Between 2018 and 2023, Illinois housing market didnt move in one directionit split along urban and rural lines.
Urban vs. From 2018 to 2023, the majority of Illinois home purchases occurred in and around Chicago.
Home values in urban Illinois remained significantly higher than in rural areas.
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Market Dynamics and Pace
The pace of the market varied between regions.
Both urban and rural Illinois experienced a sellers market by 2021-2022, with record-low inventory and quick sales statewide.
Property Types and Preferences
The types of homes purchased varied significantly between urban and rural Illinois.
From 2018 through 2023, single-family houses consistently represented about two-thirds to three-quarters of all home purchases in Illinois.
Pandemic-Driven Shifts
Home size and style preferences shifted notably during the pandemic.
In 2020-2021, buyers increasingly sought larger homes with yards as remote work and stay-at-home living became common.
Many Illinois families in city apartments or small houses decided to upsize to bigger properties.
By 2022-2023, condos regained popularity as some buyers looked for more affordable options amid rising house prices.
New construction remained a relatively small segment of the market.
The vast majority of homes purchased were existing homes rather than new builds.
Whether in urban or rural areas, buyers typically purchased existing houses or condos rather than newly built homes.
This contributed to the surge in single-family home sales and rapid price increases for larger properties during this period.
Downsizing Among Seniors
Simultaneously, downsizing occurred among older homeowners.
The strong market in 2020-2022 provided an excellent opportunity for these downsizers to sell quickly at high prices.
Many seniors actually decided to age in place longer during the pandemic, which limited housing supply.
Second-Home Purchases
The pandemic period saw a notable spike in vacation and second-home purchases.
Some city residents bought second homes in rural parts of Illinois or neighboring states as personal getaways.
This trend was fueled by low interest rates and desires for personal space.
Buyers became older on average as younger adults found it harder to afford homes.
Nationwide, the median age for first-time buyers reached 36 in 2022 and about 38 by 2023.
Income levels of buyers also increased substantially.
By 2023, the median household income of U.S. homebuyers exceeded $100,000 much higher than a decade prior.
Chicago area buyers especially needed high incomes to afford rising prices.
Meanwhile, many lower-income Illinoisans remained in the rental market, unable to enter homeownership.
Migration Patterns
Urban-to-rural migration became significant during the pandemic.
As remote work expanded, some Chicago residents relocated to smaller towns within Illinois or to other states.
The Chicago metro area experienced net population outflow in 2020-2021, losing about 91,000 residents.
Some moved to other states, while others chose less dense parts of Illinois.
Local real estate agents in downstate towns reported increased interest from out-of-town buyers in 2020 and 2021.
Rural-to-urban migration was not a major trend in fact, the opposite occurred.
Illinois rural counties have generally been losing population over the past decade.
By 2023, data showed rural counties in Illinois were shrinking faster in percentage terms than urban counties.
Redfin tracking found Chicago consistently had a net outflow during 2020-2021.
In 2018, the statewide median sale price was around $202,000.
By 2023, it had climbed to roughly $269,000 a 33% increase over five years.
From 2019 to 2021 alone, the Illinois median price jumped from about $209,000 to $250,000.
Urban vs.
Rural Price Trends
Urban and rural price trends showed interesting variations.
Overall, every region of Illinois experienced price increases during this period, though at varying rates.
Inventory and Market Speed
Market conditions dramatically shifted toward a sellers market.
In 2018, Illinois had about a 3.5-month supply of homes for sale.
Homes sold increasingly quickly as a result.
The average days on market dropped from 50 days in 2019 to just 28 days in 2022.
Well-priced homes often received multiple offers within days of listing, creating bidding wars in desirable areas.
By 2023, rising mortgage rates (which exceeded 6-7%) cooled the market somewhat.
However, market conditions still strongly favored sellers.
Many homeowners with low-interest mortgages chose not to list their homes, keeping supply limited.
Thus, even with fewer buyers in 2023, competition remained for available properties, supporting price stability.
Chicagos metro experienced strong price growth and record sales in 2020-2021, followed by significant slowdowns in 2022-2023.
This small price decline was unusual and likely reflected softness in the condo market.
In contrast, Chicagos suburbs generally maintained or increased in value as families continued seeking houses in suburban communities.
Central and Southern Illinois
Central and Southern Illinois experienced different dynamics.
While these areas had lower sales volumes, they saw healthy price appreciation, especially during the pandemic boom.
Champaign-Urbana reached a median of $199,500, up 7.3%.
The Rockford MSA saw its median price increase to $173,000 in 2023, an 8% rise.
Sales activity slowed across all regions in 2022-2023.
Despite fewer sales, most downstate markets still had more demand than supply, supporting continued price increases.
Historical Comparison: 2018-2023 vs. 2008-2017
The contrast between 2018-2023 and the prior decade is striking.
The 2008-2017 period included the aftermath of the housing crash and a long recovery.
By 2017, the statewide median price (~$195,000) was just returning to pre-recession levels.
This recent trajectory represented a sharp departure from the stagnant market of 2008-2017.
Sales Volume Differences
Sales volume patterns also differed significantly.
The housing crash caused sales to plummet around 2008-2011, bottoming out around 2011-2012 before gradually rebounding.
By 2015-2017, sales were growing modestly each year but never boomed during the 2008-2017 decade.
Illinois had about 164,000 homes sold in 2017, still below mid-2000s peaks.
Market Balance Shift
Inventory and market balance completely reversed between these periods.
Demographically, the earlier decade had more participation from younger buyers and investors purchasing foreclosures.
The 2018-2023 market had fewer distressed sales and more traditional buyers, albeit older on average.
In 2008-2017, many Illinois homeowners were underwater on mortgages or rebuilding equity, limiting move-up purchases.
