Prices in city’s high-end suburbs have fallen, but agents insist it’s unrelated to rising crime rate
Chicago’s lakeside
Hugo Cox
DECEMBER 14, 2017 Financial Times
Crime in Chicago is a popular topic for Donald Trump. In January, the US president promised, via Twitter, to “send in the Feds” if the city didn’t put a stop to the “carnage” (although a good number of federal agents were already stationed there). In February, he compared parts of the city to the worst conflict zones in the Middle East. In June, he made good on his earlier promise, dispatching 20 additional federal agents to the city.
Hyperbole aside, Trump has a point. While many US cities have higher murder rates — last year, Chicago’s was 30 per 100,000, less than half the 59 in St Louis, for example — Chicago’s grew by 59 per cent in 2016, reaching its highest level since the 1990s.
While the president’s bad press seems to be having little impact on the city’s mainstream property market, at the top end values have been falling at quite a pace. Across the city, average sales prices in the third quarter of 2017 were 3.8 per cent up on the same period a year before and 9 per cent higher than in 2014, according to Midwest Real Estate Data. Neighbourhoods such as West Town and Near West Side, the areas immediately to the west of The Loop, Chicago’s downtown district, have appreciated faster. According to the Cook County index (compiled by the Institute for Housing Studies at DePaul University), prices more than doubled here in less than six years, up 136 per cent between 2011 and 2017.
Well-located, family-friendly neighbourhoods, notably Bucktown and Wicker Park, have driven the gains. Both are within easy reach of both the Kennedy Expressway (Chicago’s arterial interstate road) and the “L”-train — the city’s metro train line, which connects downtown with some suburbs.
Both spots have benefited from young families deserting Chicago’s suburbs to live closer to work. Thad Wong, co-founder of @Properties, a property broker, is one example: with four children, he still lives in the heart of the city, in Lincoln Park. In recent years, he notes, Chicago’s schools have improved. This has primed buyers prepared to sacrifice the greater space that they would enjoy further out for the benefits of a shorter commute and proximity to the amenities of the city. Many of the further-flung suburbs, an hour or more from the city centre, have lost out to downtown spots that have enjoyed price gains, he notes. @Properties is selling a six-bedroom home on Claremont Avenue in Bucktown for $1.87m.
Not everywhere is faring as well, however: the city’s prime market is struggling. Average prices in the wider area containing Lincoln Park, the city’s most prestigious neighbourhood, were down 5.5 per cent in the second quarter of 2017 compared with a year before, according to the Cook County Index. @Properties is selling a five-bedroom home on West Wrightwood Avenue in Lincoln Park for $3.29m. To the east, and closer to the park from which the neighbourhood takes its name, Baird & Warner is selling a four-bedroom home with a garage on West Eugenie Street for $1.7m.
Local agents say the recent price falls in Lincoln Park are nothing to do with the city’s growing crime rate. A survey last year by housing website RealtyTrac found that areas housing a higher proportion of convicted criminals were, in fact, associated with stronger one and five-year price gains (a function of larger gains among areas with cheaper housing stock). A separate 2016 poll, conducted by the Kaiser Family Foundation and the New York Times, found that residents of Chicago’s north, containing many of its more affluent suburbs (including Lincoln Park) reported lower levels of concern about crime than those in the city’s south. However, 42 per cent of poll respondents from North Chicago still answered that crime was the city’s biggest problem. And, while the November violent crime rate in Lincoln Park placed it 44th out of the city’s 77 neighbourhoods, its rate of property crime was the 15th highest.
Five-bedroom house on West Wrightwood Avenue, $3.29m
Oversupply at the top end is the reason for the stalling prices, say agents. As demand for Chicago’s finest homes recovered after the post-crisis slump, so did Lincoln Park prices, which gained 57 per cent between 2012 and 2016, according to the Cook County Index.
Fanned by expansive marketing claims, the de facto boundaries of Lincoln Park duly expanded, first reaching west beyond North Racine Avenue, then passing Ashland Avenue. As prices for the best family homes surpassed $4m, developers moved along this western frontier. “You saw a lot of developers jump in at around the $2m mark,” says Mike Golden of @Properties. Eventually the number of suitable homes exceeded demand and prices fell.
Buying guide
$250,000 A one-bedroom condo in Wicker Park with outdoor space
$500,000 A new two-bedroom condo with balcony and garage parking in Bucktown
$2m A newly renovated four-bedroom condo overlooking Lincoln Park
Chicago’s lakeside
Hugo Cox
DECEMBER 14, 2017 Financial Times
Crime in Chicago is a popular topic for Donald Trump. In January, the US president promised, via Twitter, to “send in the Feds” if the city didn’t put a stop to the “carnage” (although a good number of federal agents were already stationed there). In February, he compared parts of the city to the worst conflict zones in the Middle East. In June, he made good on his earlier promise, dispatching 20 additional federal agents to the city.
