The global real estate market reached a size of$3.69 trillion in 2021.
Real estate markets vary a lot depending on location. Anyone who’s considering buying or selling property should be up to date with the state of things in their area. This is because buying or selling at the wrong time could be a mistake financially.
For people living in Illinois, the Chicago housing market is one to keep an eye on. It can present a good place to invest, and knowing when to sell can help ensure you get the best price for your home.
Some things to consider are historical data, the situation in different neighborhoods, and investment factors. Having a good understanding of what you’re doing and what’s happening with the market will help you make the best decisions.
Various outlets provide information on the Chicago real estate market. Keeping up with the latest overview will give you an idea of what’s happening so that you can stay up-to-date and informed.
In this guide, we’re going to take a look at three reports that cover Chicago housing trends in 2023. This will allow you to determine what to do in terms of real estate investments over the next year.
To buy or not to buy? Looking toward Chicago’s housing market in 2023
Acacia Hernandez provided this report from WTTW, and one of the first things to note is that interest rates havemore than doubledover the last year. There was a bit of a housing boom before the pandemic, but this has had a sizable impact on that.
Higher interest rates make it more expensive for people to buy homes. Depending on a person’s situation, it can be a better choice to try to wait things out. The issue here is that it’s hard to be certain when interest rates will drop again.
Some experts think that interest rates could even continue to go up. In this case, that would make now a better time to buy for Chicago residents that don’t want to wait too long to move.
Dennis Rodkin, a residential real estate reporter for Crain’s Chicago Business has made it clear that people don’t know what will happen with interest rates moving forward. While they’ve lowered slightly, the Federal Reserve thinks they might have gone down a bit too much. A continued increase in interest rates will most likely lead to a deeper freeze on the Chicago market.
What to expect
When the Chicago real estate market is doing well, there can be a lot of very quick sales (2 weeks or less on the market). Sales like this have almost completely disappeared. The reduced demand means that buyers have more control, so they can look at various properties without having to make immediate offers.
If you do decide to put your home on the market, you shouldn’t expect offers to flood in. While there are still people looking to buy Chicago homes, the process is a lot slower than usual.
Chicago home prices did rise during the pre-pandemic boom, although not as much as some other locations such as San Francisco and Phoenix. As such, the drop in demand is also not as significant as in these areas. They’re already seeing house prices fall, while they’re still on the rise in Chicago – though only by very small amounts.
Chicago remains one of the most affordable big cities in the country for housing. While things may not be too good going into 2023, it’s better here than in most of the rest of the US. It’s important to remember, however, that things can still change.
Chicago real estate market prices, trends, forecast
Home sales in the nine-county Chicago Metro Area reached4,420 in January 2023. This is a 38.8% drop compared to the same time last year. The median house price, however, has had a slight increase of 0.7% over the same time frame.
There has been a slowdown in the market, but that’s typical of winter. Forecasts suggest that house sales and prices will likely increase over the next 3 months.
A buyer’s or seller’s market
This report written by Marco Santarelli of Norada Real Estate Investments is based only on single-family, condo, and townhome properties, and things are generally fairly balanced (supply and demand are very similar). In January 2023, the market favoredbuyers over sellersas there was a higher supply of homes, but the median price hasn’t changed much at all. This indicates that the housing boom is slowing down.
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Rent prices vary across the state, with East Chicago being one of the most affordable areas. Even so, the average price of rent has increased by 17% over the last year.
Forecast for 2023-2024
The Chicago housing market will likely continue to be one of the best-performing markets in the country. The 1-year forecast suggests aslight decline(-0.8%) for the next year primarily due to less demand and higher interest rates. Demand is still quite strong, resulting in 28.7% of homes selling above the listing price.
As a place to invest, Chicago can still be a good choice. There’s a strong renter’s market, so if you want to buy a rental property you may find some good opportunities.
Over the past 10 years, Chicago has had an annual real estate appreciationrate of 4.88%. As such, it has consistently been one of the most successful real estate markets in the country. One thing to note is that the population has decreased recently, which could have a negative effect on the housing market.
House prices remain reasonable throughout the city. There’s also a good balance between renters as well as a reasonable spread of income levels. This can make it a good place to invest for anyone looking to get on the property ladder at any level.
Chicago real estate market trends to know
This report (published in April 2021) covers 7 specific trends in the Chicago real estate market. Devon Thorsby of U.S. News & World Report gives a good indicator of where things might be going.
Prices on the rise, but not unsteadily
In general, house prices went up from 2020 to 2021 (like most of the country) but not as much as in smaller metro areas. Chicago experienced a medianprice increase of 12.5%from February 2020 to February 2021. Even with the price increase, however, the number of homes sold over the same period was smaller.
Outside of downtown, buyer competition is fierce
The Covid-19 pandemic slowed things down for the market, especially in the Chicago metro area. Residential neighborhoods, however, experienced more competition.
