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We'll discuss the latest trends and projections for the Chicago housing market. Prices are expected to continue to increase through the rest of the year while the number of sales is expected to decrease. In February 2022, median prices rose in both Illinois and Chicago PMSA. Homes in Illinois sold at a rapid pace as inventory remained low and median price increases slowed, according to data from Illinois REALTORS®.

The average Illinois home sold in 41 days, compared to 52 days in February 2021. In February, the average home in the Chicago Metro Area spent 39 days on the market, compared to 45 the previous year. However, properties in Chicago averaged 49 days on the market, compared to 50 in February 2021. The statewide median price went up 6.4 percent to $240,000 in February 2022 compared to February 2021. The median is a typical market price where half the homes sold for more and half sold for less.

In a seller's market, real estate prices increase. The strong buyer demand is driving prices in the Chicago metro area as compared to the previous year. In February, at the latest average annual pending sales rate, Illinois had enough housing inventory for 1.1 months (down from 1.2 last year). In the Chicago PMSA, the comparable figure was 1.0 months (down from 1.1 last year). Months of supply for homes in the lowest price ranges (<100K) experienced declines both in Illinois and the Chicago PMSA.

In the Chicago Metro Area, the median home sale price in February 2022 was $290,000, an increase of 7.4 percent from $270,000 in February 2021. Last month, 6,935 homes (single-family and condominiums) were sold in the nine-county Chicago Metro Area, a 3.0 percent decrease from the 7,146 homes sold in February 2021. The median price of a home in the city of Chicago in February 2022 was $320,000, the same as it was in February 2021.

Stronger buyer activity will continue with speedy sales and multiple offers leading to price gains. According to local realtors, on average, Illinois and the Chicago PMSA have already recovered to pre-bubble levels. The December 2008 median sale price has been adjusted to 2021 values to allow for the calculation of the housing price recovery factoring in inflation.

According to Fannie Mae’s latest set of predictions for 2022, home price growth in the United States is forecasted to be slower than in 2021, but still, be strong by historical standards. So, what are the projections for the state of Illinois in 2022? Well, according to the housing forecast published by the Illinois Association of Realtors and presented by Regional Economics Applications Laboratory, Institute of Government and Public Affairs University of Illinois, in 2022, median prices are expected to grow continuously within a narrower and lower range than in 2021 (source).

Year over year, these gains will range from 2.0% to 7.9% in Illinois and from 1.40% to 7.7% in the Chicago PMSA. By December 2022, the median home price in Illinois is expected to be $261,561 and in the Chicago PMSA, it will be $306,134, an increase of 7.9 percent and 7.6 percent, respectively. In 2022, both Illinois and the Chicago metropolitan area are expected to see overall negative growth in sales.

Annual growth in monthly sales is forecast to range between -4.1 percent and 11.5 percent in Illinois, with most months experiencing negative growth. The Chicago PMSA's comparative range is – 11.0 percent to -5.0 percent, with negative gains in all months. When foreclosed sales are excluded from total sales, forecasts for regular sales indicate a range of -6.8 to 9.6 percent growth for the Chicago PMSA.

Below is the latest report of the “Chicago Housing Market.” The source of this report is the Illinois REALTORS® and the counties included are Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry, and Will. The report compares the Chicago metro and the city's housing metrics from February 2022 with February 2021.

In the nine-county Chicago Metro Area, 6,935 homes (single-family and condominium) were sold in February, a 3.0 percent decrease over the 7,146 homes sold last year. The median home sale price in the Chicago Metropolitan Area was $290,000, up 7.4 percent from $270,000 in Feb 2021.

Closed Sales were down -3.0% year-over-year.

Closed sales were up +0.2% from the previous month's closed sales.

The median sales price rose from $270,000 to $290,000, a growth of 7.4%.

The inventory of available homes decreased by 34.1 percent year-over-year, from 18,633 to 12,281 units for sale.

The Days on Market Until Sale decreased by 13.3%, from 45 to 39.

Realtor.com's latest report shows that in February 2022, the median list price of homes in Chicago, IL was $325,000, trending down -6.5 percent year over year. It seems like the housing boom is losing steam in Chicago. The median price per square foot for listings was $249. The median price of a home sold was $318,500.

The sale-to-List Price Ratio was 98.72%, which shows that homes sold for 1.28% below the asking price on average. Chicago has 78 distinct neighborhoods. As the most expensive neighborhood, Lincoln Park boasts a median listing price of $560,000. A median listing price of $175,000 in Roseland makes it the most affordable neighborhood in the city.

According to Illinois REALTORS®, sales of single-family and condominium homes in the city of Chicago reached 1,879 units in February 2022, representing a 13.3 percent increase over the previous February's total of 1,658 units. The median price of a home in Chicago in February 2022 was $320,000, representing a 0 percent increase over the previous year's median price.

Closed sales in the City of Chicago increased by 13.3 percent year on year.

Sales also increased by +7.9 percent when compared to the previous month's closed sales.

The median sales price was unchanged at $320,000, representing a 0 percent increase over the previous year.

The inventory of available homes decreased by 30.3 percent, from 8,055 to 5,612.

The Days on Market Until Sale decreased by 2.0 percent, from 50 to 49.

Chicago Real Estate Foreclosure Trends

In February, for the Chicago PMSA, the percentage of foreclosed sales (e.g. REOs) among the total sales was 4.1%. 6,569 regular sales were made, 3.3% less than last year. 321 foreclosed properties were sold, 6.3% more than last year. The median price was $295,500 for regular property sales, up 8.2% from last year; the comparable figure for the foreclosed properties was $234,000, up 13.0% from this time last year.

