The trends in the Chicago housing market attract a lot of attention. Unfortunately, the market may have altered by the time you read about the latest Case-Schiller report. But there’s good news: we have access to up-to-date housing market data as well as firsthand knowledge from dealing with active buyers and sellers in Chicago and the suburbs. Let’s look at the Chicago housing market crash, trends, and forecast for 2023.
Chicago Housing Market Forecast 2023
Chicago housing market is expected to maintain its recent trends of being one of the hottest in the United States. It is also one of the hottest real estate markets for rental property investment. What is the Chicago housing market forecast for 2023?
According to data from NeighborhoodScout.com, the annual appreciation rate in Chicago has averaged 5.37% over the last ten years.
Over the last ten years, the cumulative appreciation rate has been 68.79%. Chicago’s appreciation rate over the last twelve months, from 2021 Q2 to 2022 Q2, has been 9.59%, which is lower than the appreciation rate in other places in America. House appreciation rates in Chicago were 2.59% between 2022 Q1 and 2022 Q2, equating to a 10.78% yearly appreciation rate.
Let’s take a peek at Zillow’s price trends over the last year. In the Chicago metro area, property values have gone up by almost 9.6% since October (the current Zillow Home Value Index is $311,225). Here is Zillow’s 2023 housing market forecast for the Chicago Metropolitan Statistical Area.
- Home values in the Chicago-Naperville-Elgin Metro Area have increased by 9.6% in the last year.
- Zillow forecast a 1.4% dip in the Chicago MSA housing market between October 2022 and October 2023.
Chicago Housing Market Forecast 2023 (Continued).
The UIC Stuart Handler Department of Real Estate’s sales forecast for November, December, and January for Illinois and the Chicago PMSA shows that sales will go down both annually and monthly.
- The three-month average forecasts for Illinois show a decline ranging from -19.2% to -26.0%.
- The Chicago PMSA’s comparison numbers show a drop ranging from -28.3% to -38.3%.
- Every month, three-month average sales are forecast to fall in the range of -7.4% to -10.1% in Illinois and -11.0% to -14.9% in the Chicago PMSA.
In both Illinois and the Chicago PMSA, the median price forecast suggests positive yearly growth for November, December, and January.
- The median price in Illinois is forecast to rise by 0.1% in November, 1.6% in December, and 2.1% in January 2023.
- The equivalent values for the Chicago PMSA are 3.4% in November, 3.2% in December, and 3.6% in January 2023.
These figures might be positive or negative depending on whether you are a buyer or a seller. In a well-balanced housing market, the number of homes for sale would drop to zero in about five to six months. In terms of months of supply, Chicago may become a buyer’s market if the supply exceeds five months of inventory.
And it is highly unlikely to occur. Because there is a big difference between supply and demand, the housing market is skewed toward sellers. This article’s Chicago housing market forecast for 2023 is based on educated guesses and should not be construed as financial advice. Many factors, such as mortgage rate trends in 2023, could have an impact on Chicago’s housing market value, and some of these factors are difficult to predict in advance. Real estate values are very cyclical, with many factors outside your control.
Chicago Housing Market Crash
A major crash is on the horizon, as are soaring interest rates and searing inflation in the Chicago housing market. So, will the Chicago housing market crash in 2023? No.
Housing prices in Chicago may fall slightly—perhaps by 5% or so—but they will not crash. This is due to the laws of supply and demand. On the demand side, demand has already decreased precipitously since its pandemic peak in 2022, and we estimate it to fall even lower in 2023.
The only reason we expect even a little decline in housing prices is that first-time buyers, who account for a sizable portion of the market in any given year, may be more likely to avoid the hectic spring market.
Chicago Housing Market Trends
The most recent research on “Chicago Housing Market Trends” is available below. The Illinois REALTORS® is the source of this study, and the counties included are Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will. The research contrasts the Chicago metropolitan region and housing metrics in the city.
In October, 7,645 residences (single-family and condominium) were sold in the nine-county Chicago Metro Area, a 32.4 percent reduction from the 11,303 homes sold the previous year. The Chicago Metropolitan Area’s typical house sale price was $300,000, up 3.5 percent from $289,745 in October 2021.
Is it a Buyer’s or Seller’s Market in Chicago?
The following Chicago housing market trends are based on listings for single-family, condo, and townhome properties on realtor.com. Land, multi-unit buildings, and other types of property are not included. Chicago has a balanced housing market, which indicates that the supply and demand for homes are roughly equal.
The median list price of homes in Chicago, IL in October 2022 was $349.9K, up 1.7% year over year. The Chicago housing market appears to be slowing as loan rates rise. The median listing price per square foot was $245. The median selling price of a property was $320,000.
The sale-to-list price ratio was around 98.36%, indicating that properties sold on average 1.64% below the asking price. There are 78 separate neighborhoods in Chicago. Lincoln Park, the most expensive area, has a typical listing price of $675,000. Roseland is the city’s most affordable neighborhood, with a median listing price of $165K.
