THE
NEW
NEWRULESOFREALESTATE
Elevenyearsago,
ChIcago
offeredaguidetomakingthemostofthesizzling-hothousingmarket.Whatadifferenceadecademakes.Now,confrontingtherealitiesoftoday'spinchedeconomy,localreal-estateprosweighInwiththebeststrategiesforbuyingorseilingahome.
PLUS:
OurannualsurveyofhousingpricesInnearly300neighborhoodsandtownsbeginsonpage80
intoday'smarket-thatitsimplydoesn'tmatterwhattheypaidforthehouse-andtookstrategicstepstogetthepropertysold.Withadownwardtiltthathasnowpersist-edforalmostfiveyearsandhasdrainedalargerpercentageoutofhomevaluesthantheGreatDe-pressiondid,therulesofbuyingandsellinghavechangeddramatically.BackinOctober2000,withtheeconomystillridingthedot-corn-fueledboom,
Chicago
publishedastorycalled"TheNewRulesofRealEstate."Atthetime,Ire-portedthatbecauseeverythingwasgoingupsoquickly,pastpricesweren'tmuchhelptowould-besellerstryingtodetermineasalepricefortheirhome.
As
forhomebuyers,theycouldn'tspenddaysponderinganofferbecausepropertiesweregettingsnatchedupsofast.Severalyearsofexplosivegrowthfollowed,butbythespringofthisyear,Chicago-areahomepriceshaddroppedbacknearlytowheretheywere11yearsago.Clearly,it'stimeforanewsetofrules.
(continuedon
page
103)
BYDENNISRODKIN
ARLYTHISYEAR,WITHTHEHOUSINGMARKETINITSDEEPESTDITCH
inadecade,LindaandMarkPaternostrodecidedtoselltheirGlen-coehomeoffouryearsandmovetoanothertown.Theyputthefive-bedroomhouseonthemarketat$1.149million-$101,000lessthanthe$1.25milliontheyhadpaidforitin2007.Stungbytheideaoflosingmoney,Markhadadvocatedstartingoutabovethe2007purchaseprice,justtoseewhatmighthappen.Buthavingwatchedotherhousesintheneighborhoodlingeronthemarketforayearormorebecausetheiraskingpricesreflectedrosier(andlonggone)economictimes,Lindawouldn'thave
.it,
"Priceshadbeenplum-meting,andI'mafinancialrealist,"shesays."Therealityisthereality."
A
monthafterputtingthehouseupforsale,thePaternostroscutthepriceto$1.099million;twoweekslatertheplacewentundercontractat$970,000,or22percentlessthanwhattheyhadpaidforitfouryearsearlier-andthatdoesn'tincluderoughly$1,000spentonsmallrepairsandcleanupstoputthehouseonthemarketinsparklingcondition.Despitethelosses,Lindafeels"exceedinglylucky.Itcouldhavebeenalotworse,"shesays.
"It
couldhavetakenaverylongtimewhenwewerereadytobesomewhereelse."
It
wasn'tonlyluckthatworkedforthecouple.
It
wastheirhard-nosedtakeonthedreadfulstateofrealestate.Theystartedoutbyacceptingtheprimaryruleforsellers
CITYNEIGHBORHOODS
RlISRBORHOODDETACHEDROUSIIISTOWlIHOUSIS,CORDOS,ITC.
1606721.8662
N/A
13034314.03-11.27$70,367$66,618
111
2074.76-6.84$14,1264$97,6681282334.86-3.64$71,79948
IVEYEARSINTOTHESTEADY
$82.7266414.47-22.42$18,6716
declineofChicago-areahome
72100.66-8.68$170,97780
prices,thegloomispervasive.
31414.92-7.68$70,26261
It'sevidentinthefadedsigns
12363.26-1.23$113,1606
hangingonlong-unsoldfore-closures,inthehalf-empty
68191.81-9.16$218,29429
condotowerswiththeir
BRIGHTONPARK
1266312.66-7.62$106,23012
swathsofdarkenedwindows,
BURNSIDE
1682047.366.37$13.7002
andhereinthecolumnsof
Chicago's
annual
CALUMETHEIGHTS
128887.98-9.62$36.000
real-estatecharts.whichwerepreparedwithinformationprovidedbyMidwestRealEstate
CHATHAM
123113-6.78$31.73021
Data(MRED).
CHICAGOLAWN
$67.806101-4.66$40.0002
Studythesepagesclosely,however,anda
CLEARING
$162,409147-12.47$96,39032
fewbrightspotsemerge.About20percentof
DOUGLAS
$249,307302-2.40$91,81660
the77neighborhoodsand211townsonthecharts-whichtrackhomesalesbetweenJuly
1.
