Altos Research Real Estate Insights - Chicago Illinois Real Estate

Rock On Chicago

Mike Simonsen — Mon, 30 Jun 2008 09:30:29 -0700

Yesterday I wrote about Chicago's dubious distinction as the most socially regulated city in the US. I argue that trend does not bode well for the creative class, the city's future prosperity and ultimately its real estate values over the long haul. However today I came across a glowing article on Chicago in Fast Company, calling it "City of the Year". Indeed it's a city I love, so let's look at the positives.

Fast Company lauds some of the city's social restrictions as forward thinking "Greening" efforts. (Ironically they also posit that the city's position as anchor of 20th century architecture happened here because there was "no one to tell [the developers] to do it differently.")

Construction Booms
Most of what FC is happy about though derives from, Chicago's marvelous growth spurt. The city is the fastest-growing non-Sun Belt city in the US. The economy is growing faster than New York or LA. Immigration remains strong from all over the world.

The Chicago Spire

While highrise condo development has slowed from it's frenzied pace a few years ago, I'm still excited about the Chicago's recent construction boom. The famed skyline is remains one of the most moving in the world. And its development continues. (I highly recommend the Chicago Architecture Foundation's boat tour if you have 90 minutes to spare while you're in town.) Between the 150-story Chicago Spire and the new Trump tower (who let him in there?) the city will remain on the forefront of skyscraper architecture.

With all this development, it's worth a look to see how the downtown Chicago condo market is holding up. Here's a handful of zip codes:

Price trends for condominiums in Chicago's West Loop and Near North neighborhoods. Data as of June 27 2008

Let's look at demand rates also.

Days on Market trends for select zip codes in Chicago. Condo data as of June 27 2008

Like much of the country, the most desirable parts of town have (those with the higher prices already) show reasonably consistent demand and stable prices. This is not the case as you leave the hot neighborhoods.

So what's in store for the City? Construction, investment, and immigration warm my heart. Laws to dictate my diet chill me to the bone. The good news is that buildings last a long time. Bad laws can be as ephemeral as the foie gras they're restricting. Let's call this one a net positive.

Rock on Chicago.

Link: Chicago Real Estate Data

Chicago: City of Broad Strictures

Mike Simonsen — Sun, 29 Jun 2008 10:29:47 -0700

An eye-opening piece in today's Chicago Tribune today highlighting a recent Reason Magazine study that ranked the 35 biggest US on their propensity for laws restricting personal freedoms: alcohol, tobacco, food, sex, movement, gambling, guns, and a few idiosyncratic others.

The study reveals Chicago to be a stagnant brew of blue-state for-your-own-good paternalism and red-state moralism: the most governmentally controlling city in the country. And, as the article puts it, "it wasn't even close."

Maybe it's a stretch to tie this disheartening trend into the real estate market, but let me try: It's about where people want to live.

American cities have enjoyed a nearly two decades of prosperity and revitalization. They have done so as people (generally young people) sought a rebound from the stifling banality of American Suburbia. Cities bring depth and texture, excitement and engagement, grit and opportunity. These laws are designed to smooth out the very grit that people seek.

The legal activism that seeks a protective climate suitable for everyone's comfort-level winds up with a harsh climate tolerable by none.

No city is immune of course. San Francisco is incredibly nosy about what you eat, live, and move, but is ok if you like to partake in recreational drugs. Louisville may not like your bedroom practices, but a bourbon and a concealed weapon make for a good party anyway. Chicago just can't make up it's mind so Richie Daly steamrolls everyone.

The impact on housing prices is a long term one. Over time, these personal nuances are the underpinnings of a city's desirability for the next generation of creators, builders, innovators. These freedoms are what people seek cities for. Restrict at your peril.

Evanston Illinois, Housing Market, Charts and other Goodies

Mike Simonsen — Thu, 17 May 2007 15:02:27 -0700

I was in the Chicago area recently and had a chance to tour some cool new properties just on the market from Altos client, real estate broker and developer extraordinaire, Jamie "Ironman" Isberner. Evanston is such a great town, I thought I'd relate a little about the market and show some snapshots of Jamie's properties.

First a bit about Evanston

Evanston is to Chicago as Cambridge is to Boston--it's the college town on the urban edge. Home to about 75,000 people, the town's culture is dominated by Northwestern University, it's lake front position, and proximity to the City. The Claritas/prizm folks peg Evanston's demographics as the hippest mix of youth and creativity with a little money thrown in, but not enough to be blue-blood-boring which you get a few miles north in the Chicago area.

Evanston is bustling and prospering these days with great new condo projects mixed in with 100-year old Victorians on big lots, a walk from the beach (if that's your thing.)

Two Cool Properties

In fact, the location is a big check in the plus column for these new homes built by the Ironman group. A quick walk to Northwestern, restaurants, or hop on the train and be downtown in 20 minutes. Spacious (3 stories + basement!) and nicely decked out. Here's a pic of the properties. You can check out details here (floor plans, etc.) if you're interested.

