The North Shore Housing Market Prices, Trends, & Forecasts 2023

The North Shore is home to some of Chicago’s most beautiful neighborhoods. Bordering Lake Michigan, the area has long been associated with luxury homes, upscale living, and tight-knit communities. If you’re hoping to invest in this gorgeous area in 2023, make sure you know what to expect in regard to last year’s trends and this year’s forecast. Read on below for expert market insights from Jena Radnay, a top broker in the state.

For anyone interested in investing in the North Shore real estate market in 2023, understanding the forecasted trends is integral to creating a solid and savvy investment plan. Though 2022 brought a return in many ways to pre-pandemic conditions, the market wasn’t as competitive as it was in 2020 and 2021 due to buyer hesitation and rising interest rates. Will 2023 follow the same path? Let’s take a look at what to expect from pricing, interest rates, and rental property demand.

Home prices overall did not increase substantially in 2022, and although spikes are expected in the spring season, it’s likely that prices will remain stable throughout 2023 with the potential for another slight increase.

The most significant factors impacting price in 2023 will be demand and inventory, as increased interest rates and inflation will contribute to higher prices. If demand remains low and inventory high, prices won’t move much and may even fall. However, if inventory is low and demand high, buyers and sellers will see prices rise, and the North Shore real estate scene will enter into a seller’s market.

Mortgage rates that once sat between 2% and 3% during the early days of the pandemic are now back to pre-pandemic norms. Rates for 30-year mortgages are hovering between 6 and 7%, which could drive buyer demand lower as individuals choose to wait on making an investment. Though lower rates aren’t anticipated in 2023, it isn’t likely that they’ll climb too much higher, either. Buyers and sellers can expect rates to remain in a similar range as the year goes on.

Rental prices saw a much more significant uptick in 2022 than home appreciation did. Higher interest rates and rising inflation spurred many to reconsider buying and opt to rent instead. With higher demand for rental properties, landlords were able to increase their prices. The same trend is expected in 2023, which serves as good news for those hoping to see strong returns on their rental property investment in the coming years.

Like other major cities, Chicago saw a movement of residents away from the city as the pandemic hit in 2020. Individuals and families sought roomier, more suburban homes and began to leave urban areas in droves. Since then, however, a return to normalcy has begun and will continue throughout the year, bringing with it a continued return of residents to the city once again.

The COVID-19 pandemic sent many markets across the country into some of the strongest seller’s markets seen in decades. With record-low interest rates and unexpected demand, prices soared in markets from coast to coast. Competition between buyers was fierce, with many properties receiving multiple competing offers and selling far above the list price.

However, 2022 saw lower demand and only slightly higher prices throughout the country as many buyers stepped away from their home searches. The Chicago Metro area also experienced this trend, including Cook and Lake counties. According to Illinois Realtors’ latest market update, closed sales within the area fell by 38% year-to-date, mirroring buyer hesitation as interest rates and inflation were on the rise. For single-family homes specifically, closed sales dropped by 37%. Likewise, closed sales dropped by 41% for condos. In addition, as of January 2023, homes were spending slightly longer on the market, currently sitting at 38 days until selling.

The median sales price of single-family properties has held relatively steady, only dropping by 0.3% as of January 2023. For condos, there was a modest 5.4% median sales price increase. For all properties, the median sales price rose by just 0.7% overall between January 2022 and 2023. That was good news for home buyers who still wanted to invest despite the spike in interest rates. Pricing in any market will be impacted primarily by supply and demand, and with the higher inventory and lower demand seen in 2022, prices were accordingly slow to rise.

It wasn’t a competitive year for buyers, with most homes receiving single offers and selling for close to their listing price. With homes spending longer on the market, buyers felt less pressure to make a decision immediately. Understanding how trends played out in 2022 can help buyers know what to expect as they step into the market in 2023.

As you assess the market trends for 2022, will 2023 be the year to finally invest? With only modest price increases expected, buyers may want to take advantage of the even playing field and finally make their move. Buyers will likely enjoy increased negotiating power, with many sellers willing to lower the sales price. If you’re selling a property, working with an expert agent will give you a leg up. Your agent will provide innovative marketing strategies to get your home seen and sold, no matter how the market is behaving.

If you are intrigued by all that the North Shore has to offer, reach out to an expert for top-tier guidance throughout your real estate journey. Jena Radnay is a leading Illinois broker who is ready to help you get results and find amazing properties. To learn more about what to expect from the North Shore real estate market in 2023, reach out to Jena Radnay today.