In recent data, Chicago was one of 12 major U.S. markets where the new-home sales volume and sales rate were "significantly overperforming" historical market averages, according to the new Zonda Market Ranking.
Additionally, Chicago was one of the three markets that overperformed historical averages the most in November, along with Florida's Tampa and Port St. Lucie. Since summer, Chicago and Detroit have posted some of the largest year-over-year gains on the S&P CoreLogic Case-Shiller Home Price Index.
Prices in Chicago and Detroit did not overheat as much as other markets during the pandemic, and now these two metros are reaping the rewards.
Strengths
Buyers continue to seek newly built quick move-in (QMI) homes. Chicago’s three-month average number of QMI homes per project has decreased consistently since its most recent peak in May and fell under 1 as 2024 began.
Weaknesses
Chicago’s rate of year-over-year job growth has slowed and has trailed Illinois and the nation for most of the past 12 months. In October data, year-over-year job losses were observed across all but three metro employment industries. Illinois' property tax of 2.2% is the second highest nationally.
Sales
New-home sales in the Chicago-Naperville-Elgin,IL-IN-WI metropolitan area increased 5.2% year over year to an annualized rate of 6,221 units in November. Existing-home closings for the 12-month period ending in October posted a year-over-year decline of 36.1% to an annualized rate of 108,068 units.
Prices
The average list price for a new detached home in the region increased 0.6% from 2022 to $454,232 in December, while the average list price for a new attached home increased 7.7% over the same period to $561,348. Homes priced under $250,000 experienced the most closing activity over the past year. The new-home affordability ratio for a detached home reached 28.1% in October.
Economy
Total nonfarm employment in the metropolitan statistical area increased 0.9% from the same period in 2022 to 4,776,900 payrolls in October, with approximately 14,400 fewer jobs compared with the previous month. The local unemployment rate increased to 4.4% in October compared with 4.1% in the previous month. October's jobless rate was lower than the same time the previous year when it stood at 4.7%. Zonda had forecast the region's unemployment rate to end 2023 at 4.9%.
Community
The population for the metropolitan area is approximately 9,411,460 people and is projected to decrease by 0.3% this year. There are approximately 3,665,140 households in the region, which is up 0.2% year over year. Forecasts show that current household formation is expected to decrease by an annual growth rate of 0.4% for 2028. Incomes increased by 4% from the previous year to $90,760.
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