DUNNING
$181,276119-11.46$106,60769
2010,andJune30,2011-sawincreasesintheir
EASTGARFIELDPARK
$72.4142704.72$37,69967
averagehomesalepriceswhencomparedwith
EASTSIDE
$96,896160-3.24$47,6001
lastyear.(Only10percentofthecommunities
EDGEWATER
$632,262137-9.42$176,613363
ontheOctober2010chartsexperiencedagain.)There'snoperceptiblepatterntotheseupticks:
$298.18997-6.62$112.66617
Annualincreasesoccurredinareaswithhigh,
107-66.60-16.32$6,4606
middle,andlowincomes;onthecity'sNorth
16193.64-2.66$187.61421
andSouthSides;andinsuburbsbothneartoandfarfromthecity.
27
N/AN/AN/A
0
Theyaretheluckyones.Inmorethanthree-
877.78-0.36
N/A
0
quartersoftheneighborhoodsandtowns,home
GARFIELDRIDGE
16146.14-7.28$64.7229
pricesweredownfrom2010.(Thepercentage
GRANDBOULEVARD
$173,96216938222.43-12.46$66,043166
ofcommunitieswithincreasesandthepercent-agewithdecreasesdon'taddupto100percent
GREATERGRANDCROSSING
$66,166120109-8.66-2.04$12,4888
becausesomecommunitieshadnosales,oth-
HEGEWISCH
$116,8211914166.66-2.48
N/A
0
ershadtoofewtomakeanaccuratecomparison,
HERMOSA
$114,7491616312.61-3.49$29,94316
andsomeexperiencednochange.)Overall,ac-
$66,4941161271.386.02$60,00746
cordingtodatafromtheStandard&Poor's/case-ShillerHomePriceIndices,homepricesinthe
$744,13313716231.3917.13$201,246
111
Chicagoareaaredownabout33percentfrom
$274.808166166107.79-16.69$164,191106
theirSeptember2006peak.
$233,66613010763.73-12.72$132,07333
Possiblythemostdisturbingrevelationon
$689,96822346.03-0.09$162,22474
thechartsisthefactthataboutoneinsixcom-munities-1S.6percent-hadanaveragesale
$1,083.162108296.973.64$344,761980
pricebelowwhatithadin1994,theearliest
133276.66-13.87$411,233
yearforwhichMREDhascomprehensiverecords.(InOctober2010,11percentofthere-gionshowedpricesbelowthe1994level.)Themajorityofthecommunitiesbelowthe1994fordtoselltheirhomeforlessthantheyoweonarkaremoderate-incomeareas,suchasthe
METHODSANDSOURCES
townsHarvey,Burnham,andNorthChicagothemortgage,andinothers'theyareunabletoandthecityneighborhoodsWestEnglewood,movebecausetheycantselltheircurrenthome.ThesechartswerepreparedusingdatasuppliedEnglewood,andWestGarfieldPark.ManyofThat'sborneoutonthecharts,wheremorethanbyMidwestRealEstateData(MRED).Inaddi-themwerehithardbytheforeclosurecrisis;80percentofthecornmenltlessawfewerhomestiontolistinghomepricesinthe77Chicagotheirplummetingsalepricesreflectthebar-soldthanayearago.neighborhoodsrecognizedbytheU.S.Censusgainresalesofbank-ownedproperties,evenThosearejusta
few
ofthehigh-andlowlights.Bureau,wehavealsotrackedsalesinmosttownsthoughthosesaleswereslowedformuchofDuringthenextf~wweeks,Iwillcontinuetoex-inCook,DuPage,andLakeCountieswherefig-thepastyearbymoratoriumsonforeclosures.plorethedataintheWednesday"HousingBul-ureswereavailable.Fortheoutlyingcounties-
As
priceshavedropped,morefamilieshaveletin"ofmythrice-weeklyblogatchicagomagKane,McHenry,andWill-wehavelistedanum-hadtostavinelace;insomecasestheycan'taf-.com/dealestate.berofreeresentativetowns.InLakeCounty,the
CITYNEIGHBORHOODS
RlJaBBOIHOOD
communityfromJuly1,2010,toJune30,2011.Thefourthcolumnreportsthepercentageofincreaseordecreaseinaveragesalepricesincethe12-monthperiodbeginningJuly1,1993,andendingJune30,1994,theearliestdatefor
LINCOLNSQUARE
whichMREDhascomprehensivedataavailable
LOGANSQUARE
-1.42$260.402212
formostofthecityneighborhoodsandsuburbs.
LOOPN/A
$480,189623
InAlbanyPark,forexample,theaveragesale
LOWERWESTSIDE
114.049.46$172.87117
price17yearsagowas$134.203:thispastyear,itwas$275,006,anincreaseof104.92percent.
McKINLEYPARK
77.26-23.86$186,34613
(Priceshavenotbeenadjustedforinflation.)
