Tag Archives: Chicago neighborhoods

Buying in 2013? Here’s what to expect.

I don’t really spend much time talking about the home buying market. There’s plenty of folks who write well about that side of the business. I feel that renters and landlords are somewhat under-served, so I focus on them. However, the changes occurring in the Chicago residential market are going to affect everyone this year. It’s time that we have a little talk about what to expect if you are moving from renting to buying.

You’ve probably heard a lot over the past several years about the depressed housing market. If you’re renting, you may have thought you still had some time to take advantage of the lowest home prices and mortgage rates seen in decades. Guys, you’re running out of time. Prices are climbing, inventory is short, and rates are starting to move up again. While the prices aren’t likely to spike back up to 2006 levels any time soon, the bottom of the market has passed you by. (more…)

Resolutions for Chicago Real Estate

So it’s 2013. Funny how that happened. World didn’t end, although for some of us we were wishing it might have done after the New Year’s Eve parties. I’m sure some of you already have resolutions that found you duking it out over a treadmill this morning. A few more never hurt, though. Here’s a few that you might want to consider if you’re thinking of moving or buying property this year.

For Renters:

Try communication before confrontation. It doesn’t matter if you talk with your landlord directly or with the office staff of a big property management corporation. It doesn’t matter how badly things escalated last year over assorted issues with your apartment. This is a new year and time to start over. If you’ve had big problems, schedule a time to sit down calmly with a decision-maker for the property and review how both sides can resolve problems in an efficient and effective way. Don’t go for the big guns like lawyers and unions until you’ve tried to talk it out first.

Seriously? Always around?

Seriously? Always around is the nicest thing on the list?

Likewise, make a point of warning your landlord if you know there are problems on the horizon. Whether it’s money problems or crowds of house guests, it’s better to notify ahead of time and work out a game plan than it is to sneak around and hope they don’t notice.

Remember, moving is more expensive than you think. (more…)

Mapping Chicago by School performance

Happy November everyone! Hope you all had a great Halloween. Operation Porchlight was a great success and I’ll have a report on it for you very soon. I’m still assembling all the results and feedback, though, so it may be a week or two before I can get to it. In the meantime, I wanted to share with you the results of some recent research I did for a buyer client.

These buyers are open to many neighborhoods in Chicago, but want to be able to send their kids to a good public school. So I utilized some of the new technology available through Google’s Fusion Tables to make a map for them.

Of course, I am personally no arbiter of school quality so I went to a source that is. I made a list of all of the elementary schools ranked on GreatSchools.org as either an 8, 9 or 10. Greatschools bases their rankings chiefly on test scores using a 10 point scale, with 10 being the best. They also offer the opportunity for students, parents and school faculty to give feedback. I included magnets, charters and neighborhood (“district”) schools in the list, but did not include private schools. I find them to be a very useful resource for both objective and subjective critiques of not only the grade schools that I surveyed but also the high schools and private schools.

After assembling my list of schools I paid a visit to the fabulous data warehouse for Chicago public information located at data.cityofchicago.org. I pulled down the freely available geographic locations for each of the schools on the list, including the attendance boundaries for the schools that have them. I mashed it all up in a fusion table. Enjoy.

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The Average Chicago Condominium

We’ve done average apartments. How about average condos?

Second verse, same as the first.

A few weeks ago I did a little overview of what the average Chicago apartment looked like. It was pretty popular. But my office is on me for material that they can promote from their new social media campaign, and they’re not so pleased with all the rentals that I do. (They are a residential sales brokerage, after all. They want me selling stuff, not renting it. Hint hint.) So, we’re going to do the same thing with condos today as I did with rentals before – find the profile of the average condo and then pick out a few from the recent sales bin to show you what they look like.

What’s the point? Well, if these are all hovering around the median price point for recent sales, then you can reasonably expect to find something comparable at or around this price in the immediate future somewhere in Chicago. Prices have started to tick upward, especially at the lower end of the spectrum, so we may not see this as the average for much longer. More importantly, this serves as a historical snapshot of what the average Chicago home buyer could afford to purchase in 2012. (more…)

Weekend Links: August 25, 2012

Nerdy Pig by Dani Jones of  Danidraws.

