We’ll discuss the latest trends and projections for the Chicago housing market. Prices are expected to continue to increase through the rest of the year while the number of sales is expected to decrease. In December, median prices rose in both Illinois and Chicago PMSA. Homes in Illinois sold at a rapid pace as inventory remained low and median price increases slowed, according to data from Illinois REALTORS®.
The year-end stats show that Illinois home sales went up 11.8 percent and median prices rose 11.1 percent as homes sold quicker in 2021 compared to 2020. In December 2021, statewide home sales (including single-family homes and condominiums) totaled 14,881 units, a decrease of 1.3 percent from 15,072 in December 2020. Year-end 2021 home sales totaled 193,333, an increase of 11.8 percent over 2020’s 172,867.
The statewide median price in the Illinois housing market was $244,000, up 7.3% from $227,313 in December 2020. The median price is a representative market price in which half of the homes sold for more and half for less. The median price in year-end 2021 was $250,000, up 11.1 percent from $225,000 in 2020. The average time it took to sell a home was 33 days, down from 42 days a year ago. Homes for sale totaled 20,546, a decrease of 34.4 percent from December 2020, when 31,326 homes were on the market.
In a seller’s market, real estate prices increase. The strong buyer demand is driving prices in the Chicago metro area as compared to the previous year. The Chicago PMSA had the housing inventory for 1.1 months (down from 1.9last year). Months of supply for homes in the lowest price ranges (<100K) experienced declines both in Illinois and the Chicago PMSA. The highest price ranges ($700K+) showed the largest decline.
In December 2021, the median home sale price in the Chicago Metropolitan Area was $288,000, an increase of 8.5 percent from $265,500 in December 2020. The median price in year-end 2021 was $299,000, up 11.6 percent from $267,900 in 2020. The median price of a home in the city of Chicago in December 2021 was $315,000, up 3.3 percent compared to December 2020 when it was $305,000. The year-end 2021 median price reached $335,000, up 6.2 percent from $315,500 in 2020. The median price is a representative market price in which half of the homes sold for more and half for less.
Stronger buyer activity will continue with speedy sales and multiple offers leading to price gains. According to local realtors, on average, Illinois and the Chicago PMSA have already recovered to pre-bubble levels. The December 2008 median sale price has been adjusted to 2021 values to allow for the calculation of the housing price recovery factoring in inflation.
According to Fannie Mae’s latest set of predictions for 2022, home price growth in the United States is forecasted to be slower than in 2021, but still, be strong by historical standards. So, what are the projections for the state of Illinois in 2022? Well, according to the housing forecast published by the Illinois Association of Realtors and presented by Regional Economics Applications Laboratory, Institute of Government and Public Affairs University of Illinois, in 2022, median prices are expected to grow continuously within a narrower and lower range than in 2021 (source).
Year over year, these gains will range from 2.0% to 7.9% in Illinois and from 1.40% to 7.7% in the Chicago PMSA. By December 2022, the median home price in Illinois is expected to be $261,561 and in the Chicago PMSA, it will be $306,134, an increase of 7.9 percent and 7.6 percent, respectively. In 2022, both Illinois and the Chicago metropolitan area are expected to see overall negative growth in sales.
Annual growth in monthly sales is forecast to range between -4.1 percent and 11.5 percent in Illinois, with most months experiencing negative growth. The Chicago PMSA’s comparative range is – 11.0 percent to -5.0 percent, with negative gains in all months. When foreclosed sales are excluded from total sales, forecasts for regular sales indicate a range of -6.8 to 9.6 percent growth for the Chicago PMSA.
Chicago Housing Market Trends 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 December 2021 with December 2020.
In the nine-county Chicago Metro Area, 10,357 homes (single-family and condominium) were sold in December, a 2.9 percent decrease over the 10,666 homes sold last year. The median home sale price in the Chicago Metropolitan Area was $288,000, up 8.5 percent from $265,500 in Dec 2020.
Closed Sales were down -2.9% year-over-year.
Closed sales were up +2.8% from the previous month’s closed sales.
The median sales price rose from $265,500 to $288,000, a growth of 8.5%.
The inventory of available homes decreased by 34.5 percent year-over-year, from 21,345 to 13,991 units for sale.
The Days on Market Until Sale decreased by 14.3%, from 35 to 30.
