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Chicago Alerts

A daily look at the most significant and interesting stories affecting Chicago. Written by Monica Eng and Justin Kauffman.

Axios Chicago Thought Bubble

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

Axios Chicago

Data: Freddie Mac; Chart: Madison Dong/Axios Visuals

The Chicago metro area's  real estate market is starting to level off, writes Axios' Sami Sparber. 

Why it matters: After two-plus years of plummeting inventory and sky-high home prices, buyers have waited a long time for a little relief.

What's happening: Mortgage rates started to surge in May and have since passed 7%, squeezing homebuyer budgets and making monthly mortgage payments significantly more expensive than they were a year ago.

By the numbers: Pending sales are down 28.1% since May, according to the latest data from Redfin/MLS.

Median home sales prices fell from $329,000 to $305,000 from May to September.

In September, 23.3% of listings had price cuts, up from 13.2% in May.

More than 31% of homes sold above list price in September, down from 53.2% in May.

And homes sold in 57 days in September compared with 48 days on average in May. 

The bottom line: Chicago's market is calmer, but buying a home right now isn't necessarily cheaper.  

Buying a house in Chicago is finally easier — but not cheaper

Why it matters: Buyers have waited a long time for a little relief.

The Chicago metro area&#x27;s real estate market is starting to level off, writes Axios&#x27; Sami Sparber. Why it matters: After two-plus years of plummeting inventory and sky-high home prices, buyers have waited a long time for a little relief.

Real Estate

The season of giving is almost upon us, so we found a few volunteer opportunities with local organizations that need your help.

But, but, but: Don't stop here. There are dozens of other worthy causes in and around Chicago.

Play with, socialize and train adoptable pets at Paws Chicago.

Why it matters: Volunteering helps animals at the shelter find a caring home.

What to expect: Opportunities include providing hands-on care for dogs and cats and helping folks navigate the adoption process.

Details: Complete an online application to get started. Those under 18 years of age can volunteer with a parent or guardian.

Other needs: Consider fostering a pet, or support the organization's community events and outreach.

Help plan and execute an Honor Flight Chicago experience.

Why it matters: The organization treats veterans to a trip to Washington, D.C., to visit war memorials.

What to expect: Volunteers assist with pre-flight operations at Midway Airport, fundraising, outreach and more.

Details: Hundreds of volunteers are needed. Apply online to get involved.

Lend a hand at Greater Chicago Food Depository.

Why it matters: In fiscal year 2022, the food bank served a phenomenal   77.3 million meals.

What to expect: Roles range from repacking bulk products into family-sized portions to distributing fresh produce in the community.

Details: Check this calendar for dates and availability. Those over age 16 can volunteer independently, and younger volunteers (ages 11-15) are welcome with adult supervision.

Other needs: Start a virtual food drive, or donate shelf-stable items in person.

Donate great reads or spend time volunteering at Bernie's Book Bank.

Why it matters: The organization provides free, high-quality books to underserved Chicagoland children.

What to expect: Help sort, sticker and pack books at its Lake Bluff processing center.

Details: Anyone can volunteer. Sign up online for a morning, afternoon or evening session.

Other needs: Organize a book drive or donate new and gently used children's books at a location near you.

5. Support those experiencing homelessness

Get involved at Lincoln Park Community Services.

Why it matters: The shelters serve folks across Chicago who are at risk of or are currently experiencing homelessness.

What to expect: Cook a meal, teach a class or work a front desk shift at centers in Lincoln Park and Old Town.

Details: Browse and sign up online for volunteer opportunities, including virtual, off-site and onsite options.

Other needs: Donate clothing, hygiene products and other items from the organization's wish list.

Know a worthy cause? Email us at chicago@axios.com, and we may feature your nonprofit in an upcoming newsletter.

Volunteer guide: 5 ways to give back in Chicago

Here are some ways to help your community during the season of giving.

Illustration of a welcome mat that reads "help"

The season of giving is almost upon us, so we found a few volunteer opportunities with local organizations that need your help.<ul><li>But, but, but: Don&#x27;t stop here. There are dozens of other worthy causes in and around Chicago.</li></ul>

Things to Do

Data: Moody's Analytics; Table: Kavya Beheraj/Axios

 Rent is still getting pricier in Chicago, but renters are faring better here than in much of the U.S. 

Driving the news: In the fourth quarter of 2022, the average asking rent in Chicago was $1,830, up 8.2% from a year earlier, per economic research firm Moody's Analytics.

Still, that percentage is lower than the national average. 

Why it matters: Affordability concerns are starting to weigh down the booming rental market, Axios' Sami Sparber writes.

What's happening: Many would-be homebuyers chose to rent longer last year, sustaining apartment demand, economists at Moody's Analytics say. But folks are hitting their spending limit.

For the first time in over two decades, households now have to spend 30% of their income on average rents, a new report shares.

What they're saying: Year-over-year rent growth slowed across the board in the second half, "and we expect further deceleration as new supply makes it to market at the same time the labor market softens," senior economist Lu Chen tells Axios.

Experts recently predicted that Chicago rents could start normalizing this year to increases of 2% to 4%, Crain's reported.

Zoom out: Rents are already falling in cities near the epicenter of the pandemic home-price boom, Axios' Matt Phillips reports, citing Realtor.com data.

