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Chicago-Naperville-Elgin, IL-IN-WI housing market
Housing market indicators
| Indicator | 2022 | 2023 | 2024 | 2025* | Change | 2022 | 2023 | 2024 | YTD |
|---|---|---|---|---|---|---|---|---|---|
| Median Listing Price per Square Feet | $188 | $200 | $204 | $211 | -1.6% | 6.4% | 2% | 3.4% | |
| Active Listing Count | 15,983 | 13,067 | 13,880 | 16,751 | 4.1% | -18.2% | 6.2% | 20.7% | |
| Median Days on Market | 54 | 51 | 51 | 38 | 1.9% | -5.6% | 0% | -25.5% | |
| Share of listings with price increase | 0.8% | 0.8% | 0.7% | 0.7% | |||||
| Share of listings with price decrease | 11.9% | 11.4% | 11.7% | 13.1% | |||||
| Employees, thousands | 4,694 | 4,742 | 4,759 | 4,774 | 2.1% | 1% | 0.4% | 0.3% | |
| Permits | 1,530 | 895 | 1,228 | 1,473 | 63.6% | -41.5% | 37.2% | 20% | |
* last available value
Home prices
Short term housing supply drivers
Long term housing demand drivers
Long term housing supply drivers
Note: 12M MA - 12 months moving average, Permits - New Private Housing Structures Authorized by Building Permits. Source: FRED
Housing market overview
Overview of Chicago-Naperville-Elgin, IL-IN-WI MSA
- Total MSA population around 9.3–9.4M residents, making it the 3rd largest metro in the U.S.
- Spans parts of Illinois, Indiana, Wisconsin, anchored by Chicago on Lake Michigan and extensive suburban belts in all directions.
- Population growth has been slow and slightly negative over the past few years, with recent signs of stabilization and small gains.
Key Cities/Towns and Geographic Subregions
- MSA is formally organized around four broad subregions:
- Core city and lakefront: Chicago and near-lake suburbs.
- North/Northwest suburbs: Cook (north), Lake, McHenry counties (IL), Kenosha (WI).
- West/Southwest suburbs: DuPage, Kane, Will, Kendall (IL).
- South and Indiana suburbs: South Cook, Kankakee (IL), Lake and Porter counties (IN).
- Below is a simplified selection of representative cities and towns (illustrative, not exhaustive).
| Area | City/town | Population (approx.) | Density (people/sq mi, approx.) | Income level | Quality of Schools | Crime level | Property tax (%) | Personal Income tax | Comments |
|---|---|---|---|---|---|---|---|---|---|
| Core City | Chicago, IL | ≈2.7M | ≈11,800 | Mixed (very low to very high by neighborhood) | Highly variable by neighborhood (from elite magnet schools to underperforming) | High overall, sharply different by area; central and north side lower, some west/south sides high | ≈2.0–2.5% of market value effective (varies by neighborhood/year) | City income tax: None (only Illinois state tax) | Urban core, strong job base, high amenities, significant inequality and fiscal pressures |
| Inner West Suburbs | Oak Park, IL | ≈54k | ≈11,000 | Upper-middle | Strong public schools, high-performing high school | Moderate (lower than Chicago overall, higher than outer suburbs) | ≈2.5–3.0% | No local income tax | Transit-rich, historic housing stock, progressive community, high taxes |
| North Suburbs – Lakefront | Evanston, IL | ≈75k | ≈10,000 | Upper-middle to high | Strong schools; presence of Northwestern University | Moderate | ≈2.3–2.7% | No local income tax | Lakefront, mixed single-family and multifamily, strong rental and student demand |
| Affluent North Suburbs | Winnetka, IL | ≈12k | ≈3,400 | High | Top-tier schools | Low | ≈2.0–2.3% | No local income tax | High home values, constrained supply, stable long-term appreciation |
| Northwest Suburbs | Schaumburg, IL | ≈75k | ≈3,400 | Middle to upper-middle | Above-average schools | Low to moderate | ≈2.2–2.6% | No local income tax | Major retail/office node, diversified housing, strong condo/townhome market |
| West Suburbs | Naperville, IL | ≈150k | ≈3,900 | Upper-middle | Consistently top-rated schools | Low | ≈2.0–2.3% | No local income tax | Family-oriented, strong tech/professional base, high demand for SF homes |
| West Suburbs | Aurora, IL | ≈180k | ≈4,500 | Lower-middle to middle | Mixed; some strong, some weaker schools | Moderate | ≈2.3–2.7% | No local income tax | More affordable than inner DuPage, sizable Latino population, room for infill and new subdivisions |
| South Suburbs (IL) | Tinley Park, IL | ≈55k | ≈3,000 | Middle | Above-average schools | Low to moderate | ≈2.7–3.2% | No local income tax | Commuter suburb with Metra access, relatively affordable SF homes |
| Indiana Suburbs | Hammond, IN | ≈77k | ≈3,200 | Lower-middle | Mixed, generally average to below-average | Moderate | ≈1.3–1.8% | No local income tax (IN state + county local income tax) | Lower taxes than IL, industrial legacy, value-oriented SF and small multifamily |
| Indiana Suburbs | Munster, IN | ≈24k | ≈3,300 | Middle to upper-middle | Strong schools | Low | ≈1.3–1.8% | No local income tax (IN state + county rate applies) | Popular for IL out-migration seeking lower taxes and good schools |
| Wisconsin Edge | Kenosha, WI | ≈100k (city + environs) | ≈2,900 | Middle | Average to above-average | Moderate | ≈1.8–2.1% | No local income tax | Cross-state commuter base, lower home prices vs IL lakefront, growing logistics/industrial |
| Outer Southwest Suburbs | Plainfield, IL | ≈47k | ≈3,000 | Middle to upper-middle | Above-average schools | Low | ≈2.3–2.7% | No local income tax | Newer housing stock, strong SF subdivision growth, auto-oriented |
To see all table columns, please open this table on a laptop or desktop computer.
