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Illinois Housing Market: Prices, Trends, Forecast 2024

July 6, 2024 by Marco Santarelli

The Illinois housing market is exhibiting signs of recovery, with rising prices and inventory levels. However, challenges remain, particularly in the Chicago area, where home sales have slightly decreased and inventory is tight. The next few months will be crucial in determining if these trends will continue or shift as predicted. Here are the latest trends in the Illinois housing market.

How is the Illinois Housing Market Doing Currently?

Illinois Home Sales

Illinois home sales saw a slight uptick in May 2024, according to Illinois REALTORS®. The state recorded 13,068 home sales (including single-family homes and condominiums), marking a 0.2 percent increase from 13,041 sales in May 2023. This growth, while modest, suggests a steadying market.

In the Chicago Metro Area, however, home sales experienced a slight decline. The region saw 8,976 homes sold in May 2024, down 1.3 percent from 9,098 sales in May 2023. The city of Chicago itself reported a 2.4 percent decrease in home sales, with 2,404 sales in May 2024 compared to 2,462 sales the previous year.

Illinois Home Prices

Home prices in Illinois have been on the rise. The median price statewide in May 2024 reached $300,000, representing a 9.1 percent increase from $275,000 in May 2023. This median price is a crucial indicator, showing that half of the homes sold for more and half for less.

In the Chicago Metro Area, the median home price also saw a significant rise. It was recorded at $360,000 in May 2024, up 9.1 percent from $330,000 in May 2023. The city of Chicago itself had a median home price of $362,000 in May 2024, an 8.1 percent increase from $335,000 the previous year.

Illinois Housing Supply

The number of available homes in Illinois also saw a rise. In May 2024, there were 18,295 homes available for sale statewide, a 2.1 percent increase from 17,925 homes in May 2023. This increase in inventory is a positive sign, suggesting a slowly recovering market.

In the Chicago Metro Area, there were 12,516 homes available for sale in May 2024, a 2.1 percent rise from 12,259 homes in May 2023. Conversely, the city of Chicago experienced a 5.2 percent decrease in available homes, with 4,808 homes for sale in May 2024 compared to 5,073 homes the previous year.

Illinois Housing Market Trends

The Illinois housing market shows a mixed bag of trends. Matt Silver, President of Illinois REALTORS®, highlighted the importance of increased inventory and stable home sales for the local and state economies. Despite the slight uptick in sales and inventory, the market still requires collaborative efforts to boost housing availability at all levels.

Dr. Daniel McMillen, Professor of Real Estate at the University of Illinois-Chicago, noted that while prices and sales increased in May, forecasts predict a seasonal decline in prices and sales over the next three months. Consumer confidence in the economy remains mixed, despite low unemployment rates and a drop in inflation.

Erika Villegas, President of the Chicago Association of REALTORS®, advised sellers to prepare for quick sales and encouraged buyers to act swiftly as prices continue to rise. Engaging a REALTOR® can provide valuable guidance during this time.

Sales and price information were generated by Multiple Listing Service closed sales, reported by 22 participating Illinois REALTOR® local boards and associations, including Midwest Real Estate Data LLC. The data covers the period from May 1 through May 31, 2024.

According to Freddie Mac, the average commitment rate for a 30-year fixed-rate mortgage in May 2024 was 7.06 percent, up slightly from 6.99 percent in April 2024. This is higher compared to the 6.43 percent average in May 2023.

Illinois Housing Market Predictions 2024

The annual housing market forecast for Illinois for 2024 provides valuable insights into the upcoming months. These forecasts have been presented to Illinois Realtors® by the UIC Stuart Handler Department of Real Estate.

The Illinois housing market is poised for a strong performance in 2024, with positive trends forecasted for both Illinois and the Chicago Primary Metropolitan Statistical Area (PMSA). The predictions indicate growth in sales and median prices, providing a promising outlook for homebuyers, sellers, and investors.

Sales Forecast

The sales forecast for June, July, and August suggests an increase on both a yearly and monthly basis for Illinois and the Chicago PMSA.