Chicago is quite old, and has the unique perspective of growing up twice – we “rebooted” in 1871 after the Great Chicago fire. The city has a wide selection of historians, both professional and amateur, who have been sharing their work on the web for decades. Today on the weekend links – it’s the Chicago History edition!

Blogs & Hobbyist History Sites

First, the amateurs. These sites are not professionally designed, some of them have not been updated for years, and in fact one of them has vanished from the web altogether and is only now available through the Internet Archives. Still, if you’re looking to learn about the city’s history from people with a legitimate passion for it, these guys will not steer you wrong.

Forgotten Chicago – the articles are great, but the forums are the real draw here. Lots of folks talking about recently (or distantly) departed icons of the late 20th century.

Phil O’Keefe’s Chicago Tunnel Company Site – This used to be my favorite site for years, but unfortunately it vanished from the web in 2009. Fortunately it’s preserved for the most part in the internet archives, and it’s the archived version to which I’m linking here. The site discusses the narrow-gauge rail system that runs under the entire downtown area.

Chicagology – Includes the self-described “larged online collection of pre-fire images in the world.” Some excellent coverage of Chicago from before 1871, as well as some detailed essays about other pertinent parts of the city’s history.

Chicago History Journal – This may sound like the official blog of some cultural institution but it appears to be a personal effort with some very thorough articles on lesser-known people from years gone by.

Uptown Chicago History – Poor Uptown. It’s gone from the most trendy neighborhood in Chicago to a district of great concern over the past 75 years. Find out about how it used to be with articles and abundant photos.

Chicago-L.org – Exhaustive discussion of the Chicago public transit system – mostly the trains but some conversation about the buses, too. If you want to learn about the El, the CTA and its predecessors, this is the ultimate site. I’m linking here to the history page but this entire site is worth exploring. I have spent hours here. Possibly entire days.

Chicago Theatre History Project – The rest of this site is of interest, but the page linked here is truly fascinating. It’s a series of maps, splitting city’s many theatre companies up by the decade in which they started. Very cool.

Midway History – Books and sites about O’Hare are abundant, but its little sister airport Midway gets pretty neglected. This is the companion site to a book about Midway airport and appears to be very detailed.

Professionally-Maintained History Sites

The Encyclopedia of Chicago – a joint effort between the Chicago Historical Society, the Newberry LIbrary and Northwestern University.

Digital Photo Archives of the Chicago Public Library – The Library system houses multiple collections of photos from early Chicago. There’s a pretty large collection of them online including shots of individual houses going back to the 1850’s. In particular, since they’re the neighborhoods immediately surrounding my office, checkout their collections for Lincoln Square and NorthCenter.

History of Chicago Street Names (pdf) – From the Chicago Historical Society. If you’re curious as to how your street got its name, you may be able to find it in here.

The Great Chicago Fire and the Web of Memory – Another joint effort between the CHS and Northwestern. Nicely executed presentation on what is arguably the most pivotal event in the history of Chicago. (Although some might say that changing the course of the river, either of the World’s Fairs, or the election of Richard J. Daley might also be of equal significance.)

The Average Chicago Apartment

Remember these two-flats from last week? Time to pay them another visit. We’re hunting for the average Chicago apartment.

When new tenants are moving to Chicago they’re often shocked to discover that most of the city does not consist of skyscrapers and that most of the apartment buildings are actually approaching a century old. Yes, we have apartments that you can afford, but they may not mesh with what you have in mind when you think of a Chicago apartment. Looking at the housing stats from City-data.com one can paint a picture of the most common apartment in the city. It has two bedrooms, in a building between two and six units, and was constructed prior to 1939.

The HUD guideline for an affordable apartment is one that costs no more than 30% of your income. (According to a 2009 report from the Metropolitan Tenants Organization, 53% of Chicago residents spend more than that, but oh well. We try our best.)

According to City-Data.com, the median income for a Chicago renter in 2009 was $46,773. 30% of that works out to about $1170 per month to spend on rent.

Today I’ve put all of this together and went in search of vintage 2 bedroom apartments currently on the market for $1150 to $1200 per month in smaller buildings. I didn’t find many – only 12 came up and only 6 of those had photos worth sharing with you. All but one of the listings are at least five miles out of downtown, and you’ll notice a distinct absence of name brand neighborhoods in the lot. But I’ve assembled photo galleries of those six apartments after the jump to give you an idea of what the average Chicago apartment looks like, and where it can be found.

