Chicago 2021: State of the Real Estate Market
today at 11:42 am
As we enter 2021, we must take a look at the state of the real estate and construction markets amid the pandemic and subsequent economic shifts that resulted. Many companies have been able to weather the shift of the pandemic, while other businesses, especially those dependent on the public gathering in commercial real estate spaces, were forced to close. Since March of 2020 we have seen the use and enjoyment of real estate, transfer to the home.
Technology has played a pivotal role in allowing this to happen to ensure that the health and safety of individuals, employees, friends and families are at the fore front. Businesses have implemented health screenings to limit infectious disease exposure within essential-worker commercial properties, while places of gathering in Chicago have been creative in providing outdoor spaces comfortable for winter dining while touch-less menus have become the norm.
Median Sales’ Prices for single family homes are up 16% this winter to $272,650 and 3.7% higher at $325,000 for condominiums and townhouses. Inventory decreased a by a staggering 44.5% for single family homes while condominiums and townhouses increased by 36%.
Mortgage rates are at near-record lows, hovering at 2.5-2.7% for well-qualified buyers, making it an advantageous time for those utilizing debt to secure a home or investment purchase.
On the governmental front, on December 20th, Congress has approved a $900B COVID-19 Relief Bill which includes the following:
– A second round of stimulus payments of $600 to most Americans, including dependents.
– Extension of Unemployment Assistance through April 19, 2021 with a $300 weekly boost in payment.
– An additional $284B for the Paycheck Protection Program which will provide eligible businesses to receive a second PPP loan and creates a simplified forgiveness process for most borrowers.
– Provides $20B for Economic Injury Disaster Loans.
– Provides $25B to states through September, 2022 for rental assistance and allows landlords to apply for funds on behalf of tenants.
– Provides $7 to states for Broadband Expansion, including $300M for rural expansion.
– Extends the Federal eviction ban through the end of January.
– Provides funding for schools and vaccine distribution.
What’s happening in the construction market can be observed by how many cranes seen erected across the city. Crane counts have decreased significantly in Chicago from the start of 2020 vs the end, a decrease of 48%, signifying much less demand for high-rise buildings in the city. Residential high-rise buildings still show demand while transportation and governmental commercial projects have strong production amid the pandemic and economic shifts that have followed.
Although, the real estate market is operating with an adjustment, it is still essential and many businesses and individuals have and are continuing to make those adjustments to remain profitable, safe and healthy. We will see new businesses formed, while changes in real estate business and trading will make themselves known in the coming weeks, months and years.