This shows how much things can differ based on the neighborhood. When buying and selling, make sure you look into specific areas to see current market conditions.
High-rise buildings are seeing more vacancies
Another impact of the pandemic was the style of living people wanted. High-rise condo buildings often involve more interaction with neighbors, which is something many people began trying to avoid. As a result, people started moving out of these properties and into areas with a bit more space and freedom.
Square footage and outdoor space are driving sales
With the effects of the pandemic, a lot of people started to live differently. Many buyers were placing more value on outdoor space and a more home-centric environment. This is especially true amongyounger buyers.
Renewed interest in dense city living hinges on entertainment
With many people working from home, the need to find a property close to one’s work fell significantly. For those who do want to live in densely populated metropolitan areas, work isn’t as much of a concern. Things like restaurants, activities, nightlife, etc. are now the driving factor.
If you’re considering the suburbs, look for small downtowns
If you want to move to the suburbs, locating a small downtown can be very beneficial. It will ensure you’re close to all the amenities you need without the crowds and chaos of the city center.
People from pricier metros see Chicago as ideal for investment
Many Chicago real estate investors come from outside the city. It presents a good place for people to enter the real estate market as there’s a lot of potential and it’s generally more affordable than other big cities like New York or Los Angeles.
The Chicago housing market in 2023
While there’s still a lot of uncertainty in the Chicago housing market, it can still be a great place to invest. It has consistently performed better than markets in other areas of the country, and will likely continue to do so.
If you’re planning on investing, make sure you take the time to research different neighborhoods and types of properties. Your decision should also be based on if you’re wanting to move, or if you’re buying as an investment.
You may also be interested in selling your home, which can be a lengthy process, especially with the current state of the market. You can make things much easier for yourself by selling with iBuyer. We provide instant cash offers on properties, speeding up the process significantly.
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FAQs
Chicago, IL MSA: The forecast for the Chicago MSA suggests a moderate increase in housing prices. In May 2023, prices are predicted to rise by 0.3%, followed by a slight growth of 0.1% in July 2023. However, the most significant increase is expected in April 2024, with prices projected to rise by 1.5%.
What do economists predict about the housing market for 2023? ›
Fannie Mae: Economists at the firm predict that U.S. home prices, as measured by the Fannie Mae HPI, will fall 1.2% in 2023 and another 2.2% dip in 2024. That's a big upgrade from March, when Fannie Mae predicted national home prices would fall 4.2% in 2023 and another 2.3% dip in 2024.
Is the housing market slowing down in 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.
How is Chicago housing market? ›
Chicago housing trends and stats
The number of home sales in the metro area has declined by 29.4 percent year-over-year. In the city proper, the drop is even steeper at 37.3 percent. Homes spend an average of 87 days on the market before selling in Chicago, per Redfin.
Why is Chicago real estate so cheap? ›
Unlike other major cities that have limited space for new construction, Chicago has a vast inventory of existing housing stock. This means that there are more homes available for purchase or rent, which creates more competition among sellers and landlords, leading to lower prices.
What are the housing market predictions for Wisconsin? ›
Lower Home Prices. Some experts predict that due to low inventory, home prices won't drop in 2023. While others believe that due to the higher interest rates, sellers will lower their prices to current levels. Home values are expected to go down by 5% to 10% due to unaffordability.
Will 2023 be a good time to buy a house? ›
Homebuyer.com data analysis indicates that, for first-time home buyers, June 2023 is a good time to buy a house relative to later in the year. This article provides an unbiased look at current mortgage rates, housing market conditions, and market sentiment.
Will the US housing market decline to worsen in 2023? ›
Experts are predicting another 10% to 15% drop by the second or third quarter of 2023, according to multiple sources. Several other factors point to a further home price correction.
Will 2023 recession affect housing market? ›
Fannie Mae expects U.S. home prices to fall -1.2% between Q4 2022 and Q4 2023, and then another -2.2% between Q4 2023 and Q4 2024.
Which Illinois suburb has the lowest property taxes? ›
Which Chicago suburb has the lowest property taxes? Chicago suburbs with the lowest property taxes include Indian Head Park, Burr Ridge, Glenco, and Long Grove, Illinois. When it comes to property taxes in Cook County suburbs only, Winnetka and Kenilworth are the lowest with 0.93% and 0.88% respectively.
It's no secret that Chicago faces a housing crisis. In 2020, the city's Housing Department estimated that the city faces a shortfall of 120,000 affordable units. And that number has almost certainly risen as rents have spiked, especially in supply-constrained wealthy neighborhoods.
What is the average house price in Chicago? ›
Chicago, IL Housing Market
In April 2023, the median listing home price in Chicago, IL was $350K, trending up 3.2% year-over-year. The median listing home price per square foot was $257. The median home sold price was $333.5K.