(Oh, and by the way, if you want to rent any of these I can show them to you, provided they’re still on the market by the time you find this article. Shoot me an email and we’ll figure something out.)

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Chicago Real Estate Stats: Single Family Homes vs Two Flats

In this corner, the Chicago single family home…

The Secret Route to a Cheap 5-Bedroom Home in Chicago

Let’s talk about two-flats. Despite their prominence in some sections of Chicago, They’re often overlooked by homebuyers, existing somewhere in the borderlands between a house and an apartment building. They absolutely should not be ignored. If you’re looking for a large living space with a yard and garage, and are willing to do some work as a landlord in exchange for a lower purchase price, you’re going to find some excellent deals.

Today I’ve taken a quick survey of the last six months of sale prices across an assortment of neighborhoods, comparing the results of two specific types of property. On the one hand we have single family homes with 3 to 4 bedrooms. On the other, we have two-unit buildings where at least one of the units has 3 bedrooms and the other has at least 2 bedrooms.

… And in this corner, the Chicago Two-Flat. It’s the ultimate Chicago vintage property showdown!

The smart reader will realize that this type of two-flat could actually could serve as a five bedroom home if the owner chose to use both units for themselves. Alternately, if rented out, the extra unit could provide some backup income to help with expenses.

A lot of folks think that multi-unit buildings would be more expensive than single family homes. Today’s research will show that this is not really the case. In fact, in most of the neighborhoods I studied, the median price of a two flat was comparable or lower than the median price of a single family, and the maximums were all 35-50% lower on the two flats than the single family homes. (more…)

Weekend Links for July 14, 2012

  • Learning to love a new neighborhood. The rising rent rates in Chicago mean that many 2012 tenants will need to find apartments outside of their comfort zone. ChicagoNow blogger Lainie Peterson gives us her account of learning to love her new neighborhood, Old Irving Park.
  • Another new Credit Score – for mortgages only. CoreLogic has partnered with FICO to create a special credit scoring model designed to assess how well you’d do paying a mortgage specifically. Weak payers have been scoring better than usual on this model, leading some to worry that it will open the door to home loans for too many subprime buyers again. More info on the score tells us that it folds in rent payments, payday loan payments and other non-traditional loans to assemble a more comprehensive picture. However, available data depends on the sources making it available. While upscale landlords may have the werewithal to submit data on their wealthy tenants, it’s the poorer tenants who really need the boost that this score could bring. Low-rent landlords are not likely to surrender their payment info gladly, especially if the income numbers don’t match what they send to the IRS.
  • The Phantom Fourth Credit Bureau. Like the Fifth Beatle and the Seventh member of Monty Python, there have been any number of claimants among lesser-known risk analysis companies of being the fourth credit bureau on par with Equifax, TransUnion and Experian. Check out these articles on Innovis, CoreLogic, and a shady network of other providers of personal payment histories. (The photo gallery on the last one has a misleading cover image as it’s an older article, but the data within the slideshow is pertinent.)
  • Eviction of the week. A Dayton, OH property manager is under investigation for stealing upwards of $10,000 from her employer. Residents of her former properties are now faced with proving that they paid their rent or getting evicted. The thieving manager remains at large until the cops figure out exactly how much she stole.
  • CHA’s Empty buildings getting emptier. Last week I linked you to the scoop on the Chicago Housing Authority’s high vacancy rate in their subsidized low-income housing projects. The nadir for occupancy was the Lathrop Homes, at 80% vacant. Now Lathrop residents are protesting the CHA’s decision to remove the remaining residents to complete their modernization on the complex.
    They may not be allowed back in when it’s finished, but would instead have to go to the end of the lengthy waitlist.

  • A great companion article to the ongoing bargaining series. Derek Thompson of the Atlantic discusses the 11 Ways that Consumers are Hopeless at Math. Basically, we are unable to judge value accurately, so we will settle for judging it precisely … against the options presented to us.
  • Where not to get a cheap apartment. Curbed Chicago has released a “heatmap” of the most popular and trendy downtown Chicago high rise apartments. I’ve spoken with managers in many of these buildings over the past few months. Most of them are booked until October. It’s currently July. Protip: to help out your fellow Chicagoans instead of faceless corporate property management, make note of the addresses, and then look into renting a condo on the same block.

