Chicago Housing Market: Prices | Trends | Forecast 2021-2022
Let’s take a deep dive into the latest trends and projections for the Chicago housing market. First, we will begin by examining the statewide data for July 2021. Fall is coming to a close, with homes being purchased at premium prices. In July, median prices rose in both Illinois and Chicago PMSA, while sales fell in Illinois but rose in Chicago PMSA. Homes in Illinois sold twice as quickly as they did last year, extending a hot market that pushed median sales prices higher even as total statewide sales fell slightly, according to Illinois REALTORS®.
Statewide home sales (including single-family homes and condominiums) in July 2021 totaled 19,196 homes sold, down 1.0 percent from 19,387 in July 2020. Homes sold on average in 24 days statewide, down from an average of 50 days in July 2020. In a seller's market, real estate prices increase. The strong buyer demand is driving prices in the Chicago metro area to all-time highs. Both median prices and sales experienced a positive annual change in the Chicago housing market as well.
In July 2021, the statewide median price was $263,000, up 12.6% from $233,500 in July 2020. The median price is a representative market price in which half of the homes sold for more and half for less. This is a 30 percent decrease from July 2020 when 44,864 homes were for sale. It appears that as the summer selling season winds down, the number of potential buyers has dwindled as a result of low inventory.
In the Chicago Metro Area (it comprises the nine counties), the median home sale price in July 2021 was $310,000, an increase of 12.3 percent from $276,000 in July 2020. All these trends show that Chicago home prices are on the rise due to a very tight supply and low mortgage rates. Housing prices are expected to continue their positive trends into the third quarter of 2021. More homebuyers would enter the bidding wars to scoop up their favorite deals.
Stronger buyer activity will continue with speedy sales and multiple offers leading to price gains. According to local realtors, Illinois and Chicago PMSA both have already recovered to their pre-bubble levels on average. The median sales price in July 2008 has been adjusted to 2021 values to enable calculation of the housing price recovery considering the effects of inflation. While prices continue to grow in both Illinois and Chicago, sales are forecast to decline over the next few months. Illinois home prices will rise 8.3% to 19.6% this year, while the Chicago PMSA will rise 6.9% to 16.0%.
Chicago Housing Market Trends & Forecasts 2021 – 2022
Data by Illinois REALTORS®. The forecast is deemed reliable, it is not guaranteed.
Below is the latest report of the “Chicago Housing Market.” The source of this report is the Illinois REALTORS® and the counties included are Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will. The report compares the Chicago metro and the city's housing metrics from July 2021 with July 2020. The data from May shows the stark contrast of where it was last year when the COVID-19 stay-at-home order truly started to impact the Chicago real estate market.
In the nine-county Chicago Metro Area, 13,781 homes (single-family and condominium) were sold last month, a 2.2 percent increase over the 13,479 homes sold in July 2020. The median home sale price in the Chicago Metropolitan Area was $310,000 in July 2021, up 12.3 percent from $276,000 in July 2020.
Closed Sales were up +2.2% year-over-year.
Sales were also up +55.7% from the previous month's closed sales.
The median sales price rose from $276,000 to $310,000, a growth of 12.3%.
The inventory of available homes decreased by 25.9 percent, from 31,152 to 23,097.
The Days on Market Until Sale decreased by 48.8%, from 41 to 21.
Screenshot Courtesy: ILLINOIS REALTORS®
City of Chicago Housing market Trends
Realtor.com's latest report shows that in July 2021, the median list price of homes in Chicago, IL was $349.9K, down -2.5 percent year over year. The median price per square foot for listings was $257. The median price of a home sold was $342,000. The sale-to-List Price Ratio was 99.75%, which shows that in July 2021, homes in Chicago, IL sold for approximately the asking price. Chicago has 78 distinct neighborhoods. As the most expensive neighborhood, North Center boasts a median listing price of $649,900,000. A median listing price of $224.5K in East Rogers Park makes it the most affordable neighborhood in the city.
According to Illinois REALTORS®, sales of single-family and condominium homes in the city of Chicago reached 3,273 units in July 2021, representing a 17.2 percent increase over the previous July's total of 2,793 units. The median price of a home in Chicago in July 2021 was $345,000, representing a 5.3 percent increase over the previous year's median price of $327,500.
Closed sales in the City of Chicago increased by 17.2 percent year on year.
