Chicago’s Housing Market
Prices, listings and sales all rose in July 2021 in the city of Chicago. And with housing inventory dropping, there could be rising price pressure affecting sales in August.
Yet, home prices have levelled off, at an elevated level, however it appears the summer sales heat has cooled.
Chicago Home price timeline history chart. Screenshot courtesy of Redfin.That availability of homes makes Chicago unique. Contrast that with Los Angeles, San Diego, San Francisco, and others in California, along with Honolulu, Denver, Phoenix and Las Vegas and you can see Chicago is unique.
Chicago Housing Report for July 2021
A total of 3300 homes were sold in July, down from 3,839 sold in the City of Chicago in June 2021. that is up only 18% from July of last year. The median sales price in the City of Chicago for all types of properties for June 2021 was $345,000 down from $350,500 in June. Listings in the city averaged 59 days on the market until contract, which is down 1 day from the previous month.
Redfin posts different numbers for Chicago. Redfin reports average sales price of $350,000 (+7.15), homes sold 3515 (+12.5%), and 17 days on market (-22%). They also report the sale to listing price rose 1.1% to 99.4%, 34% of homes sold above list price (+25%) and 13% of homes sold with a price drop (+32%) from last year.
Illinois Housing Market Report
Illinois Realtors posts slightly different numbers for June but enough to comment on.
They forecast positive annual growth for July, August, and September in both Illinois and the Chicago PMSA. They predict the median price will grow by 15.9% in July, 12.7% in August and 10.9% in September. Their prediction for the Chicago PMSA, is a 15.4% home price rise in July, 12.5% in August and 11.9% in September.
And with current apartment rental prices being comparatively high given Chicagoan’s cost of living and job situation, the potential for rental property investors might not be so bad. Between buying vs renting a home, Chicagoans may choose to rent for the next decade and you can tap into that multifamily market demand.
Chicago the Renter City
Wages in greater Chicago (annual income of $44,600) have suffered which makes home ownership dreams difficult to realize. Unemployment remains high at 4.8%. With only 45% of residents owning their home, we could dub Chicago as a renter city.
Foreclosed property sales are dropping, yet are still a big part of the Chicago housing market. Foreclosures and short sales were 4.9% of all homes sold in the city last summer according to Chicagobusiness.com.
Rent Prices in Chicago Illinois
Zumper’s rent price report shows 2 bedroom rentals in Chicago decreased by -3% to $1,700 in July. They’re still almost half of what they were in 2016.
A City with Housing Issues
Zillow forecasts Chicago home prices will bottom out right now, and rise a little by years end. Clearly, no one is predicting a boom in the greater Chicago area.
The Chicago housing market is also plagued with more underwater mortgages than any other city. Almost a quarter of a million houses, condos, and apartments are worth less than their mortgages. That’s 16% of homeowners across metro Chicago. Some 20% of these mortgage holders owe twice as much as their homes are worth! Acquiring foreclosures is big business here.
Which Are Chicago’s Most Expensive Neighborhoods to Rent in?
Chicago Loop is very popular with young professionals who want to live/work/play. Google, Salesforce and Facebook are said to be looking to expand in downtown Chicago.
Salesforce, the San Francisco tech giant, is expected to create 1,000 new jobs within its new base, a 57-story tower (at right) on the north bank of the Chicago river in the Loop.
Institutional investors have focused on the Loop for both established properties and newer multifamily developments. And they’re very interested in transit routes including next to Metra stations (commuter rail) and rail lines. Cap rates are expected to remain in the high 4% range.
See this interactive rent mapper of the Chicago area from Zumper:
August 31st, 2021, ManageCasa is Coming to Chicago!
ManageCasa will be at the Apartmentalize conference McCormick Place Convention Center in Chicago Illinois from August 31st to September 2nd. Learn more about the event and which speakers will be presenting and speaking in sessions. Come on out and meet the ManageCasa team and put your name in the draw!
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