Illinois has a bustling real estate market that holds great opportunities for investors. But with so many options, where should you start looking? Here’s what you need to know about the best real estate investment markets in Illinois.
Real estate investment is a wonderful opportunity to build your portfolio and generate income. However, many investors stumble into common traps and make cost-prohibitive mistakes. One of those common mistakes is choosing the wrong market.
Just because a general area or state, such as Illinois, has a great investment opportunities doesn’t mean that every market within that state is going to be the best fit. Even so, choosing from the available markets and timing your purchase correctly can make the process even more complicated.
So how do you know where the best markets are? Where should you begin your search?
The first step should be working with a local, experienced real estate agent in your area. Only an experienced realtor can help you make the best choices by providing expertise and market-specific guidance.
However, being able to give your agent a few areas in which you’d like to start looking helps. We’ve compiled five of the top real estate investment markets in Illinois to help you narrow your search and get started on the right foot.
What to Expect from the Illinois Real Estate Market
Before we dig down into the specific areas that make for the best investment markets, let’s take a look at the overall market in the state. This will give you a reference point for the figures and data presented in the city-specific sections to follow.
On the whole, the real estate market in Illinois is strong. According to data from Zillow, the median home value is $181,100 with year-over-year growth of 4.1% and a predicted growth of 2.5% in the coming year. The median list price is $239,900 and the median sale price is $200,200.
About 14.8% of homes in Illinois have negative equity, which is much higher than the national average of 8.2%. While this is unsettling for homeowners, it’s promising for investors because it means there’s likely to be an increase in the availability of foreclosures in the near future.
What’s more, on average about 16.6% of listed homes in Illinois experience a price cut, giving you a great deal on investment properties.
With a promising state-wide market, there are specific places where the market is even better for investors.
Naperville’s median home value is well above the state’s average at $397,600. Home values in this area have grown by 1.7% in the last year and are expected to grow as much in the coming year.
Currently the Naperville market is still leaning toward the sellers advantage. However, it’s just cool enough that there are some excellent opportunities for investors.
The median list price in Naperville is $442,000, and the median sale price is $373,300. About 6.5% of homes have negative equity, and a whopping 23.2% of listings have an associated price cut.
The combination of discounted prices and the high possibility of available foreclosures means Naperville offers not only a great price but appreciation, as well.
Chicago is one of the most sought-after real estate markets in the country right now. Not only is it attractive to buyers, but it also boasts some of the best real estate investment opportunities in the state.
Since Chicago is a lively center of culture, history, and the arts, investing here means you’re investing in a growing community while capitalizing on the revitalization and consistently increasing popularity of the Windy City.
Like Naperville, the market here is warm and still leans toward a seller’s market. However, there are great opportunities for investors. The median home value here is $230,400 with a median list price of $339,900 and a median sale price of $298,900.
Home values in Chicago have risen by 1.1% in the last year and are expected to see another 1% growth in the coming year.
While none of that might stand out as particularly impressive to an investor, the fact that 21.4% of homes have negative equity might. Not only is that way above the national average, but it exceeds the state average, as well.
When you add to that the fact that 16.6% of listed homes have a price cut associated with them, you can start to see how new foreclosures, price cuts, and the relatively small chance foreclosed properties will need extensive renovations all add up to an excellent real estate investment market.
Near West Side
Right now, Near West Side is a cold buyer’s market, but that’s not expected to last for long. The median home value in this area is $365,800, but considering the fact that values here have decreased by 3% in the last year and are expected to rise by 0.7% in the coming year, it’s fair to say that the market is starting to turn around.
This unique situation creates a prime investment opportunity. Getting into a market when it’s just starting to see a rise in home values means you can simultaneously enjoy a lower entry price and the forthcoming appreciation.
What’s more, about 18.3% of listings have an associated price cut, meaning you can get an even better deal on already low prices.
Another cool market that’ll be heating up in the future, Ottawa presents a solid opportunity for investors. The median home value here is $115,600, with a median list price of $142,450 and a median sale price of $128,100.
In Ottawa, 14.9% of homes have negative equity, again foreshadowing the coming opportunity to take advantage of future foreclosures that hit the market. Additionally, 12.3% of listings have a price cut associated with them.
While the one-year forecast might indicate only a small amount of growth, the fact that appreciation continues to rise in this area and that it offers a suburban atmosphere with great schools means it’s a desirable community that’s bound to keep growing.
Forest Lake is a great community that’s starting to recover from a recent downturn in home values. The median home value in Forest Lake is $290,300, and although home values dipped by 0.5% in the last year, they’re expected to rise by 1% in the coming year.
While the foreclosure forecast is unclear, it’s a beautiful, small, suburban community that has a lot of curb appeal and a lot to offer interested renters. Since prices are low right now, investors can benefit from the forthcoming appreciation.
With an average rent of $2,586, far above the national average, investors who choose to purchase property in Forest Lake can also enjoy a decent rental income and relatively low cost of upkeep, adding to the reasons that Forest Lake is one of the best investment markets in Illinois.
Of course, it’s critical to make real estate decisions based on data, expertise, and professional guidance. That’s why working closely with a local, experienced real estate agent is critical.
A local agent has the experience, background, and information necessary to help you make the best property choice, time your purchase in accordance with market trends, and negotiate for the best possible deal.
Clever Partner Agents work on a flat-fee basis and can help you through the entire investment process, from purchasing and renovating through renting your property out or reselling it. Get in touch with Clever today for a no-obligation consultation.