Chicago’s residential and commercial real estate market saw significant changes throughout 2019. Ever-evolving, real estate markets may experience effects due to a range of factors. Events at the state, national, and global levels; tax changes; employment opportunities; and even the weather may drastically affect home and commercial property sales and purchases.
Finding Balance in the Housing Market
Staying on its upward trend, Chicago’s residential property market held strong through 2019. Home prices remain high through the city and suburbs. With more inventory hitting the market, potential homebuyers have more options, helping bring balance to the market. Further, mortgage rates have dropped to near-historic lows, incentivizing buyers. As the market levels out, more potential buyers see purchasing mid-range housing and upscale homes as a good value.
Changing Luxury Market
While the state’s luxury market largely faltered in 2019, some neighborhoods saw growth. Large homes in the suburbs have languished on the market; however, downtown condo sales saw exponential growth. Over the course of the year, there was an expectation that as many as 300 units would hit the market; representing the largest market availability since 2010. Large units in boutique condominiums, such as those in the Hayden West Loop project, traded at premium prices through 2019.
Falling Investment Sales
Illinois saw the sales of investment properties drop significantly over 2019. Business Insider reports Cook County saw a 42% decrease in commercial real estate sales. Employment options, population, market prices, and other factors have long drawn investors to the Chicago area. However, facing concerns over changes in the state’s assessment policies, the state’s economic health, and increasing taxes, many investors opted to purchase in other markets or have taken a wait-and-see approach before putting more money into purchasing apartment, hotel, office, and industrial buildings in the state.
Moving Forward with Megaprojects
Continuing with 2018’s megaproject trend, developers continued work on large scale projects through 2019. Several active developers in the area got project approvals, received sizeable tax subsidies, secured extensions to apply for federal funding, and broke ground. As of a December 2019 report, Chicago had 13 mega projects in the works. Other projects, such as the Presidential Center and Trump Tower Chicago, have not gotten off the ground or have sat on the market with little interest or success drawing tenants.
