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A daily look at the most significant and interesting stories affecting Chicago. Written by Monica Eng, Justin Kaufmann and Carrie Shepherd.

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Data: U.S. Census Bureau; Chart: Axios Visuals

Chicagoans are increasingly turning to renovations as fewer homeowners want to sell.

Why it matters: A lack of inventory in most markets is fueling buyers' appetite for new construction, real estate experts say.

Yes, but: In the city, where there's less land for development, more people are opting to fix-up the home they already have.

"Anything being built sells for decent prices, but it's hard to find lots," Chicago builder Pat Cardoni tells Axios.

The big picture: Sales of existing U.S. homes, the great majority of houses sold nationally, slid 19% from a year earlier, while new home sales soared 24%, according to June figures.

The new-build boost comes after rising mortgage rates curbed pandemic-driven home buying demand.

Builder confidence is now at its highest level since June 2022, having declined every month that year, according to the National Association of Home Builders.

Zoom in: Sales of new Midwestern homes have fallen less sharply than those of existing houses.

The number of newly built homes sold in the Midwest ebbed 13% in June compared to a year earlier, per the U.S. Census Bureau.

Existing home sales dropped 19.5% during that time, according to regional figures from the National Association of Realtors.

The number of listings coming onto the Chicagoland market is down roughly 31% compared to June 2022, per Redfin.

Between the lines: Cardoni says his custom building company has seen a recent jump in demand for projects like converting two-flats into single-family homes and adding short-term rental space in the basement.

Of note: There's still some new construction activity in the area, particularly in the suburbs and near Guaranteed Rate Field, where Cardoni says lots cost about $200-210 per square foot.

Sales are up in newly built communities in the North suburbs, Madison and Milwaukee, Deborah Beaver with William Ryan Homes tells Axios.

What we're watching: Some builders are offering smaller, more affordable houses to lure first-time buyers, Axios' Matt Phillips reports.

Go deeper: Old houses now cost as much as new houses

Locked in place, Chicagoans renovate their homes

A lack of inventory is fueling buyers' appetite for new construction.

Real estate

A line chart shows newly built homes sold in the U.S. by region. U.S. is at the top with 697K, next is South at 460K, West at 143K, Midwest at 53K and last is Northeast at 41K

Chicagoans are increasingly turning to renovations as fewer homeowners want to sell.Why it matters: <a class="gtmContentClick" data-vars-link-text="A lack of inventory" data-vars-click-url="https://www.axios.com/local/chicago/2023/07/08/housing-supply-illinois-mortgage-rates" data-vars-content-id="31218490-4d85-4a1d-904a-6026b0e04720" data-vars-headline="Locked in place, Chicagoans renovate their homes" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/chicago/2023/07/08/housing-supply-illinois-mortgage-rates" target="_self">A lack of inventory</a> in most markets is fueling buyers&#x27; appetite for new construction, real estate experts say.<ul><li>Yes, but: In the city, where there&#x27;s less land for development, more people are opting to fix-up the home they already have.</li></ul>

Real Estate

Crisp white siding, natural wood and black roofs and window casings have become home design staples in Chicago's suburbs.

Why it matters: Modern farmhouses have dethroned McMansions as the suburban dream home.

Driving the news: The breezy, neutral style was popularized 10 years ago when Chip and Joanna Gaines launched HGTV's "Fixer Upper."

Zoom in: Homeowners are largely drawn to the trend because it "translates across geographic regions and looks equally appealing in suburban or more rural areas," Kate Marker, principal designer and owner of Barrington-based Kate Marker Interiors, tells Axios.

modern farmhouse kitchen with eating area

Photo: Courtesy of Stoffer Photography Interiors

The big picture: Retailers and homebuilders jumped on the bandwagon to give consumers what they want.

Target's home goods section is stocked with farmhouse-inspired Magnolia and Studio McGee collections.

The style dominates new-build communities around the country.

Of note: Some design experts predict the trend is here to stay.

"Accessibility has played a significant role in the phenomenon of the modern farmhouse," says Veronica Valencia, host of HGTV's "Revealed."

