Chicago's Suburban Luxury Home Market Tightens
The market for homes priced over $1 million in Chicago's North Shore and western suburbs is reportedly tight. High demand in these areas is being driven by buyers prioritizing safety and schools. This contrasts with softer pricing observed in the city's condominium market.
The migration to Chicago's suburbs is quantifiable, with the city's population declining by three percent between April 2020 and July 2023, while suburban cities like Naperville experienced population growth. This shift is largely influenced by remote work, as 49% of remote workers choose suburban areas over the 29% who opt for urban locations. This trend is creating sustained demand for single-family homes outside the city core. The divergence between Chicago's luxury housing types is stark. While the median price for single-family homes over $1 million jumped 14% in Q3 2024 compared to three years prior, the median price for condos in the same price tier fell 9.1% over the same period. In late 2024, the average days on market for luxury properties ($7.2M average sale price) nearly doubled to 323 days, signaling a slowdown and potential leverage for buyers in that segment. For investors, the Midwest multifamily market is showing significant strength, boasting the highest average cap rate in the U.S. at 6.0% in the first quarter of 2024. The region's multifamily vacancy rate of 7.8% was well below the national average of 8.7%, a performance delta not seen since the Great Financial Crisis. During late 2025, Midwest apartment deliveries were the lowest relative to their historical average, easing pressure on occupancy and rents. Institutional investors are notably underweight in the Midwest, where only 6% of NCREIF multifamily assets by value are currently held, down from 11% a decade ago. This