 

10 Common First-Time Renter Mistakes

After I did first-time buyer mistakes for Monday it occurred to me that there’s other real estate virgins out there who might need a few warnings. Tenants, for example, are often the newest of all to the housing market, and they do tend to make some common errors that mark them as newbies in the apartment hunt. Whether this is your first apartment or your twelfth, avoiding these missteps will save you a world of grief.

It may be pretty, but can you cook in it? (Photo: ApartmentTherapy.com)

1. Choosing the prettiest apartment. I did this back in 2003. Found a lovely vintage apartment on the lakefront with crown molding, dining room chandelier, lots of space, and a shiny new kitchen. It was cheap, the landlord would accept my pet bunny, I rented it. I failed to take into account that the only bathroom was inside the bedroom. It turned out to be a very impractical location for me as I had a lot of overnight houseguests at that point in my life. Much like when choosing a spouse, it’s what’s on the inside that counts more than the apartment’s looks. Make sure the room layout and amenities suit your lifestyle.

Here’s one quick benchmark for practicality. Each of us has a ritual that we have to do on a regular basis at home, or the rest of the day doesn’t feel right. For me it’s my morning coffee and breakfast – I will NOT leave the house for the first hour or so after I wake up. For others it will be going through the mail right after they get home from work, or taking a pause from gaming to refill your water glass from the fridge. Figure out what you ritual is. As you go through each apartment, play out how that ritual will work for you in the new space. If it doesn’t work, nix the listing. (more…)

10 Common First-Time Buyer Mistakes

The real estate industry loves a first time buyer and will cut them a lot of slack to get them on the path to homeownership. Agents who work with first time buyers on a regular basis (like me) are accustomed to the errors that can crop up when you’ve never done this kind of thing before. However, there’s a few mistakes that are easily avoided.

Price is only part of the puzzle.

1. Looking at only price. A recent buyer client found a sweet deal on a 3 bedroom in Skokie for $79.9k. She also looked at a 2 bedroom in Morton Grove for $100k. However, the monthly payment for the 3 bed was $1253 while the monthly payment on the 2 bed was $1021. This is with the same down payment, same mortgage rates. When looking at a condo you need to consider not just the purchase price but the property taxes and the assessments. When looking at a single family home, it’s property taxes and insurance. When you’re browsing online for homes, make sure you take the monthly expenses into account. (more…)

Hype Dodger: You Do Not Live in Chicago

Book cover of "How to Lie with Statistics" by Darrell Huff

It's down! It's up! It's down! It doesn't matter!

Any statistics that claim to speak for the entirety of Chicago are full of crap.

Any statistics that look at only the downtown area of Chicago are full of crap.

Any statistics stating that the Chicago real estate market is collectively going up, down, sideways or falling into the lake should be collectively and summarily ignored.

Big City, Itty Bitty Pieces

To paraphrase Douglas Adams for a moment, Chicago is big. You just won’t believe how vastly, hugely, mind-bogglingly big it is. I mean, you may think it’s a long commute to work in your current city, but that’s just peanuts to Chicago.

As the wonderful “Manhattan Elsewhere” map shows, most of Manhattan would fit between Armitage and I-55. Chicago has three “sides,” 77 community areas, 85 zip codes, and over 200 neighborhoods. Each neighborhood has its own downtown area, cultural identity, school districts, parking demands, peak traffic times, dominant gangs and rent/own ratios.

The rent vs buy scenario immediately surrounding North Park University will be very different from what you’ll find right next to the top-rated Edison School for the Gifted just a few blocks away. Distressed properties will appear at higher rates in communities where language barriers made first-time buyers more susceptible to predatory lending practices. Or where dominant cultural traditions left families with single wage-earners more vulnerable to job loss. Or where aging populations forced estate sales in a down market. Areas full of Class B investment properties will not turn into areas full of Class A properties in any foreseeable future.

Besides, you’re going to be living in your home for over 5 years, and look at what happened to Wicker Park condos from 1998 to 2002 (pre-bubble) – sales volume increased 2.7x over and the average sale price increased 60%. As a famous fictional local once said, “Life moves pretty fast.” You, on the other hand, won’t need to move for quite a while if you buy well.

