Median Home Prices In Illinois
The Illinois real estate market has mirrored national trends for the better part of a decade. Nearly every market across the country, for that matter, has seen prices rise considerably in the wake of the last recession. While Illinois home values are historically high at the moment, they were considerably lower no more than seven years ago. As recently as the first quarter of 2012, in fact, real estate prices in Illinois bottomed out around $134,000. After seven consecutive years of appreciation, the
median home value in Illinois is now around $182,600 — that’s an increase of 36.2%. In that time (from March 2012 to today), the
median home value in the United States saw 55.0% increase.
Illinois’ real estate success over the course of the most recent recovery is directly correlated to the same factors increasing prices across the country: growing optimism in the real estate sector, a strengthening economy, and a distinct lack of available housing. If for nothing else, more buyers are able to actively participate in the market thanks to improving working conditions, opportunities and wages. Nonetheless, there simply aren’t enough homes in the state of Illinois to satiate demand; that, and the economy still has some ground to make up until it’s on a level playing field with the rest of the county.
Thanks, in large part, to a dependance on a struggling agricultural industry, Illinois has yet to experience the same economic stimulation many states across the country already have. More specifically, however, it’s the trade rift developing between the United States and China that has prevented Illinois from realizing its full potential within the agricultural industry. According to
Kiplinger, “agricultural exports to China, especially of soybeans, make up a larger portion of total exports in Illinois than they do in almost any other state.” That, combined with negative net migration and uncertainty within the local business climate, has prevented Illinois from realizing its full potential.
Consequently, the housing market hasn’t been able to stretch its legs as much as residents would like to see. While prices have increased, they have trailed behind the national average, and should continue to do so for the foreseeable future. Whereas median home values across the United States are expected to increase 2.8% over the course of next year, Illinois home values are only expected to jump 1.8%.
In theory, Illinois’ current economic environment should increase home prices at a faster rate. Falling building permits, lower housing inventory and declining borrowing costs — all of which are present in Illinois — have become synonymous with higher prices. Nonetheless, Illinois has one thing working strongly against the prospect of homeownership: exorbitantly high property taxes. Taxes incurred as a result of homeownership are so high, in fact, they have all but ensured demand for homes and their respective prices won’t live up to their potential. Even willing and able buyers question the proposition of homeownership because of state’s high taxes, which have done nothing but undercut the housing market in recent history.
In the event taxes were more in line with the rest of the country, there’s a good chance demand would have kept pace with national trends. Instead, they have caused many buyers to look elsewhere, even across state lines.