Rent or Buy in Chicago Series: South Loop Spotlight

Are We in the South Loop? 

The South Loop is a neighborhood of Chicago located just south of Downtown,

Unlike most Loop neighborhoods, the South Loop’s borders are not that clearly defined. It starts roughly around Van Buren (400 S.) in the north and ends at the Stevenson Expressway in the south. East to west it ranges from the lake to the South branch of the Chicago River. As people move further south, the South Loop (as a real estate entity) expands.

The South Loop is the gateway to the South Side. The area boasts lots of interesting places, including Printer’s Row, the main branch of the library, the museum campus including the Field Museum and Shedd Aquarium, Columbia College, and more, all while providing a quiet, residential feel right near Downtown.

Culturally, the area has a long history of changing demographics. Criss-crossed by railroad tracks and wide boulevards, today it is less walkable than Downtown. What it does have is a great location near tons of great activities, a mix of ethnicities and ages, professionals and students. And because it’s still developing, it’s more affordable than, say, River North.

Much of the South Loop has been built up since the mid-to-late 90s, when many other Downtown neighborhoods were already firmly established. One longtime resident, Dan Smith, told me, “It was still far off in many people’s minds in 1995. For so long, Roosevelt Road was a boundary people wouldn’t venture past.”

Despite being one of the first residential districts in the city, two fires changed its character. During the late nineteenth and early twentieth century South Loop became Downtown’s Skid Row. The “Levee District” was home to many vice establishments, with pawn shops, brothels, shelters, and cheap hotels. A new local startup named Vice District Brewing Company reflects that history.

Today the South Loop’s streets are known for the many murals and historic places. Columbia College, an arts college and frequent host of arts walks and other events, owns many buildings here. But, as in other neighborhoods in or near Downtown, the main draw is the location. Proximity to Soldier Field, McCormick Place, Dearborn Station, Northerly Island, Prairie Avenue Historic District, and Chinatown all make this a distinctly desirable place to be.

We talked about the South Loop with Mickey Hobson, real estate broker at The Matt Laricy Group who works in Downtown and the Near South Side. “The main draw in the South Loop is the location, obviously,” he began. “It’s easy to get to Downtown and River North if you live in the South Loop.”

But you are just a bit out of the center, too. “Those who are drawn here want a bit of a buffer,” Mickey said. “Being right in the thick of things isn’t as important to people here.”

Still, South Loop is growing every year with new condos, restaurants, and stores. It also has big box stores like Whole Foods and Trader Joes, making it easy to live, work, and shop there. And, with good schools, tons of history and a location near the lake, Downtown, and points south like Bronzeville and Hyde Park, South Loop’s distinct advantages come into view.

“It’s right near everything, it’s a safe place to be and walk around in, its cool and arty, there’s name recognition, and, if you commute to the south and west sides, it’s easy to get to work,” Mickey said.

Mickey moved with his wife from South Africa to the South Loop three years ago. Her job was on the Southwest side, so they first rented and then bought in the South Loop. This is a typical story here. Like many transplants to Chicago, Mickey marvels at the affordability of the city. “Not sure what’s stopping people from buying, it is really the more affordable of the major cities in the United States.”

And it does ring true—when you look at the numbers, in almost every neighborhood, “If you’re staying more than two years it is makes sense to buy,” he said.

When to Buy in South Loop

As part of the recent development boom in high-rise condos downtown, South Loop has lots on the menu and reasonable prices for the location.

Mickey said, “Price ranges here are large—you can find a deal on a condo for under $300K, but the newer fancy ones go for $600K and up.”

Prices have leveled off since the highs of a few years ago. The median price in the South Loop is $365,000, a bit down from last year but still trending up since 2013.

And if you are looking to live in any Downtown neighborhood, you will be looking mostly at condos. Last year there were around 1000 condo sales, and roughly 2 single-family homes sold.

Inventory is on the low side right now, which is typical of winter, but “as we move along into Spring and more becomes available, it will be more of a buyer’s market,” Mickey said.

Many potential residents are drawn to the high-ceilinged lofts in the far north of the neighborhood, a legacy of Chicago’s printing nexus, Printer’s Row, or the beautiful townhomes in the Prairie Avenue District. These come up rarely, so if you’re set on owning an historic piece of the South Loop, the cost will be higher.