Is it worth it to buy a house in Chicago? ›
Chicago is a good investment for many reasons
For those seeking an opportunity to invest in exceptional value and a strong market, Chicago may be the place to go. It's true home prices are rising, and inventory is low, yet there is demand for rental housing here.
What is the best time of year to sell a house in Chicago? ›
The answer is anytime, especially in a seller's market. Every year, sellers go through the same process of trying to time the sale of their houses, condos and income properties. Historically, the spring and early summer months have been the prime seasons for selling and they still tend to be.
Are rents falling in Chicago? ›
The same data shows Chicago's year-over-year rent growth is at 5.2%, a drop from the nearly 12% year-over-year increase at this time last year. This number is nearly 6% year-over-year for Illinois in April 2023.
Will home prices drop Chicago? ›
Forecast for 2023-2024
The 1-year forecast suggests a slight decline (-0.8%) for the next year primarily due to less demand and higher interest rates. Demand is still quite strong, resulting in 28.7% of homes selling above the listing price. As a place to invest, Chicago can still be a good choice.
Is Chicago worth moving to? ›
Chicago is a fantastic city to move to in the United States. You will find a delicious food scene, all four seasons, and kind people. But harsh winters, high taxes, and traffic are a few things that make people think twice about moving to Chicago.
Is it cheaper to live in Chicago or suburbs? ›
The good news is the cost of living in Chicago suburbs can be much lower and while offering everything you're looking for, whether you want to stay within commuting distance to downtown Chicago, want good schools and low crime, or you're looking for fantastic shopping and recreation.
What happened to housing in 2008? ›
The housing market crash of 2008 remains one of the most significant events in the history of the United States housing market. It was caused by a combination of factors, including the subprime mortgage crisis, high levels of debt, and a lack of regulation in the financial sector.
Is there a housing crisis in Wisconsin? ›
The housing shortage has also caused challenges for the state's homeless population. Rising rents have made it more difficult for Pillars, one of the largest shelters in the Fox Valley, to offer subsidized housing programs.
In the first nine months of 2022, home sales dropped by 8.8% when compared to the same nine months of 2021. However, when looking at the last quarters of each year, home sales dropped by 30.1% in 2022. The median price of homes in Wisconsin rose by 8.5% from Jan. 2022 to 2023.
Will mortgage rates drop in 2024? ›
Fannie Mae, Mortgage Bankers Association and National Association of Realtors expect mortgage rates to drop through the first quarter of 2024, by half a percentage point to about nine-tenths of a percentage point. Figures are the predicted quarterly average rates for the 30-year fixed-rate mortgage.
Are mortgage rates expected to drop in 2023? ›
The Mortgage Bankers Association predicts rates will fall to 5.5 percent by the end of 2023 as the economy weakens. The group revised its forecast upward a bit — it previously expected rates to fall to 5.3 percent.
What will cause housing prices to fall? ›
A downturn in general economic activity leads to less disposable income, job losses, and fewer job openings, which decreases the demand for housing.
Will mortgage interest rates go down in 2023? ›
“[W]ith the rate of inflation decelerating rates should gently decline over the course of 2023.” Fannie Mae. 30-year fixed rate mortgage will average 6.4% for Q2 2023, according to the May Housing Forecast. National Association of Realtors (NAR).
What is the richest suburb of Chicago? ›
Glencoe, located north of Chicago along Lake Michigan, ranked the highest for Illinois at just over $3 million. It has a population of 8,849, as of the 2020 Census.
What is the richest part of Chicago? ›
The richest Chicago suburb is Winnetka. This city is situated along Lake Michigan's Northern Shore, about 22 miles from Downtown Chicago. It is home to over 12,000 residents, all of whom appreciate the area's tree-lined streets, local beaches, beautiful parks, and quality school systems.
What is the richest suburb in Chicago? ›
1. Winnetka. Winnetka is a picturesque village in Cook County, Illinois, and one of the North Shore suburbs that create the affluent “North Shore” area near Chicago. With a population of 12,428 in 2019, Winnetka has some of the most opulent neighborhoods that many successful professionals call home.
What are Chicago's worst housing projects? ›
Though Chicago has had a number of notorious public housing projects, including the Robert Taylor Homes and Stateway Gardens on the South Side, and Rockwell Gardens and the Henry Horner Homes on the West Side, Cabrini–Green's name and its problems were the most publicized, especially beyond Chicago.
What is the problem with housing in Chicago? ›
Chicago's housing crisis has been a systemic issue for decades but has been exacerbated by the unprecedented impact of COVID-19. As a result, low-income households have been spending more than half of their income on rent, leaving many renters to sacrifice other necessities to afford their housing.
Approximately 40 percent of the rental units in Chicago are affordable for lower-income households earning 150 percent of the poverty level.