Citizens: Income and Education
- Median household income in the MSA is around high-$80k range, above the U.S. median.
- Income distribution:
- Substantial high-income clusters in north and west suburbs (north Cook, DuPage, parts of Lake, Kane, Will).
- Lower-income concentrations on Chicago’s south and west sides and in some south suburbs/legacy industrial areas.
- Education:
- Share of adults with at least a bachelor’s degree is above national average.
- Very high educational attainment in core professional suburbs (Evanston, Naperville, Oak Park, north shore).
- Lower attainment in older industrial communities and some inner-city neighborhoods.
- Professional and managerial occupations make up a large share of employed residents, especially in the suburbs.
Key Economic Sectors
- Finance, insurance, and professional services
- Large concentration of banks, trading firms, corporate headquarters, legal, consulting, and accounting services in the Loop and western suburbs.
- Logistics, warehousing, and transportation
- Major rail, trucking, and air hub; extensive warehouse and intermodal facilities in Will, DuPage, Lake, and Kenosha/Kane corridors.
- Manufacturing and advanced industry
- Legacy manufacturing base transitioning toward advanced manufacturing, food processing, and equipment in IL, IN, and WI corridors.
- Healthcare and education
- Large hospital systems, medical research centers, and universities (e.g., Northwestern, UChicago, UIC, Loyola, NIU satellites).
- Tech and digital services
- Growing but still smaller share than coastal tech hubs; clustered in downtown Chicago and certain suburbs (Naperville, Schaumburg, Oak Brook).
- Tourism, culture, and hospitality
- Strong downtown and lakefront tourism, conventions, sports, and entertainment sectors.
Housing Market: Supply Drivers
- Zoning openness and land availability
- Core Chicago: more open to density and multifamily along transit corridors; mid- and high-rise common.
- Inner suburbs: mixed; some embrace transit-oriented development, others preserve low-density single-family zoning.
- Outer and exurban suburbs (Will, Kendall, far Kane/McHenry): more greenfield land, relatively easier for new subdivisions.
- North shore and established affluent suburbs: restrictive zoning, strong preservation, limited large-scale new supply.
- Regulatory strictness
- Illinois municipalities: complex entitlement processes, strong local control, impact fees and design standards raise costs.
- Indiana and Wisconsin fringe communities generally have simpler permitting and more pro-growth stances.
- Construction costs and workforce
- Construction labor costs are moderate to high compared with many Midwest metros due to union presence and large-project demand.
- Material and financing costs have risen, slowing some multifamily projects.
- Infrastructure and transit
- Extensive commuter rail and highway network supports both infill multifamily near transit and greenfield SF developments farther out.
- Some transit-adjacent areas remain underbuilt relative to capacity due to local opposition or outdated zoning.
- Redevelopment opportunities
- Significant stock of underused industrial and commercial land in Chicago and inner suburbs suitable for mixed-use or residential conversion.
- Adaptive reuse potential in aging office and retail corridors (e.g., malls, suburban office parks).
Housing Market: Demand Drivers
- Migration
- Net domestic out-migration from Illinois persists (especially from Chicago and south suburbs) because of taxes, weather, and perceptions of crime.
- Net international in-migration remains a key positive driver, especially to Chicago proper and select suburbs.
- Some redistribution within the region toward west/northwest and Indiana/Wisconsin suburbs with lower taxes and newer housing.
- Growing sectors and job nodes
- Growth in logistics/warehousing, advanced manufacturing, and e-commerce supports housing demand in Will, Lake (IL/IN/WI), and Kenosha corridors.
