Home prices in Waukegan increased by about 13% annually over the past five years, but buying a home in the city of nearly 90,000 people on the shores of Lake Michigan remains more affordable than in many northeast Illinois communities.
With the average sale price of a single-family home in Waukegan currently between $247,000 and $253,000, according to Realtor.com, it was $166,916 five years ago. Kris Seegren of RE/MAX Plaza in Waukegan said starter homes to Sheridan Road historic houses are a value.
“Sheridan Road homes average $400,000 in Waukegan, and in the North Shore suburbs they would be seven digits,” Seegren, a 35-year veteran of the industry, said. “Waukegan has always been a place for the first-time-homebuyer market.”
Marty Golden with HomeSmart Connect has a residential real estate career in Waukegan and Lake County spanning 40 years. He said he noticed a major change three years ago, though he sees prices starting to drop slightly in recent months.
“It seems to me in 2023 everything went up $100,000,’ Golden said. “Homes selling between $210,000 and $220,000 are now selling in the $330,000 to $360,000 range. Homes are staying on the market 30 days, and we’re seeing price reductions.”
Waukegan area real estate professionals are seeing a market slightly slowing in Waukegan, North Chicago, Zion and Gurnee, and remaining more affordable than other parts of Lake County.
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With similarities in home prices in Waukegan and Zion, Seegren said they are a little higher in Gurnee and slightly lower in North Chicago. Homebuyers historically look at the schools, proximity to major employers, and “placemaking.”
“It’s important the appearance of the home and the area is appealing,” Seegren said. “Buyers want the home move-in ready. Curb appeal is important. The roads and landscaping need to look good. Mayor (Sam) Cunningham’s Rebuild Waukegan is helping with that.”
Golden said higher values in Lake County communities like Barrington, Grayslake and Libertyville may push property taxes higher in the northeast part of the county despite the lower home prices.
Both Golden and Seegren said a brick ranch between 1,000 and 1,300 square feet with a garage and basement is a staple for both first-time home buyers and “baby boomers” born in the years following World War II looking for a smaller dwelling. They average around $260,000.
Rebecca Solano, an owner of Greentown Real Estate in Waukegan, said that, generally, real estate prices increase, though she has seen the market slowing slightly, particularly the higher-priced homes in excess of $300,000.
“It’s still pretty strong, but I’ve seen it weakening a little bit,” Solano said. “It’s definitely slower for homes over $300,000. They’re taking longer to sell. The less expensive homes typically sell more quickly.”
Larger homes are less popular. Golden said people are looking for places where less maintenance and upkeep are required. Some of the time they choose to rent their dwelling rather than purchase it.
“Young people are apprehensive homebuyers,” Golden said. “They don’t want the responsibility. They would rather rent. They’re looking for maintenance-free homes.”
Finding a smaller home is only part of the issue for baby boomers. Seegren said their larger
homes often have a mortgage rate of around 3% or less. Now the interest rate has climbed into the 6% or slightly higher range. The cost of a mortgage can be limiting.
“It is crazy now,” Seegren said of a 3% mortgage. “Six percent has been the average for the past 30 years. There is less inventory due to those low rates. People don’t want to give them up and pay 6 or 7%. The rate was 2.65% in January of 2021.”
Fewer people want the larger homes now, making them more challenging to sell. Golden said when he sees shortages of building materials at a home improvement store, it is an indication people are improving homes rather than selling them.
“There’s a lot of home remodeling,” Golden said. “Places like Home Depot in Waukegan are running out of things like drywall. You don’t see that in Gurnee. That really tells you what’s happening.”