South Loop
               
Property Type Avg. List Price Min. Price Max. Price Avg. days on market Inventory Price Change from 2015 Sales Change from 2015
Condo  $506,520  $140,000  $3,995,000 55 178 -2% -21%
Single Family Home   NULL   NULL   NULL NULL NULL NULL NULL
Townhome  $682,967  $624,000  $749,900 55 3 51% 100%
Printer’s Row
               
Property Type Avg. List Price Min. Price Max. Price Avg. days on market Inventory Price Change from 2015 Sales Change from 2015
Condo  $279,470  $125,000  $420,000 144 11 -20% 0%
Dearborn Park
               
Property Type Avg. List Price Min. Price Max. Price Avg. days on market Inventory Price Change from 2015 Sales Change from 2015
Condo  $387,026  $175,000  $1,150,000 74 19 -17% 40%
Single Family Home  $824,000  $824,000  $824,000 222 1 NULL
Townhome  $504,260  $324,900  $749,000 51 5 NULL
Prairie District
               
Property Type Avg. List Price Min. Price Max. Price Avg. days on market Inventory Price Change from 2015 Sales Change from 2015
Condo  $358,171  $224,900  $725,000 45 32 3% 33%
Single Family Home  $1,760,000  $1,725,000  $1,795,000 120 2 NULL NULL
Townhome  $964,750  $950,000  $985,000 89 4 24% 600%

Home prices for the South Loop generally, and the more popular mini-neighborhoods within it. Prices range from $175,000 to $3.9 million, quite a range, demonstrating an economically diverse area.

Rent or Buy: By the Numbers

We highly recommend playing with the New York Times Rent vs. Buy Calculator, which will help you think through the benefits of buying versus renting.

When we plugged in average numbers, we found that in the South Loop, it would take 3 to 4 years to make it worth your while to buy. In other words, if you are paying $1800 to rent in the South Loop, and were to buy a condo at $365,000, after 3–4 years you’d be better off financially than if you had continued to rent. This reflects the fact that buying is better the longer you plan to stay in an area, and rents tend to go up over time.

Mickey warns (and we agree) that if purchasing a condo try to work with an experienced agent who knows condos and which questions to ask about financials. It’s not always that easy to discover the real costs of condo living, beyond the maintenance, or HOA, fees.

Renting South of the (downtown) Border

As we’ve detailed elsewhere, renting versus buying has as much to do with market timing as it does where you live.

The market in Chicago is generally affordable, without the inflation of prices seen in some other U.S. metro areas. Meanwhile, it’s Chicago’s rents that have been rising quickly the past few years.

The median rent in Chicago (from Zumper) for a one-bedroom was $1970 in January (2016), up 10.7 percent from the previous January. Two bedrooms were up 8.2 percent, to $2630.

Last year housing prices rose 7 percent, and only 3–4% in many neighborhoods.

Mickey said, “Developers are really past the condo trend and into rental housing now. They are making out well in the rental market, which should tell you something.”

Keeping it Casual

The main reasons people rent are:

  • Location uncertainty; new to the area
  • Downsizing (e.g. due to retirement) or change in lifestyle
  • Economic constraints (can’t afford to buy where you want to live)
  • Bad Credit
  • No upkeep or unexpected costs

For those with bad credit and little savings, it would be wise to talk to a mortgage lender earlier than later, especially if you do want to buy some day. They have resources that will help you repair credit. They also know about many local and national programs for downpayment assistance.

If you do want to keep renting, for the time being, the South Loop is a nice place to do so. It is far more affordable than the Near North Side and Downtown. And yet you’re still only a 10-minute walk away from the action.

Near North Side: $2660

Loop: $2190

South Loop: $1770

Mickey said that, despite his enthusiasm for Chicago real estate, “If you find the right rental situation now, and you’re saving up for a bigger purchase a few years down the road, then renting makes sense.”

In other words, you don’t need to be in a hurry to buy.

Rents Around the South Loop

  South Loop Loop Bronzeville Pilsen
Studio $1640-2075 $2068-2555 $775 $1,600
1 Bedroom $1800-2355 $2096-2795 $950-1400 $1300-3200
2 Bedrooms $2400-3443 $3020-4604 $1100-1600 $1,700
3 Bedrooms $2727-5615 $4000-9638 $1395-2200
4+ Bedrooms $1250-2000
  West Loop Near West Side University Village  
Studio $1745-2168 $1,800 $1600-2200
1 Bedroom $2100-2704 $1600-2175 $2000-3200
2 Bedrooms $2550-3764 $1800-1875
3 Bedrooms $3650-6874
4+ Bedrooms
All rent info courtesy of domu.com

The South Loop is one of the more affordable places to rent near Downtown. Otherwise you’d have to move a bit further off (Uni Village, Bronzeville, Pilsen) to find comparable rents.

Parting Thoughts

A savvy buyer will look around extensively for good deals in the South Loop. Not everyone likes the area, so it is a good idea to live and rent there before buying, as the Hobsons did.

Renters who have a mind to buy in a few years will look into affordable (ideally below their budget) rents around Downtown so that they can save for a down payment.


More insights from Mickey Hobson.

To look deeper into the numbers we recommend the New York Times’ Rent Vs. Buy Calculator. Find it here.

Looking to buy or sell? Check out homes available in South Loop here.

Emily Johnson

Emily Johnson is a writer, researcher, editor, and publishing consultant with a decade of learning in the field. For Truepad she covers real estate trends and develops knowledge base articles that help people learn about the process of buying as they’re looking for a home. She went through the process herself two years ago and is a proud homeowner in Logan Square.

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