"As a homeowner, when you look at a simple modern farmhouse room, you immediately feel like, 'Oh! I can tackle that!' There are no bells and whistles to it. … It's simple and familiar," Valencia says.

If you want to incorporate the style at home, here are Valencia's top tips:

🪑 Accessorize with antiques and modern lighting.

🖼 Frame large, contemporary prints with natural wood.

🔨 Install shiplap vertically instead of horizontally, and then paint with your favorite color.

Yes, but: "It is a very ubiquitous look so personalizing is a key way to make your own home more distinctive," Marker says.

She suggests adding stone or brick exterior finishes, and embracing a darker contrast color on the exterior to break up the white.

Also, incorporate reclaimed materials in shutters, doors or beams to create a more timeless aesthetic.

Between the lines: The average consumer isn't ready to quit the approachable style.

What they're saying: "Pinners are also putting their own spin on the trend to make spaces feel like their own," says Swasti Sarna, global director of data insights at Pinterest.

Modern farmhouses dominate Chicago's suburbs

Modern farmhouses dethroned McMansions as the suburban dream home.

Crisp white siding, natural wood and black roofs and window casings have become home design staples in <a class="gtmContentClick" data-vars-link-text="Chicago&#x27;s suburbs" data-vars-click-url="https://www.axios.com/local/chicago/2023/06/10/chicago-suburbs-home-prices-soar" data-vars-content-id="6b2bb754-8eb3-4902-8cdf-1798a254d554" data-vars-headline="Modern farmhouses dominate Chicago&#x27;s suburbs" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/chicago/2023/06/10/chicago-suburbs-home-prices-soar" target="_self">Chicago&#x27;s suburbs</a>.Why it matters: Modern farmhouses have <a class="gtmContentClick" data-vars-link-text="dethroned McMansions" data-vars-click-url="https://www.nytimes.com/2023/07/07/realestate/modern-farmhouse-suburbs.html" data-vars-content-id="6b2bb754-8eb3-4902-8cdf-1798a254d554" data-vars-headline="Modern farmhouses dominate Chicago&#x27;s suburbs" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.nytimes.com/2023/07/07/realestate/modern-farmhouse-suburbs.html" target="_blank">dethroned McMansions</a> as the suburban dream home.

Data: RentCafe; Visual: Lindsey Bailey and Jacque Schrag/Axios

Chicago will be at the forefront of turning office buildings into apartments in the coming years, a new report shows.

Why it matters: Cities across the nation with fewer commuters and shuttered businesses are scrambling to revitalize downtowns in a post-pandemic world.

Driving the news: Roughly 70% of the units in Chicago's pipeline for conversions will be repurposed office spaces, exceeding the share in Los Angeles or New York City.

That's according to the report by RentCafe, which analyzed data from commercial real estate intelligence service Yardi Matrix.

Zoom in: The push comes as downtown Chicago foot traffic is at 52% of pre-pandemic 2019 levels, Axios' Alex Fitzpatrick and Kavya Beheraj report.

What's happening: Chicago has announced an initiative to revive the financial district along LaSalle Street, which last year logged the highest post-pandemic vacancy rates in the Loop.

The effort includes offering city financial assistance for proposals that will develop more than 1,600 mixed-income housing units.

The big picture: The national pipeline for office conversions is hot, even as those flips slowed from their record high in 2020. In Chicago, 2,454 apartments are expected to be created from office space in future years, according to the RentCafe report.

In 2022, Chicago transformed only 68 units. Midwest cities including St. Louis, Cleveland and Kansas City were among those with the most apartments converted from other building types.

Be smart: There's still demand for high-quality offices, says Ralph Zucker, CEO of the development firm that's transforming AT&T's former campus in suburban Hoffman Estates into a sprawling hub of work, residential and entertainment space.

What they're saying: Bell Works Chicagoland has proved particularly appealing to commuters (who want to work closer to home), suburban workers (who are reluctant to return to outdated offices) and those who want perks like a bar, cafe and pickleball courts close at hand, Zucker tells Axios.

The revamp has attracted more than 250,000 square feet of commercial leases since its inception in 2018, according to Inspired by Somerset Development, which plans to start building 164 high-end townhouses and about 300 apartments in spring 2024.