Hyperbole aside, Trump has a point. While many US cities have higher murder rates — last year, Chicago’s was 30 per 100,000, less than half the 59 in St Louis, for example — Chicago’s grew by 59 per cent in 2016, reaching its highest level since the 1990s.
While the president’s bad press seems to be having little impact on the city’s mainstream property market, at the top end values have been falling at quite a pace. Across the city, average sales prices in the third quarter of 2017 were 3.8 per cent up on the same period a year before and 9 per cent higher than in 2014, according to Midwest Real Estate Data. Neighbourhoods such as West Town and Near West Side, the areas immediately to the west of The Loop, Chicago’s downtown district, have appreciated faster. According to the Cook County index (compiled by the Institute for Housing Studies at DePaul University), prices more than doubled here in less than six years, up 136 per cent between 2011 and 2017.
Well-located, family-friendly neighbourhoods, notably Bucktown and Wicker Park, have driven the gains. Both are within easy reach of both the Kennedy Expressway (Chicago’s arterial interstate road) and the “L”-train — the city’s metro train line, which connects downtown with some suburbs.
Both spots have benefited from young families deserting Chicago’s suburbs to live closer to work. Thad Wong, co-founder of @Properties, a property broker, is one example: with four children, he still lives in the heart of the city, in Lincoln Park. In recent years, he notes, Chicago’s schools have improved. This has primed buyers prepared to sacrifice the greater space that they would enjoy further out for the benefits of a shorter commute and proximity to the amenities of the city. Many of the further-flung suburbs, an hour or more from the city centre, have lost out to downtown spots that have enjoyed price gains, he notes. @Properties is selling a six-bedroom home on Claremont Avenue in Bucktown for $1.87m.
Not everywhere is faring as well, however: the city’s prime market is struggling. Average prices in the wider area containing Lincoln Park, the city’s most prestigious neighbourhood, were down 5.5 per cent in the second quarter of 2017 compared with a year before, according to the Cook County Index. @Properties is selling a five-bedroom home on West Wrightwood Avenue in Lincoln Park for $3.29m. To the east, and closer to the park from which the neighbourhood takes its name, Baird & Warner is selling a four-bedroom home with a garage on West Eugenie Street for $1.7m.
Local agents say the recent price falls in Lincoln Park are nothing to do with the city’s growing crime rate. A survey last year by housing website RealtyTrac found that areas housing a higher proportion of convicted criminals were, in fact, associated with stronger one and five-year price gains (a function of larger gains among areas with cheaper housing stock). A separate 2016 poll, conducted by the Kaiser Family Foundation and the New York Times, found that residents of Chicago’s north, containing many of its more affluent suburbs (including Lincoln Park) reported lower levels of concern about crime than those in the city’s south. However, 42 per cent of poll respondents from North Chicago still answered that crime was the city’s biggest problem. And, while the November violent crime rate in Lincoln Park placed it 44th out of the city’s 77 neighbourhoods, its rate of property crime was the 15th highest.
Five-bedroom house on West Wrightwood Avenue, $3.29m
Oversupply at the top end is the reason for the stalling prices, say agents. As demand for Chicago’s finest homes recovered after the post-crisis slump, so did Lincoln Park prices, which gained 57 per cent between 2012 and 2016, according to the Cook County Index.
Fanned by expansive marketing claims, the de facto boundaries of Lincoln Park duly expanded, first reaching west beyond North Racine Avenue, then passing Ashland Avenue. As prices for the best family homes surpassed $4m, developers moved along this western frontier. “You saw a lot of developers jump in at around the $2m mark,” says Mike Golden of @Properties. Eventually the number of suitable homes exceeded demand and prices fell.
Buying guide
- Median sale prices in Chicago were $285,500 in the third quarter of 2017, according to Midwest Real Estate Data
- Average sale prices in Chicago gained 3.8 per cent in the third quarter, compared with the year before, although average prices for homes over $1.5m fell 8.4 per cent
- Direct flights connect New York with Chicago in about 2hrs 30m
- Chicago’s homicide rate between 2010 and 2015 was the 18th highest among major US cities
$250,000 A one-bedroom condo in Wicker Park with outdoor space
$500,000 A new two-bedroom condo with balcony and garage parking in Bucktown
$2m A newly renovated four-bedroom condo overlooking Lincoln Park
