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2025 Real Estate Market Trends & Predictions: Illinois Insights

Welcome to 2025! It’s a brand new year and that means many of us are making resolutions, strategizing and considering big moves—including in real estate. Regardless of whether you are planning to buy your first home, sell your house, or just trying to make sense of market trends, staying informed is key. A lot of times the market is unpredictable especially when it comes to real estate but with the right information and advice, you will never go wrong whatever the situation.

Despite these challenges, the Illinois housing market in 2024 proved to be full of opportunities—inventory constraints and rising mortgage rates made housing affordability a record low across suburban Chicago. Many buyers complained of high competition, with affordable homes selling within a short span of their listing. While these conditions left some feeling discouraged, they also highlighted the importance of preparation and expertise in making successful real estate decisions.

So, what does 2025 hold? Analysts are expecting that even slight alterations will change the dynamics for both the buyer and the seller. Mortgage rates are predicted to stabilize, and therefore present a glimmer of hope for affordability, while inventory could possibly experience small increases. So, any person thinking of making real estate changes this year needs to understand these trends.

At 23 Legal, we’re here to offer you the legal advice and the individual guidance you’ll require to make sound decisions in this environment. Now let’s look at the future of the real estate market in the US and Illinois in 2025!

The Current State of the U.S. Real Estate Market in Early 2025

When moving to the year 2025, the market of real estate in the U.S. is still in the process of changing due to various reasons. After a year of fluctuations in 2024, we’re seeing signs of stabilization, though challenges remain. While mortgage rates have flattened compared to the rates recorded in the year before, housing inventory remains limited across many areas, thus boosting demand.

A few key statistics paint a picture of the current landscape:

  • Home Prices: While the prices have been escalating for several years, many regions observed stagnation or even a decline in home prices. While that is the case, the market still stands out prominently in Illinois. For instance, Springfield homes had a median sale price of $385,000 in January 2024—an astounding 48.1% year-over-year increase. At the same time, homes in Peoria increased by 44.4% with the median sale price standing at $130,000. Nonetheless, the national trend of modest cooling may bring new opportunities to buyers in some markets even with these price surges.
  • Mortgage Rates and Inventory: Interest rates on mortgages, which reached the record level in 2024, have slightly declined to 6.5-7% on average. Rates in Illinois are slightly above this figure at 7.28%, and this has given buyers a little hope. However, inventory management continues to present a major challenge. Across the country, a shortage of homes for purchase has continued to put pressure on buyers, with 28.5% of homes being sold at or above the listed price in some markets. This is evident in Illinois where there is only a 3 month’s supply of homes; a situation that shows that the market is still in the side of the sellers.
  • Rental Market and Broader Implications: The rental market continues to be strong, rent continues to increase in the urban and suburban areas. For the homeowners, such conditions mean high demand for the property; for the buyers, scarcity of housing is a call to think about their actions more carefully. The market in Illinois has been proven fairly stable over the last five years, with average home values increasing by 34.9% during that period, regardless of the overall fluctuations in the economy.

These trends tell the homeowners, buyers and sellers that 2025 will be a year of optimism but with caution. There are likely to be more opportunities than in previous years but buyers will still need to be act fast. Sellers, on the other hand, will still enjoy high home demand if only they can set appropriate prices.

Illinois Housing Market: What to Expect in 2025

Since property values are influenced by changes in state legislation, market conditions in the locality and national trends, people have to be informed. Here’s what the experts are projecting for the year ahead.

The Chicago Area Market

  • Home Prices: Established residential home prices in the Chicago area are expected to be stable or to rise moderately in 2025. Although there could be some fluctuations in some of the neighborhoods, in general, it is possible to speak about the stabilization of the prices. The balance of the market will probably help to mitigate fears about rapidly declining or increasing prices.
  • Sales Volume: A slow and steady decline in the mortgage rates as estimated by organizations such as Fannie Mae and Mortgage Bankers Association (MBA), should help to reignite buying activity. However, while the market will not return to the high sales volumes of the years before the recession, competitively priced and well maintained homes will generate a lot of interest.

Suburban Areas in Illinois

  • Rising Suburban Demand: Other suburban Illinois places such as Naperville, Schaumburg, and Evanston are poised to benefit from working from home and hybrid models. Buyers are prioritizing properties with more space, better access to parks, and amenities suited for work-from-home lifestyles.
  • Affordable Housing Initiatives: In 2025, Illinois has increased its investment in first-time homebuyers through the tax credits and grants in order to make homeownership more accessible. Such programs, together with the steady mortgage rate, will lead to the generation of chances for people who are entering the housing market.

Illinois Real Estate Laws Impacting the Market

New legislation in real estate in Illinois in 2025 would require residents to keep abreast with changes in zoning laws, tax reassessment and tenant rights. These updates will directly impact the way homes are bought, sold, and even rented.

