Chicago is undoubtedly one of the most vibrant cities in the USA, and it has gone through its fair share of ups and downs in the real estate market. It is known for its rich history, iconic skyline, architectural wonders, and, of course, the deep dish pizza, and it remains one of the most popular places for living in the USA. But what do the real estate market trends say about the real estate landscape in 2024? Let's dive in. 

Current Situation of Chicago's Real Estate Market 

Before we see what 2024 holds for Chicago's real estate market, let's look at what is happening now. There are 22,400 home sales and a 20.9% decline from the previous year. The median home price dropped by 1.5% to $330.000. As it is now, it seems that the year 2024 will only be optimistically successful regarding the overall situation in real estate. 

There is a housing shortage that Chicago is fighting, and the deficit amounts to a staggering 142,000 homes, which is 3.7% of the metro area's inventory. What are the reasons for this shortage? There are two critical forces and play. 

First, since the mortgage rates are higher, many homeowners stay put in their current homes instead of selling them. This has caused the "lock-in effect" because they don't want to give their homes up. 

Second, not enough homes have been constructed in Chicago since the Great Recession. When we compare Chicago to other big cities like those nearby, Chicago has built far fewer new homes per person. For example, only about eight new single-family homes were built for every 1000 people living in Chicago from 2010 to 2020. This shortage of new homes additionally increases the problem because there aren't enough houses to meet the demand for people who want to buy. 

Consequently, the price of the available homes skyrocketed in December 2023, with the median home price in the city climbing by 7.8% and 7% in the surrounding areas. So what will happen next? 

Chicago Real Estate Market In 2024 

Even if it seems pessimistic due to the recent data and numbers, there is still a glimmer of hope on the horizon. Forecasters see a shift in the winds of the Chicago real estate market by the end of 2024. Here's what the future holds. 

Mortgage Rate Movement 

At the moment, experts think the mortgage might drop a little soon, making it cheaper for people to borrow money to buy homes. Even though the drop could be small, only about 5.8% to 6.6%, it might still encourage more people to dip into the real estate market and buy homes. This could be people thinking about buying a home but couldn’t afford it in the past and people who already own homes but want to move to a different one. 

Rising Home Prices 

When the demand for houses is huge, and there aren’t enough homes available for sale, competition for the available houses increases the home prices. That is what is happening in Chicago at the moment. The demand is high, so the price keeps going up, and even though the mortgage rates go down, more people want to buy homes. With the shortage of available homes, the prices will stay high or even go up further by the end of 2024. 

Life Events Driving Decisions 

Important milestones in people's lives urge them to buy or sell their homes. For example, Millennials are now reaching the age where they typically start thinking about buying houses, so they will be looking to settle down in a new home regardless of what the market is doing. This means that even though the real estate market situation isn't shiny, people's personal life events will still push them to buy or sell homes. 

Chicago's Real Estate Opportunities 

Now, let's talk about the substantial opportunities in the Chicago real estate market and why owning a property there remains one of the most popular options. 

Strong Economy 

Chicago has a strong economy with many jobs and businesses, making it a good place for real estate investors. The most straightforward reason is that property values tend to go up over time when the economy is doing well. 

Steady Home Value Growth 

Another great opportunity is that the homes in Chicago are increasing in value slowly but steadily, so when you invest in real estate there, your investment will grow exponentially. 

Diverse Neighborhoods 

Chicago is known for its many different kinds of neighborhoods, and each of them has their own unique charm. This is particularly attractive for buyers and investors who want to find the perfect property to meet their needs. 

Top Notch Education 

There are top universities in Chicago, like the University of Chicago and Northwestern University, to which many students and professionals worldwide are attracted. This creates a steady demand for housing in the city for owning and renting which increases the work of the property management companies as well.

Rich Culture and Entertainment 

We must also list Chicago's rich entertainment culture, from sports teams to museums and festivals. This makes it an attractive place to live, work, and play and keeps people returning year after year. Short-time rentals are also popular due to this vibrant culture. 

Conclusion 

Even though there are some challenges in the Chicago real estate market, there are plenty of opportunities for those who want to go deep into the market and navigate it confidently and determined. It might be a bit challenging at first, but once you are in, the success will keep on building.