The Ultimate Guide to Lake Forest Real Estate Market Trends

The Lake Forest real estate market, whether in California or Illinois, offers a dynamic and appealing landscape for buyers, sellers, and investors. Known for its scenic beauty, affluent communities, and strong economic fundamentals, Lake Forest is a prime location for real estate activity. This comprehensive guide dives into the latest market trends, historical data, and key factors influencing the real estate markets in both Lake Forest, CA, and Lake Forest, IL, providing actionable insights for navigating these competitive markets in 2025.

Understanding the Lake Forest Real Estate Markets

Lake Forest, California, and Lake Forest, Illinois, are distinct markets with unique characteristics, yet both are known for high property values, desirable neighborhoods, and competitive housing dynamics. Below, we explore the key trends shaping each market, drawing on recent data to provide a clear picture.

Lake Forest, California: A Seller’s Market with Strong Appreciation

Lake Forest, CA, located in Orange County, is a vibrant suburban city with a population of approximately 85,638 and a median home value of $1,190,000. The housing market here is highly competitive, with a Redfin Compete Score of 70 out of 100, indicating strong demand and limited inventory. Here are the key trends:

• Median Sale Price: As of November 2024, the median sale price in Lake Forest, CA, was $1.2 million, up 3.3% from the previous year. By March 2025, Rocket Homes reported a median price of $1,185,000, reflecting a 5.5% year-over-year increase.

• Days on Market: Homes typically sell in 36 days, slightly longer than the 34 days recorded last year, suggesting a fast-paced but slightly cooling market. Hot homes, however, can go pending in as little as 22 days.

• Inventory: In March 2025, there were 229 homes for sale, a 4.1% increase from February 2025, but overall inventory remains tight, contributing to a seller’s market.

• Price per Square Foot: The median sale price per square foot was $609 in November 2024, down 0.16% from last year, but by December 2024, it rose to $642, reflecting strong demand for quality properties.

• Appreciation Rates: Lake Forest, CA, has seen robust appreciation, with a 9.78% increase in home values over the past year and a quarterly appreciation rate of 2.09%, equating to an annualized rate of 8.62%. This outperforms 80% of California markets.

• Market Dynamics: The market is characterized as a seller’s market, with demand exceeding supply. Homes receive an average of three offers, and 50% of homes in March 2025 sold above asking price, while 40% sold below.

The housing stock in Lake Forest, CA, is predominantly single-family detached homes (53.74%), followed by row houses (18.78%) and large apartment complexes (18.31%). Owner-occupied homes account for 69.74% of the market, with three- and four-bedroom homes being the most common.

Lake Forest, Illinois: A Neutral Market with Steady Growth

Lake Forest, IL, located in Lake County, is a smaller, affluent city with a population of 19,252 and a median home value of $1,014,876. The market is less competitive than its California counterpart, with a Redfin Compete Score of 44 out of 100, indicating a neutral market. Key trends include:

• Median Sale Price: In February 2025, the median sale price was $1.1 million, down 6.0% from the previous year, but earlier data from October 2024 reported a median sold price of $1,045,000, up 10% year-over-year. The median list price in the 60045 zip code is $1,489,900.

• Days on Market: Homes sell in an average of 56 to 102 days, with hot homes pending in 32 to 37 days. This is slower than last year’s 97 days, reflecting a slightly less urgent market.

• Inventory: In March 2025, 118 homes were for sale, a 25.5% increase from February 2025. However, only 23 homes were listed in the 60045 zip code, representing 6.23% of properties.

• Price per Square Foot: The median sale price per square foot was $366 in February 2025, up 1.7% from last year, with single-family homes costing $33 more per square foot than condos.

• Appreciation Rates: Home values rose 4.9% over the past year, with a 6.51% appreciation rate in the last 12 months, slightly above the national average. However, over the past decade, appreciation has been modest at 34.35% (3.00% annually).

• Market Dynamics: Lake Forest, IL, is a neutral market, with balanced supply and demand. Homes typically sell for 1% to 3% below list price, though hot homes can fetch 3% above. Traditional home sales dominate (97.6%), with foreclosures and short sales minimal.

The housing stock in Lake Forest, IL, is primarily large, single-family detached homes, with 56.56% having three or four bedrooms. Owner-occupied homes make up 82.13% of the market, and much of the housing was built between 1970 and 1999 (41.95%).

Factors Influencing the Lake Forest Real Estate Markets

Several factors drive the real estate trends in both Lake Forest markets, including economic conditions, demographic shifts, and environmental considerations.