Infographic Courtesy: ILLINOIS REALTORS®
Infographic Courtesy: ILLINOIS REALTORS®
City of Chicago Housing market Trends
Realtor.com’s latest report shows that in January 2022, the median list price of homes in Chicago, IL was $324,900, trending down -5.8 percent year over year. The median price per square foot for listings was $241. The median price of a home sold was $315,000. The sale-to-List Price Ratio was 98.33%, which shows that homes sold for 1.67% below the asking price on average. Chicago has 78 distinct neighborhoods. As the most expensive neighborhood, Lincoln Park boasts a median listing price of $579,000. A median listing price of $175,000 in West Ridge 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 2,392 units in December 2021, representing a 5.5 percent increase over the previous December’s total of 2,267 units. The median price of a home in Chicago in December 2021 was $315,000, representing a 3.3 percent increase over the previous year’s median price of $305,000.
Closed sales in the City of Chicago increased by 5.5 percent year on year.
Sales also increased by +18.3 percent when compared to the previous month’s closed sales.
The median sales price increased from $305,000 to $315,000, representing a 3.3 percent increase over the previous year.
The inventory of available homes decreased by 31.4 percent, from 8,254 to 5,662.
The Days on Market Until Sale remained unchanged at 38.
Chicago Real Estate Foreclosure Trends
In December, for the Chicago PMSA, the percentage of foreclosed sales (e.g. REOs) among the total sales was 3.0%. 9,924 regular sales were made, 1.8% less than last year. 359 foreclosed properties were sold, 23.9% less than last year. The median price was $290,000 for regular property sales, up 7.8% from last year; the comparable figure for the foreclosed properties was $240,000, up 11.6% from this time last year.
Chicago Rent Prices
The Zumper Chicago Metro Area Report analyzed active listings last month across 5 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Illinois one-bedroom median rent was $1,177 last month. Chicago was the most expensive city with one-bedrooms priced at $1,590 while Aurora was the most affordable city with one-bedrooms priced at $1,210.
The Fastest Growing Cities For Rents in Chicago Metro Area (Y/Y%)
Oak Park had the fastest-growing rent, up 13.4% since this time last year.
Naperville saw rent climb 7.5%, making it the second-fastest-growing.
Schaumburg was third with rent increasing 7.4%.
The Fastest Growing Cities For Rents in Chicago Metro Area (M/M%)
Chicago had the largest monthly rental growth rate, up 1.9%.
Source: Zumper
Chicago Real Estate Market Forecast 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 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 in 2019. The home prices grew by a mere 1.5 percent, lagging behind the nation.
Let us look at the price trends recorded by Zillow over the past few years. Since Feb 2012, Chicago metro home values have increased by around 62.7% (Current Zillow Home Value Index = $289,595). As you can see in the graph below, the Chicago housing market was weak in 2019, essentially flat, but prices have gone up 11.6% 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 4.31%. The cumulative appreciation rate over the ten years has been 52.51%%. In the latest quarter, the property appreciation rate was 4.69%, which annualizes to a rate of 20.12%. 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 January, February, and March suggest increases on a monthly and yearly basis for both Illinois and the Chicago PMSA. Annually for Illinois, the three-month average forecasts point to an increase in the range of 3.5% to 4.7%. The comparative figures for the Chicago PMSA are an increase in the range of 4.6% to 6.2%. On a monthly basis, the three-month average sales are forecast to increase in the range of 1.3% to 1.7% for Illinois and increase in the range of 1.4% to 1.9% for the Chicago PMSA.
The median price forecast indicates positive annual growth for January, February, and March in both Illinois and the Chicago PMSA. In Illinois, the median price is forecast to change by 6.5% in January, 7.8% in February, and 4.9 % in March. For the Chicago PMSA, the comparable figures are 6.3% in January, 8.0% in February, and 5.4% in March.
Here is Zillow’s housing forecast for Chicago, Cook County, and Chicago MSA until Dec 2022. Chicago is expected to see strong home price gains in 2022. According to their forecast, the supply and demand dynamics will likely push prices north again over the next 12 months.
Chicago-Naperville-Elgin Metro home values have gone up 13.6% over the past year.
Zillow predicts they will rise 11.6% over the next twelve months to reach $323,000.
