Chicago Real Estate Update: Key Changes from January to February 2025

The Chicago real estate market has experienced some notable shifts from January to February 2025. From changes in inventory and sales trends to new policy developments, here’s what you need to know about the latest market conditions in the Windy City.

Residential Market Trends

Inventory on the Rise

Chicago’s housing inventory saw a significant increase at the start of the year. In January 2025, the number of homes for sale rose by 11.5% compared to December 2024, totaling 7,602 available properties. This increase provides more options for buyers but also indicates a potential shift in market demand.

Sales Slowdown

Despite the rise in inventory, the number of homes sold in Chicago declined by 27.1% in January compared to the previous month, with only 1,293 homes changing hands. This dip suggests a more cautious buyer pool, possibly influenced by economic uncertainty or seasonal market trends.

Stable Prices

While sales numbers dropped, home prices have remained relatively stable. The median home price in Chicago saw an 8.1% year-over-year increase, reaching $369,000 in January 2025. This price stability indicates that demand is still strong enough to maintain property values, even as sales slow.

Commercial Real Estate Developments

Growth in Industrial Spaces

One of the most notable trends in Chicago’s commercial sector is the rise of industrial developments, particularly in logistics and technology-related spaces. For instance, a 1.2 million square-foot multistory logistics facility at 1237 W. Division in Goose Island highlights the increasing demand for industrial and storage solutions.

Policy and Regulatory Changes

Proposed Tax Hike on Luxury Sales

Chicago Mayor Brandon Johnson recently announced plans to revisit a proposal to increase taxes on real estate sales exceeding $1 million. This policy, aimed at raising $100 million annually to combat homelessness, could impact high-end property transactions. If passed, luxury buyers and sellers may need to factor in higher costs when closing deals.

What This Means for Buyers and Sellers

• Buyers: With more inventory available, buyers have more choices, but they should be aware of potential policy changes that may impact the cost of high-end purchases.

• Sellers: Slower sales indicate a more competitive market, so proper pricing and strategic marketing will be crucial to attracting buyers.

• Investors: The industrial and logistics sector is showing promise, making it a key area to watch for potential opportunities.

Chicago’s real estate market continues to evolve, with shifts in both the residential and commercial sectors. Staying informed on these trends will help buyers, sellers, and investors navigate the landscape effectively. Keep an eye on future developments as we move further into 2025!