The Chicago housing market continues to hold strong, with average housing prices increasing by 2.2% from October last year to October 2022. Moreover, there is a decrease in homes for sale when looking at the same time period last year, which shows that the demand for homes in the city of Chicago is high.
However, with the rising mortgage rates and far fewer home sales being closed, the Chicago market is showing signs of cooling down. However, houses within the Chicago area are still on the market for a short period (on average 34 days). Therefore, a cool-down will likely not happen for the rest of the year and going into 2023.
Average Sales Price
Days on Market Until Sale
Inventory of Homes for Sale
Source: Illinois Realtors
Chicago Housing Market Predictions
Based on the above statistics, we have made an educated hypothesis on how the housing market will go in the coming months in the midwest city of Chicago, Illinois.
While the mortgage rates are rising, the demand for houses is still high as the market is even more undersupplied than last year. As a result, housing prices in Chicago and even some of its surrounding areas will likely stay the same or steadily rise at a much slower rate because of the competitive seller's housing market but high-interest rates.
River Forest- 12,000
Western Springs- 14,000
La Grange Park- 13,000
Oak Park- 55,000
La Grange- 16,000
Burr Ridge- 11,000
According to market data, the housing market for the Chicago Metro Area (including Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will Counties) follows the same trends as Chicago. For example, average sales prices are up, and active listings are down year-over-year in October. Some major cities in the Chicago metro area that aren't in Cook county include DeKalb, Illinois, Naperville, Illinois, Morris, Illinois, Aurora, Illinois, and Joliet, Illinois.
Similar housing market trends are in effect throughout the state of Illinois.
However, the time on the market will continue to increase slowly. It is no longer the trend for buyers to feel the need to skip inspection or go well beyond the list price. And sellers still often think that the housing market is in the same position as it was in 2021. As a result, it can take longer for a buyer to accept a buy from a seller. So, for now, while buyers can still expect their home to sell in the Chicago area easily, sellers should also not expect interested buyers to put in offers immediately or to get way over the market value price.
Additionally, housing prices are continuing to be higher than last year. For example, there is a 2.2% increase in average home sale prices in Chicago from October 2021 through October this year. So, while this isn't an astronomical increase in home prices year-over-year, it is still significant to note that housing prices have continued to go up in a market that was already a competitive seller's market with inflated housing prices and interest rates.
We predict that the Chicago housing market and its surrounding areas will continue to be a seller's market in the United States going into 2022. However, people are not holding off as they foresee a crash shortly with incredibly high-interest rates. So, we also predict that buyers will start seeing more of an inventory of homes in the Chicago metro area, but we still predict that the real estate activity to continue to grow into 2023.
However, we also predict that limited housing and properties will remain available as the market steadies. Additionally, interested buyers and renters may have to pay more than they are right now for their housing choice when looking in the Chicago area and other neighboring cities such as Oak Park, Illinois, and Gurnee, Illinois.
The Chicago area has always brought in interested investors and homebuyers as it's an area that has a lot of opportunity, recreation, and excitement. With so much to offer, there is rarely a time when it isn't a good idea to invest in Chicago real estate. In addition, Chicago hosts large events in The United Center and Wringley Field. Chicago is also a great tourist spot that is known for its culture and historical landmarks.
The Chicago area has a consistently short supply of real estate, so when an investment opportunity comes up at a fair market price, it is rarely a bad investment. Moreover, with the strong job market and high demand for housing, we predict that investing in real estate within the coming months can still be profitable.
Chicago's real estate market is still competitive despite high-interest rates. However, it remains a seller's market as there is more demand than supply.
In October, the Chicago housing market had 7,234 homes for sale, an almost 19% decrease since last October. Higher interest rates contribute to homes in Chicago not flying off the market, but the low supply of inventory contributes to homes in Chicago still selling relatively quickly.
For the real estate market to switch to a buyer's market, the inventory needs to increase by several months. The Chicagohousing market could become a buyer's market, but likely not for a while. Therefore, those looking to purchase real estate in the Minnehaha County area during the upcoming months should consider that it is still a seller's market before submitting an offer.
Why are fewer (-30.8% year-over-year in October 2022) closed sales in Chicago, Illinois, when homes are selling for more than they were on average less year?
Houses for sale across the city of Chicago and the surrounding areas are getting fewer multiple offers and rarely sell without an inspection. However, with few homes on the market, the Chicago area housing market is still strong. The imbalance of homes available versus interested buyers in the area makes Chicago a hot market and a dream for home sellers.
Therefore, we predict the Chicago area will still be a seller's market going into 2023.