Connecting the Dots: What Q4 Data Is Really Telling Us

Current Market Conditions

When I was a sophomore in high school, my history teacher taught us about World War II in a way I’ll never forget.

It wasn’t a lecture , it was a game, loosely based on Risk.

Two students teamed up, picked a country, and if you won, you earned a bonus A. Not extra credit, the equivalent of a full test grade. A real prize.

Each country started with two pins. Each pin got one move per day. If you invaded a territory and took it over, you got their pins. The more pins you had, the more moves you made. The more moves you made, the more territory you controlled.

I chose England.

My teacher immediately told me it was one of the worst choices. England was an island , it took a full day just to get your pins off of it. But that was exactly the point. If it took me a day to leave, it would take anyone else a day to invade.

I loved history. I knew the map. More importantly, I studied my competition. I quickly learned who cared about the game and who didn’t. I built alliances with Russia and Germany , strong positions, motivated players.

Day by day, territories fell. Eventually, only five countries remained: England, Russia, Germany, France, and Italy.

That’s when strategy mattered.

I convinced Russia and Germany to invade France and Italy. While they were exposed, I invaded them. I took their pins, then their countries, and finally the territories they had just conquered.

I won. I conquered the world.

It was the first time it had ever happened in my teacher’s 20+ year career.

When he asked how I did it, my answer was simple:
I studied the past. I understood positioning. I watched human behavior. I didn’t guess, I took calculated risks.

And that’s exactly where the market is right now.

Q4 stats are in. Many people don’t like numbers, they feel boring or overwhelming , but numbers tell the story of the market if you know how to read them.

Below are the Q4 Market Stats.

Here’s what it tells us.

The Near North Side is starting the year at 3.8 months of inventory, the lowest level in five years. Despite what headlines suggest, the data shows demand hasn’t disappeared. If inventory continues to tighten while rents rise, it’s only a matter of time before this market regains momentum.

That said, the story isn’t uniform. Properties above $1M are still sitting at 6.9 months of inventory, meaning the luxury segment is lagging. But perspective matters, this was 13.8 months in 2024. The improvement is real.

Now look at the outskirts markets.

Inventory is roughly one quarter of downtown levels. Market times are short. Prices are up. That’s why multiple offers are common, and why buyers are feeling pressure. If we’re entering Q1 with inventory already this low, and buyer demand continuing to rise, conditions are only going to become more competitive.

Just like that game in high school, success isn’t about predicting the future blindly. It’s about understanding what’s already happened, recognizing positioning, and anticipating how people will move next.

As Steve Jobs said:

“You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future.”

The dots are on the board.

The advantage comes from seeing how they connect, before everyone else does.

With the Current

What Else Happened This Week

Demand has surged exactly as anticipated. This is consistent with what we typically see after the first of the year, and the market is following that pattern closely.

Inventory was up, exactly as expected. We typically see many sellers wait until after the holiday season to bring their properties to market.

Rates took a meaningful dive this week, with some programs now showing rates in the 5s.

Contract were up this week, exactly as expected, as many buyers return from the holidays motivated to move forward.

Overall, the market was very hot this week. January is the new April, and we expect activity to continue heating up as we move further into the month.

Market Trends

What's Trending

Rates have already dropped another 0.5%. Additionally, there has been discussion around a potential $200B purchase of mortgage-backed securities. If this materializes, rates could move meaningfully lower, likely another 0.5% or more. This is one to watch closely, as it would significantly reshape the market landscape heading into 2026.

We’re seeing many sellers limit first showings to open houses. This will likely be a continuing trend. While it can be frustrating, it’s a strategy sellers are using to concentrate demand and create urgency.

We’re seeing more “highest and best” due dates on hot properties. Sellers are setting offer deadlines, often Sunday night or Monday, to collect more offers. This is a common high-season strategy and one we expect to see more frequently moving forward.

Checking Inventory

Single Family Homes

Single family homes continue to be the most sought after segment of the market, especially entry level homes in the outskirts. This is very much the unicorn right now. The mid range to luxury single family market is still moving a bit slower, but momentum is clearly starting to build. This is typical for the beginning of the year, as activity usually heats up first at lower price points and then works its way up as we move into February. As new single family homes come on over the next few weeks, expect strong interest and heavy showing activity, particularly on well priced listings. Lines to get in would not be surprising.

Overall, this remains a very strong seller’s market.

Lincoln Park, Lakeview, North Center, Roscoe Village

The entry level market here is starting to take off quickly. There is a convergence of buyers who have been waiting for months, New Year New Me buyers, and rental cycle buyers all entering the market at the same time. As a result, entry level homes are moving immediately and often seeing multiple offers. Mid tier properties are experiencing similar conditions, with strong interest and fast sales when priced correctly.

The luxury segment is also performing well, though not at the same pace as the entry and mid tier levels. Even so, anything that shows well and is priced appropriately is moving quickly. Overall, this remains a very strong seller’s market.

West Town, Wicker Park, Bucktown, Logan Square, Avondale

Same as above.

West Loop

We are starting to see a small bump in activity now that the calendar has turned. The entry level segment in particular has picked up with an increase in new buyer activity. The mid tier to luxury segment has been quieter, which is typical for the very beginning of the year. That portion of the market usually takes longer to gain momentum. This will be an area to watch closely as the year progresses to see if activity continues to build and shifts toward a seller friendly environment. For now, this remains a buyers market.

Old Town

Activity here is coming in strong. Walk up properties in the entry level and mid tier segments are performing the best, with quick movement and strong interest. The luxury segment was more moderate this past week, which is not unusual early in the year. Based on early indicators, we expect that side of the market to pick up quickly over the next few weeks. For now, this remains a very strong seller’s market.

South Loop

We have not seen a meaningful improvement here yet to start the year. The entry level segment saw a slight uptick in activity this past week, though that is coming off one of the slowest weeks of the year, so the change is modest. The mid tier to luxury segment remains very quiet at this point. Overall, this remains a big buyers market.

New East Side & The Loop

We are seeing a small boost in demand at the entry level, which is in line with expectations. Many renters in the neighborhood are starting to explore what buying looks like, and that has begun to show up in activity. The mid tier to luxury segment remains very quiet with limited movement so far. That said, this is an area worth watching closely, as it is starting the year with the lowest inventory we have seen in the past four years. For now, this remains a big buyers market.

River North, Streeterville, Gold Coast

There is some encouraging news here to start the year. Inventory is at its lowest level in four years, and the entry level segment is especially notable. Inventory there has dropped below four months, which is something we have not seen since 2019. We also saw a modest bump in demand at the entry level this past week, which is an important early signal. On the other side, the mid tier and especially the luxury segment still carry higher inventory than ideal, and demand remains limited for now. That said, conditions are shaping up better than they have in recent years, and the overall setup is improving. This is definitely an area to watch closely as the year unfolds. For now, this is a buyers market.

The Big Picture:

• Outskirts: It remains a seller’s market across all categories, 
• Downtown Core: Is a buyer’s market.

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What to Read

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• Real estate agents say the housing market is starting to balance out
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Have a great week! Let me know if you need anything.