Why Chicagoland’s first-time homebuyers face a tough spring

by Peter Thomas Ricci

first-time-homebuyer-obstacles-inventory-affordable-housing

From stagnant wages to competition from cash buyers, first-time homebuyers face many challenges in today’s housing market, but perhaps none is greater than the inventory shortage – a fact that is especially true here in Chicagoland.

According to a new analysis from Zillow, the inventory of affordable homes in Chicagoland has fallen 14.2 percent over the last year. Meanwhile, the supply of homes in the market’s middle tier is down 10.5 percent, and luxury homes in the top-tier are up 2 percent; those numbers are consistent with earlier analysis from Trulia.

The declining supply is causing prices to rise in the lower price points, and Svenja Gudell, Zillow’s chief economist, said that will only add to first-time buyer struggles.

“It’s going to be a tough homebuying market this spring, especially for first-time buyers or even people looking to move up into a slightly more expensive home,” he said.

Here is a more detailed breakdown on housing inventory across the country:

Metro Area Bottom-Tier Percent Inventory Change Middle-Tier Percent Inventory Change Top-Tier Percent Inventory Change
Atlanta -11.5% -11.9% 1.3%
Boston -13.1% -4.8% 14.6%
Chicago -14.2% -10.5% 2%
Dallas -27.5% -32.5% -10.1%
Los Angeles -26.3% -11.3% 1.3%
Miami -3.6% 7.8% 15.4%
New York -9% -3.6% 4.7%
Philadelphia -2% -6.4% 0.5%
San Francisco -17.7% -6.7% 1.7%
U.S. Average -10.4% -10.4% -1.9%