Chicago Real Estate Market 2021

Chicago Real Estate Market Trends & Statistics 2021

With higher real estate prices and lower-than-average job and population growth, the Windy City may not seem like a “good” place to invest in real estate. That being said, it is one of the few cities in the nation where housing prices still haven’t risen above their 2006 levels. When focusing on finding the highest capital growth and cash flow, you’ll find some Chicago neighborhoods offer homes at $130,000-$248,400 with rents as high as 1.23% of the purchase price every month. All of this is good news for investors looking for under market value properties, with tremendous monthly cash flow, and poised for steady appreciation. Explore Chicago’s housing market, population, and employment trends in the next tabs to learn more.

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Data Sources:

• https://www.zillow.com/
• RealWealth Property Team Data
• https://factfinder.census.gov/
• https://www.deptofnumbers.com/

Chicago Real Estate Market Prices are Still Affordable

 

• The median price of the average home in the Chicago metro area was $248,400.
• This is 2% less than the national average of $254,000 for average homes.
• In the neighborhoods where RealWealth members invest, the median purchase price was only $130,000 in 2020, which is 49% more affordable than the national average.
• This shows us that real estate in Chicago is still more affordable than many other areas in the United States today.

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Chicago Rental Income is Strong

• In 2020, the median monthly rent for average homes in Chicago was $1,783, which is 0.72% of the purchase price of $254,000. This is higher than the national purchase-to-rent ratio of 0.68%.
• In the neighborhoods where RealWealth members invest, the median monthly rent of R.E.A.L. Income Properties™ was $1,600 per month, which is 1.23% of the $130,000 median purchase price.
• This shows us that Chicago offers investors a strong opportunity to generate cash flow at a significantly higher rent-to-purchase ratio than many cities across the nation today.

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Chicago Offers Steady Equity Growth Potential

• Over the last 6 years, the average home in the Chicago metro has appreciated by nearly 23%, compared to 36% nationally. 
• This shows us that Chicago home prices have been rising more slowly than other U.S. cities, but what’s important is that they have been increasing. This is a good indicator that Chicago’s real estate market is more stable than quickly appreciating/depreciating markets.

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Chicago Rents Have Been Rising Consistently

• Between 2014 and 2020, the median monthly rent for average homes in Chicago has increased by 14%. Nationally, rents increased by 23%.
• Although rents have risen more slowly than other U.S. metros, it’s important to note that Chicago has a higher rent to purchase ratio than the national average.
• The median home in Chicago rents for 0.72% of the purchase price. Nationally, average homes only rent for 0.68% of the purchase price. This is a good sign that Chicago offers investors a good opportunity to make more passive monthly income over the next few years.

The Chicago Real Estate Market is Not Experiencing Significant Population Growth

• Since 2010, Chicago’s population decreased by 0.13%, compared to the national average growth of 6%.
• While Chicago’s population growth is well below the national average, it’s important to note that it’s holding steady. This is a good sign for investors looking to invest in more stable markets.

Chicago Job Creation is Lower Than Other U.S. Cities

• In the past year, Chicago experienced 330,400 job losses due to COVID-19- an annual loss rate of 7%. This year, the U.S. annual job loss rate was 6%.
• According to Michael Lucci, vice president of policy at the right-leaning Illinois Policy Institute, neighboring states offer stronger job and business opportunities than Illinois today. This is especially true for younger, working-age adults, who make up some of the largest groups leaving the state.

Chicago is Still Affordable

• In the Chicago neighborhoods where RealWealth members invest, the median purchase price was only $130,000 in 2020, which is 49% more affordable than the national average.
• This shows us that real estate in Chicago is still more affordable than many other areas in the United States today. In the neighborhoods where RealWealth members are investing property values are even more affordable.

Chicago Rents are Strong

• In the neighborhoods where RealWealth members invest, average homes rent for a median $1,600 per month, which is 1.23% of the $130,000 median purchase price. This is 81% higher than the national average.
• This shows us that, in some Chicago neighborhoods, there is a strong opportunity to generate cash flow at a significantly higher rent-to-purchase ratio than many cities across the nation today.

Chicago Offers Some Equity Growth Potential

• Since 2014, the median price of homes in Chicago has appreciated by almost 23% (compared to 36% nationally). 
• The median rental price for average homes appreciated by over 14%, nearly 37% slower than the national average.
• This shows us that Chicago home prices have been appreciating more slowly than many other U.S. cities. They have been rising, however, which is a good indicator that Chicago’s real estate market is more stable than quickly appreciating / depreciating markets.

Chicago is Not Growing as Much as Other U.S. Cities

• Since 2010, Chicago’s population decreased by 0.13%. During the same period the national population grew by 6%.
• In the past year Chicago lost over 330,000 jobs due to COVID-19 – an annual job loss rate of  7%. This is just above the U.S. annual job loss rate of 6%. Showing us that Chicago’s diverse economy is keeping the job market somewhat stable.