Chicago Rent Prices 2022

The Zumper Chicago Metro Area Report analyzed active listings last month across 4 metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Illinois one bedroom median rent was $1,185 last month. Chicago & Naperville were the most expensive cities with one bedrooms both priced at $1,600.

The Fastest Growing Cities For Rents in Chicago Metro Area (Y/Y%)

Naperville had the fastest growing rent, up 26% since this time last year.

Oak Park saw rent climb 12.6%, making it the second fastest growing.

Chicago was third with rent increasing 10.3%.

The Fastest Growing Cities For Rents in Chicago Metro Area (M/M%)

Schaumburg had the largest monthly rental growth rate, up 2.1%.

Naperville was second with rent climbing 1.3% last month.

The Chicago housing market is shaping up to continue the trend of the last few years as one of the hottest markets in the United States. It is also one of the hottest real estate markets for investing in rental properties. What are the Chicago real estate market predictions for 2022? In 2018, the Chicago real estate appreciation rate was running at about half the national rate; at a 3 percent range when the nation was at 6 percent. After cooling off, Chicago became the weakest housing market in 2019. The home prices grew by a mere 1.5 percent, lagging behind the nation.

Let us look at the price trends recorded by Zillow over the past few years. Since the last decade (Apr 2012), Chicago metro home values have increased by around 66.32% (Current Zillow Home Value Index = $296,053). As you can see in the graph below, the Chicago housing market was weak in 2019, essentially flat, but the pandemic has led to a boom since July 2020. Home prices have gone up 14.0% over the past twelve months alone.

Similar growth has been recorded by NeighborhoodScout.com. Their data shows that over the last ten years the Chicago annual appreciation rate has been averaging at 4.31%. The cumulative appreciation rate over the ten years has been 52.51%%. In the latest quarter, the property appreciation rate was 4.69%, which annualizes to a rate of 20.12%. This figure corroborates Zillow's forecast, which also predicts that home prices in this region are expected to increase over the next twelve months.

The sales forecast presented by the University of Illinois to Illinois Realtors for March, April, and May suggests a decrease on a yearly basis and an increase on a monthly basis for both Illinois and the Chicago PMSA. Annually for Illinois, the three-month average forecasts point to a decrease in the range of -2.3% to -3.1%; the comparative figures for the Chicago PMSA are a decrease in the range of -4.4% to -6.0%. On a monthly basis, the three-month average sales are forecast to increase in the range of 18.0% to 24.3% for Illinois and increase in the range of 17.6% to 23.8% for the Chicago PMSA

The median price forecast indicates positive annual growth for March, April, and May in both Illinois and the Chicago PMSA. In Illinois, the median price is forecast to change by 3.7% in March, 3.8% in April, and 2.8 % in May. For the Chicago PMSA, the comparable figures are 4.9% in March, 3.7% in April, and 2.9% in May 2022.

Here is Zillow's housing forecast for Chicago, Cook County, and Chicago MSA. Chicago is expected to see strong home price gains of 11.2% until Dec 2022. The supply and demand dynamics will likely push prices north again over the next 12 months. 

Chicago-Naperville-Elgin Metro home values have gone up 14.0% over the past year and they will continue to rise albeit rather slowly.

Chicago home values have gone up 9.1% over the past year (current value = $309,268) and will continue to rise over the next twelve months albeit rather slowly.

Cook County home values have gone up 11.8% over the past year (current value = $304,239) and will continue to rise over the next twelve months.

Naperville home values have gone up 13.6% over the past year (current value = $465,516) and will continue to rise over the next twelve months.

Elgin home values have gone up 15.5% over the past year (current value = $260,997) and will continue to rise over the next twelve months.

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? While many have lost jobs, making them ineligible for a home mortgage, some sellers have taken their homes off the market. As expected by many analysts, price forecasts point to positive price increases over the coming months in Illinois and Chicago MSA.

Home sales usually are directly tied to an economy's health and rise and fall with economic activity. As economies slow, the supply of money tends to become more restrictive. As money becomes harder to borrow, fewer home buyers enter the housing market. With more jobs, you expect a corresponding deepening and growth of housing markets.

The Illinois Department of Employment Security (IDES) announced on March 24, 2022, that the unemployment rate fell -0.2 percentage points to 4.8 percent, while nonfarm payrolls increased by +19,600 in February, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES.

The January monthly change in payrolls was revised from the preliminary report from +8,600 to +10,800 jobs. The January unemployment rate was unchanged from the preliminary report, remaining at 5.0 percent. The February payroll jobs estimate and unemployment rate reflects activity for the week including the 12th.

Illinois continues on a positive economic trajectory, with unemployment rates going down and job numbers going up in key industries, such as transportation, manufacturing, and hospitality. The number of unemployed workers was down from the prior month, a -2.8 percent decrease to 308,600, and was down -28.8 percent over the same month one year ago.

The Illinois Department of Employment Security produces both 2-year and 10-year projections.  The 10-year (2018- 2028) COVID-impacted employment projections were developed to provide the public with a preliminary assessment of potential long-term structural changes in the Illinois labor market caused by pandemic-induced changes in consumer and firm behavior. The 2-year (2020-2022) employment projections will be made available in Spring 2021 and will also reflect the economic impact of COVID-19 on the Illinois economy.