Illinois Real Estate Market: Predictions for 2024

Illinois homes continued to sell at eye-popping prices last month. The median home sale price rose 8.9% year-over-year from $236,700 to $257,800 in January. The number of homes sold also increased by 113 homes to 7,272.

Interest rates are at 7.28%, but is Illinois still a seller’s market? Let’s look at the facts.

Springfield homes sold for a median sale price of $385,000 in January, up 48.1% year-over-year. Homes in Peoria sold for a more than median sale price of $130,000, a 44.4% increase year-over-year.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 28.5% of homes sold above the list price!

• If You Are a Home Buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 8.5% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
• If You Are a Home Seller: You can lock in Illinois’s high home prices. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current Illinois real estate market statistics don’t reflect the national trend of high demand and low supply. Home sales and property prices in Illinois increased despite 2023’s slow market.

So, How Is the Real Estate Market in Illinois?

Swell! Home values in Illinois rose by 34.9% in the last 5 years. Home sales increased by 1.6% in January 2024 YoY despite the mortgage rate climbing to 7.28%! So, Illinois’s housing market is strong, if not bullish.

Even if mortgage rates continue to increase alarmingly, home sales will not falter. So, if you want to sell a Illinois property, now is the right time to list it on MLS.

» What is My Home’s Worth in 2024: Find your home’s market value in amid 2024’s current housing trends.

Illinois Real Estate Market Statistics

• Average Home Prices: The average median home price in Illinois is $257,800, up by 8.9% YoY. In 2024, experts predict the median sale price will increase due to the tight inventory. Currently, the sale-to-list price ratio is at 98.1%.
• Home Sales: As per January 2024 data, home sales increased by 1.6% YoY! In January 2023, 7,272 homes were sold, up from 7,159 in January 2023.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Chicago pays $2,251, while the one living in Columbia pays $1,395.
• Median Days on Market: The median days on the market for homes for sale was 58 days, down by 9 days YoY.
• Pending Sales: The number of homes for sale dropped by 15.3% YoY compared to 2023. Currently, there are 30K homes for sale in Illinois.
• Months of Supply: The average months of supply is 3 months. Illinois’s inventory isn’t as squeezed as the national housing market.

Illinois Housing Market Predictions 2024

Illinoians have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Illinois’s housing market:

1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.28% in January due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across IL YoY, reaching $257K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
5. New Home Constructions Sales Will Increase: Illinois DCEO, construction permits were increased by 1.6% in 2023, The increase in permits issued is a sign of a strong economy in Illinois.
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.

Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on an NAR-affiliated MLS.

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Illinois?

A housing market crash in Illinois is unlikely.

Illinois’ snowy wonderland of winter will continue to attract buyers. The Prairie State offers something for everyone, from urban adventures to outdoor recreation. This is also why 31,529 migrants chose Illinois as their next residential location.

Chicago was the fastest-growing city in 2023 and is home to a number of Fortune 500 companies, including McDonald’s, Boeing, and United Airlines. This strong economy has led to a surge in job creation, which has attracted new residents to the city.

Illinois job market is also strong. The unemployment rate is at 4.4%. In fact, Illinois’s private sector employment grew by 4.1% in January 2024, faster than the national average of 2.0%.

The average cost of living in Illinois is $49,588. The median household income of Illinois state is $73,000. Living on the grassland of Illinois is SO AFFORDABLE, making it one of the cheapest places to live in the U.S.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Illinois are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in IL was 37,000 in September 2023. This is close to the 45K homes in the summer of 2023, a period that is regarded as the best time to sell a house in Illinois.

In November, the mortgage rate plummeted from a two-decade-high rate of 8% to 7.35%, adding more new listings on the market. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on Illinois MLS.

The increase in new home listings in Illinois has also brought back home shoppers who were hugging the sidelines. In fact, the recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Illinois houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Illinois will increase. So, whether you are looking for a condo in Chicago or a single-family primary home in Springfield, you will find your dream home next spring.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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