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Feb 10, 2025

Does Chicago have a housing problem?

Chicago's Housing Crisis: 289K Affordable Homes Needed, 18K Homeless in 2023

Does Chicago Have a Housing Problem? A Deep Dive into the Affordable Housing Crisis

Chicago is facing a growing housing crisis that continues to worsen. With 13,891 new individuals experiencing homelessness since 2023, the total number of people without stable housing in the city now stands at 18,836. According to Housing Action Illinois, there is a glaring shortage of affordable homes, with 289,419 units needed across the state. Specifically, in Chicago, the shortage of affordable rental homes is a staggering 126,125 units.

The shortage of affordable homes is not just a statistic—it's a pressing issue that affects many residents of Chicago. This housing gap puts immense pressure on renters, especially low-income households, and exacerbates homelessness. Rising rents and limited options for affordable housing contribute to the growing number of individuals and families who are being pushed out of the market or forced to live in unstable conditions.

What’s Causing the Housing Crisis? Several factors contribute to the current housing shortage in Chicago, including economic inequality, rising property prices, and the slow pace of affordable housing development. Over the past few years, Chicago has seen a wave of gentrification, where upscale developments are displacing low-income residents. While new construction projects may bring in new businesses and investments, they often fail to cater to the city’s most vulnerable populations.

The Role of Affordable Housing and Its Importance Affordable housing is essential for ensuring that every resident has access to stable, safe, and dignified living conditions. It is the foundation of thriving communities, and without it, Chicago will struggle to meet the needs of its diverse population. Whether it's for seniors, families, or individuals, the availability of affordable housing ensures that people can live with dignity and security.

How Can Chicago Solve Its Housing Crisis? Addressing the housing crisis in Chicago will require coordinated efforts from the public and private sectors. The city must invest in the construction of affordable housing units, expand rental assistance programs, and implement policies to protect renters from displacement. Local advocacy groups, including Housing Action Illinois, are already pushing for legislation to address the housing shortage and increase funding for affordable housing development.

Conclusion: Chicago's housing problem is multifaceted and urgent. The shortage of affordable homes and rising homelessness should be at the forefront of policy discussions in the city. With a shortage of over 289,000 affordable homes and rising homelessness numbers, it's crucial for city leaders, developers, and citizens to work together to create long-term solutions for the housing crisis.


🏡 First-Time Homebuyer?

Chicago real estate is a great investment! We’ll guide you through the process and help you qualify—even with credit challenges.

Don't Miss Out on the Perfect Home! Get access to exclusive listings not found online. Visit www.heartofchicagohomes.com or call/text (815) 765-4252 to learn more. Email us at info@heartofchicagohomes.com.

Sources:

  • Housing Action Illinois - Affordable Housing: Source
  • Chicago Homelessness Report 2023: Source
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Is it cheaper to live in Chicago?

Is It Cheaper to Live in Chicago? A Comprehensive Cost of Living Analysis

When considering a move to a new city, understanding the cost of living is crucial. Chicago, known for its rich culture and deep-dish pizza, presents a unique financial landscape for residents.

Housing Costs

Housing in Chicago is approximately 39% more expensive than the U.S. average. The average rent in Chicago is $1,854, which is 19% higher than the national average. However, compared to cities like New York, where rent prices are significantly higher, Chicago offers a more affordable urban living experience. (Source: RentCafe, Apartments.com)

Utilities

On a brighter note, utility costs in Chicago are about 9% less expensive than the national average, providing some financial relief to residents. (Source: RentCafe)

Groceries and Clothing

Basic necessities such as groceries and clothing are slightly more expensive in Chicago. Groceries are around 3% pricier, while clothing costs are approximately 7% higher than the national average. (Source: RentCafe)

Overall Cost of Living

When all factors are considered, Chicago's overall cost of living is about 14% higher than the national average. This encompasses various expenses, including transportation, healthcare, and entertainment. (Source: RentCafe)

Comparison to Other Major Cities

Despite being above the national average, Chicago remains more affordable than other major U.S. cities. For instance, the overall cost of living in Chicago is 26.6% less expensive than in New York City, with rent prices being 46.8% lower. (Source: Numbeo)

Conclusion

While Chicago's cost of living is higher than the national average, it offers a more affordable alternative to other major metropolitan areas. Factors such as lower utility costs and relatively affordable housing compared to cities like New York contribute to its appeal.