Annual Increase: The three-month average forecasts for Illinois point to an increase in the range of 2.9% to 3.9%. For the Chicago PMSA, the expected annual increase is in the range of 3.8% to 5.1%.
Monthly Increase: On a monthly basis, three-month average sales are forecast to increase by 1.3% to 1.8% for Illinois and by 1.3% to 1.7% for the Chicago PMSA.

These figures reflect a robust market environment, driven by strong demand and favorable economic conditions. The anticipated sales growth indicates a healthy and active real estate market throughout the summer months.

Median Price Forecast

The median price forecast also indicates positive annual growth for June, July, and August in both Illinois and the Chicago PMSA.

Illinois Median Price Growth: The median price is forecast to change by 7.3% in June, 7.0% in July, and 6.9% in August.
Chicago PMSA Median Price Growth: For the Chicago PMSA, the forecasted median price changes are 6.7% in June, 7.0% in July, and 5.4% in August.

The projected increases in median prices are a testament to the rising value of properties in both Illinois and the Chicago PMSA. These price trends reflect the desirability of the region, supported by economic growth, population influx, and limited housing inventory.

Market Drivers

Several key factors are driving the positive trends in the Illinois housing market:

Economic Stability: A strong state economy with low unemployment rates and steady job growth contributes to consumer confidence and increased purchasing power.
Low Interest Rates: Favorable mortgage rates continue to make homebuying more accessible and affordable for many buyers.
Population Growth: Illinois, and particularly the Chicago PMSA, continues to attract new residents, further driving demand for housing.
Limited Inventory: A relatively tight supply of homes on the market creates competitive conditions, pushing up prices.

Top Areas in Illinois Poised for Home Price Decline

The housing market in Illinois is experiencing fluctuations, and certain areas are poised for a notable decline in home prices. Here are the areas in Illinois where home prices are expected to decline, providing insights and analysis based on recent data.

Lincoln, IL

Lincoln, a metropolitan statistical area (MSA) in Illinois, is expected to see a significant drop in home prices. The data suggests:

-0.9% decline by June 30, 2024
-3% decline by August 31, 2024
-7.1% decline by May 31, 2025

These projections indicate a substantial downward trend, making Lincoln one of the top areas in Illinois for potential home price decline.

Jacksonville, IL

Jacksonville is another MSA experiencing a notable decrease in home prices. The forecast shows:

-0.8% decline by June 30, 2024
-2.7% decline by August 31, 2024
-7% decline by May 31, 2025

The consistent decline suggests potential challenges for homeowners and opportunities for buyers in Jacksonville.

Mount Vernon, IL

Mount Vernon is projected to experience a significant decline in home prices over the next year. The expected decreases are:

-0.9% by June 30, 2024
-3.2% by August 31, 2024
-6.4% by May 31, 2025

These figures highlight Mount Vernon as a key area to watch for declining home prices.

Carbondale, IL

Carbondale's housing market is also facing a downturn. The projections include:

-0.3% decline by June 30, 2024
-1.9% decline by August 31, 2024
-5.8% decline by May 31, 2025

While the initial decline is modest, the cumulative effect over the year is significant.

Galesburg, IL

Galesburg is expected to see a steady decline in home prices. The data shows:

-0.2% decline by June 30, 2024
-1.4% decline by August 31, 2024
-5.7% decline by May 31, 2025

This trend suggests a gradual but notable decrease in home values.

Quincy, IL

The housing market in Quincy is projected to decline as follows:

-0.4% by June 30, 2024
-1.8% by August 31, 2024
-5.5% by May 31, 2025

These figures indicate a consistent downward trend in Quincy's home prices.

Danville, IL

Danville is another area with expected home price declines. The projections are:

-0.4% by June 30, 2024
-2% by August 31, 2024
-5.1% by May 31, 2025

This steady decline makes Danville a key area for potential home buyers to watch.

