Got cash? With few properties on sale, Chicago homebuyers are having bidding wars

Michael Mutz has been ready to move out of his parents’ home in Lincoln Park.

But after nine months of trying to buy his first home, he’s starting to feel worn down.

“The experience is not particularly rewarding. I’ve specifically lost on several occasions to all-cash offers — additionally, all-cash offers far over listing prices,” he said. “With the supply being so limited, tons of people [are] trying to find places, and it’s taking forever. I did not at all expect going into this that it would take this long.”

Chicago homebuyers and real estate agents said there’s bidding wars for the few homes hitting the market, especially in neighborhoods like Lake View, Lincoln Park and Northalsted. The battle among buyers has been great for home sellers as properties sell for up to hundreds of thousands of dollars over their asking price. And some buyers — to help sweeten the deal — have been waiving certain contingencies like inspections.

“Things have been crazy. January was really the start of it, and things just went kind of nutso from there,” Alley Ballard, broker with real estate firm @properties, said.

Neighborhoods with strong retail corridors, like Andersonville, Lincoln Park and Wicker Park, are seeing high demand, Ballard said. But across the city, she’s seen homes sell for $100,000 to $200,000 — sometimes even $300,000 — above their asking price.

Zillow data shows Chicago’s housing market started the year hot, when it’s typically a slow period for home sales. An April report said 25% of Chicago homes in February sold in seven days or less, illustrating the speed at which properties flew off the market. And 24.7% of February’s home sale prices were above asking. For homes in the 60657 ZIP code, which covers Lake View, Lake View East and Roscoe Village 63.4% of homes sold above its list price, and more than half, or 53%, sold in seven days or less.

“Chicago is still too fast relative to the rest of the country and because homes that come on the market still sell so rapidly, inventory is not building fast enough,” Orphe Divounguy, senior economist at Zillow, said.

‘Lot of competition’

Agents said they don’t see the bidding wars ending soon, as the lack of new inventory remains an issue.

The number of new listings in June was down 11.3% year-over-year for single-family homes in Chicago and 2.8% for attached properties, like condos and townhomes, according to the Chicago Association of Realtors. There were 1,245 new single-family homes listed last month and 2,083 attached homes, the association found.

Meanwhile, the number of homes for sale hit a historical low in June. There were 1,373 single-family homes and 2,121 attached properties on the market — the lowest figures the association has on record since 2008, the start of its available data. That’s less than two months of supply for both attached and detached properties, well below the 4-6 month threshold needed for a housing market to be considered balanced.

“This year, we have all of those prospective home buyers that have been trying to purchase homes the last four or five years coming out of COVID but have lost multi-offer situations. Combine that with the new rush of buyers out there that wants to move for the usual reasons and with the limited inventory, it really creates a lot of competition,” Sammy Lubeck, Realtor at Baird & Warner, said.

Years of high interest rates following the pandemic kept many prospective homebuyers on the sidelines, but agents said buyers are feeling restless, spurring demand. But borrowing costs are still high. The average rate on a 30-year fixed-rate mortgage rose to 6.66% from 6.58% last week, Freddie Mac said Thursday. It’s now the highest since July 31, 2025, when the rate was 6.72%. In February, the rate fell to 5.98% — the lowest since 2022.

Divounguy said although there have been more home sales in Chicago over the past year, it’s still below pre-pandemic levels. That’s because there aren’t enough homes on the market, and once listed, they’re selling fast.

“Unless we get enough listings on the market, the market’s going to remain tight, and that keeps the pressure on prices and rents,” Divounguy said. “Chicago prices and rents are still rising relatively faster than other major markets.”

In Lincoln Park and Lake View, the average sale price for a home has risen dramatically following the pandemic. The average sale price for Lincoln Park properties in June was $795,000, up 12% from June 2025 when the average sales price was $710,000, according to Zillow’s InfoSparks. In Lake View, the average sale price in June was $587,500 — a 5.4% year-over-year increase from $557,500.

Homes in Lincoln Park and Lake View sold in an average of 17 and 23 days, respectively.

