In Chicago’s south and west suburbs, the typical distressed seller no longer fits the familiar profile. These homeowners are current on their mortgages. They haven’t lost jobs or taken on reckless debt. The pressure forcing them out is the property tax bill. Rising insurance premiums and HOA fees have compounded the problem, according to Aaron Gaines, a Realtor with Keller Williams Preferred Realty who has worked the Chicagoland market for eight years.
Gaines says he is seeing more pre-foreclosures, active foreclosures, and short sales driven not by mortgage distress but by the compounding costs of ownership. “I think factors that are affecting this, one being our inflation, and also our rising property taxes,” Gaines says. “We’re seeing those things being shouldered on a lot of the south and west suburbs.”
The result is a wave of preemptive sales. Homeowners are choosing to list before they fall behind, rather than waiting for the foreclosure process to begin.
Illinois property owners can appeal their assessments, and some successfully reduce their burden through that process. But Gaines says the system doesn’t work as a safety net for everyone facing high tax bills.
“Those that can’t get their taxes appealed or lowered are either forced to sell, or they’re at a loss and have to get out,” he says.
On the day of this interview, Gaines was heading to a property where the owners had made exactly that decision. “They can’t afford the house anymore,” he says, “so before they end up in foreclosure, they’re going to sell the house.”
This pattern complicates how listing activity in these suburbs should be interpreted. A rise in inventory in certain south suburban zip codes may not signal improving supply conditions. It may instead reflect financial stress among existing owners who are exiting before their situation worsens.
Gaines identifies property taxes as the leading pressure point, but notes that taxes aren’t acting alone. Insurance premiums have also increased, and HOA fees add another fixed-cost layer that owners must absorb regardless of market conditions.
“Taxes are going to be an issue, HOAs are going to be an issue,” Gaines says. “Insurances, premiums have also gone up some.”
For households operating near the edge of affordability, any single increase might be manageable. The combination of all three, layered on top of a mortgage payment, is proving too much for a segment of south suburban homeowners. Gaines says no pocket of the south suburbs is shielded from these economics. Tax spikes are hitting broadly across the region.
For buyers considering the south suburbs, this means that a home’s sticker price alone does not capture the full cost of ownership. A property that appears affordable based on its sale price may carry a tax burden that has risen sharply in recent reassessment cycles. That burden does not reset at closing.
Even with distressed sellers entering the market, Chicagoland remains in a seller’s market with tight inventory, according to Gaines. That creates a particular bind for buyers squeezed on affordability: fewer move-in-ready options exist at lower price points, and what does become available may carry the same elevated tax and insurance costs that pushed the previous owner out.
Gaines says that almost as long as he has been selling real estate, Chicago has been in a seller’s market. Buyers with five items on their wish list are forced to narrow to their top three non-negotiables. Even then, they may only get one or two of those met.
The tight supply also means that distressed listings in certain communities do not sit long. Demand absorbs them, but the underlying ownership cost problem transfers to the next buyer unless taxes are successfully appealed or costs otherwise decline.
Gaines describes his approach to distressed sellers as case-by-case problem solving rather than a standardized process. “I consider myself a puzzle maker of sorts,” he says. “There is no one size fits all, you have to have the ability to hear a person’s heart, to hear where they’re at, and be able to best solve for X and get them to a reasonable out.”
Part of that process involves connecting distressed sellers with lending partners and programs that may offer alternatives to an outright sale. On the acquisition side, Gaines says his team actively seeks out loan officers and down-payment assistance programs that can help buyers absorb some of the cost burden when purchasing in high-tax communities.
For sellers facing sustained tax pressure, however, Gaines acknowledges that a sale is often the most viable path. The question is whether they act early enough to sell on their own terms, or wait until the foreclosure process narrows their options.
About the Expert: Aaron Gaines is a Realtor with Keller Williams Preferred Realty, working across roughly 10 counties in the Chicago metro area, with a focus on the south suburbs.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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