In addition, sales increased by +87.4 percent when compared to the previous month's closed sales.
The median sales price increased from $327,500 to $345,000, representing a 5.3 percent increase over the previous year.
The inventory of available homes decreased by 9.8 percent, from 9,678 to 8,730.
The Days on Market Until Sale decreased by 19.4%, from 36 to 29.
Chicago Real Estate Foreclosure Trends
In July 2021, for the Chicago PMSA, the percentage of foreclosed sales (e.g. REOs) among the total sales was 2.6%. 13,321 regular sales were made, 5.4% more than last year. 351 foreclosed properties were sold, 52.7% less than last year. The median price was $312,000 for regular
property sales, up 10.2% from last year; the comparable figure for the foreclosed properties was $253,000, up 29.7% from this time last year.
Chicago Rent Prices
The Zumper Chicago Metro Area Report analyzed active listings in July 2021 across 7 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Illinois one-bedroom median rent was $1,158 last month. Schaumburg was the most expensive city with one-bedrooms priced at $1,510 while Skokie was the most affordable city with one-bedrooms priced at $1,110.
The Fastest Growing Cities For Rents in Chicago Metro Area (Y/Y%)
Schaumburg had the fastest-growing rent, up 10.2% since this time last year.
Palatine saw rent climb 9.8%, making it the second-fastest-growing.
Naperville was third with rent increasing 7.6%
The Fastest Growing Cities For Rents in Chicago Metro Area (M/M%)
Oak Park had the largest monthly rental growth rate, up 5.3%.
Naperville saw rent increase 5.2% last month, making it second.
Schaumburg was third with rent jumping 4.9%.
Chicago Real Estate Market Forecast 2021-2022
The Chicago housing market is shaping up to continue the trend of the last few years as one of the hottest markets in the United States. It is also one of the hottest real estate markets for investing in rental properties. What are the Chicago real estate market predictions for 2021 and 2022? In 2018, the Chicago real estate appreciation rate was running at about half the national rate; at a 3 percent range when the nation was at 6 percent. After cooling off, Chicago became the weakest housing market of 2019. The home prices grew by a mere 1.5 percent, lagging behind the nation.
According to LittleBigHomes.com, the highest annual change in the value of houses was 21% in the twelve months ended with the 2nd Quarter of 1977. The worst annual change in home values in the Chicago Market was -11% in the twelve months ended with the 1st Quarter of 2010. The highest growth in home values in the Chicago MSA over a three-year period was 35% in the three years ended with the 2nd Quarter of 1989. The worst performance over a three-year period in the Chicago Market was -23% in the three years ended with the 2nd Quarter of 2011.
Let us look at the price trends recorded by Zillow over the past few years. From 2011 to 2012, the prices declined continuously. Since Jan 2013, Chicago home values have increased by around 60% (Zillow Home Value Index). As you can see in the graph, the Chicago housing market was weak in 2019, essentially flat, but prices have gone up 10.3% over the past twelve months.
Similar growth has been recorded by NeighborhoodScout.com. Their data shows that over the last ten years the Chicago annual appreciation rate has been averaging at 3.19%. The cumulative appreciation rate over the ten years has been 36.88%. In the latest quarter, the property appreciation rate was 0.99%, which annualizes to a rate of 4.03%. This figure corroborates Zillow's forecast, which also predicts that home prices in this region are expected to increase over the next twelve months.
The sales forecast presented by the University of Illinois to Illinois Realtors for August, September, and October suggests a decrease on both a yearly basis and a monthly basis for both Illinois and the Chicago PMSA. Annually for Illinois, the three-month average forecasts point to a decrease in the range -2.7% to -3.6%; the comparative figures for the Chicago PMSA are a decrease in the range -4.5% to -6.0%. On a monthly basis, the three-month average sales are forecast to decrease in the range of -3.5% to -4.7% for Illinois and decrease in the range -4.9% to -6.7% for the Chicago PMSA.
The median price forecast indicates positive annual growth for August, September, and October in both Illinois and the Chicago PMSA. In Illinois, the median price is forecast to change by 8.9% in August, 6.9% in September, and 6.8% in October. For the Chicago PMSA, the comparable figures are 9.3% in August, 8.6% in September, and 8.3% in October.
