According to a recent real estate forecast, the Chicago area is predicted to have the weakest housing market among 100 U.S. metropolitan areas looked at for the study. The forecast looked at both the median price and the number of homes sold locally, both of which are predicted to decrease in 2019.
The report forecasts that in 2019 the number of home sales in the Chicago area will drop by 7.4 percent while the median sale price will decrease by 1.9 percent.
Chicago previously ranked at the bottom of the list in 2017. This return to the lowest rung is a disappointment for the city. In comparison, there were just three other areas that were predicted to move down on the list in regards to both price and the number of home sales. However, Chicago’s predicted decrease far exceeds the negative forecast for those markets.
“The real estate market will be a reflection of what we’re seeing in the Chicago economy in general,” stated Danielle Hale, the author of the report and chief economist for Realtor.com which conducted the study. She elaborated by explaining that Chicago is experiencing slower population and employment growth compared to other metropolitan areas, which has a negative effect on local home sales. Other factors that Hale attributed to the negative plunge for Chicago include property tax increases, higher mortgage rates, and a decrease in the federal deduction for property taxes which will particularly affect Chicago’s real estate market because of the many high value homes there.
While this news will not be perceived as positive by homeowners seeking to sell their property, these figures will certainly be advantageous for the people looking to purchase a new home. The Law Offices of Marc J. Blumenthal, Ltd. reiterates this trend, noting that “metros with the most affordability include Allentown, Pennsylvania; Rochester and Albany, New York; New Haven and Hartford, Connecticut; Chicago, Illinois; and Worcester, Maine.”
Hale added that she does not see this downward move as particularly worrisome for Chicago. She would be more concerned, she explained, if the decline “were doubled with inventories that were piling up on the market.” On the contrary, the Chicago-area inventory of homes for sale is still relatively limited. She added, “If more homes could come up for sale, more would sell.”