Chicago Real Estate: A Steady Market With an Eye on 2026
The Chicago real estate market in 2025 has found a steadier rhythm after several years of change, turbulence, and many ups and downs, particularly in established neighborhoods and suburbs on the northwest side.
Inventory remains limited, largely because many homeowners are choosing to stay in their homes, which were financed at historically low interest rates. This has caused increases in pricing in the first half of the year. Some buyers retreated to take a break in some Chicago areas in the third and fourth quarters of this year. In our local neighborhoods, buyers continue to seek classic architecture, generous lots, and convenient access to transportation, parks, and local schools. The median home price for Norwood Park is in the mid-$400s range. This information comes from the Chicago Association of Realtors, which views Norwood Park as the geographic area from Gunnison Avenue to the south to Albion Avenue to the north, Milwaukee Avenue to the east, and Canfield Avenue to the West. Norwood Park is also one of the largest geographic areas in the Multiple Listing Services, which causes a wider range in pricing.
Interest rates in 2025 have decreased and somewhat stabilized, allowing buyers and sellers to plan with greater confidence. While rates are higher than the “ultra-low” levels of the past, they have become familiar—and manageable—for many households. Creative financing options and thoughtful pricing are playing a larger role in getting homes to the closing table.
Looking ahead to 2026, most economists anticipate gradual interest-rate easing, rather than dramatic drops. Even modest declines could bring more buyers into the market and encourage some homeowners to sell, slowly increasing inventory. This points toward a healthier, more balanced environment rather than sharp price swings. It has been forecasted by industry professionals that, with mild rate reductions in the coming year, home prices could increase up to ten percent in 2026 in many local areas.
My takeaway is one of cautious optimism. Buyers should be prepared to make educated decisions, while sellers should focus on realistic pricing and presentation. As the market moves into 2026, neighborhoods remain well-positioned in pricing—offering stability, lifestyle, and long-term value in an ever-changing real estate landscape.
I look forward to working with many of you in the coming year.
Contact Dympna Fay-Hart, SRES with Baird & Warner Real Estate by calling 773-230-3800 or visit: www.fayhart.com.