“While prices continue to grow in both Illinois and Chicago, sales are forecast to decline over the next few months, a usual pattern for August, September, and October,” said Geoffrey J.D. Hewings, emeritus director of the Regional Economics Applications Laboratory (REAL) at the University of Illinois. “Sales levels will be below those recorded in 2020, but still above those for 2019.”
Here is Zillow's housing forecast for Chicago, Cook County, and Chicago MSA until May 2022. Chicago is expected to see strong home price gains in 2021. According to their forecast, the supply and demand dynamics will likely push prices north again over the next 12 months. The Chicago housing market will favors sellers over buyers.
Chicago-Naperville-Elgin Metro home values have gone up 10.7% over the past year and Zillow predicts they will rise 12.4% over the next twelve months.
Chicago home values have gone up 10.3% over the past year and will continue to rise over the next twelve months.
Cook County home values have gone up 11.9% over the past year and will continue to rise over the next twelve months.
The chart below, created by Zillow, shows the growth of median home values since 2011 and their forecast until July 2022.
Courtesy of Zillow.com
These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? While many have lost jobs, making them ineligible for a home mortgage, some sellers have taken their homes off the market. As expected by many analysts, prices have declined much less than sales, and forecasts point to slightly positive price increases over the next few months in Chicago.
The Illinois Department of Employment Security (IDES) announced that the unemployment rate fell 0.1%pt to 7.1% in July 2021, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS). Non-farm payroll jobs rose by 35,400 over the month. The industry sectors that reported the largest payroll gains were: leisure and hospitality (+14,200), educational and health services (+7,100), and professional and business services (+4,200).
“Illinois is on the path to recovery, as evidenced by last week’s reopening of all sectors of the economy, and by steady improvements seen by key industries in monthly labor reports this year,” said DCEO Acting Director Sylvia Garcia.“
The good thing for the real estate industry is that it is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges. Sellers, brokers, and homebuyers seem to be adjusting to restrictions imposed on the real estate industry because of the coronavirus pandemic.
Home sales have been climbing to the highest level in recent years as buyers moved quickly to snap up available homes amid historically low-interest rates. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Chicago can become a buyer’s real estate market if the supply increases to more than five months of inventory.
And that’s not going to happen. This housing market is skewed to sellers due to a persistent imbalance in supply and demand. The sales & price forecasts for March, April, and May suggests an increase on a yearly and monthly basis for both Illinois and the Chicago PMSA.
For buyers in Chicago, the good news is that mortgage rates are still low. Most buyers are driven by record-low mortgage rates, are eager to get into an increasingly competitive market to find their dream home. More home sellers are listing their properties on the market. So what does that mean? Buyers have more options, and rates are insanely low.
Unless they have personal or financial reasons to hold off, now is a great time to buy a property in the Chicago housing market. With sales prices up and interest rates still low, buyers who are on the fence should make their move. Currently, the inventory remains relatively higher in the city of Chicago. Buyers may be in a better position to negotiate a deal and bring that seller down to a more workable price. In fact, it is the right time to buy and sell in this market.
Please do not make any real estate or financial decisions based solely on the information found within this article. Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Many variables could potentially impact the value of a home in Chicago in 2021 (or any other market) and some of these variables are impossible to predict in advance. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control.
Chicago Housing Market Overview For 2020
We shall now do a quick recap of the impact of the pandemic on the Chicago housing market. The median home price in Chicago rose 9.2% year-over-year to $338,500 in April. The rolling 12-month median, which considers the whole year of sales up until April 30th, was $299,900, up 4.3 percent. The City of Chicago saw 2,039 homes sell in April – a steep 21.4% drop since last April. The impact of the COVID-19 pandemic was evident in April and May, driving Chicago home sales and inventory lower even though median prices remained pretty much stable.
Data from the Chicago Association of Realtors showed fewer buyers were willing to purchase a home from late March through mid-April. Roughly 330 residential properties went into contract in each of the three weeks before April 18 compared to 674 homes that went into contract for the week ending March 7, before the falloff. New listings also declined by almost 50 percent. 588 homes hit the market in each of the three weeks before April 18. That compared to 1,313 new listings that went on the market in the first week of March.
COVID-19 and a stay-at-home order continued to have a significant effect on the Chicago housing market in May, disrupting spring home sales and driving down available inventory for buyers. Home sales in May declined at a steeper rate than in April. However, the median price of homes sold was higher than the corresponding period in 2019. May 2020 data from Illinois REALTORS® shows that in the nine-county Chicago Metro Area, home sales (single-family and condominiums) there was a sharp decline in closed sales and inventory due to stay at home orders.