Macomb, IL

Macomb's housing market is facing the following projected declines:

-0.3% by June 30, 2024
-1.5% by August 31, 2024
-4.9% by May 31, 2025

The decline, though moderate initially, accumulates to a significant drop over the year.

Charleston, IL

Charleston's home prices are projected to decline as follows:

-0.5% by June 30, 2024
-1.7% by August 31, 2024
-4.5% by May 31, 2025

This steady decline highlights the downward trend in Charleston's housing market.

Davenport, IA

Davenport, though primarily in Iowa, impacts the Illinois housing market. The projections include:

0% change by June 30, 2024
-0.9% by August 31, 2024
-4.4% by May 31, 2025

The decline is less steep initially but becomes more pronounced over time.

Rochelle, IL

Rochelle is expected to see a decline in home prices, with projections of:

-0.4% by June 30, 2024
-1.9% by August 31, 2024
-4.3% by May 31, 2025

This trend suggests a steady decrease in home values in Rochelle.

Springfield, IL

Springfield, the state capital, is also facing a decline in home prices. The projections are:

0.1% increase by June 30, 2024
-0.7% by August 31, 2024
-4.2% by May 31, 2025

Despite a slight initial increase, the overall trend points to a decline.

Taylorville, IL

Taylorville's housing market is expected to see the following declines:

0.2% increase by June 30, 2024
-0.5% by August 31, 2024
-3.9% by May 31, 2025

The initial increase is minimal compared to the projected overall decline.

3 Housing Markets Including California Face Downturn Risk

June 17, 2024 by Marco Santarelli

A recent report by ATTOM, a leading real estate data provider, has shed light on the varying vulnerabilities of housing markets across the United States. The Special Housing Risk Report spotlights counties more susceptible to potential decline, based on factors like affordability, underwater mortgages, and unemployment rates. The data, gathered in the first quarter of 2024, reveals a concerning trend – California, New Jersey, and Illinois continue to hold the highest concentrations of at-risk markets.

Housing Market Slowdown Risk Persists in California, New Jersey and Illinois

This isn't entirely new information. Over the past few years, these same states have consistently shown up on the “most vulnerable” side of the housing market spectrum. The latest report reinforces this trend, highlighting a geographic concentration of risk, particularly in areas surrounding major metropolitan areas like Chicago and New York City, as well as inland regions of California.

In contrast, the report identifies a different story playing out in the South and Midwest, where a significant portion of the 50 counties considered least vulnerable are located. This suggests a regional divide in terms of housing market resilience.

The report emphasizes that these findings shouldn't be interpreted as a prediction of imminent decline in any specific market. Instead, they serve as an indicator of relative vulnerability based on key metrics. With the housing market experiencing a slowdown over the past year, the report highlights how some areas are inherently better positioned to weather a potential downturn compared to others.

Let's now delve deeper into the specific factors considered in the risk assessment and how they contribute to the overall vulnerability score.

Decoding the Vulnerability Score

The ATTOM report utilizes a multi-pronged approach to assess the vulnerability of housing markets across different counties. This section explores the four key factors that contribute to the overall risk score:

Foreclosure Risk: This metric evaluates the percentage of homes in a county facing potential foreclosure. A higher percentage indicates a more vulnerable market, as foreclosures can destabilize property values and inject uncertainty into the market.
Underwater Mortgages: This factor examines the proportion of homes with mortgages exceeding the estimated value of the property. These “underwater” mortgages can limit homeowners' financial flexibility and disincentivize selling, potentially leading to a stagnant market.
Housing Affordability: This metric dives into the financial burden of homeownership in a particular county. It considers the percentage of an average local wage required to cover major expenses associated with owning a median-priced single-family home. A higher percentage indicates lower affordability, making it harder for potential buyers to enter the market and potentially leading to a decrease in demand.
Unemployment Rates: Local unemployment data is factored into the analysis because job losses can significantly impact a household's ability to afford mortgage payments. Higher unemployment rates can lead to an increase in foreclosures and put downward pressure on housing prices.

