What does this mean for Chicago’s housing market? While both Strauss and Yun described the year ahead as, essentially, more of the same weakness, Ratiu offered a specific forecast: As Crain’s reported in December, Realtor.com expects Chicago-area home sales to decline by 0.9 percent in 2020, and prices to dip 0.3 percent. That’s essentially flat with 2019, particularly on prices.

At least 14 of the biggest 100 U.S. cities are expected to decline more than Chicago, in Realtor.com's forecast.



The economists offered some reasons that have become familiar: ongoing population loss and high property taxes.



In Illinois, “half a million people are employed in state and local government,” Ratiu said. “I’m just going to point out that has an effect on your taxes. I’ve heard taxes are a problem in Chicago.”



Yun said a factor that’s hurting Chicago’s market is a national problem as well. “There’s not enough inventory for sale at the midprice level, midprice and below,” which he put in the $200,000s. “That’s where most of the buyers are,” he said.



There are two key reasons for the lack of Chicago-area homes available for sale at that price level: Vast numbers of homeowners in our slowly rising market are upside down on their mortgages and can’t afford to put them on the market with the prospect of having to show up at the closing with cash to fill in between the sale price and mortgage debt. And builders of new homes can’t afford to build at low prices in many of the areas where young households want to be, such as the city’s hot neighborhoods in the West Loop, along the Milwaukee Avenue corridor and the Near Southwest Side.



“I would say—builders, build midpriced homes and you can sell them,” Yun said, though he acknowledged that making the numbers work is a challenge.