The Chicago housing market ended 2020 strong with December and year-end jumps in sales and median prices. In Dec 2020, 10,530 homes (single-family and condominiums) were sold in the nine-county Chicago Metro Area, a 32.0 percent increase from the 7,976 homes sold in December 2019. Year-end 2020 home sales totaled 120,256, up 8.8 percent from 110,523 homes sold in the region in 2019. The median home sale price in December 2020 was $266,250 in the Chicago Metro Area, an increase of 12.3 percent from $237,000 in December 2019. The year-end 2020 median price reached $268,000, up 8.1 percent from $248,000 in 2019.
In the city of Chicago, home sales (single-family and condominiums) in December 2020 totaled 2,220 homes sold, up 17.3 percent from December 2019 sales of 1,892 homes. Year-end 2020 home sales totaled 25,999, down 0.8 percent from 26,217 homes sold in 2019. The median price of a home in Chicago in December 2020 was $307,500, up 11.4 percent compared to December 2019 when it was $276,000. The year-end 2020 median price reached $316,000, up 7.1 percent from $295,000 in 2019.
Illinois Housing Market Statistics (Describes 2020 Year-to-Date)
In 2020, home sales totaled 172,394, up 9.6 percent from 157,268 in 2019. The year-end 2020 median price reached $225,000, up 7.7 percent from $209,000 in 2019. Months Supply of Inventory in 2020 was 2.0, a decline of – 44.4% from the previous year. In the Metro Chicago Housing Market, which comprises the nine counties, the number of homes sold in the metro area during the year rose by 8.8 percent in 2020, to 120,256 sales. That’s the highest since 2012, according to the Illinois Realtors market report released in December.
Months Supply of Inventory in 2020 for the metro area was 1.8, a decline of – 45.5% from the previous year. This shows that it was a strong seller's market in 2020. A seller's market arises when demand exceeds supply. In other words, there are many interested buyers, but the real estate inventory is low. With continued record low-interest rates, there's an increase in demand for properties as indicated by the year-over-year increase in closed sales of all properties.
The median home sale price in December 2020 was $266,250 in the Chicago Metro Area, an increase of 12.3 percent from $237,000 in December 2019. The year-end 2020 median price reached $268,000, up 8.1 percent from $248,000 in 2019. In the City of Chicago, the year-end 2020 median price reached $316,000, up 7.1 percent from $295,000 in 2019.
Source: Illinoisrealtors.org
Chicago Real Estate Investment: Should You Invest in Chicago?
Is Chicago a Good Place Real Estate Investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Chicago housing market 2020 forecast for answers on why to put resources into this market. Chicago is a strong renter market. Over 50% of the population rents in this city. Chicago is the 6th most walkable city in the nation. Chicago metro area has a population of approximately 8,865,000, a 0.03% increase from 2019. It is the most populous city in the U.S. state of Illinois, and the third-most-populous city in the United States.
Chicago has a mixture of owner-occupied and renter-occupied housing units. According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom large apartment complexes are the most common housing units in Chicago. Other types of housing that are prevalent in Chicago include single-family detached homes, duplexes, rowhouses, and homes converted to apartments. Single-family detached homes account for roughly 25.98% of Chicago's housing units.
Chicago has been one of the hottest real estate markets in the country for many years. In the past ten years, the annual Chicago real estate appreciation rate has amounted to 4.40%, according to NeighborhoodScout.com. Chicago metropolitan area or Chicagoland is an area that includes the city of Chicago and its suburbs. So if you buy a Chicago real estate investment to use as a rental property, you could benefit in this market.
Although the recent population loss has been a concern for real estate investors, Chicago is still the most populous city in the Midwestern United States. About three million people live in Chicago and another ten million in the surrounding metro area. Chicago MSA is the third-largest metropolitan area in the U.S. It has a large population, a diverse economy, and a stable market. It is home to 32 Fortune 500 companies, with very high private sector employment.
Chicago's 58 million domestic and international visitors in 2018 made it the second most visited city in the nation, as compared with New York City's 65 million visitors in 2018. These are just some of the highlights that make Chicago a great place to live and invest in real estate. The list can go on and on. Chicago is also a major world financial center, having the second-largest central business district in the United States.