- Professional services, healthcare, and tech growth maintains strong demand in downtown Chicago, near north side, and high-amenity suburbs (Naperville, Oak Brook area, Schaumburg).
- Household formation and preferences
- Millennial and Gen Z cohorts drive demand for walkable, transit-served neighborhoods in city and inner suburbs.
- Families continue to seek good schools + larger homes in west and northwest suburbs and select Indiana communities.
- Remote/hybrid work sustains interest in exurban and outer-ring single-family homes with more space.
- Affordability relative to coastal markets
- Metro remains more affordable than major coastal cities, attracting some relocations, although property taxes are high in Illinois.
- Interest rates and credit
- Higher mortgage rates have cooled transaction volume, but structural demand in top school and amenity-rich areas remains strong.
Key Challenges in the Housing Market
- High property taxes (especially in Illinois)
- Effective rates frequently around or above 2% of market value in Chicago-region counties.
- Contributes to out-migration toward Indiana and Wisconsin edges and to lower-tax states.
- Uneven demand across subregions
- Strong and rising prices in top school districts and high-amenity areas.
- Stagnant or declining values in some south suburbs and disinvested city neighborhoods.
- Affordability and income inequality
- City and near-suburb rents and prices increasingly burdensome for low- and moderate-income renters.
- Homeownership gap by race and income remains large.
- Aging housing stock and infrastructure
- Many city and close-in suburban homes are older, requiring significant maintenance and energy upgrades.
- Infrastructure backlogs (streets, transit, water systems) in some municipalities.
- Crime perception and school quality gaps
- Public safety concerns in parts of Chicago and some older suburbs weigh on buyer sentiment.
- School quality differentials heavily shape demand and prices, reinforcing spatial inequality.
- Fiscal pressures
- Pension obligations and municipal budget pressures in Illinois can translate into higher levies and uncertainty.
Investment Potential by Area
- Assessment below is relative within the MSA and assumes medium-term (5–10 year) horizon.
| Area | Appreciation potential | Risk | Key drivers |
|---|---|---|---|
| Downtown / Near North / West Loop (Chicago) | Medium to High (more for rentals/condos than SF) | Medium | Concentration of jobs and amenities; strong rental demand; cyclical exposure to office market, crime perception, and taxation |
| Gentrifying city neighborhoods (Logan Square, Pilsen, Avondale, etc.) | High | High | Transit access, amenity growth, infill redevelopment; policy risk (zoning, affordability mandates) and volatility in local sentiment |
| Stable North Side city neighborhoods (Lakeview, Lincoln Park, North Center) | Medium to High | Medium | Established high demand, good schools, strong rental market; already high prices and tax burden temper upside |
| South and West Side disinvested areas (various) | Low to Selective High (block by block) | Very High | Low entry prices; potential upside tied to targeted redevelopment and policy initiatives; elevated crime, weak schools, and thin buyer pool |
| North Shore suburbs (Winnetka, Wilmette, Highland Park, Lake Forest) | Medium | Low to Medium | Top schools, high incomes, supply constraints; prices already elevated, slower but steady appreciation profile |
| West suburbs (Naperville, Wheaton, Glen Ellyn, Downers Grove) | Medium to High | Low to Medium | Strong schools, diversified employment access, family demand, limited large-scale land; resilience despite high property taxes |
| Outer West/Southwest growth corridors (Plainfield, Yorkville, far Joliet-area suburbs) | Medium to High (particularly for SF new construction) | Medium | Land availability, demand for larger homes, logistics employment nearby; more exposure to interest rates and commuting costs |
| Northwest suburbs (Schaumburg, Hoffman Estates, Arlington Heights) | Medium | Medium | Established employment centers, good schools; some aging housing and office stock; potential gains from transit-oriented redevelopment |
| South suburbs of Cook County (Harvey, Dolton, Markham, etc.) | Low | High | High taxes, weaker schools, crime and disinvestment; limited demand growth; some niche value opportunities for repositioning |
| Indiana suburbs (Munster, Dyer, Schererville, Crown Point area) | Medium to High | Medium | Lower taxes, good schools, inbound movers from Illinois, logistics corridor proximity; exposure to state/local policy and job trends |
| Indiana industrial cities (Hammond, East Chicago, Gary) | Low to Selective Medium | High | Very low entry prices and some lakefront opportunities; ongoing economic transition and crime perception weigh on broad appreciation |
| Kenosha / southeast Wisconsin corridor | Medium | Medium | Lower taxes vs IL, growing logistics/manufacturing base, cross-state commuting; moderate price base and steady demand |
To see all table columns, please open this table on a laptop or desktop computer.
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