Chicago Real Estate Market 2023

Chicago Real Estate Market Trends & Statistics 2023

Chicago is a strong renter’s market. More than half of the population rents in this city. Chicago is the 6th most walkable city in the nation, with a metro area population of approximately 9.5 million people. It is the most populous city in Illinois, and the third-most-populous metro area in the United States.

The Chicago metropolitan area, with a population of roughly 9 million people, has an economy of $697.4 billion, making it the third-largest in the United States and larger than entire nations such as Poland, Thailand and Sweden.

Like other “gateway” markets like New York, Boston and San Francisco, Chicago is an elite group of powerhouse U.S. cities with high liquidity, large economies, influential culture and international brand recognition.

While the residential market in Chicago (and across the US) has slowed down, it is not a repeat of 2008-09 because mortgage underwriting standards remain restrictive and homeowners have equity in their homes.

Click on the tabs above to learn more about Chicago’s housing market, population, and employment trends.

Data Sources:

• https://www.zillow.com/
• RealWealth Property Team Data
• https://factfinder.census.gov/
• https://www.deptofnumbers.com/

Median home values stats and descriptions

The median home value in Chicago is $305,009, 11.15% less than the national average. This has grown by 10.6% between July 2021 and July 2022 from $275,805 to $305,009.

In the city of Chicago, Redfin data shows that the average real estate price is $328,000 and homes go pending in 69 days. The Chicago, IL housing market is moderately competitive, scoring 32 out of 100, based on Redfin’s analysis.

Median Monthly rent stats and descriptions

The median monthly rent in the Chicago metro area in 2022 is $1,876, 4.92% lower than the average rent in the United States.

Despite the fact that Chicago’s price to rent ratio favors buying over renting, 55% of households in Chicago rent their homes. This has created a thriving opportunity for investors in the Chicago MSA.

The average RTV ratio for rental properties in the Chicago MSA is 0.62, 7.9% greater than the US average of 0.57.

Median home value appreciation rate 2014-2022

The Chicago real estate market is growing steadily, with home prices increasing by 50.78% between 2014 and 2022. However, this growth rate has been almost 40% slower than the general US market.

While this may seem like a problem, it also means that housing is not overpriced here. It’s also important to note that between July 2021 and July 2022, Chicago’s real estate prices grew by 10.6% YOY from $275,805 to $305,009.

Median monthly rent appreciation rate 2014-2022

In the past eight years, Chicago’s rent prices have risen 20.13 percent, from $1,561 in 2014 to $1,876 in 2022. The city’s rent growth has been much slower than the national average; in fact, Chicago’s total rent growth rate is 50.7% lower than the national average.

However, there have been major changes in rent prices in some Chicago neighborhoods. In the past year, rents in some areas have risen by more than 10 percent. For example, rents in Aurora have increased by 20 percent according to Zumper. Also, according to data firm CoStar Group, rent prices in Chicago city rose 9.4% in 2022.

The Chicago metropolitan area has a population of 9,509,934 based on the 2021 census.

In the eleven-year period between 2010 and 2021, Chicago’s metro area population grew only 0.41%, 94.31% less than the national population growth rate for the same period.

The City of Chicago is one of the slowest growing major cities in the U.S. In fact, since its peak in 1950, Chicago has lost nearly 1 million residents.

Kendall County has grown the most rapidly of any county in the Greater Chicago, Illinois-Wisconsin HMA, with an average annual growth rate of 1.3% between 2010 and 2018. The county’s estimated population as of July 1, 2018 was 127,900.

Chicago added 200,000 new jobs between July 2021 and July 2022, a growth rate of 4.42%. Its job growth was 15.05% faster than the national average.

Chicago’s total gross metropolitan product in 2020 was $770.7 billion, ranking third in the United States behind New York and Los Angeles. Chicago’s total gross metropolitan product is greater than that of Switzerland.

However, unemployment is relatively high. The unemployment rate in Chicago was 4.7%in September 2022 while the national unemployment rate at that time was 3.5%.

Some of the biggest employers in Chicago include the US Government, Chicago public schools, Amazon, Walgreens, Advocate Aurora Health, and Sears Holdings.

Strong economy and job growth

Chicago is one of the world’s largest, most diversified economies, contributing to a strong gross domestic product of about $770 billion.

The Windy City is also a significant distribution center for global trade. Its location makes it an important port for intermodal shipping and the third-largest port of that designation in the world.

Chicago is also a major hub for freight distribution and passenger rail travel in the United States; it has direct connections to all the major metros on both coasts except New York City.

Between July 2021 and July 2022, Chicago added 200,000 new jobs—a year-over-year growth rate of 4.42 percent—15 percent greater than the US job growth rate.

Solid cash flow opportunities

The Chicago area has rents that are comparable to other major U.S. cities. However, growth in rent prices has been slower than in many other prominent cities over the past few years.

The real estate market in Chicago is not growing very fast; hence, investors can easily find affordable properties. There are also plenty of distressed properties that can be purchased at bargain prices.

The average RTV ratio for rental properties in the Chicago MSA is 0.62, which is 7.9% greater than the US average of 0.57.

Balanced real estate market

Chicago is a balanced market, where supply and demand for homes are roughly equal.

