Chicago Real Estate Market Analysis

1. Market Overview

Chicago’s real estate market remains stable but cautious entering 2025. Key indicators suggest moderate home value appreciation, relatively high inventory, and decreasing days on market, which could indicate increased buyer activity.

Key takeaways from the data:

Median sale price: $312,497 (December 2024)
Price per square foot: $209.84 (November 2024)
Sales count: 386 transactions (November 2024)
Days on market: 41 days (December 2024)
Inventory: 22,274 active listings (December 2024)
Rent index: $1,982 (December 2024)
Home value growth: 2.3% projected for 2025

2. Home Prices & Affordability

Median Sale Price Trends

Chicago’s median home sale price declined slightly from $317,431 in October 2024 to $312,497 in December 2024.
The price per square foot fluctuated in 2024, peaking at $223.29 in July, then decreasing to $209.84 in November.
While home values are projected to increase by 2.3% in 2025, appreciation remains lower than in previous years.

Affordability & Income Needed

Chicago remains relatively affordable compared to coastal metros. However, the estimated annual income needed to buy a median-priced home has not been reported for 2024 in the dataset.
With property taxes continuing to be a major burden, affordability calculations should factor in these costs.

3. Days on Market & Buyer Activity

Faster Sales in 2024

Homes spent an average of 41 days on the market in December 2024, a significant improvement from 51 days in early 2018.
The fastest-moving period in 2024 was June-July, where homes averaged 24-26 days on the market.
A reduction in days on market typically signals strong buyer demand or fewer listings, suggesting the market remains relatively healthy.

4. Housing Inventory & Supply Trends

Active inventory at the end of 2024 was 22,274 listings, a drop from a peak of 25,420 in October.
Chicago’s inventory levels are historically high, indicating plenty of options for buyers but potential price softening if demand doesn’t keep up.
Compared to 2018 levels (~48,000 listings), inventory has dropped by over 50%, reflecting long-term supply constraints.

5. Sales Volume & Market Competitiveness

Sales Activity Decline in Late 2024

Sales volume peaked at 520 homes in May 2024, before slowing down to 386 sales in November 2024.
This is a seasonal trend, with lower transaction counts in the winter months.
Sales activity is still stronger than 2018, when monthly transactions hovered around 250-300.

Market Temperature Index

Chicago’s market temperature index hit 76 in March 2024, indicating a balanced market, before cooling to 58 by September.
This suggests that buyer enthusiasm was stronger in early 2024, with signs of slower activity heading into 2025.

6. Rental Market & Investor Perspective

Rising Rents & Demand

Chicago’s ZORI (Zillow Observed Rent Index) reached $1,982 in December 2024, up ~3.5% from 2023.
Rent prices remain well below New York ($3,200+) and Los Angeles ($2,900+), keeping Chicago attractive to renters.
Multifamily investment remains strong, as high mortgage rates keep many would-be buyers in the rental market.

Investor Takeaways

Higher rental demand and slowing home price appreciation make Chicago a viable market for long-term rental investment.
Class B and C properties in emerging neighborhoods (South Loop, Bronzeville, Logan Square) remain in demand.
Cap rates are more favorable in Chicago (typically 6-8%) compared to coastal cities.

7. Home Value Growth & 2025 Forecast

Past & Future Appreciation Trends

Chicago’s home value growth for 2025 is projected at 2.3%, a slower rate than national averages (3-5%).
In 2024, home values grew 1.3% from March to December, reflecting a stable but unspectacular appreciation rate.
The strongest growth period historically has been March through July, aligning with peak buying season.

Conclusion: Where is Chicago’s Market Headed in 2025?

Based on current data trends, Chicago’s housing market in 2025 will likely experience: ✔️ Moderate home value appreciation (~2-3%)
✔️ Lower days on market (faster sales compared to past years)
✔️ Stable rental price growth (~3-4% YoY)
✔️ Potential buyer opportunities due to high inventory & slowing sales

🔻 Risks include:
❗ Higher property taxes impacting affordability
❗ A slowdown in transaction volume
❗ Potential inventory overhang in certain submarkets

Final Take

For Buyers: 2025 presents opportunities, especially in high-inventory neighborhoods.
For Sellers: Expect longer days on market in less competitive areas.
For Investors: Solid rental demand supports long-term buy-and-hold strategies.