Of note: Conversions require time, money and effort. Not all projects will be completed, and some could take multiple years.

What we're watching: The conversion trend is poised to grow as more cities roll out incentive programs, according to Steven Paynter at Gensler, a global design and architecture firm.

Chicago will lead office-to-apartment flips, report says

The push comes as downtown Chicago foot traffic is at 52% of pre-pandemic 2019 levels.

Chicago will be at the forefront of turning office buildings into apartments in the coming years, a new report shows.Why it matters: Cities across the nation with fewer commuters and shuttered businesses are scrambling to revitalize downtowns in a post-pandemic world.

Data: RentCafe; Note: Includes buildings with 50 or more units; Table: Kavya Beheraj/Axios

Around 6,160 new apartment units are expected to be built across Chicago this year, down from roughly 8,970 in 2020, according to a new report.

Why it matters: A housing shortage in the U.S. has contributed to the rising cost of both renting and buying.

What's happening: Chicago is among the 20 metro areas where the bulk of new pandemic-era apartments are located, per the report by RentCafe, which analyzed data from real estate intelligence service Yardi Matrix.

Zoom out: A historic surge in new apartment supply — 1.2 million units were completed during the pandemic — helped curb rent growth nationwide, but some parts of the country saw more housing being built than others.

The big picture: Nearly three-fourths of renters say they're renting in an area where they couldn't afford to buy, according to a new survey from RealPage, a real estate analytics and software company.

Reality check: Around 89% of the U.S. units completed from 2020 through 2022 are high-end, per the report, and not the type of affordable apartments many renters want.

Flashback: Amenity-packed luxury apartment buildings are popping up across Chicago.

Asking rents for new leases in the Chicago metro area are up roughly 3% from a year ago, according to August data from RealPage.

What they're saying: Steep rents and choosy landlords pushed Kirsten Onsgard, a 30-year-old graduate student, to purchase a one-bedroom condo in Rogers Park.

Onsgard tells Axios they have "10 years of good rental history and plenty of savings — I just don't have the monthly income right now" to meet some landlords' requirements such as "4x rent in income."

Data: RentCafe; Note: Includes buildings with 50 or more units; Chart: Axios Visuals

Zoom in: Outside the city, far west suburb Warrenville, near Naperville, led Chicagoland in new apartments built during the last three years, per the RentCafe report.

What's next: Across the U.S., 1 million rental units are slated for completion through 2025, but higher costs and other headwinds could hinder developers' pace in future years.

"Tightening of bank lending standards — combined with rising costs of construction materials, labor and land — has made new projects harder to pencil," senior analyst Doug Ressler at Yardi Matrix says in the report.

Chicago new apartment construction declines

Rent prices for new leases in Chicago are still climbing.

Around 6,160 new apartment units are expected to be built across Chicago this year, down from roughly 8,970 in 2020, according to a new report.Why it matters: A <a class="gtmContentClick" data-vars-link-text="housing shortage" data-vars-click-url="https://www.axios.com/2023/06/20/housing-shortage-prices-high" data-vars-content-id="e80c9d4d-037c-47fd-aad8-ae282657c41d" data-vars-headline="Chicago new apartment construction declines" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/06/20/housing-shortage-prices-high" target="_self">housing shortage</a> in the U.S. has contributed to the rising cost of both renting and buying.

News

To command top dollar in Chicago's housing market, start by pulling up the carpet.

Mid-century homes here usually have coveted hardwood hiding underneath, according to Chicago broker associate Mike McCallum.

Why it matters: Homebuyers already hampered by gravity-defying prices and mortgage rates don't want to spring for a place that looks like an HGTV "before" photo.

What they're saying: "Get rid of the one thing that really dates your house as old," McCallum says: Replacing far-out faucets and removing bygone drapes are easy refreshes.

With fewer homes to choose from, some buyers will overlook big-ticket upgrades like appliances, McCallum tells Axios.

Zoom in: Even a fresh coat of paint can make a difference. Ashley Morse hired a painter to glaze her Lakeview home's multicolored kitchen backsplash with Benjamin Moore's "Linen White," to match the walls.

