Q: What is the state of the general real estate market in Chicago?
A: In general, in 2016 we saw home prices appreciate to at, or at least near, 2006 levels. Things are pretty much at or near the peak in most neighborhoods in Chicago. To be more specific, right now it’s a seller’s marker. Inventory still remains low in most neighborhoods. There is also still moderate demand overall. Considering those dynamics, I expect property values to continue to increase but the level of appreciation to slow down somewhat.
Now the caveat to that statement is that these trends will differ when you start looking at individual neighborhoods. In the West Loop, where I live for instance, the demand far exceeds the supply… even with all the new construction you see everywhere.
Q How about rent prices?
Rent prices continued to increase last year too, but I think rent-price appreciation will slow down a bit this year as well. It’s just a byproduct of the number of units being added to the rental inventory. With the increase in supply and the fact the rent prices are rather high to begin with, something’s got to give. They’ll have to stabilize and slow down substantially this year, especially as a lot of the new construction around town starts to reach completion.
“You’re looking at high 200s to low 300s for a single-family bungalow home in Portage Park right now, and that’s very affordable compared to what lies just a mile or two east and south.”
Q: What do you think is the next neighborhood on the rise in Chicago?
Photo by DNAInfo
I’m seeing a lot of new activity and interest from buyers in Portage Park. I think there are a lot of factors driving that. As prices continue to go up in the neighborhoods closer to the city center, naturally people start to look further out, especially along the expressways, and Portage Park is a very convenient location, being close to 90/94, the blue line and the Metra. That combined with the fact that there are a lot of new businesses, stores, bars and restaurants coming to the Six Corners area up and down Irving Park Road.
I see a lot of young families buying the sturdy bungalows they have in that area. There are condos and two and three flats too, but the vast majority of housing stock in Portage Park consists of the typical Chicago-style bungalows. You’re looking at high 200s to low 300s for a single-family home there right now, and that’s very affordable compared to what lies just a mile or two east and south.
Also, the near west side close to the United Center continues to gain steam. There’s talk of a new pink and green line station at Damen and Lake, which would help a lot. There’s a mixture of new builds that were going on before the crash, which obviously slowed down, but there are plenty of new projects picking up now. Whether it’s row houses, single-family homes or mid-rise condos, the long-term trajectory is really solid from an investment perspective.
Home price appreciation hasn’t risen as fast if you go west of Ashland though. I think this is in part due to the boundaries of the Skinner West Elementary School — one of the top-rated schools in Chicago. Everyone wants their kids in there, and you need to be east of Ashland to be in the district.