What Does the 2019 Chicago Real Estate Market Look Like?

2019 Chicago Real Estate Market, Real Group Real Estate

Ah, the beginning of a new year! The perfect time to take a look back at where you’ve been – and where you’re going. This is a great time for reflection and speculation, and that goes doubly so when it comes to the real estate market.

Are you planning to buy or sell a home in the Chicago area in the year ahead? If you’re considering making this major move, then it’s important to take stock of the housing market here in Chicagoland.

What do the months ahead potentially hold for home buyers and sellers? What might the real estate market look like in 2019 - and what are the factors that could be driving any changes or trends? Let’s dive in, and take a look at what may be in store for the Chicago area housing market in 2019:

1.) Home Prices Are Projected to Rise

Looking at data from Illinois REALTORS, one can see an obvious trend: Year over year, median sales prices have tended to rise statewide in Illinois over the last several years. For instance, in June 2018, the statewide median sales price peaked around $224,900 - up significantly from both June 2017 ($215,400) and 2016 ($203,325).

Though there are yearly cycles and trends to be aware of every calendar year, we have seen growth overall in Illinois for the past few years, and there is currently no reason why this trend should reverse, should the economy continue to remain fairly strong, as it is currently forecast to do.

2.) Home Sales Are Forecast to Increase

Looking into 2019, it seems likely that total home sales will continue to grow, both in our area and around the country. Bolstering our prediction is a recent report from Keeping Current Matters, which polled several different housing authorities - including Fannie Mae, Freddie Mac, and the National Association of REALTORS (NAR) - and found that, to a “t,” every expert anticipates there to be more sales in the year ahead.

Take a look at the graph below, courtesy of Keeping Current Matters:

 

As you can see, each group anticipates a general rise in home sales in 2019, compared to 2018. The NAR and the Mortgage Bankers Association (MBA) predict the largest leap in total sales.

3.) Time on Market Should Continue to Speed Up

According to a report from the Chicago Tribune, market times in our area sped up significantly in 2018, compared to 2017. In the Chicago metro area, houses took about 47 days to sell, down from 53 days in 2018. That trend continued into the city itself, where houses typically sold in about 44 days as of 2018 (down from 46 days in 2017).

Will we continue to see wait times accelerate into 2019? If trends continue, we should see homes stay on the market for even less time, as buyers pursue the limited quantity of inventory that is on the market. There are several important things to keep in mind here, however. Will market conditions conspire to encourage more owners to sell? Will rising interest rates discourage buyers from entering the market? There’s a lot to consider.

4.) Keeping an Eye on Inventory

According to a report from Illinois REALTORS, inventory has been in a general decline in Illinois for some time now. In October of 2018, for instance, there were roughly 58,700 homes available - down from the same time in 2017 (60,326), a point which was itself down from 2016 levels (64,683).

Inventory has remained low across the country in recent years, as we’ve noted before. The Chicagoland market is hardly unique in that respect. And even as inventory has dropped, other market factors - such as total home sales and median sales price - have remained high, suggesting that the market is still active even though inventory may be low.

One big thing to keep an eye on in the year ahead? 2019 could be a year in which we see an enormous amount of turnover in inventory, as the Tribune points out. As they explain:

“...generational turnover is accelerating, as the oldest baby boomers finally relinquish their houses… That translates to a bumper crop of split-levels and ranch houses that are easily renovated to the open-concept layouts popular with young families.”

5.) What Neighborhoods Will Be Hot in 2019?

With all of these factors in mind, it’s important to remember that Chicagoland - both the city and the suburbs - is truly a market of neighborhoods. Market trends for one square city block could differ significantly from those just a mile away. (For an illustration of those hyperlocal market trends in action, check out any of our neighborhood market spotlights, available in our menu).

So, with that said, there are certainly areas of Chicagoland that are projected to be more active than others in the year ahead. Culling from reports from Crain’s and the Tribune, we see a few markets that have seen strong growth in 2018, and are poised to continue to hold their “heat” in 2019, including:

Looking to Enter the Market in 2019?

What real estate market conditions are you keeping an eye on in the year ahead? Looking to buy or sell your home? Have any further questions about exploring your dream Chicagoland community? Want to talk Chicagoland real estate in even more depth?

For all these matters and more, you’ve come to the right place! Whether you’re looking to buy or sell in 2019, the Real Group RE team is here and ready to help! Drop us a line today to get the conversation started.

 

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