You're probably hearing a lot about rising interest rates and a shifting real estate market, but what's happening in other parts of the country is not what's happening in Chicago. (Here is a great article summarizing the national real estate landscape.)

First, Chicago didn't experience a 30-40% increase in value over the last 2 years like many other cities in the south and southwest did. I met a buyer moving here from Tampa last week; he purchased his home for $340,000 in 2020 and it is under contract for $610,000!

Here, the median sale price for Bucktown condos in Sept 2019 was $415,000 and in Sept 2022 it was $445,000. For Gold Coast condos, the median price in Sept 2019 was $386,000 and in Sept 2022 it was $400,000.

In real estate, supply and demand is measured by months' supply of inventory. More than 7 months of inventory is a buyers' market; less than 5 months is a sellers' market and in between 5-7 months is a balanced market (which happens very rarely). The areas of the country that saw these significant increases are now seeing a sharp drop-off in buyer demand and increasing inventory.

However, in Chicago, inventory is still relatively low. Here are current inventory levels for condos in a handful of neighborhoods:

• Lincoln Park: 2 months

• Gold Coast: 3.9 months (down from a high of 9 months in May 2021)

• Wicker Park: 1.2 months

We measure buyer demand by the number of units going under contract. In Chicago, buyer demand is back to 2019 levels, so we are experiencing a more "normal" fall market. Here are the number of condos that went under contract in Lincoln Park between Sept 1-Oct 15 over the last several years:

• 2019: 82 under contract

• 2020: 119 under contract

• 2021: 154 under contract

• 2022: 89 under contract

So although inventory is still low and interest rates have increased, buyers have it much better than they have throughout the pandemic because there is a lot less competition with other buyers this fall.

Bottom line:

Chicago is back to our typical fall market where buyers have more room to negotiate and sellers need to be realistic with their list prices.

Interest rates are rising faster than prices are going down, so this fall is a great opportunity for buyers.

I do not expect a significant drop in value in our market since we did not experience a huge pandemic uptick like many other cities.

Despite rising interest rates, I predict we will also see a typical "spring" market beginning in mid-January with more buyer demand and still limited inventory.

Ready to find your perfect home?

We can help you move forward.