Chicago was ranked first in the 2018 Time Out City Life Index (Time Out Group).
On the UBS list of the world's richest cities.
Often rated as having the most balanced economy in the United States.
Ranked seventh in the entire world in the 2017 Global Cities Index.
Home to 12 Fortune Global 500 companies and 17 Financial Times 500 companies.
Third-largest gross metropolitan product in the United States.
Strong Rental Market – Over 50% of the population rents.
Fully renovated single-family homes with great ROI.
Solid blue-collar areas with high rents.
High private sector employment.
Major transportation hub in the United States.
It has the largest number of federal highways & railroads in the nation.
Strong economic and job growth.
Chicago tourism recorded 55 million visitors in 2017.
The tourism and hospitality industries have added thousands of jobs, generating billions of dollars in direct spending by visitors.
An international hub for finance, culture, commerce, industry, education, technology, telecommunications, and transportation.
Let’s take a look at the number of positive things going on in the Chicago real estate market which can help investors who are keen to buy an investment property in this city.
Chicago Rental Market Is Very Strong
What makes Chicago such a hot market for rental real estate? Over 50% of the population rents. The large population of renters means that rental income for properties is far better than you’d see if you invested elsewhere in the country. Luxury Rentals Are a Profitable Niche in Chicago. Many people know that there are solid blue-collar areas with high rents, but it isn’t just the working class that rents townhomes and condos. According to Crain’s, the number of upper-income households in Cook County that rent has nearly doubled over the past ten years.
The Institute for Housing Studies at DePaul University found that the number of rental households among those earning at least $132,000 a year nearly doubled, while those earning $80,000 to $132,000 saw the number of renting households increase by just over 50%. Chicago has a booming supply of high-end rentals, especially luxury apartments downtown. Home prices in the Chicago area are low compared to regional income.
Yet economic uncertainty and shifts in the employment market are leaving many who want to live in a single-family home unable to afford to buy one. This is causing many to rent single-family homes instead. Crain’s last year's April report found that the hottest areas for detached single-family homes were in Calumet Heights, Gage Park, and West Ridge. However, home prices are low compared to rents almost everywhere in the Chicago metropolitan area.
The workforce in Chicago is shifting from high-paying but slow-to-no growth manufacturing jobs to lower-paying and less stable retail, business services, and healthcare jobs. This is causing many who would have been able to afford a middle-class home to rent apartments instead. Crain’s last year's April report stated that the hottest Chicago markets for condos and townhomes were Grand Boulevard, Kenwood, and Lincoln Square.
Chicago Rental Prices Trends
As of September 6, 2021, the average rent for a 1-bedroom apartment in Chicago, IL is currently $1,450. This is a 3% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Chicago increased by 2% to $1,050. The average rent for a 1-bedroom apartment increased by 2% to $1,450, and the average rent for a 2-bedroom apartment increased by 3% to $1,750.
Two-bedroom apartment rents average $1,750 (a 3% decrease from last year).
Three-bedroom apartment rents average $2,200 (a 2% increase from last year).
Four-bedroom apartment rents average $2,925 (a 1% increase from last year).
53% of the households in Chicago, IL are renter-occupied while 48% are owner-occupied. The most expensive neighborhoods in Chicago are River West, Streeterville, and River North.
The most affordable neighborhoods where the rent prices are below the average Chicago rent:
Austin
The Island
Cottage Grove Heights
Fernwood
Longwood Manor
Princeton Park
Chicago Real Estate Prices Are Reasonable
Because households at all income levels choose to rent instead of buy, they are reducing demand for houses for sale, slowing the rise in home prices. This also explains why housing prices haven’t skyrocketed despite the limited supply. Chicago’s inventory of homes for sale is very tight. Both attached and detached single-family home inventory has been declining since 2012.
At the end of 2017, potential buyers in Chicago had about five thousand fewer properties on the market to select from than if they’d been shopping at the end of 2016. This contributed to homes closing five days faster than the year before. If you start shopping for rental real estate, you could find something and rent it out.
Chicago’s real estate market has been one of the slowest to recover since the housing bubble burst at the start of the Great Recession. Home prices were 19% below their pre-crash levels in 2017, and they aren’t expected to hit peak values yet. This means that the Chicago real estate market is likely going to continue its slow, upward market trend.
