Chicago Real Estate Market: Quick Overview
Best known as either Chicagoland or the Windy City, Chicago is a popular city for real estate investment. In this article, we will go over the details on what makes the third-most-populous city in Illinois such an attraction.
A Look At Real Estate
The pandemic has impacted activity and pricing in the real estate industry across the country. However, recovery is underway and all indications point to a rebound trending in both city and suburb properties for both residential and commercial in and around Chicago. With a record-setting low for inventory, getting into the real estate market will be challenging for anyone looking in the Chicago area to invest or relocate. The stats from September 2021 are promising and show the following:
A total of 2,604 properties were sold during the month generating $1.1 billion in volume. Although that is down 3% from September 2020, it is also down from the 2,924 properties sold in August 2021 ($1.3 billion in sales volume), which is customary as the market adjusts for the transition from a hot summer of sales to cooler totals in fall. The average price of homes sold in September 2021 was at $430,000 with the time spent on the market totaling 58 days. There were a total of 980 detached homes sold during the month generating a total sales volume of $420-million. 1,624 properties sold in the same period were attached homes with sales volume totaling $695-million. Read more here.
Other Key Market Indicators
Home values in Chicago have increased by 9.5% in the past year and over 26% over the past five years. The median listing price of a single-family home is $347,000 which breaks down to a median list price per square foot of $265. The median time a home spends on the market in Chicago is 65 days and the median selling price of a single-family home is $350,000. That means homes in the region are selling for just about the asking price as the sale-to-list ratio figures out to be 99.4%. The most affordable of Chicago’s 78 neighborhoods is West Ridge with a median listing price of $199,900. The most expensive of the neighborhoods is Lincoln Park with $650,000 as the median listing price.
Chicago Is A Sellers Market
A tight home inventory best describes the real estate situation in Chicago at present. In September 2021, there were a total of 6,813 properties on the market. This amounted to an average supply of 2.29 months. In other words, based on sales activity, the total number of properties currently available would take about 2.29 months to sell. What that means is Chicago is a seller’s market. Anytime the inventory totals less than six months of supply, it indicates that buyers have fewer options available to choose from. The benchmark for a balanced market is six months of inventory. When there is more than six months’ worth, there is a lot of choices available to buyers and this generally leads to a drop in pricing by sellers attempting to attract sales.
Chicago Is Also A Renters’ Market
With prices continuing to climb as the Chicago real estate market bones back from the pandemic, more people are opting to rent where they live. Stats to support this include the following:
Rents in the Windy City have increased by 2% year-over-year, and almost 26% in the past three years. The median rent is pegged at $2,250 per month for a 3-bedroom unit and over half of the occupied housing in Chicagoland (53%) is rented. The most affordable neighborhoods to rent in the region are Auburn Gresham, Pullman, and Riverdale. Rents in these areas average no more than $1,200 a month. On the there end of the scale, the highest rental rates are in the neighborhoods of Near North Side, Loop, and South Loop where rentals average up to $5,000 per month. It is interesting to note that 41% of Chicago’s population is made up of Millennials and Generation Z residents (aged 20 to 49).
There is something for everyone in and around Chicago as the cost of living in the city is still considered affordable compared to many other major cities in the country. For example, compared to San Francisco, the Windy City is 39% less expensive to live in and 52% more affordable than New York City. The best neighborhoods to live in Chicagoland are West Loop, Printers Row, River North, and Streeterville with Oak Park, Naperville, Evanston, and Hinsdale coming out as the top suburbs to settle in. According to Forbes, and based on criteria related to household income growth and high-tech employment, Chicago is considered an excellent location for business and career development. Niche.com states Chicago ranks near the top for family living, diversity, and nightlife and comes in at the 21st best city in the US for young professionals. The city hosts several professional sports teams including the NFL Bears, NHL Blackhawks, NBA Bulls, and MLB Cubs and White Sox earning the distinction of being the Best Sports City in the country. As for major attractions for locals and tourists, Chicago has many including the Magnificent Mile, the Art Institute of Chicago, Museum Campus, and Millennium Park to name a few.
Chicago is a popular place for real estate investment for several reasons. It is still an affordable place to live compared to other big cities in the US and has a large population of residents 49 years of age and younger. With 78 different neighborhoods and a diverse collection of cultural and artistic offerings, there is something for everyone. If you choose to move to Chicago, you will not be sorry. Your life will be full and active with high-paying career options and no shortage of activities to fill the time not spent working. If you are planning on raising a family, Chicago offers an amazing network of educational institutes from primary to post-secondary and beyond. Chicago is a lot more than a sports town situated on the shores of Lake Michigan. It is a great place to live and grow.