The total home equity growth in Chicago is almost 40% slower than in the general US market, indicating that home prices here aren’t overvalued. You’ll have more stability in your investment and a lower chance of falling victim to a housing bubble.

The market neither favors buyers nor sellers with a normal 6.04% annual appreciation rate for homes.

Strong renter’s market

Chicago’s rental market is strong. 55% of Chicago’s residents rent their homes.. Even with population declines, Chicago has shown resilience and year over year rent growth in some neighborhoods has been in double digits.

Aurora is one example. Rent for a one-bedroom apartment grew by 20 percent between 2021 and 2022, according to Zumper.

In Downtown Chicago, which has the second-largest multifamily inventory in the metro area, rents also surged during the year.

Has a number of prominent college towns

College towns are great places to invest in real estate. They tend to have stable economic climates, which means that properties are more likely to appreciate in value than they are to depreciate. The presence of a college or university attracts money and creates demand for rental properties.

Chicago has a number of prominent college towns, including Evanston, Illinois, home to Northwestern University; Rogers Park (Loyola University); Hyde Park (University of Chicago); and Lincoln Park (DePaul University). These neighborhoods are close to the Chicago Loop and downtown area, where there’s lots of demand from students and faculty members at these universities.

Chicago’s downtown area is home to a number of universities, including Roosevelt University; Columbia College Chicago; National Louis University; Adler University; the University of Illinois – Chicago School of Law; Harold Washington College; Chicago-Kent College of Law; Loyola University Health System School of Pharmacy; and more.

High quality of life ratings

In the 2021 U.S. News & World Report Best Places to Retire list, Chicago received an overall score of 6.3 out of 10. It ranked 7.7 for desirability, 6.1 for value, 6.4 for its job market, 6.3 for quality of life and 4.9 for net migration (the difference between the number of people moving into a location versus those moving out).

The cost of living in Chicago is relatively affordable compared to other major urban areas. While crime rates tend to be high in certain neighborhoods, the city maintains a livability score of 67/100 according to Citytistics, a website that provides insights on cities in the US.

Newsworthy building developments and projects in Chicago

Lincoln Yards

On the heels of a massive development deal with the city, Lincoln Yards is making headlines in Chicago.

The Lincoln Yards development will transform more than 55 acres of industrial riverfront real estate between Lincoln Park and Bucktown into a huge mixed-use campus. Developer Sterling Bay has proposed a $6 billion plan to build 14.5 million-square-feet of high-rise buildings, providing 23,000 full-time jobs and 6,000 residential units as well as 21 acres of parkland, three pedestrian bridges, and an extension of the 606 trail.

The company has a deal with the city to receive $1.3 billion in tax increment financing. The entire development could take roughly ten years to complete—depending on the pace of the economy.

The 78

The most ambitious construction project in Chicago’s history will begin this year, with completion expected in 2024. The 78, located at Roosevelt and the Chicago River, will expand the downtown area’s borders to better connect with historic Chicago neighborhoods.

The 78 is projected to bring nearly $8 billion of economic activity to the city. The Innovation District at The 78 will be Chicago’s first education-based innovation district including Discovery Partners Institute (DPI). The new building will provide more than 200,000 square feet of office, classroom, lab and event space for DPI and its university and industry partners.

United Yards

The United Yards project is a retail and housing development that would be located in the Back of the Yards neighborhood. It was chosen by the city’s Invest South/West initiative.

INVEST South is an initiative launched by Mayor Lori E. Lightfoot to improve commercial corridors on Chicago’s South and West Sides. One of these targeted neighborhoods is the Back of the Yards, which lies within a Priority Corridor (New City). United Yards will be developed in three phases: IA, IB and IC.

United Yards IA is a mixed-use development with 51 affordable rental homes, commercial space for community organizations, and a 6,000 square foot hub for economic development. The hub will offer opportunities in skills development, living wage job placement, and entrepreneurship support programming to the community. By the end of 2023, the United Yards team hopes to complete all three elements of this project.

One Central

One Central is a $3.8 billion-dollar civic infrastructure development that is privately funded by Wisconsin-based Landmark Developments and its partners. When completed, it will include a “Chi-Line” tramway that would run along the sunken bus lanes between Millennium Park and McCormick Place. The project will also include one of the nation’s only four-system transit hubs, which connects Metra, CTA, Amtrak and the new CHI-Line Central Area Circulator at a single location.

One Central is a gateway to Chicago’s Loop, Museum Campus, McCormick Place, Wintrust Area, and Soldier Field. It has capacity for future civic, retail and residential development. The ONE Central Project itself covers an area of 20 million square feet—enough room for commercial offices, residential units, hospitality spaces, health/wellness centers, educational facilities as well as open space for public use.

The River District

The River District, a mega-development project that is being constructed on 30 acres of Tribune Media-owned land in the River West neighborhood, halfway between Lincoln Yards and The 78, will consist of 14 mixed-use buildings that will house 4,100 residential units and create 19,000 jobs.

The neighborhood will be a mix of residential and commercial spaces, including apartments and hotels. The development extends Chicago’s downtown district and creates a seamless connection between the Loop, River North, Fulton Market, and River West neighborhoods.