Increase in Real Estate prices:
Real estate prices in Chicago have been increasing constantly, and saw a growth of 11.8 percent in the year 2013. The prices further increased by 9.6 percent in 2014. The increase in prices indicates a robust and stable real estate market, that presents a great opportunity for investments in realty, as an investment asset class.
Median real estate prices:
The median price for homes in Chicago, Illinois in the months from October 2014 to January 2015 was around USD 225,000. This was an increase of 7.1 percent as compared to the prices for the same period a year ago. However, there was a decline of 9.9 percent in the sale of homes.
Chicago’s community areas:
Chicago’s population is approximately 2.7 million, living in 77 community areas. These community areas were determined by the researchers from the University of Chicago in the 1920s. Chicago has a total land area of 237 square miles and the community areas are classified into four different sides. These are the North Side, South Side, West Side and the Central.
Proximity to Downtown Chicago:
The proximity to Chicago also determines the price of homes. The price of one of the most expensive penthouse condominium is around USD 32 million. Downtown Chicago has much higher prices and offers homes in high-rise condos, while the prices are relatively lower as one moves further out. The property options available in the outskirts of Chicago include condominiums, single-family houses and townhouses.
Fewer number of loan defaults:
The number of loan defaults in the Chicago real estate segment has reduced significantly in the last one year. It is expected to drop to 2.5 percent by the end of 2015.
Buying is more affordable than renting a home:
An increase in the rents and the slow growth in the real estate rates have made it more feasible to buy homes rather than pay rents. Hence, it is logical to buy homes that are expected to appreciate rather than spend on rent.
Construction of new condominiums:
Property developers in Chicago have been adding newer inventory and are expected to add another 6,000 apartments over the next two years. This will increase the availability of homes, and will keep homes affordable.
Positive indications from S&P Homebuilder Index:
The S&P Homebuilder index has been on the rise and indicates positive growth in the Chicago real estate in future. This clearly means that buying homes is a good option for homeowners as well as investors who expect a decent return on their investments.
Reduction in loan foreclosure:
The foreclosure percentage in Chicago is higher than the national average; however it is on decline and shows positive signs for Chicago real estate segment. The November 2014 foreclosures were lower by 25 percent as compared to foreclosures in November 2013.
Rehabilitation of old properties:
The South Suburban Land Bank Authority and the Cook County Land Bank Authority have started the acquisition of dilapidated properties and redevelop vacant and abandoned homes. This will contribute towards improving Chicago's real estate segment even further.