Recent forecasts for the Chicago, Illinois housing market suggest that home values might rise more slowly over the coming months, though they will most likely continue moving north.
Predictions for continued price growth are largely based on the current supply-and-demand situation. In short, limited supply combined with steady demand is putting upward pressure on home prices. Above all else, this is what’s driving the Chicago housing market forecasts for 2017 and 2018.
An Updated Look at Home Price Trends
As of September 2017, the median home price in Chicago was slightly higher than the national average. The median house value in Chicago was $223,000 in September, according to Zillow. Nationally, the median was $200,700 during that same month.
Supply is still tight within the Chicago real estate market, and forecasts creators are bearing this in mind. This is actually a common trend affecting many cities and metro areas across the country, as we head into the fall of 2017.
Doug Carpenter, president of Illinois Realtors, recently told the Chicago Tribune that there are fewer sales due to a lack of inventory. “Buyers are still looking but just aren’t finding what they want,” Carpenter said.
Carpenter went on to explain that the market has slowed a bit, due to the inventory crunch. According to data released in September by Illinois Realtors, home sales dropped 4.9% in July compared to the same month a year earlier. This continues a trend of slowing home sales that began in the spring of this year.
The Regional Economics Applications Laboratory at the University of Illinois issued a similar statement regarding lack of inventory. According to their experts: “lack of available homes could continue to impact the market [in Chicago].”
Competition is particularly fierce within the “starter home” range, at the lower end of the pricing spectrum. Properties in the $100,000 – $200,000 range are especially scarce. Houses in that price point tend to be snapped up quickly, often with multiple offers from competing buyers.
Forecasts for the Chicago Real Estate Market
Given the current supply and demand situation, it’s not surprising to see Chicago housing market forecasts calling for continued appreciation through 2018. And that’s just what we have been seeing over the last few weeks.
The real estate research team at Zillow, for example, recently predicted that prices will continue upward through the end of this year and into next. Their economists and analysts expect the median home value in Chicago to rise by another 3.2% over the next 12 months. This prediction was issued in September 2017 and extends into the same month of 2018.
As for the previous 12 months, Zillow reported an increase of 7.9% for the median home value in Chicago. So clearly they expect house prices to rise more slowly over the coming months than they did in the past.
In many ways, the forecast and outlook for Chicago’s real estate market is very similar to the nation as a whole. Home price appreciation is expected to slow down in most cities over the coming months, and going into 2018. Additionally, many cities across the country are experiencing a shortage of homes for sale, relative to demand. So you might say that the Chicago housing market is “par for the course.”
A Good Time to Buy a House?
Home price predictions for the Chicago housing market suggest that home prices will continue rising into 2018. This is largely the result of a supply and demand imbalance, a common trend seen in many cities across country.
Additionally, the Mortgage Bankers Association recently updated its finance forecast for the next 12 months. The industry group expects the average rate for a 30-year mortgage loan to creep upward over the coming months, perhaps reaching 4.3% by the end of 2017. The average rate for a 30-year loan is currently hovering around 3.78%, as of September 8, 2017.
Which begs the question: Is now a good time to buy a house in Chicago?
From a cost standpoint, one could argue that it would be better to buy sooner rather than later. Home prices and mortgage rates are expected to rise over the coming months, so those buyers who postpone their purchases until next year could encounter higher housing costs.
Disclaimer: This article includes various predictions and forecasts relating to the Chicago real estate markets between now and 2018. Such statements were provided by third parties not associated with our company, and are the equivalent of an educated guess. We have presented them here as an educational service to our readers.