“It’s a frenzy because there’s so little inventory,” Dawn McKenna, broker and founding principal of Dawn McKenna Group, said.

McKenna said Lincoln Park is currently one of the best markets in Chicago. Her team listed a two-bedroom, two-bathroom property with a roofdeck in April for $1 million. There were 17 offers, and it sold in May for $1.2 million, she said.

“If something is really great — it’s a great location, and it’s priced where the market is meeting the demand — it just pops off,” McKenna said. “Lincoln Park is the hottest market. It’s very, very challenging to even rent, let alone buy a house.”

Anthony Vazquez/Sun-Times

Agents will study a neighborhood’s comps, or comparable sales, to get a sense of the market and what their clients can expect to spend, or earn. But Ballard and other agents said comps have effectively become meaningless because homes are selling at a much higher price, as buyers bid above asking to stay competitive.

Some agents are even encouraging clients to shop for homes in a lower price range so they can bid significantly more than than its list price. Buyers will also offer to pay in cash, waive inspections or cover the property’s appraisal gap, if applicable, according to McKenna. The appraisal gap is when the appraised value of a home is lower than the purchase price.

Lake View resident Ellie Howie is looking to buy her first condo and has mostly been looking in Lake View and Lincoln Park.

She made her first offer June 29 on a two-bedroom, one-bathroom condo in Lake View, but it fell through. There were six other offers on the property.

She said it’s been “crazy” since she started looking two months ago.

“I still check every day to see if that offer fell through,” Howie said of the condo she lost. “There’s just not a lot out there. It seems like any place I find that’s reasonable … is going for oftentimes $100,000 over asking and has so much competition [and] people putting in anything to get it.”

Cash and contingencies

Mutz was at an open house in Lake View last month. The top-floor condo on Aldine Avenue was on the market for the first time in nearly 30 years, according to listing details. He was one of more than a dozen potential buyers touring the property.

Listing agent Patrick O’Brien, of Compass, said he had more than a dozen tours scheduled for the following day.

The 950-square-foot one-bedroom, one-bathroom unit was flooded with natural light. Listing details show the property sold for $400,000, about a month after it hit the market asking $329,900.

O’Brien said the property had multiple offers, with the winning buyer paying cash.

“The offer we accepted not only had a great purchase price but also had really great terms and conditions,” he said.

O’Brien said many buyers lack an accurate picture of the current market. Online platforms like Zillow, Redfin and Homes.com give people the chance to browse listings and market data, but experiencing the market firsthand presents a different reality.

“The buyer walks away going, ‘But I gave them $50,000 above list price with … 20% down. That’s a really good offer.’ In another market, in another time, it would be,” O’Brien said. “The question is: Is it in this market? Do you need an as-is clause? Do you need the right to inspect without requests for repairs and credits? The answer is yes, you do. You have to throw everything at the seller if you really, really want it.”

And many are putting in offers where they waive an inspection contingency, forgoing their right to negotiate repairs or the purchase price based on repairs that need to be done. Some brokers are divided on if they’d advise their client to waive inspection contingencies.

McKenna said her team will often bring contractors and architects to home tours, in lieu of an inspection. She also advises her sellers to do a pre-inspection before listing their home so potential buyers will feel more at ease.

Lubeck said he’d never recommend a client waive an inspection contingency. He also stressed that offering to cover the appraisal gap is “huge” when the buyer is taking out a mortgage.

“You just never know what kind of money pit somebody may walk into,” he said. “You’ve got to have your opportunity to do your due diligence in these multibid situations.”

Above all, brokers stressed that those looking to buy should enter the market early and have patience. But searching during the slow seasons, like late fall and winter, can give buyers a leg up.

Mutz said he feels grateful to be living with his parents while looking for a home, even though it’s taken longer than he expected. He said patience is key, and it’s something he’s trying to remind himself of when the search gets difficult.

“I really don’t want to get into a mindset of settling for a place,” he said. “If you’re patient enough, I think the prospects of you finding a place that’s right for you only grows with time.”