Millennials driving competitive real estate market in Illinois

[February 03, 2022]  By Kevin Bessler

(The Center Square) – It was a red-hot real estate market in Illinois last year, and millennials looking to buy their first home were a driving force behind it.

Illinois home sales increased nearly 12% and median prices rose about 11% in 2021 compared to the year before.

A wave of first time millennial home buyers entered into the market eager to purchase their own homes. As a result, low inventories made the market that much more competitive.

Jaime Seale with the real estate data company Clever said research shows 90% of millennials said they would make an offer on a home without seeing it in person.

“I think it really has to do with the competitiveness of the market,” Seale said. “You see a house that looks good, you have to jump on it. You might not have time to schedule a showing.”

Home ownership is also taking a bigger chunk out of paychecks. Nearly half of the millennials surveyed by Clever said they expect to max out their budgets when buying a home, with 33% planning to purchase a home that costs more than the median U.S. home price of about $405,000.

The median sales price for a home in Illinois in December 2021 was $244,000, up 7.3% from December 2020.

The tight housing market is forcing some to make an offer on a second or third choice. Clever’s research shows 82% of millennials are more likely than boomers (62%) to purchase a fixer-upper, but 1 in 4 who do so regret it.

Once they take the plunge, some don’t plan to stay there long. According to the Clever survey, nearly a third of millennials (31%) plan to live in their homes for less than five years.

Seale expects the market to calm down a bit this year, but she said it will still present challenges for millennials.

“I think it is going to stabilize, but home buyers, especially millennials, are still expecting a lot of obstacles,” said Deale. “Expect to pay more than asking price and expect to have other bidders on the same home.”