Dr. Lawrence Yun, Chief Economist of the National Association of REALTORS®, presented his forecast for Chicago’s housing market in 2025 at the Market Outlook. Let’s examine the key factors shaping our industry’s future.
Shifting Market Dynamics
Pre-pandemic, downtown Chicago was highly desirable, while suburban homes struggled to find buyers. COVID-19 reversed this trend, making suburban properties more attractive. Now, Dr. Yun suggests we may be on the verge of another shift back towards urban living. This potential downtown revival is driven by employees returning to offices and rising rents in the inner suburbs.
Inventory Trends
While national trends show increasing inventory, Chicago presents a unique situation. Despite tighter inventory, home sales in Chicago increased in December compared to the previous year. This raises an intriguing question: What could happen if more inventory becomes available?
Dr. Yun believes we’ve reached the lowest point in inventory and expects more homes to enter the market in 2025. This prediction is based on life changes that may prompt even homeowners with low mortgage rates to sell, such as growing families, new job opportunities or retirement plans.
Midwest Affordability Advantage
As coastal markets face affordability challenges, the Midwest, including Chicago, is becoming more attractive to buyers. Chicago’s relatively affordable housing compared to coastal cities positions it well for potential growth. The region is experiencing faster price appreciation, indicating its growing appeal.
Nationwide 2025 Forecast
Dr. Yun projects a 9-13% increase in nationwide home sales for 2025. Conditions for growth in Chicago provide promising advantages, including:
- Expected increase in inventory
- Steady job growth
- Slightly lower mortgage rates
Implications for Chicago REALTORS®
As professionals in the Chicago real estate market, it’s crucial to stay informed about market trends so you and your business can adapt to any changes. Check out our monthly and weekly market statistics to stay up-to-date on data trends.