🏡 First-Time Homebuyer?

Chicago real estate is a great investment! We’ll guide you through the process and help you qualify—even with credit challenges.

Don't Miss Out on the Perfect Home! Get access to exclusive listings not found online. Visit heartofchicagohomes.com or call/text (815) 765-4252 to learn more. Email us at info@heartofchicagohomes.com.
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Feb 9, 2025

Why is real estate cheap in Chicago?

Why Is Real Estate Affordable in Chicago?

Chicago's real estate market is notably more affordable than other major U.S. cities. Several key factors contribute to this trend:

1. Abundant Housing Supply

Chicago’s vast geography allows for extensive development, leading to a large inventory of homes. This surplus increases competition among sellers and landlords, keeping prices lower for buyers and renters. Source

2. Economic and Demographic Factors

High property taxes and crime perceptions discourage some potential residents, affecting demand and keeping property prices below those in other major cities. Source

3. High Property Taxes

Illinois, particularly Cook County, has high property taxes. These additional costs lower property values since buyers factor them into purchase decisions. Source

4. Climate Considerations

Chicago’s harsh winters deter some potential residents. Increased heating and maintenance costs impact housing demand, influencing overall property prices. Source

Conclusion

A combination of abundant housing supply, economic and demographic factors, high property taxes, and climate conditions make Chicago’s real estate market more affordable. Understanding these factors is essential for buyers and investors navigating the city’s housing landscape.

Sources:

For further insights, check out this video: 🎥 Why Is Chicago Real Estate So Cheap?

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Do I Need a Seller’s Permit to Sell in Illinois?

Selling a property in Illinois doesn’t generally require a seller’s permit, but there are exceptions depending on your specific circumstances. If you’re selling personal property or engaging in activities where sales tax is involved, you may need to get a sales tax permit. Understanding when you need a permit is important to ensure compliance with Illinois state laws.

What is a Seller's Permit in Illinois?

A seller’s permit (also known as a sales tax permit) is a state-issued authorization that allows a business or individual to collect sales tax from customers. In Illinois, the Illinois Department of Revenue (IDOR) issues these permits to those who engage in taxable activities such as selling goods or services. However, real estate transactions typically do not fall under the same rules as retail or business sales.

When Do You Need a Seller’s Permit in Illinois?

For most real estate transactions, a seller’s permit is not required. However, there are certain situations where a seller’s permit might be necessary:

1. If You Are a Real Estate Investor

If you regularly buy and sell homes or property for investment purposes, you may be required to have a seller’s permit. In this case, the Illinois Department of Revenue may classify you as a business, and you could be subject to sales tax on the sale of certain types of property.

2. If You Sell Goods or Services Along with Real Estate

If you sell personal property (such as furniture, appliances, or home goods) along with the real estate, you may need to collect sales tax on those items. In this case, a sales tax permit would be required for the sale of those goods, but not for the real estate itself.

3. If You Have a Business or Physical Presence in Illinois

If you run a business in Illinois, have a physical location, or meet economic nexus requirements, you may need a seller’s permit. This applies to businesses selling goods or services, but not to individuals selling real estate as part of a one-time transaction.

4. Economic Nexus Requirements

Illinois has economic nexus laws that require businesses to collect sales tax if they have a certain amount of sales within the state, even if they don’t have a physical location. If you're operating as a business that frequently sells property or goods in Illinois and surpass certain thresholds (e.g., $100,000 in sales or 200 transactions), you may need a permit.

Do You Need a Permit for One-Time Property Sales?

For individuals selling their personal home, no seller’s permit is typically required. As long as the property is a primary residence and you are selling it as a one-off transaction (not for business or profit), you do not need a sales tax permit. The Illinois Department of Revenue does not consider personal property sales of real estate as taxable sales under this context.

What Other Permits Might Be Required to Sell a Property in Illinois?

While a seller’s permit is not usually necessary, there are other aspects of selling a property that may require additional permits or documentation:

  • Transfer Tax: If you are selling a property within Chicago, there may be a Real Estate Transfer Tax that you are responsible for. The tax rates depend on the sale price and the location.

