Chicago’s housing market took a plunge with the rest of the nation in 2006, and it has yet to fully recover. 2017 won’t see much of a change in that. According to the Chicago Tribune, Chicago will be at the bottom of the list for the nation’s 100 largest metropolitan areas housing markets in 2017. In 2016, average national home price levels returned to what they were before the 2006 crash, but Chicago remained 19% below the pre-crash values. Despite this outlook, a slow and steady rise in home sales is projected to cause a favorable change towards a healthier housing market in the years to come.
The Illinois Realtors 2017 Housing Price Forecast tells of this positive outlook for the future. Forecasts show that, despite the lack of employment growth, home prices and home sales have continuously increased over the past few years. The increase may be small, but it is an increase, nonetheless.
What Buyers Should Know
Home prices in Chicago are relatively cheap right now. Compared to the average income in the area, home prices are low and affordable. The risk associated with buying a home is therefore lower than normal. The problem is that many local jobs are being cut by employers. Homes are very affordable, but job security is low. Forbes notes that, while it would be beneficial to wait to buy a new home, investments in single family housing, housing developments and apartments are ideal in Chicago at a time like this.
What Sellers Should Know
There has long been a difference in how quickly detached and attached (condos and town homes) properties sell. Typically, condos and town homes sell faster than single family homes. During the crash, this was reversed. Lately, single family properties are still selling faster than condominiums in Chicago, making them a more sought after commodity. Chicagoans may find that it takes a bit longer to sell their condominium than expected.
The Exceptions
A fear of rising interest rates shocked many home buyers into action after the 2016 presidential election. In order to secure lower interest rates, many have purchased homes which has helped to boost sales growth numbers.
There are also a few neighborhoods in Chicago that are doing better than most. They are seemingly unaffected by the same factors that have perpetuated the effects of the crash on the housing market.
Overall, Chicago’s housing market is still lagging. However, relatively low prices and a recent surge in home purchases are both signs of continued improvement. Will it be completely healed within the next two years, as predicted by Geoffrey Hewings, a regional economics professional and educator? We can not know for sure. 2017 may not be the best year for the housing market, but it is a positive transitional year leading to what will likely be better times for home selling and buying in Chicago.
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