2012 Economic Forecast for Chicago: Real Estate and Jobs
Industry experts predict 2012 will be a better year for Chicago than 2011, citing gains in both residential and commercial real estate sales. The recovery may not hit previously expected levels for job growth, but the housing market could see a 40% jump in sales from last year.
An article yesterday from Crain’s Chicago Business broke down a New Year’s forecast from Moody’s Analytics that predicted slight but positive gains for the local economy. Chicago real estate will likely make a noted improvement in regards to number of sales. Luxury commercial properties are already being bought up much quicker than before. This premium market demand is expected to eventually lead to more activity in the mid- and lower-end markets—especially for bank-owned properties that will likely drop prices drastically in 2012 to unload excess inventory of foreclosures.
Annual sales for Chicago-area housing may shoot up by as much as 40% in 2012, says the president of one consulting firm for residential real estate in Schaumburg. This sizeable increase in home sales would be good for trimming down the number of distressed properties in Chicago neighborhoods, however it would make it tougher for real estate values to rebound as home sellers compete for buyers with properties that are discounted 25%.
On the employment front, industry analysts predict job growth in areas such as manufacturing, sales and business development. Production of aerospace technology and medical equipment is expected to do well this year, as are positions directly related to bringing in revenue for a company (e.g. sales agents and business strategy developers). Even with an optimistic outlook for certain sectors, Moody’s anticipates the unemployment rate in the Chicagoland area will rise less than a percent in the first 6 months of 2012. It closed out 2011 at 10.6% and is predicted to hit 11.4% by June 2012. The numbers are slightly weaker than a prior forecast from Moody’s when it announced the jobless rate would drop to 9.2% in the first half of this year.
Both employment and real estate have a lot of ground to make up before things are considered rosy again. However, it is important to remember we need to look at pre-housing bubble levels when examining recovery figures. The era before the real estate boom reveals much more realistic conditions for a healthy and sustainable economic environment. So while an economic rebound will be slow going, there is light at the end of the tunnel.