Chicago Community Area #8024 (West Town,) and its East Village sub-area, which extends from Ashland to Damen, and from Chicago to Division, is an up and coming center of gentrification. The East Village in particular is seen as a promising neighborhood, due to its proximity to other prestigious old neighborhoods, such as Ukrainian Village and Wicker Park. With its own Blue Line stop at Division and Ashland, and with its complex commercial community along Chicago Avenue and Division Street, the East Village appears to be the focus of substantial residential improvement.
CONDO SALES ACTIVITY IN THE PAST DECADE
Sales Activity: Sales volume in the West Town area during the past ten years is up substantially, from 146 to 343 sales a year. West Town is now the third most active condo market in the City, surpassing even Lincoln Park.
Graph 1: West Town Sales Volume, 1994-2004
Condo prices in West Town have experienced a spectacular increase during the past decade, rising from $146,000 to $343,000 in just ten years! West Town prices are now higher than prices in either Lake View or the Near West Side, both of which are very popular condo markets.
Of particular interest, the median sales price in West Town, and the average sales price in the community are virtually identical. This means that condo units in the area, which includes Wicker Park, Ukrainian Village, and Noble Square are priced within a narrower price range. This is due to the high concentration of newer, mostly similar condo units, which have built in the older neighborhoods of West Town.
West Town condo prices were relatively stable during 2003 and 2004. However, prices did rise throughout 2005. By the end of the third quarter of this year, the average price was at $376,000. Prices in the area are not expected to fall going into 2006. But they may not rise as they have in the past five years, when interest rates were lower.
What is expected to change in the West Town condo market is market time, that is, the length of time it takes to sell a unit. Market time has already increased, from less than two months five years ago, to over a 100 days in the fall of this year. In addition, a substantial number of units have been taken off of the market.
However, even though market times are expected to continue to rise, the price of new units will probably not drop in price.
Graph 2: West Town Condo Prices, 1994-2005
MARKET TIME:
Five years ago, the average length of time a West Town condo unit was on the market was less than two months. This trend held up, even with the addition of a substantial number of new units. More recently, the average listing period (market time) has approached earlier market time levels seen five years ago.
However, a search of current MLS listings indicates that many, many units still sell within sixty days. However, there are those units that, for whatever reason, including new construction timing, have much longer listing periods (six months or longer.) These units tend to pull market time higher. It may well be that newer units sell faster, once they are completed, leaving ‘older’ resale units competing for a limited number of buyers.
Graph 3: West Town Market Times
The average price for units sold in the past couple years is approximately $350,000. The average market time to sell these units was only 79 days. There were 4,500 of such sales, for a staggering total value of $1.6 billion! Currently, the multiple listing service reports 217 “pending” sales, which sold for an average price of $381,000. These more recent sales were on the market for 108 days. It should also be noted that the prices for recently expired and cancelled units were listed at higher price levels and were on the market for longer periods. The current number of active listings is 614; their average price is $389,000 and the average market time is already 126 days. Clearly the West Town condo market has gotten both more expensive and harder to sell.
EAST VILLAGE STATISTICS
Some recent statistics were gathered for this sub-area only. The average price for 60 closed sales was $408,000, for pending sales the average price was $398,000. For those units currently for sale, the average asking price is $411,000. Market times for all types of listed units in the East Village have been much shorter than for the West Town area in general . Clearly, this sub-market is in demand, even with higher prices. If in fact, East Village units are preferred, the market may be willing to continue to pay more for such units, and market times for East Village condos may continue to be shorter.
SOME IDEAS ON BUYER STRATEGY IN WEST TOWN:
Sellers with larger capital gains in their properties may be more willing to offer concessions (units owned for five years or longer.)
In West Town, location counts, and the designated East Village sub-market is expected to hold value better than many other locations, (due to its good shopping and public transportation.)
Re-sale units may offer more value than newer units, particularly if the seller’s situation requires a fast sale.
With so many similar properties on the market, there is a strong opportunity to find value among seemingly similar units. Suggested ‘value’ components to look for are: the quality of the block, the appeal of the building, and a unit’s amenities, (especially parking.)
P J Fugiel ©2005
For Patrick McEneeley, special research request, December 15, 2005
* Market information supplied from the Fast Stat quarterly reports issued by the Chicago Area Realtors Association, and from the Multiple Listing Service (MLSNI) community data base for the West Town area.