With the spring market in full effect, below is my outlook for the 2020 Chicago real estate market. Let me know if you have any other questions about the value of your home or the outlook for 2020!
The market will see slow but steady growth.
Most economists agree that the real estate market will see slow but steady growth through 2020, driven by low inventory and low interest rates. However, the expectation is that the growth rate this year will be between 1-3%.
Expect to continue to see less inventory.
Expect to see a decline in inventory in the city. A big factor for this is that development is not keeping up with demand. Many buyers currently looking for homes are looking in the low to mid-price point, where inventory constraints are more exaggerated.
The key to growth in 2020 will be affordability.
There continues to be a growing demand for low to mid-range housing in Chicago, with very little inventory to show in that segment of the market. Although demographics are driving housing, Chicago’s inventory is not meeting the demand of the younger generations. Inventory is also tight in move-up segments of the market, which is further restricting entry-level housing.
Millennials are leading the housing market.
Demographics are driving the housing market, which bodes well for US homeowners where 60% of the population is under the age of 60. Millennials have the highest share of primary home mortgages.
Anticipate a pullback in construction throughout the city in most areas.
Housing construction throughout the city will see a decline for the second year in a row, although not in all neighborhoods. Areas with a population that is predominantly young and highly educated, such as Fulton Market are still seeing heavy action.