For example, new transparency requirements and rental protections—such as those concerning the disclosure of flood risks and requirements for fee-free rent payment options—will affect buyers, sellers, and renters across the state.

Top Real Estate Trends for Homeowners to Watch in 2025

As the year 2025 begins, there are some trends that are expected to define the real estate industry. Homeowners, in particular, should pay close attention to these developments, as they could directly affect property values, investment strategies, and lifestyle choices.

Sustainability and Green Homes

Environmental concerns are becoming increasingly important in 2025, and sustainable living is a top priority for many homeowners. Energy efficient homes, solar homes, eco friendly homes and green renovations are becoming popular among the buyers who want to build green homes and save on energy costs.

  • Green Building Incentives: Illinois has offered new measures for green construction including tax credits for the use of solar panels and energy efficient systems. Homeowners planning renovations or new builds should consider incorporating these elements to not only help the environment but also increase their property’s long-term value.
  • Smart Home Features: Smart home technology is still on the rise. People purchasing homes are also looking for an automated system for energy control, security, and comfort.

The Rise of Remote Work and Suburban Living

The increased focus on work from home is a trend that will not disappear in 2025. As more and more people are employed in their offices and work from home, more people are looking for bigger homes with an office. This shift is helping in the growth of the suburban markets as families are now seeking more space due to the work from home culture.

  • Home Offices and Outdoor Spaces: There is a great demand for homes with designated offices, outdoor living zones, and flexible use spaces. If you are selling, having a well designed office or backyard might help sell your house to potential buyers.
  • Migration to Suburbs: With more people going to work from home, they are now relocating from central business districts to the suburbs because of better living standards and cheap houses. This trend should continue in 2025 and help suburban markets in Illinois and other states.

The Resurgence of First-Time Homebuyers

Despite higher mortgage rates, 2025 could see a resurgence of first-time homebuyers. Federal and state-level initiatives designed to help first-time buyers are expected to play a significant role in making homeownership more accessible.

  • Down Payment Assistance: Increased Illinois down payment assistant programs for first-time buyers can help overcome that major hurdle to homeownership.
  • Affordable Housing Programs: Programs designed to make homes more affordable, such as tax incentives and low-interest loans, will attract more first-time buyers to the market in 2025.

Why Reach Out to Attorney Ben Weaver at 23 Legal?

As you navigate the property markets in 2025, ensure a trustworthy legal expert is at your side to prevent your efforts from going into stupid transactions. Purchasing either your first house, selling your properties, or having to deal with complex legal regulations, Attorney Ben Weaver and the team of 23 Legal are here to help. 

Real estate transactions are complicated and even a little bit sloppy can lead to significant financial or legal complications. Here, you’d find that Ben Weaver’s extensive knowledge of Illinois real estate law is what you need to overcome challenges such as new tax assessments, legal documents, and compliance with local regulations, making your business secure, efficient, and successful.

Conclusion: A Bright Year Ahead in Real Estate

When we enter the year 2025, a new shift is expected to happen in the real estate market. It will be the season of opportunities and risks for both buyers and sellers in the coming months. From dealing with increasing home costs to capitalizing on emerging green building opportunities, real estate is an exciting place to be right now.

At 23 Legal, we know that buying or selling a home comes with big decisions and sometimes even bigger challenges. That is why we are here to be your guide and support through the whole process. Our team takes care of all the legal aspects and helps with any issues that might arise in the process, so you are ready for success. Real estate isn’t just about transactions—it’s about building a future, and we’re ready to help you make wise choices that align with your long-term goals.

Ready to make 2025 your year? Don’t wait—call Ben Weaver today and let’s start the conversation! No matter if you are planning to purchase or sell a property, or decide on your further actions, 23 Legal is always there to help you make your way easy, comfortable and effective.

Accomplish your real estate goals with 23 Legal: (847) 447-6004

Why Choose 23 Legal

23 Legal offers Real Estate and Estate Planning legal services to individuals, families, community associations and small business owners throughout Chicagoland. We know how intimidating “the law” can be. In fact, when most people think of law offices, they think of stuffy leather chairs, huge wooden desks and pompous lawyers who charge outrageous fees. That’s not us! We believe in 1-to-1; the same lawyer should work with you all the way through. Whether you have an estate planning issue, family trust concern, or you have a legal problem in regard to a new home, business, real estate or remodel, you need a lawyer who cares. That’s where Ben comes in! We are great listeners; more than that, we are lawyers who believe that our clients always come first.

Attorney Ben Weaver is an expert in Real Estate Law for Arlington Heights, Prospect Heights, Mount Prospect, Des Plaines, Glenview, Park Ridge, Wheeling and the surrounding communities.

Contact attorney Ben Weaver for expert legal guidance in 2025!

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