Chicago's North Side Real Estate Market | 2024 In Review

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 Chicago's North Side Real Estate Market | 2024 in Review

How sluggish is the current real estate market? We're currently experiencing the slowest market in well over a decade, and the latest inventory data suggests that the pace of real estate transactions is likely to slow even further. Unless driven by a significant life event, most people simply don't want to move. Buyers are hesitant to purchase with mortgage rates hovering around 7%, while sellers are equally reluctant to give up their historically low 2-3% rates. The result is a stalemate: a slow but appreciating real estate market.

As of December 31, total real estate transactions on Chicago's North Side increased by 4.0%, a slight uptick after 2023's dramatic 35% decline. Inventory levels—homes and condos listed for sale—are at historic lows, which suggests that, barring an unexpected catalyst, this slow pace will likely persist into the 2025 selling season. While each neighborhood has its own unique data, this general slowdown is consistent throughout Chicago.

In this newsletter, we'll break down the current state of the North Side of Chicago real estate market (defined as Chicago St to Lawrence Ave, and Lake Michigan west to California Ave, covering the neighborhoods of Lincoln Park, Lakeview, Bucktown, Wicker Park, Roscoe Village, North Center, Lincoln Square, and Ravenswood). We'll explore the causes behind the slowdown, current inventory levels, valuations, and offer our forecast for the 2025 selling season. Let’s dive in.

Data Insights

Who doesn’t love data? We certainly do, which is why we track Chicago's housing trends so closely. It's impossible for us to represent your best interests without a thorough understanding of the data that drives housing supply and demand. While the figures below provide a macro or high-level overview of the North Side real estate market, it's equally important to analyze similar data specific to the neighborhood and property type you're interested in. Our team is happy to share our expertise and insights. If you have specific questions about Chicago or suburban real estate, don't hesitate to reach out. We’re here to help.

Closed Sales | North Side 

As of December 31, 2024, closed real estate transactions on Chicago's north side increased by 4.0% compared to the same period in 2023. The graph below, which shows monthly sales data, uses a 12-month rolling average (month-to-month data can be too volatile and may not accurately reflect current market trends). The graph highlights the extraordinary spikes in 2021 and 2022, when sales soared after COVID-19 restrictions were eased.

The headline 4.0% year-over-year increase follows 2023's 35% drop in sales transactions. We're now trending at decade-low sales volumes, and as you’ll see in the data and commentary below, contracted properties and inventory levels point to a market that may continue to slow.

The good news? Property valuations are still rising, which we’ll cover shortly. The reduced demand—driven by higher interest rates and market uncertainty—is being more than offset by historically low inventory levels. Buyers are hesitant to take on a 6-7% mortgage, but many sellers are unwilling to part with their rock-bottom 2-3% rates. This has created a slow market with steadily increasing valuations.

_{Closed transactions increased 4% for the rolling 12 month period ending Dec 31, 2024}

Inventory Levels | North Side 

Inventory levels on Chicago's north side are exceptionally low, nearly off the charts (see below). As of December 31, 2024, the number of listed homes (single-family homes and condos) is down 14.2% compared to the previous year. This follows a 34% drop in inventory levels in 2023 compared to 2022. To put this into perspective, nearly 5,400 properties were for sale on the North Side in 2011. Today, we have just 1,204 properties listed, a staggering 77% drop from the peak year in our data series.

Low inventory levels actually help support property valuations, which we will discuss further. We anticipate these low inventory levels to continue for the foreseeable future.

_{Current inventory of SFH & condos are down 14.2% for 12 months ended Dec 31, 2024}

Contract Activity | North Side 

Contract activity is one of the most important metrics to understand when assessing the current real estate market, especially when combined with inventory levels. The year-end data for 2024 shows that contract activity for single-family homes and condos increased by 3.9% when compared to 2023. While this might suggest stability in buyer behavior, it also indicates that valuations will continue to rise, given how low inventory levels have fallen.

_{Contracts accepted increased 3.9% for 12 months ended Dec 31, 2024}

Median Sales Price | North Side 

Real estate valuations on the North Side of Chicago increased by 8.7% over the 12-month period ending December 31, 2024. This is particularly strong considering that many regions across the country are experiencing declines of over 10%. In contrast, many Chicago neighborhoods and suburbs are seeing steady increases in value, driven by demand outpacing the limited supply of available homes.

I expect this trend to continue, particularly as interest rates begin to decline and urban living becomes more desirable again on a national scale.

_{Home values increased by 8.7% for the 12 months ended Dec 31, 2024}

Market Insights & Outlook | North Side 

Persistently high mortgage rates and rising home valuations continue to sideline many prospective homebuyers, as concerns about inflation, bank volatility, weakening economic growth, and the potential for a recession loom. Additionally, Chicago faces challenges such as crime rates, ongoing remote work trends, and an increasing trend of suburban migration—all of which may affect demand for urban housing.

How the Chicago market will perform moving forward is difficult to predict. With many homeowners locked into historically low mortgage rates, we expect many will opt to stay in place unless absolutely necessary to sell. Others may choose to rent their homes and take advantage of their low mortgage payments. All of these factors point to continued low inventory levels, which could, in turn, drive property valuations even higher if demand continues to remain strong.

We're Here to Help

If you're in the market to buy or sell a home, please don't hesitate to reach out. Our goal is to educate, communicate, and execute to the best of our abilities, ensuring that your next real estate transaction is a complete success.

Contact Us Today:

📞  773-330-5356 (call or text)

✉️  [email protected]

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