The past two years have been interesting for real estate in the Chicago metro. There is a lot to cover so we are doing a 5-part post. We will publish these reports on a weekly basis. If you wish to receive the full report right away, please reach out to a Soloma team member or click here if you have not been in contact with a team member. This is not meant to be investment advice; this is our interpretation of what has happened in the Chicago real estate market based on data and our team’s experience.
In these posts we look at the data and what we believe happened. The final posts will include collections on what experts believe will happen going forward and how it may impact you.
Many of our readers, prospects, and clients have heard enough from their coworkers, friends & family to anecdotally produce similar conclusions as below. Here are the general conclusions based on the data we reviewed and filtered from the MRED MLS with more details and specific examples to follow below:
Key Takeaway: Less dense neighborhoods within Chicago city limits (i.e., Lincoln Park) and suburbs significantly outperformed more dense neighborhoods (i.e., Near North) in terms of price appreciation and transaction volume growth in 2020 and 2021.
We believe the key drivers were low suburb inventory, raw material cost increases, a shift in demand preferences, labor cost increases, and reduced interest rates.
Within Chicago: In 2020, Chicago condo and townhome transaction volume and prices were more negatively impacted than the same data points for Chicago single family homes.
In 2020 within Chicago city-wide, single-family homes were more desirable for buyers than city-wide condos (especially in high-rise buildings).
Chicago VS Suburbs: In 2020, Chicago suburbs significantly outperformed city properties on price appreciation and volume of transactions.
In 2020, Chicago Suburbs were simply more desirable to buyers than Chicago city-wide real estate.
High Density Areas: In 2020, the areas with the most density (Near North Side, Near West Side, Near South Side & the Loop) experienced the worst performance in terms of average price and active days on market.
The desire for buyers to be in these areas decreased most significantly relative to suburbs and other less dense Chicago neighborhoods.
Luxury High-rise Apartments: In 2020, the Chicago high-rise luxury rental market was the softest we’ve seen with many top-tier buildings offering 3 months free concessions during the height of what is normally the hot summer leasing season.
Within Chicago: In 2021, the data shows a strong rebound in the market for Chicago city-wide condos and townhomes as average price and volume sold increased significantly.
Within Chicago: In 2021, Chicago city-wide single-family homes continued to perform positively for a second year in a row and continued to outperform city-wide condo and townhome figures.
Chicago Suburbs: In 2021, Chicago suburbs continued to grow significantly in terms of both transaction volume, average price and days on market declined materially.
High Density Areas: In 2021, the areas with the most density (Near North Side, Near West Side, Near South Side & the Loop) experienced a strong rebound in transaction volume and price but active days on market increased as units sat longer before finding buyers.
Luxury High-rise Apartments: In 2021, the Chicago high-rise luxury rental market improved significantly but not quite to 2019 levels. Many top-tier buildings increased rents while some older buildings continued to offer concessions but not at the aggressive rates we saw in 2020.
We will be posting part 2 next week in which we discuss what happened to single family homes and condos and townhomes across all of Chicago. If you don’t want to wait, reach out to a team member via the contact form or click here if you want it emailed directly to you automatically.
Comentários