Chicago’s hot housing market scaring off first-time buyers

Home seekers are being priced out of accessible neighborhoods: report

Chicago /
Nov.November 05, 2021 01:05 PM

The booming housing market has been pushing medium-income buyers to less expensive areas (iStock)

Chicago’s housing market is hotter than ever but the soaring home prices are keeping out first-time buyers.

The effect of these home seekers being priced out could impact the rental market and the accessible city neighborhoods and suburbs, the Chicago Tribune reported, citing a report from the Joint Center for Housing Studies at Harvard University.

Chicago had 120,000 fewer affordable housing units even before home prices skyrocketed this year due to a shortage of inventory, high construction and labor costs.

The report found that a buyer earning between 50 and 80 percent of the area’s median income could afford a house priced at $196,450 in June 2020. But one year later, a home that was 80 percent of the median price sold for $220,562, making it less accessible for low-income buyers.

The booming housing market has pushed medium-income buyers to less expensive areas including Garfield Park and Humboldt Park, where they would make offers over asking price. Residents of those neighborhoods lose bidding wars, and are likely to stay in rentals, ultimately driving up rent prices, the Tribune reported.

“It’s like this vicious loop,” said John LeTourneau, president of the suburban Mainstreet Organization of Realtors.

Changing zoning regulations to allow more high-density housing in some Chicago neighborhoods and offering a rehab loan for buyers of properties that need work are suggestions from real estate professionals.

But it comes down to investing in more affordable housing and programs that offer down payment assistance, Raheem Hanifa, Harvard research analyst, told the Tribune.

Measures to preserve affordable housing have to come quickly as there will be fewer places left for low-income buyers, she said. “And it’s creeping to middle income and folks that are higher in the future.”

Low-income families could afford a home in just 20 of the country’s 100 largest metro areas this year, down about 50 percent from 2020.

[Chicago Tribune] – Connie Kim





    Related Articles

    arrow_forward_ios
    The property lies on the South side of Smith Road, between Klein Road and Route 59 (Google Maps)
    Pulte scraps suburban Chicago subdivision after local pushback
    Pulte scraps suburban Chicago subdivision after local pushback
    11 E Walton Street, apt 5500 in Chicago (Redfin)
    Waldorf Astoria penthouse asking $15M comes back on the market
    Waldorf Astoria penthouse asking $15M comes back on the market
    Chicago, Homes, Rise, Stock Market Rewards
    Chicago down payments rise as buyers reap stock market rewards
    Chicago down payments rise as buyers reap stock market rewards
    Smith Road between Route 59 and Smith Road in Wayne Township with James Beifuss and Matt Garling (City of West Chicago, Google Maps)
    Pulte Homes hits roadblock on 266-unit West Chicago project
    Pulte Homes hits roadblock on 266-unit West Chicago project
    Fern Hill's Nick Anderson and render of Gold Coast condos (Fern Hill, LinkedIn)
    Developer plans condo project in Gold Coast
    Developer plans condo project in Gold Coast
    Matt Nagy and 570 Lansdowne Lane in Lake Bluff, IL (Redfin, Getty)
    Ex-Bears coach Matt Nagy lists Lake Bluff home for $5.95M
    Ex-Bears coach Matt Nagy lists Lake Bluff home for $5.95M
    1317 W Wrightwood Avenue (Google Maps)
    Over neighbors’ objections, couple seeks to tear down Lincoln Park home to build rentals
    Over neighbors’ objections, couple seeks to tear down Lincoln Park home to build rentals
    Alderman Anthony Napolitano, Chicago mayor Lori Lightfoot and rendering of Higgins Road Multifamily (Anthony Napolitano, Higgins Road Multifamily, Getty Images)
    Glenstar scores $24M tax break for O’Hare affordable housing
    Glenstar scores $24M tax break for O’Hare affordable housing
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...