For those of us who grew up in Chicago after World War II, it appeared that everyone was leaving for the suburbs. It seemed that the old neighborhoods were doomed. The only vitality left in the City was in the Loop, or along Michigan Avenue. Annual statistics for the year 2004, made available by the Chicago Area Realtors, indicate that for the first time in many years, homeownership in the City of Chicago has regained its former luster. Their statistics track metropolitan area prices and sales volume for both detached and attached units, over the past ten years. While the volume of sales is still dominated by suburban activity, the price of owner units shows substantial gains made by City residences, whether they are detached or attached units.
In 2005, the price of a home in Chicago, whether attached or detached, is roughly comparable to suburban prices. The production of attached units in the City is booming, and the sales volume of owner units has accelerated rapidly. For those of us who have always loved the City, and wanted to see it re-invent itself, these statistics from C.A.R. are an amazing set of numbers. Unlike many other rustbelt cities, from Buffalo to St. Louis, Chicago is at the center of a historic real estate renaissance. Prices only seen in New York or San Francisco have come to Chicago’s most desirable neighborhoods.
SALES VOLUME:
Back in 1994, the region’s suburbs absolutely dominated the volume of sales for both types of owner units. In those days, Chicago had renters and the suburbs had owners. Only 18% of all owner sales in the region were for units in the City. But in the past ten years, the volume for owner sales in the City is up 140%. Sales volume for attached units has gone up over 200%. Price gains like we have seen in the past decade encourage an increase in unit sales. By 2004, City sales were a quarter of all metro home sales. In the booming market for attached units, City sales have become an impressive 42% of the metro market.
PRICES FOR DETACHED HOMES:
The most amazing trend among all types of units is the price rise among detached Chicago owner units. Because of their scarcity, detached homes have seen prices increase 135%, going from $91,500 to $216,300. The median price in eleven City neighborhoods rose above the $500,000 mark. Prices for this type of unit rose in many other neighborhoods as well. Such increases are a sure indicator of just how few detached units they are in the more desirable areas. Even in Woodlawn, the median price of a detached home rose 205%. On the west side, in West Garfield Park, the median price rose 200%. In stable Bridgeport, prices were up 400%.
Ten years ago, in 1994, the median price for suburban detached units was $133,000, compared with the City price of only $91,500. In 2004, the suburban price was $220,200, compared with a City price of $216,300. The numbers are now almost the same. A forty thousand dollar price gap has virtually disappeared.
ATTACHED HOMES:
While the price gap has all but disappeared for detached City and suburban units, the price differential for attached units is even more remarkable. The median price in 2004 for an attached Chicago unit stood at $168,000, compared to the suburban median of $156,000. Back in 1994, the suburban median unit was valued at $81,615, compared to the City median of just under $70,000.
The Chicago neighborhoods with the highest volume in 2004 for attached units, include the Near South Side (3,918 units,) West Town (1,603 units,) the Near West Side (1,453 units,) and Lakeview (2,440 units.) These neighborhoods have a high concentration of young working adults, a lot of conversions or new construction, proximity to jobs or transportation, and a scarcity of owner inventory. Prices for attached units reflect the higher incomes earned by households moving into these areas. Here is a listing of the ‘hot spots’ in Chicago city ownership trends.
