The decline in the Chicago market is deceptive. Other markets across the Midwest have been languishing as their key industries move abroad, but Chicago has one of the most diverse economies in the country and has mostly avoided this trend.
Instead, Chicago’s market has been slowing due to demographic trends. The city’s population has not changed significantly since the 1980s, and today there are about as many residents as there were 100 years ago. In cities on the West Coast, which are seeing unprecedented growth, there is a constant need for housing, businesses, schools, and roads. This is just not the case in Chicago. Most of the city’s existing facilities are still adequate, and the focus has instead turned to renovations.
Chicago’s residential sector experienced the same spike in demand in 2021 as many other markets. But because it is a small part of the overall market, this was not enough to offset downturns in other sectors. Combined with issues in the infrastructure and commercial sectors, the market declined in 2020 and 2021. Looking ahead, however, Chicago’s position at the center of the nation’s railroad and airline networks means that the shift to e-commerce will not be as damaging here.