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.
ALSO READ: Illinois Housing Market Forecast
Chicago Housing Market Update
Decline in Home Sales
According to Illinois REALTORS®, in April 2023, home sales in the nine-county Chicago Metro Area totaled 7,593, a significant 31.2 percent decrease compared to April 2022, when 11,041 homes were sold. This decline in sales indicates a slowdown in the market and presents challenges for sellers seeking to offload their properties.
Decrease in Median Home Prices
The median price of a home in the Chicago Metro Area also experienced a decline. In April 2023, the median price stood at $320,000, a 1.5 percent decrease from April 2022, when it was $325,000. This drop suggests a shift in buyer preferences or market conditions, influencing the pricing dynamics within the region.
Expert Insights and Forecasts
Dr. Daniel McMillen, head of the Stuart Handler Department of Real Estate at the University of Illinois at Chicago College of Business Administration, provides valuable insights into the current market situation. He points out that while prices increased in the previous month, the median sale price in the Chicago area remains lower compared to the same period last year. Dr. McMillen forecasts that the number of sales may increase in June but will likely remain lower than last year's levels. Additionally, he anticipates a price increase next month, albeit still below the levels observed in the previous year.
Sales Decrease in the City of Chicago
The city of Chicago, specifically, has seen a significant decline in home sales. In April 2023, there were 2,028 home sales, representing a year-over-year decrease of 37.6 percent compared to the 3,249 sales in April 2022. This decline indicates a more pronounced slowdown within the city's real estate market.
Decrease in Median Home Price for Chicago
The median price of a home in the city of Chicago also experienced a notable decrease. In April 2023, the median price was $340,000, down 8.1 percent from April 2022, when it stood at $370,000. This decline suggests a more significant adjustment in pricing within the city compared to the broader Chicago Metro Area.
Challenges and Opportunities
Sarah Ware, president of the Chicago Association of REALTORS® and principal and designated managing broker for Ware Realty Group in Chicago, acknowledges the decline in the housing market but highlights the ongoing activity and opportunities for both buyers and sellers. While factors such as low inventory, increased inflation, and higher mortgage rates have affected real estate markets nationwide, Ware emphasizes that there are still chances for those who were previously intimidated by the hectic pace of the market.

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 $1,314 last month. Oak Park was the most expensive city with one bedroom priced at $1,900 while Delkab was the most affordable city with rent at $710.
The Fastest Growing Cities For Rents in Chicago Metro Area (Y/Y%)
- Oak Park had the fastest growing rent, up 39.7% since this time last year.
- Des Plaines saw rent climb 32.8%, making it the second fastest growing.
- Valparaiso was third with rent increasing 19.3%.
The Fastest Growing Cities For Rents in Chicago Metro Area (M/M%)
- Des Plaines had the largest monthly rental growth rate, up 6%.
- Elmhurst was second with rent climbing 5.7%.
- Chicago saw rent grow 3.4% last month, making it third.

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 the upcoming months, May, June, and July, both Illinois and the Chicago PMSA exhibit interesting patterns with regards to yearly and monthly changes. Let's delve into the forecasted numbers and explore what they mean for the Chicago housing market.
Sales Forecast
The sales forecast for the next three months presents a combination of yearly decreases and monthly increases. When considering the annual perspective, Illinois is projected to experience a decline in the range of -10.5% to -14.2%. Similarly, the forecast for the Chicago PMSA indicates a yearly decrease ranging from -12.4% to -16.7%. These figures suggest a challenging market environment compared to the previous year.
However, on a monthly basis, there is a glimmer of hope. The three-month average sales forecast for Illinois indicates an increase ranging from 8.4% to 11.4%. Similarly, the Chicago PMSA is expected to see a monthly increase ranging from 7.0% to 9.5%. These positive monthly trends indicate potential recovery and demand within the market.
Median Price Forecast
While the sales forecast presents a mixed picture, the median price forecast provides insights into the expected price changes for May, June, and July. In Illinois, the forecast indicates mixed annual growth rates, but overall, a relatively stable trajectory. The median price is expected to change by -0.4% in May, followed by a further decrease of -1.0% in June. However, there is a positive outlook for July, with a forecasted growth rate of 2.2%.
Contrarily, the forecast for the Chicago PMSA suggests negative growth rates for the same period. In May, the median price is projected to decrease by -2.1%, followed by a larger decrease of -3.2% in June. July shows a smaller decline of -0.4%. These negative growth rates indicate a potential adjustment in property values within the Chicago PMSA.
Implications and Considerations
The forecasted decreases in sales and median prices, particularly on a yearly basis, emphasize the challenges that persist within the Chicago housing market. These challenges can be attributed to factors such as economic conditions, market saturation, and shifts in buyer behavior. However, the positive monthly sales forecast and the stability in median prices for Illinois offer some hope for a gradual recovery.
It is crucial for buyers and sellers to closely monitor market trends and seek guidance from experienced real estate professionals to navigate these dynamics effectively. Additionally, staying informed about macroeconomic factors and local market conditions can help individuals make informed decisions.
Let us look at the price trends recorded by Zillow over the past year. As of April 30, 2023, the average home value in the Chicago-Naperville-Elgin area stands at $294,993. This figure represents a 1.8% increase over the past year, reflecting the upward trajectory of the market. The consistent growth in home values bodes well for homeowners and investors in the region.
Market Forecast
Looking ahead, the market forecast for the next year indicates further positive developments. With a projected 1.7% market forecast, the Chicago-Naperville-Elgin area is expected to maintain its upward momentum in terms of home values. This forecast signals confidence in the market's stability and suggests potential opportunities for buyers and sellers alike.
Sales Dynamics
The sales dynamics in the Chicago housing market showcase a dynamic and competitive environment. The median sale-to-list ratio, which measures the percentage of the listing price that a home sells for, stands at 0.989 as of March 31, 2023. This ratio indicates that, on average, homes are selling very close to their list prices, highlighting the strong demand and competitiveness among buyers.
Moreover, the market demonstrates a high level of buyer activity, with 29.1% of sales occurring over the list price as of March 31, 2023. This signifies the prevalence of bidding wars and multiple offers, emphasizing the need for buyers to act quickly and strategically.
On the other hand, 57.5% of sales in the same period were under the list price. This indicates that while some properties may attract offers above the asking price, there are still opportunities for buyers to negotiate and find favorable deals in the market.
Speedy Sales
The Chicago-Naperville-Elgin housing market is characterized by rapid sales, with homes going pending in approximately 9 days as of April 30, 2023. This quick turnaround time highlights the high demand and efficient sales processes in the region. Both buyers and sellers need to be prepared to act swiftly and make well-informed decisions in this fast-paced market.
Overall, the Chicago housing market presents a promising outlook. Staying informed about market trends, seeking expert advice, and acting decisively will be key to making the most of the opportunities available in this dynamic real estate landscape.

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 May 2023, the average rent for a 1-bedroom apartment in Chicago, IL is currently $1,995. This is a 5% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Chicago increased by 5% to $1,450. The average rent for a 1-bedroom apartment increased by 11% to $1,995, and the average rent for a 2-bedroom apartment increased by 9% to $2,400.
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