Are you ready for a new home? If you want tobuild your next home from the ground up, you've likely got questions about what that will cost. It goes without saying that the cost of your new home in the greater Chicago area depends heavily on the home's location and size. Today, we’ve compiled information from Zillow, the Illinois REALTORS® via Norada Real Estate Investments, and MRED (Midwest Real Estate Data LLC) via Center Coast Realty to help you get a sense of the current housing market in Chicago and its surrounding areas as we move into 2023 and take stock of the changing new construction market.
New Construction Home Costs in Chicago
According to Zillow, new construction home costs in Chicago for a 3+ bedroom, 2+ bathroom house range between $4,900,000 (3 bedrooms, 4 bathrooms, 3,622 square feet) and $355,500 (4 bedrooms, 4 bathrooms, 2,413 square feet). Please note that the numbers listed here represent only new construction home costs, not existing homes or apartments.
For that statistic, Zillow also reports that the value of homes in Chicago is $310,452. At the time this blog was written, this number was up 3.6% year to date. These numbers are based on middle-tier homes. Furthermore, Zillow shows that home prices in Chicago have been steadily on the rise since September 2012, not including a small dip in housing costs in December 2019 that was quickly ignited by the pandemic.
Cost to Build a House
Residents of suburban Chicago know well that the state averages for Illinois are often not the reality in their local market. The allure of the Windy City drives up the cost of living in almost all areas of daily life. That's why the cost of building a new home in Illinois could be as little as $150 per square foot, but you'll pay upwards of $350 per square foot for new construction in the Chicago suburbs in affluent and trendy areas such as Arlington Heights, Barrington, and Mount Prospect, Illinois.
With that in mind, a well-appointed 2,500 square-foot 4-bedroom custom home in the northwest suburbs of Chicagoland starts at $875,000. Factors such as labor cost, sophisticated architectural details, high-end materials, demolition, and site prep work are at play. You could pay less if you build a smaller home or make compromises in your material selection. You can also buy existing new construction, but you won't have an influence on details, such as the floor plan and design selections.
2023 Market Estimates
After the volatility of the supply chain and the meteoric rise of construction costs in the last few years, many folks are waiting to see the cost of construction materials and labor go down. Unfortunately, most experts agree that the bulk of the market correction is now behind us, and we can expect the cost of building a new home to trend as it has historically. This means that we aren’t predicting labor or lumber costs to go down in 2023 or anytime soon. Though we can’t predict the future, we can safely say that remodeling and new construction are less expensive today than they will be in the future. The cost to build a house will only go up.
As you can see, the cost of building a home in Chicago (or any area) can vary, and it's wise to enlist the help of local building experts when planning your next move.
This article uses data from the most recent Remodeling Cost vs. Value report, which pulls averages from 2021. Due to unprecedented market volatility and supply chain irregularities last year, some projects' residential construction prices in Chicago have increased up to 25%. Have a discussion with an experienced builder to know the most accurate and up-to-date building cost estimates. Now, it's more important than ever to hire a professionalcontractor with longstanding supply and labor relationships.