You May Be Busier Than Ever As Illinois’ 2021 Real Estate Market Heats Up
Last year, the Illinois real estate market saw tremendous success, even reaching the reported highest level in recent years in July. In 2021, housing markets across the state are forecasted to continue that upward arc. With high demand, growing prices, and a strong economic forecast, real estate agents all across Illinois are sure to be busy this year.
2021 Illinois Real Estate Outlook: Heating Up
In November 2020, the average home in Illinois was priced at $217,672, a 4.8% increase year-over-year. There’s little sign of prices stalling, though, as Zillow predicts this figure will rise another 7.5% within the next year. Rising prices echo the gradual healing of the economy statewide, signaling that this year could be profitable for agents and sellers alike, while low interest rates maintain some degree of affordability for buyers.
Along with rising home prices, home inventory statewide dropped 34.4% year-over-year in October 2020. Days on market also fell a significant 17.31%, from 52 to 43 during that same period. Combining with those low interest rates, strong demand, and limited supply across the state firmly designate Illinois a seller’s market as 2021 unfolds.
After the economic tribulations of 2020 and in the midst of a national big city exodus, rent prices increased only 0.7% state-wide and even decreased 2.3% in the Chicago metro area. Meanwhile, a total of 8.4% of Illinois homeowners fell delinquent on their mortgage, and equity slipped into the negative on 6.5% of homes statewide. So, while new transactions boom and fairly reasonable rent hikes attract more and more people to Illinois, current homeowners continue to struggle.
2020 Illinois Real Estate Market Data
|Zillow Home Value Index||$217,672|
|1-Year Change on Home Values||+4.8%|
|1-Year Change on Rent Prices||+0.7%|
|Homes With Negative Equity||6.5%|
|Delinquent on Mortgages||8.4%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Illinois
In October 2020, The Illinois Department of Employment Security (IDES) reported that the statewide unemployment rate dropped significantly, falling from 10.4% to 6.8%. While this rate is still 3.1% higher than it was in October 2019, this decrease illustrates the localized view of a larger trend, with more people returning to work and the economy gradually healing. As strong economic activity often correlates with growth in the real estate industry, falling unemployment rates are a promising sign for agents in the year ahead.
In fact, the positive impact of this job growth can be observed in a measurable way. The Chicago Business Activity Index (CBAI), a statistical index used to predict potential developments in Chicago’s economic health, increased 58.7 points to 120.8 in September 2020. As the economic powerhouse of Illinois and the greater Midwest, strong economic growth in Chicago is great news for agents statewide as we kick off the new year.
Despite the traditionally hot spring and summer buying seasons far behind us, the average commitment rate for a 30-year, fixed-rate mortgage also fell less than a tenth of a percentage point in October 2020, landing at 2.8%. This momentum illustrates a departure from the typical seasonality of homebuying and is a good sign for the coming colder months. Buyers are still eager to commit, even without the draw of spring curb appeal and warm-weather open houses.
With a strong 2021 forecasted, Illinois real estate agents will need to be at the top of their game. From buyers with affordability top of mind to sellers fielding multiple offers, there has never been a better time to serve your fellow Illinoisans. This year, agents can expect to benefit from and help contribute to a healing local and national economy as the Illinois real estate market continues to heat up.
Take on 2021 With the Best Illinois Real Estate Courses From The CE Shop
Enroll in our Pre-Licensing program now to get your career started and begin connecting your fellow Illinoians with the home of their dreams. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything Illinois? Join the Midwestern Real Estate Facebook Group!