If you were looking to buy property in any small town, suburb or even a smaller city, you’d probably be looking within an area with a population of about 6500 people, and maybe one or two zip codes. It stands to reason, then, that when shopping for property in Chicago that you focus your search and stats on areas of comparable size.

You keep using that word. I do not think it means what you think it means.

I recently had a conversation with a landlord who was despondent about the length of time it was taking him to rent his condo in West Rogers Park. “I thought this was the peak market!” he said. “Why is it taking so long?” I had to explain to him that yes, rents are up, market times are down, and number of units rented is way up. However, a “peak market” is a very subjective thing.

In West Rogers Park, average market times for rentals have gone from 82 days in 2009 to about 60 days in 2012. Just 2 miles away from my landlord friend in chic Andersonville, the average market time for an apartment has gone from 86 days in 2009 to 26 days in recent months. In both areas the rents have gone up, and in both areas the volume of rented units has more than doubled over the past 3 years. It’s indeed a “peak market” in both places, but the term means something very different depending on whether you’re north or south of Devon Avenue.

Looking at the buyers’ side, let’s tell the story of 3 condo buildings within 2 blocks of each other in Edgewater, in a buyer’s market.

6166 Sheridan is a Class B high rise with 154 units. 7 of them, all 1 beds and 2 beds, have sold for an average price of $46,857 in the past year. The top dollar achieved was about $55k. Prices in the past 3 months have been the lowest of the year. Almost every sale was a short or a foreclosure.

Across the street, against the lake, is 6171 Sheridan, also a Class B high rise, with 312 units. 9 of these units, (studios, 1 beds and 2 beds) have sold in the past year. The average was $76,827 and the top dollar was about $126k. Prices have stayed pretty consistent throughout the entire year, but again, nearly everything was a short or a foreclosure.

Two blocks inland stands the new building at 1134 Granville, which I would also define as a Class B property due to its lack of amenities. It is also technically a high rise and of comparable density to 6166 Sheridan at 160 units, all 2 beds. 21 of these have sold in the past 12 months, at an average price of $185261. The lowest price in these units, all selling at full market prices, was $150k.

Two blocks, three buildings, three entirely different worlds. Sometimes you need to slice and dice your stats into bite-size pieces before they become useful.

The President and the Professors

Certain sections of Chicago have weathered the downturn quite well. I frequently need to explain to my renter clients that the high end condos for rent aren’t to be found in the immediate vicinity of the Ravenswood Metra station, as the station has kept sale prices high enough that the owners have still been able to sell at decent prices instead of turning into landlords.

On the south side, President Obama and his neighbors in Kenwood have seen a 42% drop in average sales prices for single family homes, from $904,639 in 2006 to $523,602 over the past year. Neighboring Hyde Park, stabilized by the presence of the University of Chicago, has seen only a 19% price drop in the same span of time, from $841,746 to $680,737.

NorthCenter, packed with excellent schools, has seen the average sale price on a single family home dip only 5% since the market peak in 2006, from $851,159 to $808,023. Market times have increased by 18% but that equates to just 19 more days. Meanwhile, in the Irving Park neighborhood immediately to the west, sale prices on single family homes fallen off by 40%, from $494046 to $296916, and market times have increased by 70%, or 63 days, in the same timeframe.

The takeaway from today should be a small amount of awareness of how generic stats about Chicago and the real estate industry in general can be incredibly misleading. Between the news and the real estate media wonks, the public is besieged by marketers with known conflicts of interest trying to alternately push them towards panic or purchases by clever use of statistics. While stats have their place, extremely fine-grain knowledge of the city’s neighborhoods is required before they can be successfully interpreted.

So, please: do not base your decision to buy a home on the citywide stats, and certainly don’t base them on any national stats. Even my divisions of Downtown, Name Brand Neighborhoods and Generic Neighborhoods are meant only as surface benchmarks. After all, you’re not buying in Chicago. You’re buying in a very small section of Chicago with a cultural identity all its own. Please treat your new community with the respect it deserves.

Oh, and by the way, if you want me to get you more fine-grain stats for any piece I write, feel free to request them in the comments!

Cover image by Darrell Huff, courtesy of Amazon.com