Economic and Demographic Drivers

• Lake Forest, CA:

  • Cost of Living: The cost of living is 56% higher than the national average, driven by high housing costs and proximity to Orange County’s economic hubs.

  • Population and Employment: With a population of 85,638, Lake Forest benefits from its location near tech and business centers in Irvine and Costa Mesa, attracting professionals and families.

  • Housing Demand: The prevalence of owner-occupied, three- and four-bedroom homes reflects demand from families seeking suburban stability.

• Lake Forest, IL:

  • Affluent Community: With a median age of 46.6 and a population of 20,807, Lake Forest is a wealthy enclave with a low unemployment rate (4.3%).

  • Proximity to Chicago: The city’s appeal lies in its access to Chicago’s job market while offering a serene, suburban lifestyle, attracting high-income buyers.

  • Stable Demand: The dominance of single-family homes and high owner-occupancy rates indicate a stable, long-term investment market.

Environmental and Climate Considerations

• Lake Forest, CA: The city is expected to see a 200% increase in days above 93°F over the next 30 years, potentially impacting property values and insurance costs. Buyers should consider energy-efficient homes to mitigate rising cooling costs.

• Lake Forest, IL: A projected 100% increase in days above 98°F over the next 30 years could affect livability, particularly for older homes without modern HVAC systems.

Foreclosure and Distressed Properties

• Lake Forest, CA: Foreclosures account for 3% of properties, with 32 properties in foreclosure, including 21 pre-foreclosures and 8 auction properties. These represent opportunities for investors but are a small portion of the market.

• Lake Forest, IL: Foreclosures are minimal, at 4% of properties, with 14 in the 60045 zip code, including 9 pre-foreclosures and 3 bank-owned properties. This low rate supports market stability.

Strategies for Buyers and Sellers

Navigating the Lake Forest real estate markets requires tailored strategies based on current trends.

For Buyers

• Lake Forest, CA:

  • Act Quickly: With homes selling in 36 days and multiple offers common, pre-approval for a mortgage and a competitive offer are essential.

  • Consider Condos: Condos are less expensive per square foot ($33 less than single-family homes), offering a more affordable entry point.

  • Research Neighborhoods: Use tools like NeighborhoodScout to identify high-appreciation areas within Lake Forest.

• Lake Forest, IL:

  • Negotiate: With homes selling 1% to 3% below list price, buyers have room to negotiate, especially for properties on the market longer than 56 days.

  • Focus on Value-Add Properties: Older homes (built 1970–1999) may offer renovation opportunities to increase value.

  • Work with Local Experts: Engage experienced agents familiar with Lake Forest’s unique market dynamics.

For Sellers

• Lake Forest, CA:

  • Price Competitively: With 50% of homes selling above asking, pricing slightly below market value can spark bidding wars.

  • Highlight Upgrades: Energy-efficient features and modern amenities appeal to buyers concerned about rising temperatures.

  • Stage Effectively: Professional staging can reduce days on market, especially for hot homes selling in 22 days.

• Lake Forest, IL:

  • Target Hot Homes: Price and market homes to sell within 32 days to capitalize on the 3% above-list-price premium.

  • Emphasize Lifestyle: Highlight proximity to Chicago and the appeal of large, family-friendly homes to attract affluent buyers.

  • Minimize Distressed Sales: With traditional sales dominating, ensure properties are in top condition to avoid price suppression.

Future Outlook for Lake Forest Real Estate

Looking ahead, both Lake Forest markets are poised for continued growth, albeit with different trajectories:

• Lake Forest, CA: The seller’s market is likely to persist due to limited inventory and strong demand from Orange County’s economic growth. However, rising temperatures may increase demand for energy-efficient homes, and buyers should monitor foreclosure opportunities for potential deals.

• Lake Forest, IL: The neutral market offers stability, with modest appreciation expected to continue. Buyers may find opportunities in a less frenetic market, while sellers should focus on differentiating their properties in a balanced environment.

Conclusion

The Lake Forest real estate markets in California and Illinois present unique opportunities for buyers, sellers, and investors. Lake Forest, CA, is a fast-paced, seller-driven market with strong appreciation and high demand, while Lake Forest, IL, offers a more balanced, stable environment with opportunities for negotiation. By understanding current trends, economic drivers, and environmental factors, stakeholders can make informed decisions to maximize their success in these dynamic markets. Whether you’re seeking a family home, an investment property, or a luxury estate, Lake Forest remains a premier destination in 2025.