Chicago Housing Market Forecast
As a real estate investor, seller, or buyer, it is important to understand what is going on in your local market. Knowing popular neighborhoods, demographics, and economic factors can give you an edge in the market.
With over 60 museums and a gorgeous skyline, Chicago is a large, global tourist attraction. However, it is also a very popular place to live. Known for having one of the best food scenes in the US, Chicago is one of the largest cities in the nation and steadily growing.
The Chicago housing market is somewhat competitive, with slightly lower home prices and a low inventory of homes. The current average interest rate for the benchmark 30-year fixed mortgage is 7.01%, up 16 basis points since the same time last week. However, it may decrease back down to the 4% range in the near future. While now is a better time to buy a home in Chicago, the low inventory still favors many sellers.
In January 2023, Chicago home prices were down 5.1% compared to last year, with a median selling price of $300K. Homes in Chicago, on average, are selling after 90 days on the market compared to 45 days last year.
Chicago Homes for Sale
Rocket Homes reported approximately 9,299 homes were on the market in Chicago, in January of this year.
As for the for-sale inventory, it was down 12.5% compared to December 2021. There were 3,716 new listings in Chicago on Zillow in December 2022, which is down 34.6% to 2021.
For real estate agents and other sellers, the best time to get higher offers on a home is in the spring. With the cold winter temperatures in Chicagoland, people are more active in their home searches in the warmer months. However, getting listings on the market at the beginning of the year, might be important, as it is forecasted that demand for homes will decrease in 2023, going from five to ten offers per listing to one to three.
For buyers, there is room to negotiate on listing prices, but nothing drastic. While it’s considered neutral, the market still tends to favor a seller.
Average Rent in Chicago
Rent varies widely depending on whether you are searching in downtown or in the suburbs. The average rent for in Downtown Chicago is $2,224 per month. for a 750 sq. ft. apartment. While in a suburb like Downer’s Grove, you can get 900 sq. fr. for only $1,800 per month. This is fairly decent increase from prices in 2022.
According to Zumper, there are 2,427 apartments for rent in the Chicago area. It seems that overall, people prefer to rent vs buy in Chicago, with renter-occupied housing at 55% versus buyer-occupied housing at 45%.
Chicago Neighborhoods
With 2.7 million residents in the area, there are a vast array of neighborhoods in Chicago. Whether you want the city life, with plenty of high-end restaurants and shops, or you prefer quiet life in the suburbs, Chicago has the neighborhood for you.
Lincoln Park
Just a mile from downtown and with a lakefront view, the Lincoln Park neighborhood is a highly desirable place to live. It is the 9th most walkable neighborhood in Chicago and is close to its namesake Lincoln Park, a massive space with 3.17 miles of greenery.
North Side and Gold Coast
The North Side and Gold Coast are for those looking for an elite and luxe experience. These neighborhoods are home to several landmarks and gorgeous mansions, such as the Magnificent Mile. It is small and exclusive, but packs a big punch.
West Loop
West Loop is perfect for families and young professionals. It is a highly walkable neighborhood with high-end amenities and new buildings being built all the time. The walkability score here is 96, and it has immediate access to major highways and the airport. If you love trying new food, you will love this neighborhood for its proximity to Restaurant Row, with many high-end restaurants.
West Town and Wicker Park
West Town and Wicker Park are perfect for art lovers and cultural enthusiasts. Both neighborhoods have plenty of street art, galleries, and other opportunities to appreciate Chicago’s cultural significance. With a Walk Score of 93, it is easily one of the most walkable areas in Chicago.
Chicago Economy
With companies such as Deloitte, JPMorgan Chase, United Airlines, and Boeing all having headquarters in Chicago, there are plenty of opportunities for work. Chicago’s job market has opportunities in business, finance, transportation, pharmaceuticals, and healthcare opportunities, just to name a few.
Even so, the job market is less healthy than in similar cities. The unemployment rate is 11% compared to the national average of 8.7%. According to Illinois Policy, this is due to sluggish job growth during the COVID-19 recovery.
Despite these somewhat dismal numbers in employment, Chicago still seems to be a great area to invest in.
Sources:
https://www.virtuance.com/blog/chicago-real-estate-market/
https://www.rentcafe.com/average-rent-market-trends/us/il/chicago/