Evanston New Development

Evanston Real Estate Market

Enough with the sales pitch, let's look at the where the housing market in Evanston is heading.

The first thing we notice is that Evanston has a broad range of prices, which reflects the new development growing over some lingering urban bungalow style homes. The market has yet to really pick up with spring seasonal buying, so a bit of inventory may offer some buyer selection.

Altos Research Real-Time Market Profile for Evanston, Illinois

Days on Market has started coming down a bit but notice that 40% of the properties currently on the market in Evanston have had price reductions. "Balanced" is the word used when you want to positively spin conditions like this. And I'm an indefatigable optimist, so I'll use it.

Here's an interesting trend to finish off the post:

Market Action Index measures demand levels relative to supply. Index values around 30 are considered balanced. Above 30 are Seller's Market opportunity, below 30 means there is more selection for buyers and homes generally take longer to sell. This chart is for Single Family Homes in Evanston 60201 as of May 15 2007

In the 60201 zip code, the north side of Evanston that includes the Northwestern campus and the homes we mentioned above, demand is looking a bit stronger at the top of the market than the lesser expensive properties. Not an overwhelming difference but a curious item to note. When buyers have the luxury to take their pick, the best properties are the ones to go first.

Days on Market, Relisting, and Stale Fish

Mike Simonsen — Fri, 09 Feb 2007 11:28:45 -0800

Some readers have asked lately about a recent jump in our Days on Market statistic. I thought it makes sense to explain it here. We recently did a methodology change where we increased the look-back window for watching properties.

By making this change, we more accurately reflect the actual total time on market, even for properties that have come on and off the market, especially including those that have been off the market for 30 days before being relisted.

In January 2007 we increased our look-back window. We'll now identify more properties as they've come on and off the market. Thus the big jump in our Days on Market statistic.

What we found was that in some markets, we can find a significant chunk of properties that have really been on the market for long periods and these properties were previously under-reported in our stats. We've seen a notable decline in the number of properties relisted (with the sole intention of "refreshing" a listing) in Silicon Valley since last fall when the local MLS changed its rules. In San Jose California we've observed a drop from nearly 25% of homes on the market having been relisted down to 9%. That's real progress.

Those rules however do not impact a property that for example was on the market all last summer, was pulled off over the holidays and put back on the market in January. A soon-to-be-announced Altos partner calls these properties "stale fish." We've adjusted our nets to catch more stale fish. We're still dolphin-safe though.

This change effected our the trend charts in most communities a little bit. In some areas, though, you might notice a big jump in the DoM stat that week in January 2007. This change is the reason for the jump. Inset is a snapshot of the current Days on Market trend for San Jose Homes.

Million Dollar (Homes) Baby

Mike Simonsen — Mon, 05 Feb 2007 17:44:05 -0800

What does one get for a million bucks these days? That's the question on our mind as we went spelunking through the database today. We grabbed 5 more or less random markets in the Bay Area, San Diego, Los Angeles, Seattle, and Chicago that have a quartile of the market with a median price at $1 million this week. Here's what you can expect if you wanted to drop a mil on a home in those markets.

City	Zip	Quartile	Avg. Square Ft	Lot Size	Era Built	Median Price Per Square foot
Carlsbad	92009	2nd (mid-high in this zip)	3369	quarter acre	Mid-Nineties	$306
Huntington Beach	92649	3rd mid-low	2291	eighth acre	Early Seventies	$469
Santa Rosa	95404	2nd	2940	1+ acres	Late Nineties	$361
Chicago	60614	4th (bottom of this zip)	1662	postage stamp	Early Nineties	$606
Seattle	98198	1st (top of the market)	2706	quarter acre	Early Nineties	$258

Some fun things to note:

The properties in these market chunks all average approximately 4 beds / 3 baths.
The Chicago zip code 60614 is Lincoln Park, a part of town that has always been among the ritziest. So for around a million bucks, you could live in a very cool single family (detatched) home, in a killer location. Any part of this zip code that wasn't always tony went through massive gentrification in the late '80s and early '90s. I particularly like this place. That's where I'd go if I transplanted my Bay Area mortgage back to Chicago. $1million is the bottom of this zip code.
For a million bucks in Huntington Beach, however, you'd get a place built in the '70s. This is the lowish side of the market too. So anything scraped and rebuilt in the last 15 years in Huntington is significantly more pricey that our sample for the day. 'Course it is February and that's gotta be worth a premium over Chicago today.
The Des Moines section of Seattle on the other hand has a wide range of properties. But the nice long stretch on the water provides some great opportunities for the high-end of the market here on the south side of town.
Santa Rosa is the most exurban of the zips in our sample today. Over 50 miles from San Francisco, the area provides some good opportunity to build on big lots at reasonable (for the Bay Area) prices. Which is great if you work in the wine business or don't mind a mega-commute.