"The space instantly felt brighter, cleaner and wider," Morse tells Axios.

Be smart: In Chicago, Taskrabbit gig workers charge an average hourly rate of $57 for minor home repairs, according to the platform.

The big picture: Self-identified fixer-uppers are typically selling for less, and more slowly, than expected, per Zillow data shared with Axios.

Across the U.S., listings that mention "fixer-upper" — 0.3% of sales in the first half of the year — sold at a 3.1% discount and took 3.2 days longer to sell relative to expectations.

Listings pegged as "remodeled" or "renovated," which accounted for 24.1% of U.S. sales, sold at a 1.2% premium and 1.8 days faster than expected.

"Most home buyers right now simply don't have enough money left over to invest in major repairs or remodeling," Redfin deputy chief economist Taylor Marr tells The Wall Street Journal.

Data: Redfin; Note: Metro divisions are subdivisions of metropolitan areas; Chart: Axios Visuals

By the numbers: Less than 13% of Chicago-area homes in July were snapped up in two weeks or less, according to Redfin data shared with Axios.

That's the smallest share among major metro divisions nationwide. Around 41% of U.S. listings were marked pending, contingent or sold within that window, Redfin found.

State of play: Houses that stay on the market for more than a month are usually overpriced or in need of major work, according to Redfin's Taylor Marr.

We spotted this West Ridge home, described as needing a little elbow grease, with hardwood floors and old-timey drapes. Listed for $393,500, it's spent at least 40 days on the market.

Chicagoland homes go off-market after a median of 49 days, remaining flat from a year ago, the Redfin data shows.

Be smart: Homes in the Chicago metro are still selling slightly over asking price, on average, compared to this time last year, per Redfin.

Listings that mention "fixer-upper" comprised 0.1% of Chicagoland sales in the first half of 2023, per the Zillow data, while those advertised as "remodeled" or "renovated" made up 26.9%.

Go deeper: This extreme fixer-upper on South LaSalle Street recently sold for $1.

Fixer-uppers are scaring off Chicago home buyers

We asked a local selling expert about fixes worth making.

Illustration of two hammers forming an "X" shape. 

To command top dollar in Chicago&#x27;s housing market, start by pulling up the carpet.<ul><li>Mid-century homes here usually have coveted hardwood hiding underneath, according to Chicago broker associate <a class="gtmContentClick" data-vars-link-text="Mike McCallum" data-vars-click-url="https://www.bairdwarner.com/agent/105492-mike-mccallum/" data-vars-content-id="ed10f309-0b1f-4786-92a8-9d499d5dcde3" data-vars-headline="Fixer-uppers are scaring off Chicago home buyers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bairdwarner.com/agent/105492-mike-mccallum/" target="_blank">Mike McCallum</a>.</li></ul>Why it matters: Homebuyers already hampered by <a class="gtmContentClick" data-vars-link-text="gravity-defying prices" data-vars-click-url="https://www.axios.com/2023/08/17/housing-prices-affordability-rise-fall-2023-goldman-sachs" data-vars-content-id="ed10f309-0b1f-4786-92a8-9d499d5dcde3" data-vars-headline="Fixer-uppers are scaring off Chicago home buyers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/08/17/housing-prices-affordability-rise-fall-2023-goldman-sachs" target="_self">gravity-defying prices</a> and <a class="gtmContentClick" data-vars-link-text="mortgage rates" data-vars-click-url="https://www.axios.com/2023/08/22/mortgage-rates-current" data-vars-content-id="ed10f309-0b1f-4786-92a8-9d499d5dcde3" data-vars-headline="Fixer-uppers are scaring off Chicago home buyers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/08/22/mortgage-rates-current" target="_self">mortgage rates</a> don&#x27;t want to spring for a place that looks like an HGTV &quot;before&quot; photo.

Sami Sparber

Featured stories

Chicago new apartment construction declines

Fixer-uppers are scaring off Chicago home buyers

Locked in place, Chicagoans renovate their homes

Modern farmhouses dominate Chicago's suburbs

Chicago will lead office-to-apartment flips, report says