MONTCLARE
30.01-8.01$109,38217
Thefifthcolumnrepresentsthepercentageof
MORGANPARK
20.38-16.71$69,67417
increaseordecreaseinaveragesalepricesince
MOUNTGREENWOOD
13711076.33-9.67$106,6789
the12-monthperiodbeginningJuly1,2009,andendingJune30,2010.InChicago,welistthe
NEARNORTHSIDE
34322137.226.20$646.706
percentagesfordetachedhomesonly.Theper-
NEARSOUTHSIDE
1376
N/AN/A
$337.487444
centagesofincreasesordecreasesinsaleprices
NEARWESTSIDE
$331.67714424166.971.63$294.476668
sinceJune30,2010,fortownhousesandcondos
$42.76711674-14.491.03$230.000
inneighborhoodswithsalesof75ormoreat-
NEWCITY
tachedhomesare:
NORTHCENTER
$802.129134152414.804.69$369.913227
NORTHLAWNDALE
$39.60611822-24.6312.24$21.46831
AlbanyPark...............-37.63
NORTHPARK
$297.6491364994.24-7.26$103.91840
Avondale.................-26.95Edgewater................-16.58
NORWOODPARK
$271.37914021963.68-8.69$122.42731
GrandBoulevard..........-25.35
OAILAND
$223,73619311783.1867.70$226.29212
HydePark.................-10.17
O'HARE
$318.2601611072.680.07$79.969120
IrvingPark................-20.29
PORTAGEPARK
$189.33614926643.44-13.62$86.20968
LakeView..................0.02LincolnPark................-7.07
PULLMAN
$71.1201702217.26-12.09$42.4268
LincolnSquare............-22.39
RIVERDALE
$11.825666
N/AN/A
$6.8762
LoganSquare..............-9.57
ROGERSPARK
$279.9601491873.26-24.68$99.867306
Loop.......................-7.17
ROSELAND
$61.223
III
210-16.34-2.76$36.61610
NearNorthSide.............10.71NearSouthSide...........-19.73
SOUTHCHICAGO
$61.83011971-9.768.20$66.43316
NearWestSide.............-5.99
SOUTHDEERING
$68.236110473.840.31$31.90424
NorthCenter....".........-1.63
SOUTHLAWNDALE
$64.76711263-29.62-3.61$36.3333
O'Hare....................-8.66
SOUTHSHORE
sm.sei
1248945.669.06$33.679136
RogersPark...............-39.16SouthShore..............-22.64
UPTOWN
$612.66817913183.62-19.38$197.160347
Uptown...................-19.41
$78.27911017711.33-8.06$18.000
WestRidge...............-31.80
WASHINGTONPARK
$16.864866
N/A'N/A
$30.84674
WestTown.................-0.28
WESTELSDON
$124.0981309717.89-14.17$86.16413
Woodlawn................-20.82
WESTENGLEWOOD
$16.276113172-63.17-8.98
N/A
0
Insomeinstances,wehaveused"N/A"
WESTGARFIELDPARK
$24.626
117
19-44.97-38.41$26.0268
wheredatawereinsufficientorunavailable.
WESTLAWN
$118.80714822617.27-10.22$31.67730
Specifically,forcityneighborhoodsandsub-
WESTPULLMAN
$46.079117187-23.95-3.11$112.6107
urbs-suchasArmourSquareandBannock-burn-thathadfewerthantenhousesalesdur-
WESTRIDGE
$269.7711549175.94-12.68$70.337460
ingthe2010-11timeperiod,wehavelistedno
WESTTOWN
$608.126166140276.79-11.53$345.609662
percentagechangesince1994or2010be-
$56.489132257.16-9.50$72.35599
causetheavailabledataprovidedaninsuffi-cientbasisforcomparisonbetweenpastandpresentsales.
ABOUTMIDWESTREALESTATEDATA
townlistedasRoundLakealsoincludesRoundhomes,whichMREDclassifiesas"detached"hous-MidwestRealEstateData(MRED)isareal-estateLakeBeach,RoundLakeHeights,andRounding.ForChicago,whereasizableportionofthedataaggregatoranddistributorthatpr~)VidesLakePark.housingstockiscomposedoftownhouses,condos,thelargestmultiplelistingserviceinthecoun-Afterthenameoftheneighborhoodorsub-andlofts-"attached"housing-wehavealsoin-try(bylistingvolume)tonearly40,000cus-urb,thefirstcolumnoneachchartliststheaver-cludedaveragesalepricesandnumberofsalestomers,withpropertyinformationencom-agesalepriceforallthehousessoldineachcom-forthoseresidencesduringthesameperiod.passingnorthernIllinois,southernWisconsin,munityfromJuly1,2010,toJune30,2011.ThesecondcolumnreportstheaverageandnorthwesternIndiana.MREDdoesnot(Obviously,ifonlyahandfulofhousesweresoldnumberofdaysthathousesremainedontheguaranteenorisitinanywayresponsibleforinaparticularcommunity.theaveragepricerisksmarketbeforetheyweresold,whichcanbeantheaccuracyofthedata.Datamaintainedbybeingunrepresentative.)Averagepricesfortheindicatorofanarea'sdesirability.Thethirdcol-MREDmaynotreflectallreal-estateactivityinsuburbsarebasedonthesaleofsingle-familyumnliststhenumberofhousesaleswithineachthemarket.
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Chicago Magazine - The New Rules of Real Estate 2011
Chicago Magazine does a compilation article on housing prices in Chicago's Neighborhoods & the Suburbs. Good overall realiable knowledge to have whether a buyer or seller.
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