  • Title and Inspection Fees: Depending on the county or city, you may need to provide title insurance or pay for required home inspections.

  • Homeowners Association (HOA) Documents: If your property is part of an HOA, you may need to provide HOA documents to the buyer, which are typically required before closing.

How to Get a Seller’s Permit in Illinois (If needed)

If you determine that you need a seller’s permit, you can apply through the Illinois Department of Revenue. The application process is relatively straightforward and can be done online or by mail.

Here’s how to apply:

  1. Register online through the Illinois Department of Revenue website.

  2. Provide necessary business information (such as your business address or physical presence).

  3. Wait for approval: Once approved, you will receive your seller’s permit, which allows you to collect sales tax for the sale of goods or services.

Final Thoughts on Seller’s Permits in Illinois

For the most part, individual sellers do not need a seller’s permit when selling residential real estate in Illinois. However, if you are a real estate investor or are involved in other sales beyond the home itself, it’s important to understand when a seller’s permit is necessary. Always be sure to check with the Illinois Department of Revenue or consult with a tax professional to ensure you are in compliance with Illinois state laws.
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What documents are needed to sell a house in Illinois?

 What Documents Are Needed to Sell a House in Illinois?

When selling a home in Illinois, especially if you are selling by owner (FSBO), there are several essential documents that you will need to gather to ensure the process goes smoothly. From property surveys to insurance records, each document plays a crucial role in the transaction, helping to protect both the seller and buyer.

Essential Documents for Selling a House in Illinois

While selling a house involves a lot of moving parts, the following documents are the most important when selling your property in Illinois:

1. Original Sales Contract

This is the document that shows the terms of your original purchase agreement when you first bought the home. It may be useful for showing proof of ownership or referencing conditions of sale.

2. Property Survey

A property survey outlines the boundaries of your property and provides important information on the layout, including any easements or encroachments. Buyers will want to see this to confirm the land's boundaries and ensure there are no disputes.

3. Mortgage Statements

If you have an outstanding mortgage, the buyer and your lender will need to know the balance owed on the property. Having mortgage statements available can help facilitate a smooth closing process.

4. Payoff Estimate from Lender

You will also need a payoff estimate from your mortgage lender, which indicates the total amount required to pay off your remaining mortgage balance, including any interest and fees. This is crucial for the closing process.

5. Utility and Property Tax Records

It’s essential to provide records for utility payments and property taxes. Buyers will need to know how much they've been paying and any outstanding balances on utilities or taxes. These records can also help clarify any future costs.

6. Homeowners Insurance Records

Buyers will need to know if the home is insured, and may also ask for homeowners insurance records, especially if they plan on transferring the policy or want to see if there are any claims history tied to the property.

7. Homeowners Association (HOA) Agreements and Rules

If your property is part of a Homeowners Association (HOA), you'll need to provide HOA agreements and rules that govern the neighborhood. Buyers need to know the monthly or annual fees and any restrictions on property use.

8. Home Repair and Maintenance Records

If you’ve had major home repairs or regular maintenance on the property, providing a record of these repairs can help buyers better understand the condition of the home. This could include roof repairs, plumbing updates, or any electrical work done.

9. Receipts for Capital Improvements

If you’ve made significant upgrades or capital improvements to the home, such as remodeling a kitchen or adding a new deck, you’ll need to present receipts and documentation. These improvements can increase the value of your home and may be a selling point.

10. Manuals and Warranties for Appliances Included in the Sale

If you plan to leave appliances behind in the home, such as a washer, dryer, or refrigerator, provide the manuals and warranties for these items. Buyers will appreciate knowing how to care for these appliances and if they are still under warranty.

Additional Documents You Might Need

While the above documents are generally the most important, here are a few other documents that may come in handy during the selling process:

  • Title Deed: This is proof of ownership, showing that you have the legal right to sell the property.

  • Lead-Based Paint Disclosure: If your home was built before 1978, you are legally required to provide a lead paint disclosure to the buyer.

  • Seller’s Disclosure Statement: This document allows the seller to disclose any known issues with the property, such as mold, water damage, or structural problems.

