
Chicago falls on Zillow's 2025 hottest markets list
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Chicago has fallen significantly on Zillow's latest hottest housing markets list.
Why it matters: Zillow's annual ranking forecasts the most competitive housing markets for buyers. Markets at the top of the list are largely "starved for housing inventory," the real estate platform shares with Axios.
- These regions tend to be relatively affordable with strong job and wage growth.
The big picture: Metro Chicago dropped 17 positions, from 22nd in 2024 to 39th in 2025.
How it works: Zillow analyzes forecasted home value growth, recent housing market velocity and projected changes in the labor market, home construction activity and number of homeowner households.
- Home value growth means how much prices in the area are going up and velocity refers to how quickly homes are selling.
- So for metro Chicago, prices from last year to 2025 are falling, while homes are sitting on the market longer.
Between the lines: Real estate broker Sammy Lubeck tells Axios that new construction in northern suburbs like Glenview, Northbrook and Burr Ridge has "definitely helped raise the median price."
- This is happening in the high-priced North Shore, too. "Kenilworth always sells for a premium price [but] Glencoe, you had nine properties in that three month period [July-Sept.] above $3 million sell. So I think you're seeing a lot more newer construction there in Glencoe, along with gut rehabs, which has definitely elevated the prices."
Zoom out: The hottest metro in the Midwest is Indianapolis, ranked No. 2 overall.
- Indianapolis is relatively affordable when compared to nearby Chicago metro. Strong employment and income growth has helped to support housing demand. That demand, combined with a lack of housing inventory, has kept competition for homes elevated.
Reality check: The days of 3% interest rates are gone — at least for the near future. So waiting to buy when interest rates drop is a waste of time, Lubeck says.
- "I do see a lot of people just wasting time and saying, 'Oh, we'll buy a house when the rates come down,' and they've missed out on so many great properties."
The bottom line: Affordability and inventory are the name of the game. If buyers really love a property, they should talk to a lender to understand what they can afford — and act quickly.
