Chicago's Housing Market to Feel Pinch of Affordability Crisis This Year, Experts Warn
The typically quiet winter months have been anything but in Chicago's real estate scene, where sales are booming and prices are on the rise. According to Grigory Pekarsky, co-owner of Vesta Preferred Realty, more than 70 homes have sold since January, a testament to the market's frenetic pace.
While some areas across the country show signs of improvement in terms of affordability, experts predict that Chicago will continue to face significant challenges in this regard. The city's median home price has jumped over 5% in the past year to $375,000, with demand outpacing supply and causing prices to rise faster than national averages.
For first-time buyers, the situation is particularly dire. Cash offers and all-cash buyers are often at a disadvantage, leaving many unable to compete in the market. The inventory crunch has made it even harder for those who need down payments as low as 3% or 5%.
Despite forecasts pointing to higher home sales and modest price growth nationwide, experts warn that Chicago's unique economic landscape will set it apart from other markets. With a shortage of listings and steady demand, prices are likely to rise further.
Some predict that lower mortgage rates could provide a boost to the market, drawing out homeowners who bought during the pandemic with more affordable mortgage rates into the market. However, this is not expected to address the broader affordability crisis facing Chicago's housing market.
Industry experts point to several factors exacerbating the issue. The Midwest missed the construction boom of the COVID-19 pandemic era and has since faced inventory problems due to rising construction costs. As a result, people are leaving the area for surrounding cities like Milwaukee and Indiana, further straining demand on existing homes.
Developers have responded with initiatives aimed at increasing affordable housing supply, such as Chicago's Missing Middle Infill Housing initiative. However, experts caution that more action is needed from policymakers to tackle the root causes of the affordability crisis.
For those considering buying a home in Chicago this year, it's essential to be prepared and patient. Mortgage rates are expected to remain high, making it difficult for some buyers to compete. The average mortgage rate is predicted to be around 5.5% to 6%, according to industry experts.
The typically quiet winter months have been anything but in Chicago's real estate scene, where sales are booming and prices are on the rise. According to Grigory Pekarsky, co-owner of Vesta Preferred Realty, more than 70 homes have sold since January, a testament to the market's frenetic pace.
While some areas across the country show signs of improvement in terms of affordability, experts predict that Chicago will continue to face significant challenges in this regard. The city's median home price has jumped over 5% in the past year to $375,000, with demand outpacing supply and causing prices to rise faster than national averages.
For first-time buyers, the situation is particularly dire. Cash offers and all-cash buyers are often at a disadvantage, leaving many unable to compete in the market. The inventory crunch has made it even harder for those who need down payments as low as 3% or 5%.
Despite forecasts pointing to higher home sales and modest price growth nationwide, experts warn that Chicago's unique economic landscape will set it apart from other markets. With a shortage of listings and steady demand, prices are likely to rise further.
Some predict that lower mortgage rates could provide a boost to the market, drawing out homeowners who bought during the pandemic with more affordable mortgage rates into the market. However, this is not expected to address the broader affordability crisis facing Chicago's housing market.
Industry experts point to several factors exacerbating the issue. The Midwest missed the construction boom of the COVID-19 pandemic era and has since faced inventory problems due to rising construction costs. As a result, people are leaving the area for surrounding cities like Milwaukee and Indiana, further straining demand on existing homes.
Developers have responded with initiatives aimed at increasing affordable housing supply, such as Chicago's Missing Middle Infill Housing initiative. However, experts caution that more action is needed from policymakers to tackle the root causes of the affordability crisis.
For those considering buying a home in Chicago this year, it's essential to be prepared and patient. Mortgage rates are expected to remain high, making it difficult for some buyers to compete. The average mortgage rate is predicted to be around 5.5% to 6%, according to industry experts.
and yeah i can see why first-time buyers are getting left behind it's like they need a million dollars for a down payment lol and dont even get me started on mortgage rates 5.5% to 6% is like, crazy 
I think the city needs to do more to help out with affordable housing cuz this crisis isnt going anywhere anytime soon 
! I mean, I get that prices are rising and all, but it's like, super tough for people to even get a foot in the door 
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. I mean, people are leaving Chicago and moving to other cities for more affordable options, which is just adding to the demand and making things worse 
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, but at the end of the day, we need policymakers to really step in and make some changes 
. Maybe if they could figure out a way to address the root causes of this affordability crisis, we might actually start to see some real progress 
.
i mean seriously though, $375k median home price? that's like, super expensive even for a millionaire 
and don't even get me started on those first-time buyers, they're basically out of luck 
like who can afford to put 5% down? not me, that's for sure 
anyway, it's like the city is just gonna keep being all pricey and exclusive until someone actually does something about it 
maybe a few more infill housing initiatives will help, but idk, i'm no expert 
and now theres a shortage of listings? thats like a perfect storm of chaos 
the gov or policymakers need to step in and do somethin' ASAP 
i mean, 5.5% to 6% mortgage rate? that's not even a challenge for some ppl 
what r they supposed to do, just keep waitin'? 
. I mean, how can you afford a $375k home when you're not even getting any help from the government? The fact that cash buyers are being left out in the cold is just ridiculous 
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. I feel like we're just kicking the can down the road and waiting for someone else to fix it 
. And with mortgage rates expected to be around 5.5% to 6%, it's going to get even harder for people to compete 
prices are getting crazy in Chicago! 
it's like they're gonna need a miracle to make this market more affordable 
. And what about those who can't afford homes at 3% or 5% down? They're the ones getting priced out of the market, it's like a never-ending cycle 
They're driving prices up and making it super hard for regular people to get a foothold. I mean, $375k median home price? That's like crazy! And don't even get me started on first-time buyers... they're basically screwed. I remember when you could get a decent 3% down payment, now that's just history at this point. 
What's really frustrating is the lack of action from policymakers to actually do something about it. They just keep talking about initiatives and stuff, but what's happening on the ground? Not much, if you ask me. So yeah, if you're thinking of buying in Chicago right now, be prepared for a wild ride... or just stick with renting, I guess 
but affordability is a whole different story 
with no chance against cash offers. Time to get creative or move to Milwaukee 
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. The construction boom in other parts of the country is also playing a role in Chicago's inventory problems 
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. We can't just rely on private initiatives to solve this problem 
. It'll be tough for people to compete in the market with high mortgage rates and no new inventory 