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Lake Forest, Illinois: A Million-Dollar Real Estate Market with High Homeownership
CATEGORY
Property Value
DATA
Percent Owner Occupied
Housing Prices
Median Rent
Population
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Property Value
Percent Owner Occupied
Housing Prices
Median Rent
Population
Lake Forest, Illinois, an affluent suburban city north of Chicago, is renowned for its picturesque lakefront and historic estates. The city boasts a high rate of homeownership and substantial average home prices. Over the past decade, Lake Forest has experienced fluctuations in both ownership percentages and housing costs, with a general trend towards increased property values and stable homeownership rates.
The homeownership rate in Lake Forest has remained relatively steady, with a slight increase from 84% in 2018 to 86% in 2022. This stability in homeownership coincides with significant changes in average home prices. In 2013, the average home price was $790,960, which rose to $852,950 in 2014, representing a substantial 7.8% increase. The market then experienced some volatility, with prices peaking at $875,581 in 2015 before declining to $762,458 in 2020, likely influenced by the economic impacts of the COVID-19 pandemic. However, the market rebounded strongly, with average home prices surging to $964,424 in 2022, a remarkable 26.5% increase from the 2020 low.
Federal interest rates have played a role in homeownership trends in Lake Forest. The period from 2013 to 2015, when homeownership rates were at their highest (88% in 2013), coincided with historically low interest rates ranging from 0.11% to 0.13%. As interest rates began to rise in 2016 and reached 2.16% by 2019, there was a slight decrease in homeownership to 85%. However, the drop in interest rates to 0.38% in 2020 and 0.08% in 2021 corresponded with a rebound in homeownership to 86%, demonstrating the influence of favorable financing conditions on property ownership.
The rental market in Lake Forest has shown a gradual increase in both the percentage of renters and average rent prices. The renter-occupied percentage rose from 11% in 2013 to 15% in 2019, before slightly decreasing to 14% in 2022. Concurrently, average rent prices experienced significant growth, increasing from $1,771 in 2013 to $2,249 in 2022, representing a 27% rise over nine years. The peak average rent of $2,531 was observed in 2021, possibly reflecting increased demand for rental properties during the pandemic.
In 2023 and 2024, Lake Forest's real estate market continued its upward trajectory. The average home price reached $1,010,131 in 2023 and further increased to $1,055,904 in 2024, marking a 9.5% rise over two years. This growth occurred despite federal interest rates climbing to 5.02% in 2023 and 5.33% in 2024, indicating strong demand and resilience in the local housing market.
Looking ahead, predictive models suggest that Lake Forest's real estate market will likely continue its upward trend over the next five years. Average home prices are projected to increase by approximately 3-5% annually, potentially reaching around $1,250,000 by 2029. Average rent prices are expected to follow a similar pattern, with estimated annual increases of 2-4%, potentially reaching $2,600-$2,800 per month by 2029.
In summary, Lake Forest has maintained a high rate of homeownership despite fluctuations in the housing market. The city's real estate values have shown resilience and strong growth, particularly in recent years. The rental market has also experienced steady growth, both in terms of renter percentages and average rent prices. These trends, combined with the city's desirable location and amenities, suggest that Lake Forest will continue to be an attractive and valuable real estate market in the coming years.