  • Closing Documents: This includes the final sales agreement, closing cost breakdown, and any transfer of property documents.

How to Get These Documents

Many of these documents should be kept in your personal records, but if you don’t have them on hand, here’s how you can obtain them:

  • Mortgage statements can be requested from your lender or mortgage servicer.

  • Property survey can be ordered from a surveyor or sometimes found in documents provided at the time of the original purchase.

  • Tax and utility records can be requested from your local government or utility companies.

  • HOA agreements can be obtained from your HOA or property management company.

  • Homeowners insurance records are available from your insurance company.

Why Are These Documents Important?

Providing the necessary documentation when selling your home ensures that the transaction proceeds without unnecessary delays. Proper documentation not only protects you but also makes the process easier and more transparent for the buyer, ultimately increasing the chances of closing the deal. In Illinois, the paperwork for selling your home can be extensive, but having all the required documents will streamline the process and give potential buyers confidence in the home.

Sources
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The Pros and Cons of Pocket Listings in Chicago Real Estate: Insights from Jessica Macey

The Pros and Cons of Pocket Listings in Chicago Real Estate: Insights from Jessica Macey

In today’s Chicago housing market, sellers have several options for listing their homes. One of the more exclusive methods is through a pocket listing, also known as a private or off-market listing. But how does this strategy work, and is it the right choice for you? Let’s explore the benefits and challenges of pocket listings, including insights from expert real estate agent Jessica Macey.

What Are Pocket Listings?

A pocket listing is a property that’s for sale but marketed privately, often outside of the widely used Multiple Listing Service (MLS). Unlike traditional listings, which appear on platforms like Zillow or Redfin, pocket listings are only accessible through direct contacts or exclusive networks managed by the listing agent. This allows sellers to maintain privacy or test the market before going public.

How Do Pocket Listings Work?

Pocket listings are shared only with a select group of agents or potential buyers. They may be marketed in invitation-only networks or to agents from a specific brokerage or region. Some sellers use this strategy to “test the waters” with pricing before listing their property widely, while others may prefer the exclusivity of a more private sale.

Benefits of Pocket Listings for Sellers

For some sellers, especially those who value privacy, pocket listings offer several advantages:

  • Exclusivity: Sellers can keep their property off public sites, which may appeal to high-profile clients or individuals who prefer discretion.
  • Avoiding Public Scrutiny: Sellers don’t have to reveal how long a home has been on the market, how many price reductions it’s had, or whether offers have fallen through.
  • Avoiding Bidding Wars: Pocket listings prevent sellers from having to evaluate multiple offers or hold open houses, offering a less stressful selling experience.

Challenges of Pocket Listings

However, there are significant challenges to using pocket listings:

  • Limited Exposure: The most significant drawback is the lack of exposure. Pocket listings don’t appear on the MLS, which means they’re only visible to a small pool of buyers. This limits the number of potential offers a seller may receive.
  • Longer Time on the Market: Research from Zillow and other sources shows that homes listed on MLSs tend to sell faster and for higher prices than those sold privately. Homes listed on MLS sold for 17.5% more than comparable homes listed off-market.
  • Pricing Difficulty: Without MLS data, sellers may find it challenging to set an accurate price. An agent can help determine the best pricing strategy, but without visibility into comparable sales data, pricing can become more difficult.
  • Uncertain Selling Success: Studies show that a significant portion of homes initially marketed as pocket listings are eventually sold on the MLS, which means they often don’t achieve their desired outcome through private listings alone.

Should You Choose a Pocket Listing?

When deciding whether to list your home as a pocket listing, it’s essential to weigh the pros and cons. While the strategy may offer privacy and exclusivity, it also limits exposure and can lead to a slower sale or a lower selling price. If your goal is to sell quickly or for the highest possible price, you may want to consider a traditional MLS listing.

Consult with a Real Estate Expert

As a Chicago-based real estate expert, Jessica Macey is here to guide you through every step of the process. Whether you’re interested in a pocket listing or prefer to market your home on public platforms, Jessica’s expertise can help you make the best decision based on your unique goals and circumstances.

Sources:

Whether you’re buying or selling, Jessica Macey offers comprehensive guidance to help you navigate the Chicago housing market with confidence!

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