Home prices keep sliding in Chicago, prolonging a trend that started last year after the post-pandemic housing boom peaked.
May marked the seventh straight month in which home prices declined in the Windy City, the longest stretch of price drops since a 13-month period from 2010 to 2011, potentially hindering the city’s economy more broadly, Crain’s reported.
The median price of homes sold in Chicago fell 4.4 percent year-over-year in May to $335,000, the outlet reported, citing data from Illinois Realtors. That drop-off is greater than the nationwide figure of 3.1 percent, according to the National Association of Realtors.
Prices in the city have been down year-over-year in eight of the past 10 months, with October being the only month in which gains were registered. Population losses, perceptions of crime levels and the remote work movement pulling demand away from the city are among reasons for the drops.
While some pockets of the city might be more resilient than others, studies show that the trend is occurring citywide. From January through May, the median prices of homes sold were down compared to 2022 in neighborhoods like Albany Park, Avondale, Hyde North Center, Rogers Park and West Town, among others. Prices are down across the entire nine-county Chicago metro, as well.
Sales activity has also slowed significantly. In Chicago, 2,397 homes sold last month, which is significantly less than any other May since 2012, excluding an anomaly year in 2020. The 8,952 homes sold in the metro last month was also, besides May 2020, the fewest amount since May 2012, the outlet reported.
Things may seem bleak for the Windy City’s housing market, but certain measures are being deployed to keep the market afloat until the market recovers more broadly.
One solution is builder buy-downs. Developers have been using this tactic to keep prices elevated as much as possible, as it allows builders to pay a portion of a home’s cost upfront to lower the interest rate, essentially discounting the property without lowering the official asking price.
— Quinn Donoghue
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