What we're watching: New apartment construction. The expected surge in supply could help reduce prices.

Downtown Chicago could see 2,900 new apartments completed this year and 5,600 in 2024, real estate valuation specialist Integra forecasts, per Crain's. That would be the most added downtown annually since at least 1999, according to Integra data.

Yes, but: Many haven't broken ground yet and could face delays due to financing or permitting issues, experts tell Crain's. 

The bottom line: Most cities will "remain undersupplied with the kind of affordable units that see the highest demand," per the Wall Street Journal. 

Chicago rents are still high, for now

Experts predict that Chicago rents could start normalizing this year.

Housing

Rent is still getting pricier in Chicago, but renters are faring better here than in much of the U.S. Driving the news: In the fourth quarter of 2022, the average asking rent in Chicago was $1,830, up 8.2% from a year earlier, per economic research firm Moody&#x27;s Analytics.

News

Local experts predict mortgage rates, which hover above 6%, will shape our real estate market in 2023, reports Axios' Sami Sparber.

There will be a resurgence toward city living

More favorable and level interest rates will help normalize the market, predicts Matt Silver, partner and senior broker with Corcoran Urban Real Estate.

If coupled with a steady return to offices and low COVID-19 levels, this could "spur the rebirth of the Loop," Silver tells Axios.

Those market shifts could boost sales volume and help stabilize prices, says Silver, president-elect of Illinois Realtors.

A lack of inventory, along with higher interest rates, could make the year challenging for homebuyers, predicts Rich Kasper, founder of The Kasper Group.

"Today's first-time buyers knew nothing of interest rates above 6 or 7%, so the shock of what that equates to on their monthly payment will need to be digested," Kasper tells Axios.

Meanwhile, homeowners who have locked in a favorable rate are reluctant to sell, Kasper says.

More first-time buyers will enter the market

Pent-up demand among first-time buyers will activate in the first quarter, predicts Tommy Choi, co-founder of Weinberg Choi Residential. A large group of future first-time buyers are still living with their parents, Choi says.

As these young professionals move into a hybrid or fully in-person work environment, Choi foresees them "jumping straight into homeownership."

That's because of rising downtown rental prices and "how much money this group has saved for a down payment by living at home," he tells Axios.

Yes, but: Chicago renters earned just 69% of the income they would need to afford a starter home, per October figures.

2023 will be challenging for Chicago homebuyers, experts say

One agent predicts more first-time buyers will enter the market.

Illustration of the year 2022, with a keyhole for a zero, which zooms in so you can see through the keyhole to the year 2023.

Local experts predict mortgage rates, which hover<a class="gtmContentClick" data-vars-link-text=" above 6%" data-vars-click-url="https://www.freddiemac.com/pmms" data-vars-content-id="bdc9ed31-2021-4deb-8b8e-bf6b09b84864" data-vars-headline="2023 will be challenging for Chicago homebuyers, experts say" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.freddiemac.com/pmms" target="_blank"> above 6%</a>, will shape our real estate market in 2023, reports Axios&#x27; Sami Sparber.<ul><li>Here&#x27;s what they&#x27;re saying:</li></ul>

Data: Point2Homes; Map: Tory Lysik/Axios Visuals

Chicago renters earned just 69% of the income they would need to afford a starter home, per October figures, Axios' Sami Sparber reports. 

Researchers at real estate website Point2Homes considered "starter homes" to be properties valued in the lower one-third of all available homes for sale.

Why it matters: Higher mortgage rates and housing costs are still keeping homeownership out of reach from many first-time buyers.

By the numbers: Renters here earned a household income of $43,591 on average in October, while the income needed to cover a mortgage was $63,440.

In September, a typical Chicago starter home cost $204,696, according to the study.

Zoom out: Following this year's interest rate hike, renter households in 15 of the 50 largest U.S. cities made less than half the income needed to buy one of the cheapest homes in town.

The big picture: Across the U.S., the share of first-time home buyers has shrunk to a record low, according to the National Association of Realtors. 

First-time buyers made up 26% of all buyers in 2022, down from 34% last year, the group found.

Go deeper: 3 reasons it's getting harder for renters to buy

Chicago renters can't afford starter homes

In September, a typical Chicago starter home cost $204,696.

Chicago renters earned just 69% of the income they would need to afford a starter home, per October figures, Axios&#x27; Sami Sparber reports. <ul><li>Researchers at <a class="gtmContentClick" data-vars-link-text="real estate website Point2Homes" data-vars-click-url="https://www.point2homes.com/news/research/starter-homes-where-to-find-them-entry-level-house-myth.html" data-vars-item="in_content_link" href="https://www.point2homes.com/news/research/starter-homes-where-to-find-them-entry-level-house-myth.html" target="_blank">real estate website Point2Homes</a> considered &quot;starter homes&quot; to be properties valued in the lower one-third of all available homes for sale.</li></ul>

Sami Sparber

Featured stories

Chicago rents are still high, for now

2023 will be challenging for Chicago homebuyers, experts say

Chicago renters can't afford starter homes

Volunteer guide: 5 ways to give back in Chicago

Buying a house in Chicago is finally easier — but not cheaper