Housing Market Trends in Chicago for October 2022
According to Illinois REALTORS®, single-family and condominium house sales in Chicago reached 1,709 units in October 2022, a 30.8 percent decrease from the previous month’s total of 2,469 units. In Chicago, home prices are rising slowly. In October 2022, the median price of a home in Chicago was $320,000, a 2.2 percent rise over the previous year’s median price.
- Year-on-year closed sales in the City of Chicago fell by 30.8 percent.
- The median sales price was $320,000, an increase of 2.2 percent from the prior year.
- The median sales price of single-family houses increased by 5.6% to $306,000.
- The typical condo sales price was $330,000, a 4.3% decrease.
- The available house inventory fell by 18.7 percent.
- The number of days on the market before a sale dropped from 35 to 34.
Overview of Chicago Real Estate Investment
If you want to know what the market has in store for the coming year, you must delve deeper into local trends. We have already looked at the forecast for the Chicago housing market in 2023 to figure out why we should invest in this market. Chicago has a thriving rental market. In this city, more than half of the population leases. Chicago is the sixth-most walkable city in the United States. The population of the Chicago metropolitan region is roughly 8,865,000, a 0.03% rise from 2019. It is the most populous city in the U.S. state of Illinois and the third-most populous city in America.
There are both owner-occupied and renter-occupied housing units in Chicago. One- and two-bedroom large apartment complexes are the most popular housing units in Chicago, according to Neighborhoodscout.com, a real estate data source. Single-family detached homes, duplexes, rowhouses, and houses converted to apartments are all common types of housing in Chicago. Single-family detached homes account for around 25.98% of all housing units in Chicago.
For many years, Chicago has been one of the country’s hottest real estate markets. According to NeighborhoodScout.com, the yearly Chicago real estate appreciation rate has been 4.88% over the last ten years. The Chicago metropolitan area, sometimes known as “Chicagoland,” encompasses the city of Chicago and its surrounding suburbs. As a result, if you purchase a Chicago real estate investment to use as a rental property, you may benefit from this market.
Are housing prices going down in Chicago?
Prices may fall by 5% or so, but housing prices in Chicago will not crash. This is due to the laws of supply and demand. On the demand side, demand has already decreased precipitously since its pandemic peak in 2022, and we estimate it to fall even lower in 2023.
Is it a good time to buy a house in Chicago?
Buyers: It is still an excellent time to purchase a property in Chicago (just not as good as a year ago). For sellers, the last few months of the year aren’t the best time to sell because buyers are distracted by the holidays. Most sellers would be wise to wait until the first half of 2023.
Why is Chicago real estate so cheap?
One of the key reasons Chicago home prices are lower than the national average is that the city has an excess housing supply, which drives down home prices. With a lower appreciation rate of 2.20%, Chicago real estate hasn’t appreciated as much as the rest of the country.
Are house prices dropping in Illinois?
Yes, in November 2022, home prices in Illinois were down 1.3% compared to the previous year, with a median price sold. The average number of homes sold was down 30.8% year over year, with 10,583 properties sold in November this year, compared to 15,274 in November last year.
Will house prices go down in 2023 Chicago?
Not at all. According to Realtor.com, Chicago-area home sales will fall in 2023 while prices rise. According to Realtor.com’s housing forecast for 2023, the number of home sales in the Chicago area will drop next year, but prices will continue to go up.
Is Chicago property a good investment?
Yes. People think of Chicago as one of the wealthiest cities because it has a well-balanced economy and neighborhoods that are good places to invest. Acquiring investment property in Chicago can be an excellent real estate investment.
Is Chicago rent rising?
Yes. Rental prices are rising around the country, including in Chicago. According to research provider CoStar Group, rent rates would rise 9.4% in 2022.
Is it a good time to buy property in Illinois?
Yes. April, May, and June are the busiest months in Illinois. More houses are on the market during these months.
Conclusion
Whether you were born and raised in Chicago or are moving to the third-most populous city in the United States for the first time, you should be aware that the housing market both mirrors and deviates from national trends. There are a lot of different kinds of neighborhoods in Chicago, from the busy city center to quiet residential streets, from shopping districts to places where college students mostly live.
If you want to purchase, sell, or rent a home in Chicago or its surrounding suburbs, you should know what to expect before you begin.
Frequently Asked Questions
Is Chicago real estate overpriced?
Chicago has a balanced housing market, which indicates that the supply and demand for homes are roughly equal. The median list price of homes in Chicago, IL in October 2022 was $349.9K, up 1.7% year over year.
Is it cheaper to live in Chicago or suburbs?
The good news is that the cost of living in Chicago suburbs can be significantly lower while still providing everything you want, whether you want to be close to downtown Chicago, have superb schools and low crime, or enjoy fantastic shopping and recreation.
How much is a decent house in Chicago?
Chicago, Illinois Housing Market
The median listing home price in Chicago, IL in November 2022 was $339.9K, up 1.5% year on year. The typical listing price per square foot for a property was $238. The median sold price of a property was $305K.
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