When we look around the country, most regions have experienced significant cooling. Inventory has increased, prices have come down, and the once red-hot Sun Belt and West Coast markets have settled into slower, more buyer-friendly market conditions. But this is emphatically not the case in Illinois and the western suburbs of Chicago. Our market is a clear outlier.
While much of the country has improved housing supply, the western suburbs of Chicago remain very tight, along with the rest of the state. This has kept conditions more competitive and expensive than the national average, and also faster than you’d typically expect for this time of year.
The most important difference between the western suburbs of Chicago and the rest of the country is inventory.
According to data from Illinois Policy and Realtor.com, Illinois currently has only about 40% of the inventory it had before the pandemic. This is much lower than the national average, which has recovered to nearly 90% of pre-pandemic levels. It’s a significant gap. Illinois has the second-lowest inventory levels in the entire country, and it explains why the Midwest, and Illinois, in particular, remains one of the hottest markets in the entire country. While much of the country has a surplus of listings, our market continues to experience a shortage of listings. Sellers, take note. While lower interest rates have helped with affordability, they have also brought more buyers out, which has also served to keep demand and competition high.
Low inventory in our region has meant fewer sales, but it has also kept prices high. Between November 2024 and November 2025, Illinois Realtors reported that home sales across the state declined by about 9%. At the same time, prices rose by about 5%. The Zillow Home Value Index showed the average cost of a home in the state rose from around $190,000 in 2018 to about $280,000 in 2025. That’s a nearly 50% increase over 8 years, or around $90,000 for the same house.
Now, these gains haven’t been uniform. Some communities have seen home values more than double. In many areas, home values have well outpaced income growth. In Naperville, homes have appreciated by over $200,000 since 2018. In Burr Ridge, homes have increased in value by almost $300,000, and in Hinsdale, they’ve come up by $415,000. And while the premium in Downers Grove has only increased by $143,000 since 2018, that still represents appreciation by 44%.
The city of Chicago provides an interesting test case. In 2018, Chicago had more than 38,000 homes for sale. By 2025, the number had fallen to around 23,000, or a decline by about 40%. That means that buyers today are competing for 15,000 fewer homes than they were 6 years ago. This trend hasn’t reversed. The city recorded fewer sales in November, 2025 than in November, 2024, while pricing remained elevated. Other markets across the state have seen inventory declines by over 70% since 2018. The issue isn’t local to a few markets. It’s statewide and systemic.
There are a number of reasons for this. New construction in Illinois remains well below what is needed, but slow wage growth and economic pressures have put builders in a difficult position, and they’re often having to cut prices or offer other incentives to entice would-be buyers. At the same time, restrictive zoning laws have also been challenging for builders and developers, especially in areas with the strongest demand. Policies that limit density, mandate expensive and impractical parking requirements, or limit accessory dwelling units like coach houses or in-law suites, all suppress inventory in a market that is desperate for more of it.
And then, there’s the burden of Illinois property taxes, which, as an added cherry on top, are the highest in the nation. These high carrying costs reduce mobility, discourage residents from downsizing in-state, and make development much less attractive, all of which further restricts inventory. It’s not just that Illinois is lagging the national recovery. We’re operating under a unique set of constraints that is preventing supply from responding to demand.
The result is a housing market that behaves differently from the rest of the country. Buyers here face sustained competition, limited options, and higher prices, even as national headlines relentlessly emphasize more relaxed conditions. Until inventory improves, Illinois will remain an exception to national trends. We’re experiencing a deeper and more persistent housing supply shortage than most of the country, and that reality continues to shape conditions for buyers and sellers. If you’re a buyer in the western suburbs of Chicago who would like help navigating this market or a seller looking to maximize your equity, reach out using my contact information, below. I’m Eric with Andersen Realty Group, a family-owned brokerage where we treat our clients like family.