Metropolitan areas are notorious for their high housing costs. Arguably one of America’s most sought-after cities, Chicago is no stranger to increased home prices, either. New data reveals that Chicago-area existing residential property prices rose 8.9% as compared to their prices a year ago.
The Chicago Tribune reports that the median price of a single-family home jumped a staggering 11.6% at the end of 2015. Condominiums saw a less-dramatic increase in price but still rose a full 4.3%.
The average price of a single family home is now at $217,700, according to the article.
Meanwhile, the National Association of Realtors said the median existing-home price for all housing types in December was $224,100, up 7.6% from a year ago.
In addition to the cost of a mortgage, studies indicate that homeowners will spend between 1 and 4% of a home’s value annually on maintenance and repairs. Overall, the average price of a home in the Chicago area beats out the state average.
What do these numbers mean for home buyers? Realtors and industry experts say even with the increase in prices, now is the best time to make a purchase.
“The Illinois housing market continued to make positive strides in 2015,” Mike Drews, president of the Illinois Association of Realtors, said in a news release. “Buyer demand remains strong even amid tighter winter inventory, and higher home prices bode well for homeowners thinking of selling.”
Although December is typically a slow month for sales, more than 8,265 homes were sold in the nine-county Chicago area last month. This is a 2.1% increase from December 2014, proving the strength of the Chicago housing market.
Dan Wagner, president of the Chicago Association of Realtors, said, “The Chicago market continues to post strong price gains, reflecting consumer interest in being in a vibrant city and a continuing shortage of available homes from which to choose.”
Despite the recent increases, Chicago home prices are still below where they were pre-recession (adjusted for inflation). Many cities in America are struggling to recover from the economic decline of 2008, but Chicago-area homes saw better price trends than those nationally.
Home sales totaled 111,462 for the entire year: a 6.6% increase overall from 2014.
Alvin “Chip” Wagner III of A.L. Wagner Appraisal Group in Naperville stresses the importance to buy now, citing the basic law of supply and demand. Supply is low, so demand is high.
“The residential housing market in the Chicago region continues to see an undersupply of housing, and, with the increasing trend of homes under contract, it’s likely that we’ll continue to see increasing values in 2016,” he said. “The reduced inventory of distressed housing, including short sales and foreclosures, is also helping our average sales price growth.”
The article closes out with one last interesting factoid: real estate markets tend to do better during years of presidential elections.