Who owns the most real estate in Chicago? ›
Jennifer Pritzker's real estate holdings are far more extensive than previously known. The Chicago billionaire and member of the family that built the Hyatt Hotels chain owns nearly 35 properties for which she has paid more than $75 million, the Tribune has found.
How much do you need to comfortably live in Chicago? ›
According to the study, a Chicago-area resident without children would need to make $65,500 after taxes to live comfortably. The study is based on the MIT Living Wage Calculator, which uses the cost of housing, food, transportation, medical care and more.
What is the average home lot size in Chicago? ›
Lot Size - The standard residential lot size in Chicago is generally accepted as 25' X 125'.
Is it better to buy a condo or house in Chicago? ›
A condo is usually more affordable than a single-family home, making it a great option for the typical first-time home buyer. Unfortunately, buying a condo with a mortgage can sometimes be more difficult than mortgaging a single-family home, and that's because condos require special underwriting.
What is the average down payment in Chicago? ›
Keep up with our unrivaled coverage of Chicago's housing market. Sign up for the Residential Real Estate Report newsletter. In dollars, the median down payment grew from $19,000 in early 2020—little changed from the same time in the prior two years—to $29,000 in the first quarter of 2022.
Why is it so expensive to live in Chicago? ›
Driven by a costly tax burden, Chicago's high cost of goods and services lands the Windy City in the top 10 for the most expensive 71 cities across the world, according to a new survey by UBS.
What month is the hardest to sell a house? ›
October is the worst month to sell
Homebuying activity typically comes to a near-standstill in December, when people tend to travel and are busy with holiday celebrations.
What day is best to sell a house? ›
Thursday is generally thought to be the best day of the week to list a house for sale. Studies show that homes listed on Thursdays are more likely to sell faster, and for a higher price. Talk to your agent about whether listing your property on a Thursday should be part of your home-sale strategy.
At what point do most house sales fall through? ›
Most collapsed house sales happen before exchange. The reason for this is simple, once you've exchanged contracts there is the risk of losing large amounts of money if a sale falls through.
Citywide rent is expected to increase 3.5-4 percent according to a 2023 Chicago annual report from Integra Realty Resources, a consulting and appraisal firm.
What months are rent cheapest in Chicago? ›
Based on the data, rents in Chicago tend to peak around September and October. Prices dip to their lowest levels in March and April, which is later in the year compared to the other cities in the report—possibly attributed to Chicago's “dreaded winter,” says Renthop.
Is the Chicago housing market slowing down? ›
Like most markets around the country, the overall sales volume in Chicago has decreased considerably since the market peaked last summer. The 2,168 homes that sold in the city last month was 25 percent less than 12 months prior, and suburban sales fell by 22 percent to 7,802.
Are Chicago rents going down? ›
The same data shows Chicago's year-over-year rent growth is at 5.2%, a drop from the nearly 12% year-over-year increase at this time last year. This number is nearly 6% year-over-year for Illinois in April 2023.
Are rents in Chicago going up or down? ›
Indeed, the growth rate in the average rent in Chicago is among the most robust in the Midwest region: From November 2021 to November 2022, Chicago's average rent rose by 8.6%, from $1,773 to $1,925.
What is the average size of a house in Chicago? ›
Conversely, single-family homes throughout Chicago and its surrounding areas surpassed the national average for home size — 2,611 square feet — and added an extra 916 square feet since 2010. Now, the average newly built home in the Chicago area totals 3,330 square feet.
How much do you need to make to live in downtown Chicago? ›
According to the study, a Chicago-area resident without children would need to make $65,500 after taxes to live comfortably. The study is based on the MIT Living Wage Calculator, which uses the cost of housing, food, transportation, medical care and more.
Can landlords raise rent Chicago? ›
Under the ordinance, landlords must provide: 60 days of notice to raise your rent if you have lived in your apartment for more than six months but less than three years. 120 days of notice to raise your rent if you have lived in your apartment for more than three years.
How much notice do I need to give my landlord to move out Chicago? ›
If you pay rent on a monthly basis, you must give your landlord at least one month advance written notice that you are moving out. Otherwise, you can be held liable for another month's rent. If you pay rent on a weekly basis, you must give your landlord at least 7 days advance written notice that you are moving.
Are rents going up forcing Chicagoans to make lifestyle changes? ›
Average rents in the Chicago area have climbed almost 9% since 2021, according to online apartment listings marketplace Apartment List. A combination of inflation and climbing demand for units as consumers emerge from the pandemic has driven up rents, with little to no sign that prices will reverse any time soon.
Reassessment increases ranged from 38 to 55 percent in Lincoln Park and Old Town. Hefty rent hikes likely will follow in spring and summer of 2023 when new leases are drafted. Median rents in Chicago are 2.3 percent higher than the national average of $1,344 a month.
