy is bolstered by various industries, including finance, technology, manufacturing, and healthcare. The city offers a robust job market, which is attractive to both renters and potential buyers.
- Diverse Economy: A mix of industries reduces the risk associated with economic downturns in a specific sector.
- Job Opportunities: A strong job market ensures a constant influx of renters and potential homebuyers.
Livability and Other Factors
Chicago's livability is a key factor for real estate investors. The city's vibrant cultural scene, excellent public transportation, and diverse dining options contribute to its appeal. Additionally, the city's commitment to infrastructure and public services further enhances its livability.
- Cultural Attractions: Chicago offers world-class cultural experiences, attracting residents and tourists alike.
- Public Transportation: An extensive public transit system makes it convenient for residents to commute, reducing the importance of owning a car.
Chicago Rental Property Market Size and Growth
The size and growth of the Chicago rental property market are promising for investors. The city's diverse neighborhoods and housing options cater to a wide range of tenant preferences. This, coupled with population growth, ensures a robust and expanding rental market.
- Diverse Neighborhoods: Chicago's neighborhoods offer various housing options, from apartments to single-family homes, appealing to a wide range of renters.
- Growth Potential: With a growing population, the demand for rental properties is likely to continue to rise.
Other Factors Related to Real Estate Investing
When considering real estate investment in Chicago, it's essential to account for various other factors:
- Local Regulations: Familiarize yourself with Chicago's property regulations and tax laws to ensure compliance and maximize returns.
- Market Research: Thoroughly research neighborhoods and property types to identify areas with growth potential.
- Property Management: Whether you plan to manage properties yourself or hire a management company, effective property management is vital for success.
Investing in the Chicago real estate market offers numerous advantages. The city's population growth, diverse demographics, job opportunities, and livability make it an attractive destination for real estate investors. Additionally, the fix and flip opportunities, the size and growth of the rental market, and other related factors provide a solid foundation for potential returns on investment. However, it's crucial to conduct thorough research, stay informed about local regulations, and manage properties effectively to maximize the benefits of investing in Chicago's real estate market.
Highest Appreciating Chicago Neighborhoods
Chicago has witnessed significant changes in its neighborhoods since the year 2000. Here are the neighborhoods that have experienced the highest appreciation in terms of property values, according to Neighborhoodscout.
W Wabansia Ave / N Whipple St
Located in the heart of Chicago, the W Wabansia Ave / N Whipple St neighborhood has seen remarkable property value appreciation. This area's proximity to various amenities and its strong community appeal have contributed to its growth.
Humboldt Park Northeast
The Humboldt Park Northeast neighborhood has seen a steady increase in property values since 2000. The neighborhood's green spaces, cultural attractions, and improving infrastructure have made it an attractive destination for homebuyers and investors.
W Wabansia Ave / N Kimball Ave
This neighborhood, situated near W Wabansia Ave and N Kimball Ave, has experienced substantial property value appreciation. The presence of local businesses, parks, and good public transportation options has boosted its desirability among residents and investors.
Palmer Square East
Palmer Square East is another neighborhood that has seen significant appreciation in property values. Its charming streets, proximity to parks, and vibrant local scene have made it a sought-after area for both residents and real estate investors.
W Wabansia Ave / N Francisco Ave
The W Wabansia Ave / N Francisco Ave neighborhood has been on an upward trajectory in terms of property values. Its location and access to various amenities have attracted homebuyers and investors looking for long-term growth.
Logan Square Northwest
Logan Square Northwest is known for its thriving arts and dining scene. The neighborhood's cultural appeal, coupled with improved public services and transportation, has contributed to its property value appreciation.
W Cortland St / N Mozart St
W Cortland St / N Mozart St is a neighborhood that has experienced remarkable growth in property values. Its accessibility to urban conveniences and a sense of community have made it a desirable place to live and invest.
Palmer Square
Palmer Square, located in Chicago, has seen substantial property value appreciation. The neighborhood's green spaces, historic architecture, and community activities have made it a popular choice for homeowners and real estate investors.
Humboldt Park North
Humboldt Park North, with its green expanses and recreational opportunities, has seen a consistent increase in property values since 2000. The neighborhood's combination of natural beauty and urban amenities has attracted both residents and investors.
W Cortland St / N Albany Ave
W Cortland St / N Albany Ave is another Chicago neighborhood that has experienced substantial appreciation in property values. Its accessibility to city amenities and transportation options have bolstered its appeal to homebuyers and real estate investors.
These neighborhoods have not only appreciated in property values but also offer various amenities, community vibes, and urban conveniences, making them attractive options for both residents and real estate investors seeking long-term growth and value appreciation in Chicago.
References:
- https://www.illinoisrealtors.org/marketstats/
- https://www.zillow.com/chicago-il/home-values
- https://www.neighborhoodscout.com/il/chicago/real-estate
- https://www.realtor.com/realestateandhomes-search/Chicago_IL/overview
