The state of Illinois was one of the hardest hit by the housing crisis and is one of the slowest to recover. In some southern Chicago suburbs, like Markham, a full recovery still seems distant. Median home prices there linger far below pre-bubble numbers, with many homeowners still underwater on their mortgages. On the other hand, cities like Springfield have seen home values—and sale prices—driven up by a lack of inventory. As a real estate investor, it’s easy to get entangled in these statewide inconsistencies and miscalculate your risks and potential returns. In fact, you’re probably wondering where you should be buying investment property in Illinois to get the most bang for your buck. So let’s take a look at the state-wide market to find out.
A Market Overview for Buying Investment Property in Illinois
According to the Regional Economics Application Laboratory (REAL) at the University of Illinois, home sales throughout the state decreased during 2017’s third quarter. For those of us who live and invest here, this information comes as no surprise since sales typically fall as the Midwest heads into winter. What is surprising, however, is the uptick in the number of homes sold during October—a time that marks not only the start of the fourth quarter but the beginning of the holidays and cold weather. This suggests that, in spite of the occasional lull, Illinois residents may be more confident and better financially positioned overall to buy.
In looking at job growth recorded from all of the state’s metropolitan statistical areas (MSAs), you can certainly see why. Though the number of jobs lost versus jobs gained varies from month to month and county to county, more jobs were added statewide in 2017 than the year previous. Since 2010, over 460,000 new positions have been created in Illinois, with cities like Decatur seeing some of the biggest jumps in employment rates next to Chicago. And, with more jobs generally comes a greater demand for housing.
When we look at the volume of mortgage applications filed and home sales recorded, as well as the increase in median price range seen around the state, the numbers do seem to signal high demand. Fifty-five counties reported steady gains in home prices over the last 12 months and 43 also reported gains in home sales, including the nine counties that make up the Chicago Primary Metropolitan Statistical Area (PMSA). Rock Island County saw an increase of 20% in sales—impressive even by national standards. And, according to Illinois REALTORS®, these positive trends are expected to continue in the year ahead.
The flip side, however, is that even with 55 counties showing promise as ideal locations to take advantage of a strong real estate market, there are 102 counties in Illinois. When deciding where to buy a promising investment property, should you ignore the other 47? Not necessarily. There may be up-and-coming neighborhoods within each that are worth investing in.
Additionally, certain niche markets perform better or worse than others no matter the location. Luxury housing, for example, has the highest unsold inventory in the state. Whereas homes priced at $500,000 or below are selling faster than this time last year. Therefore, when buying, renovating, and selling houses, it’s good to have a view of the real estate market at state, local, and niche levels. Renovating a house you might not be able to sell is a risk you might not want to take.
In light of all the information above, you can probably see why gathering market data is important to many investors. Ideally, using this data as a guide makes the ups-and-downs of real estate investing a smoother ride. But as helpful as it’s intended to be, more questions—and oftentimes more confusion—may arise. You can get bogged down by the statistics and miss a good deal. So, even though I find market analysis interesting, I don’t recommend it as the way toward finding your best investments.
What do I recommend? A HomeVestors® franchise.
A Better View of the Best Deals
As an independently owned and operated HomeVestors® franchisee, the best leads on good deals come directly to me. HomeVestors’ lead generation system for real estate investors and state-of-the-art marketing tools are available to every franchisee at any time in any market. Backed by the nationally-known “We Buy Ugly Houses®” national ad campaign, homeowners across the state know who to call when they’re ready to sell. So choosing where to focus my efforts on buying and renovating properties to maximize potential returns is as easy as picking up the phone to say “hello.” With over 75,000 houses bought by franchisees since 1996, we’ve got the stats to prove it.
To get a better view of your potential as a real estate investor, make the call that could make all the difference. Contact HomeVestors to become a franchisee today.
Each franchise office is independently owned and operated.