Chicago Rehabbed Homes Are Readily Available
Chicago is seeing a surge in fully renovated single-family homes. The Chicago Association of Realtors’ data found that most of the strong suburbs are on the south side of Chicago, and this is where many homes are being rehabbed and sold. Calumet Heights is in this category; a quarter of properties sold were either rehabbed or candidates for rehabilitation. These properties are ideal for investors who want to buy a property to rent out.
Chicago's Job Growth Keeps People Coming
Chicago is not only home to several corporate headquarters; there has been a recent trend of companies moving their headquarters to Chicago as well. The steady increase in jobs has contributed to a slow but steady increase in rents. Many businesses are attracted by Chicago’s labor pool, the largest in the nation. As these businesses move into the area and attract relocating professionals, many are forced to rent because they can’t find houses fast enough in the areas they want to live in or simply choose to rent upon relocation in one of the luxury apartments downtown.
The Chicago metropolitan area is made up of four metropolitan divisions—separately identifiable employment centers within the larger metropolitan area. In the greater Chicago metropolitan area, education and health services had the largest employment gain from November 2018 to November 2019, adding 15,600 jobs. The Chicago area’s 2.1-percent rate of job growth in education and health services was lower than the nationwide advance of 2.9 percent.
Chicago’s government supersector added 10,800 jobs from November 2018 to November 2019. Local job growth was concentrated in educational services, which added 10,600 jobs. The 2.0-percent increase in Chicago’s government employment compared to a gain of 0.7 percent nationally. The churn also keeps people renting in Chicago. Chicago’s unemployment rate has gone up while dropping in other cities as jobs shift from Chicago to the suburbs. This economic uncertainty keeps many who can afford to buy a home renting. It also keeps the rental market itself strong, since many want to remain free to follow their jobs as required.
Where to Invest in Chicago Real Estate Market?
In Chicago, arts and culture abound at top institutions like The Art Institute. Although the winters can test anyone's resolve, Chicago summers are among the best in the world, with things to do every weekend, outdoor festivals, and Lake Michigan at your doorstep. Chicago has an incredibly deep pool of potential renters at all levels of the market. Several factors guarantee that they’re not going to turn into new home buyers any time soon.
Chicago real estate market is a prime destination for investors who would like to buy where the ROI is going to be high and likely to improve over time. It won't be long before Chicago makes you feel right at home. Good cash flow from Chicago rental property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Chicago in a growing neighborhood would be key to your success.
When looking for the best real estate investments in Chicago, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Chicago might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods.
There are 76 neighborhoods in Chicago. Lincoln Park has a median listing price of $649.9K, making it the most expensive neighborhood. Auburn Gresham is the most affordable neighborhood, with a median listing price of $189.9K (on Realtor.com).
Some of the popular neighborhoods in Chicago, Illinois are Near North Side, Lakeview, West Town, Andersonville, South Loop, Bronzeville, Norridge, Logan Square, Old Town, Wicker Park, Bridgeport, Irving Park, Norwood Park, Bucktown, West Loop, and Hyde Park.
Chicago's North Side is the city's most densely populated residential section. For $200,000 price, you can purchase properties with one or two bedrooms and one or two baths. Chicago's West Side is home to the University of Illinois at Chicago. With a $200,000 budget, you can buy condos that typically offer one to two bedrooms and one or two baths.
You can buy Chicago investment properties in the Pilsen neighborhood. Pilsen is a great area for those who want a diverse portfolio of investment properties without having to run all over the city. Pilsen is located on Chicago’s Lower West Side. It features a mix of condos, apartment buildings, and single-family homes. The area is suburban enough to attract families. Its schools are a C+, which is close to the Chicago average. Parks and other amenities explain why Niche.com gave the area a B- for families.
CHECK OUT → Best Neighborhoods in Chicago Where You Can Buy Investment Properties.
Humboldt Park is another good neighborhood to buy investment properties in Chicago. The home prices in Humboldt Park peaked in 2006 but fell dramatically during the Great Recession. Home prices here hit a record low in 2012. Humboldt’s housing prices are on the rise again, though they remain below their 2006 peak. The average home price is around 300,000 dollars, while rents are around 1700 dollars a month. The area is notable for the number of foreclosed and distressed properties available to investors, and this helps pull the average rental rate down.
