Challenges and Opportunities in the Current Chicago Housing Market

Before the onset of the Iran war, Alonzo Abron Jr., a managing broker and owner of Oak Forest-based A. Progeny Global, had a positive outlook on this year’s housing market. However, the current scenario appears less optimistic. The spring home buying season is underway, yet real estate professionals note an atmosphere of uncertainty due to rising living costs and interest rates since the war began.

Abron, who represents clients in the south suburbs and is a former chair of the Global Real Estate Council with the Chicago Association of Realtors, commented on the shift. “Before the war, I expected people to be in a better financial place,” he said. He highlighted the impact of increased gas prices, higher living expenses, and job losses.

Lutalo McGee, president of the Chicago Association of Realtors and owner of Ani Real Estate, observed that the expectation is more sellers will list homes to capitalize on higher prices. He hopes homeowners who avoided selling due to low mortgage rates during COVID-19 will reconsider. McGee acknowledged the role of global events in the market’s uncertainty and inflation but noted the extent of their impact remains unclear.

Geoff Smith, executive director of the Institute for Housing Studies at DePaul University, described the market in the south suburbs and Chicago metropolitan area as challenging and complex. Inventories remain tight, with Illinois experiencing slow recovery compared to pre-pandemic levels. “We’re near the bottom,” Smith remarked on inventory recovery.

Andretta Robinson, team lead at the Titan Group at Re/Max 10, observed an increase in home inventory under $300,000 in the south suburbs. However, many of these are distressed or require updates. Throughout the metropolitan area, inventory and sales may show temporary increases but are affected by broader economic volatility.

Inflationary pressures affect housing costs, construction, and renovation, keeping affordability a major concern, noted Smith. Mortgage interest rates, currently experiencing fluctuations, also dampen buyers’ purchasing power. According to Freddie Mac, the average 30-year fixed-rate mortgage recently rose to 6.51% from 6.36%.

Abron cited an example where a prospective buyer’s purchasing power decreased from a $250,000 budget to $200,000 due to rate changes. A report by DePaul’s Institute for Housing Studies showed a 0.3% decline in single-family home sales in April year-over-year in the Chicago area, while prices increased nearly 5%. Statewide, sales dipped 0.5%, with prices rising 7.4%.

The institute’s forecast for 2026, set before the war, anticipated a 5.1% increase in home sales and a 5% price rise in the Chicago area. In Illinois, sales were expected to grow by 1% and prices by 3.4%. As of late 2025, only the Calumet City/Harvey submarket in Cook County showed a 1.2% price decline among 18 submarkets.

South suburban areas, including Oak Lawn/Blue Island, Orland Park/Lemont, Chicago Heights/Park Forest, and Oak Forest/Tinley Park, experienced price increases ranging from 3% to 5.2%. Despite higher taxes, areas in the south suburbs offer affordable housing, ample land, and access to transport networks.

When asked if now is the right time to buy a home amidst economic challenges, Abron advises prospective buyers to consider their desires and financial capacity. He shared a recent example where a house received an offer a day after listing, highlighting market competitiveness and appropriate pricing.

Michele Andrews, a Matteson resident, successfully downsized her 5,000-square-foot home with 65 attendees at an open house resulting in 10 offers. Andrews noted continued demand due to diverse life circumstances needing housing solutions.

Real estate agent Joni Bradley-Scott, with Keller Williams Preferred Realty and Andrews’ daughter, emphasized the constant influence of global events on the housing market. As economic conditions fluctuate, effective communication with clients about market realities and personal financial strategies is vital, she stated.