The State of the Chicago Real Estate Market

I’ve been heavily involved as a Chicago realtor for the last eight years and have seen quite a turnaround in our real estate market. While starting in the business just a year after 911 I have seen this market soar and to the point it is currently at, very soft in my opinion. During the condo craze, both existing and new construction sprouted up in every neighborhood and market. To fully understand how the Chicago real estate market will eventually recover you must understand the geographical and demographics of Chicago.

Neighborhoods…

Chicago is a large city comprised of many little different neighborhoods. For example every neighborhood is a different market. The near north side neighborhoods of Lincoln Park, Lakeview, and even Old Town differ in many ways from other areas like the West Loop and South Loop. Those who know the city would understand the difference in the styles of living in certain neighborhoods. For example West Loop condos are in soft loft like buildings where condos on the near north side may be in a 3-flat style building with little to no amenities.

Credit Crunch Effects on US Real Estate Markets

Credit crunches or financial crises have great impacts on many industries. And the most evident field that suffers from it is the real estate market. This financial mishap has been around since free-market trading began. It has affected real estate markets all over the world that led to bubbles, meaning there has been a surge in equity prices followed suit by drastic price drops. The main result of these economic cycles in real estate if currently manifested through massive foreclosures and bankruptcies.

Early indicators of market crashes occurred in the 1980s. The United States has been one of the primary areas where saving and loan crises occurred. There had been massive deregulation in the financial industry when savings and loans started having higher interest rates even on short-term deposits. There had been risky investments on questionable deals. Such situations transpired as bull markets of the 1980s seemed appealing for investors.