Highest Appreciating Chicago Neighborhoods Since 2000 (By Neighborhoodscout.com)
N Whipple St / W Bloomingdale Ave
N Campbell Ave / W Fullerton Ave
W Diversey Ave / N Pulaski Rd
W Armitage Ave / N Whipple St
N California Ave / W Wabansia Ave
N Francisco Ave / W Bloomingdale Ave
N California Ave / N Milwaukee Ave
N Maplewood Ave / W Wabansia Ave
N California Ave / W Division St
W Armitage Ave / N California Ave
Illinois is in the midwestern United States. Surrounding states are Wisconsin to the north, Iowa and Missouri to the west, Kentucky to the south, and Indiana to the east. Illinois also borders Michigan, but only via a northeastern water boundary in Lake Michigan.
Apart from the Chicago real estate market, you can also invest in the housing market of Indianapolis. The median sales price in Indiana saw a year-over-year increase of 9.7 percent to $170,000. Not surprising is the fact that Indianapolis house prices are also on the rise in the year 2020. Demand is still outpacing the supply, the new construction is slow, and competition for quality homes remains tough.
Like most cities nationwide, Indianapolis has experienced real estate appreciation over the last couple of years. The real estate appreciation rate in Indianapolis in the last quarter was around 0.81%, which amounts to an annual rate of 3.3%. However, it is quite unclear whether the rate of appreciation would remain steady or not due to the short-term effects of the ongoing pandemic.
Economic uncertainty might hold back sales volume for a short period in 2020. Most housing analysts expect Indianapolis house prices to remain flat or drop by a small fraction for the remainder of the year 2020.
If you head towards the west of Illinois, you should consider investing in Kansas City, MO. There is probably no hotter market right now than Kansas City, Missouri. A large, prosperous, self-sufficient, and culturally rich city, it is no wonder why it has seen a continuous rise in its employment, directly impacting the local real estate.
The Kansas City real estate market is very hot and in many ways the envy of housing pundits on both coasts. It is the largest city in the U.S. state of Missouri, famous for its distinct barbeque cuisine and jazz heritage. Also nicknamed the City of Fountains, Kansas City is now emerging as a growing market for real estate investments. High demand and low inventory are driving up both home prices and the speed of home sales in the Kansas City Housing Market.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Redwood makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Redwood makes no claims or assertions about the future housing market conditions across the US.
REFERENCES
Market Prices, Trends & Forecasts
https://www.illinoisrealtors.org/marketstats/
https://chicagorealtor.com/may-2021-market-snapshot/
https://www.zillow.com/chicago-il/home-values
https://www.illinoisrealtors.org/wp-content/uploads/2020/12/Annual_forecast_2021.pdf
https://www.neighborhoodscout.com/il/chicago/real-estate
https://www.realtor.com/realestateandhomes-search/Chicago_IL/overview
https://www.forbes.com/sites/ingowinzer/2016/05/25/should-you-invest-in-chicago-real-estate/#64c07e3c2ad1
http://www.chicagobusiness.com/realestate/20171221/CRED0701/171229976/2018-real-estate-forecast-foggy-lukewarm
Housing Price Forecasts Illinois and Chicago PMSA, August 2020
https://www.illinoisrealtors.org/wp-content/uploads/2020/08/Forecasts_August_2020.pdf
Upper household rental rates
http://www.chicagobusiness.com/realestate/20180411/CRED0701/180419970/more-upper-income-households-renting-in-chicago-area
Housing inventory numbers
http://www.chicagonow.com/getting-real/2018/04/chicago-real-estate-market-worst-home-sales-decline-in-20-months/
2016 to 2017 housing inventory decline data
http://www.chicagotribune.com/business/ct-biz-chicago-home-sales-supply-20180124-story.html
Labor pool stats
https://www.homeunion.com/real-estate-investment-locations/chicago-illinois/
Trump’s Tax Plan Makes Many Reluctant to Buy
http://www.chicagobusiness.com/realestate/20171221/CRED0701/171229976/2018-real-estate-forecast-foggy-lukewarm
Foreclosures
https://www.realtytrac.com/statsandtrends/il/cook-county/chicago/
Crain’s April real estate report
http://www.chicagobusiness.com/realestate/20180419/CRED0701/180419837/heres-where-the-real-estate-market-has-been-hottest-in-2018