By analyzing these four crucial aspects, the report assigns a vulnerability ranking to each county. Counties with a higher ranking in each category (indicating a greater risk in that specific factor) contribute to a higher overall vulnerability score. This score allows researchers and potential homebuyers to compare the relative risk profiles of different housing markets.

The report emphasizes that the data is derived from the first quarter of 2024. Real estate markets are dynamic and constantly evolving. However, understanding these vulnerability factors can provide valuable insights for those navigating the current housing landscape, particularly in areas identified as potentially more susceptible to downturns.

Let's now explore the specific counties flagged as most vulnerable and analyze the potential reasons behind their risk profile.

A Closer Look at Vulnerable Counties

The report identifies 50 counties across the United States considered most susceptible to housing market downturns. As discussed earlier, California, New Jersey, and Illinois dominate this list, with a concentration in areas surrounding major metropolitan hubs like Chicago and New York City, along with inland regions of California.

Here's a breakdown of some of the notable counties and potential contributing factors to their vulnerability:

Chicago Metro Area (Illinois): Counties like DeKalb, Kane, Kendall, McHenry, and Will in Illinois consistently rank high in terms of risk. These areas might face challenges like high unemployment rates or a larger share of underwater mortgages, making them more susceptible to price fluctuations.
New York City Metro Area (New Jersey): Essex, Passaic, Sussex, and Union counties in New Jersey share close proximity to the expensive New York City market. While offering a potentially more affordable option for some buyers, these areas might also experience a spillover effect if the New York City market faces a downturn.
California's Central Valley: Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, and Tulare counties in California's central valley find themselves on the vulnerable list. These regions might grapple with affordability issues due to a larger gap between average wages and housing costs.

It's important to remember that the report provides a general risk assessment and doesn't paint the entire picture for each county. Specific neighborhoods within these counties might exhibit different levels of vulnerability. Local factors like economic conditions, job markets, and recent housing trends can also play a role.

However, the ATTOM report serves as a valuable starting point for further research. Potential homebuyers or real estate investors in these areas might want to conduct a more localized analysis, considering factors like specific neighborhoods, property types, and recent market trends. This deeper dive can help them make informed decisions tailored to their individual situations.

Finally, let's explore some of the counties considered least vulnerable and the potential factors contributing to their resilience.

Pockets of Resilience in a Shifting Market

While the ATTOM report highlights areas of potential vulnerability, it also identifies counties considered to be more resilient in the face of a potential housing market downturn. Interestingly, a significant portion of these counties are located in the South and Midwest regions.

Here's a glimpse into some of the counties considered less vulnerable and possible reasons behind their relative strength:

Southern States: Virginia, Tennessee, and North Carolina boast several counties on the “least vulnerable” list. These states have generally experienced steadier home price growth compared to the national average and might benefit from a more balanced housing market with a mix of affordable and higher-end options.
Midwestern Markets: Wisconsin and Minnesota also contribute counties to the resilient category. These areas might have a stronger job market base compared to some of the more vulnerable regions, providing stability for homeownership affordability.

It's important to acknowledge that even these resilient markets aren't entirely immune to potential slowdowns. However, the factors contributing to their lower risk scores suggest a greater capacity to weather market fluctuations.

Bottom Line: The ATTOM Special Housing Risk Report provides valuable insights into the varying vulnerabilities of housing markets across the United States. By analyzing factors like affordability, underwater mortgages, and foreclosure rates, the report identifies areas that might be more susceptible to downturns. This information can be a helpful tool for potential homebuyers and real estate investors, guiding them towards a more informed approach when navigating the current housing landscape.

However, it's crucial to remember that the report offers a broad risk assessment and doesn't replace a thorough analysis of specific localities. Factors like neighborhood dynamics, recent market trends, and local economic conditions can significantly influence the risk profile within a county.

Ultimately, responsible homebuyers and investors should combine the insights from this report with additional research tailored to their specific interests and location. This comprehensive approach can empower them to make informed decisions in a dynamic housing market.

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