Chicago home values have gone up 8.9% over the past year (current value = $303,559) and will continue to rise over the next twelve months.
Cook County home values have gone up 11.4% over the past year (current value = $298,194) and will continue to rise over the next twelve months.
Naperville home values have gone up 12.8% over the past year (current value = $453,883) and will continue to rise over the next twelve months.
Elgin home values have gone up 15.2% over the past year (current value = $255,321) and will continue to rise over the next twelve months.
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 -0.4 percentage points to 5.3 percent while nonfarm payrolls increased by +22,800 in December, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. The preliminary report for November monthly payrolls was revised from +19,500 to +19,900 jobs. The November unemployment rate was unchanged from the preliminary report, remaining at 5.7 percent.
The state’s unemployment rate was +1.4 percentage points higher than the national unemployment rate reported for December, which was 3.9 percent, down -0.3 percentage points from the previous month. The Illinois unemployment rate was down -2.7 percentage points from a year ago when it was at 8.0 percent.
“Today’s data reflects continued encouraging growth across Illinois’ economy,” said Deputy Governor Andy Manar. “Illinois will continue to take collaborative steps to strengthen our workforce and connect workers with employers across the state. IDES encourages job seekers and businesses to utilize tools such as IllinoisJobLink.com, Illinois’ free and accessible job board with over 160,000 available jobs.”
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 big imbalance in supply and demand.
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 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 2022 (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.
Illinois Housing Market Statistics (Describes 2021 Year-to-Date)
We shall now do a quick recap of the impact of the pandemic on the Chicago housing market in 2021. In 2021, Illinois home sales went up 11.8 percent and median prices rose 11.1 percent as homes sold quicker in 2021 compared to 2020, according to data released by Illinois REALTORS®. Median prices in 2021 showed high growth in both Illinois and the Chicago PMSA in the second year of the pandemic. In Illinois, annual growth rates for each month varied between 5.38% and 22.73%. The comparative range for the Chicago PMSA was between 5.45% and 20.0%.
Sales in 2021 in both Illinois and the Chicago PMSA experienced periods of irregular growth: positive growth rates until midyear but negative later on. The sales growth rates were between – 11.01% and 54.75% for Illinois and between -11.61% and 66.64% for the Chicago PMSA. During the last few months, both regions experienced negative annual growth rates in sales.
Even with 10,780 fewer homes on the market during the calendar year, strong consumer demand meant the average time that homes spent on the market were 32 days in 2021, compared to 50 days in 2020. The year-end 2021 median price for all properties in the Illinois housing market reached $250,000, up 11.1 percent from $225,000 in 2020. Months Supply of Inventory in 2021 was 1.3, a decline of -38.1% from the previous year.
In the Metro Chicago Housing Market, which comprises nine counties, the number of homes sold in the metro area during the year rose by 14.5 percent in 2020, to 137,898 registered sales. That’s the highest since 2012, according to the Illinois Realtors market report released in December. Months Supply of Inventory in 2021 for the metro area was 1.2, a decline of – 42.9% from the previous year.
This shows that it was a strong seller’s market in 2021. 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 2021 was $288,000 in the Chicago Metro Area, an increase of 8.5 percent from $265,500 in Dec 2020. The year-end 2021 median price reached $299,000, up 11.6 percent from $267,900 in 2020. In the City of Chicago, the year-end 2021 median price reached $335,000, up 6.2 percent from $315,500 in 2020.
Source: Illinoisrealtors.org
Source: Illinoisrealtors.org
Chicago Real Estate Investment Overview 2022
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 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.
Top Reasons To Invest In The Chicago Real Estate Market?
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 February 10, 2022, the average rent for a 1-bedroom apartment in Chicago, IL is currently $1,595. This is a 10% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Chicago increased by 2% to $1,075. The average rent for a 1-bedroom apartment remained flat, and the average rent for a 2-bedroom apartment remained flat.
Two-bedroom apartment rents average $1,800 (a 1% increase from last year).
Three-bedroom apartment rents average $2,150 (an 8% increase from last year).
Four-bedroom apartment rents average $2,500 (a 7 % decrease 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.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Chicago.
Consult with one of the investment counselors who can help build you a custom portfolio of Chicago turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Chicago.
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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, Norada Real Estate Investments 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, Norada Real Estate Investments 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://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
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