General Market Update for Chicago
Chicago’s housing market is stable, with the average price rising 6 percent last year, and 3–4% over the past few years, with room to grow, according to a consensus among Truepad’s agent sources.
The first half of 2016 was very aggressive. With low inventory over the past few years, condos and houses continued to sell very quickly. Winters are typically slower, so now list prices are more reasonable, though there are fewer options. Find a motivated buyer right now, and you could get a deal. Otherwise, the spring will bring fresh options for buying.
West Town has become really hot over the past few years, owing chiefly to its location just south of Wicker Park, 15 minutes from the Loop. It is a large growing community on the (Near) West Side that encompasses several growing neighborhoods, such as Ukrainian Village, Noble Square, and Smith Park.
The community area spans from just north of North Avenue (The 606 trail) south to the Union Pacific train tracks, and from the Chicago River in the east including Humboldt Park in the west. When people talk about West Town, they usually refer to the area between Division Street and Grand Avenue, and Ashland to Western Avenue.
Why West Town?
Whether people rent or buy in West Town it’s one of the most popular neighborhoods in Chicago. It has the dual benefit of being conveniently located to Downtown, but with quiet, tree-lined streets. West Town has a prominent immigrant history going back to the 1840s, which you can see especially in the Polish restaurants and bars around Division and Ashland, and the Russian churches of Ukrainian Village. We talked to real estate expert Mike Opyd about West Town, where he lives and works extensively.
“It’s a cool mix of old buildings and brand-new condos, quieter than Wicker Park, with a different feel than Downtown or Lake View, which is more high-rise style living,” he said. “In West Town there are single-family homes, kids play outside, schools close by, a nice Mariano’s, making it super family-friendly.”
A draw of the neighborhood is that it’s only a short ride on the bus or blue line to the Loop. But its proximity to other West Side neighborhoods is equally important.
“You’re near Douglas, Garfield, and Humboldt Park. The highway going west is right there, giving quick access to the jobs and infrastructure of the west and south sides,” Mike said. “It’s not too far from Wicker Park scene, but also Fulton Market (with Google coming in), and Harpo Studios where McDonald’s is moving,” he continued.
Restaurant row on Randolph Street, Greektown, UIC, West Loop, Near North Side, Near West Side, East Village, are all easily accessible from West Town.
A Good Time to Buy?
In deciding whether to rent or buy in West Town, consider the neighborhood’s good and growing stock of homes for sale, and slow rental market. Mike told us one of the reasons he bought is that there is so much new construction, a lot of condos and single-family homes. “West Town is known for these small older homes called worker’s cottages. Developers have been tearing them down to put up larger single family homes that are modern and tricked out.” These go for $1.2–1.5 million.
The market has somewhat slowed down for single-family homes. Most never come onto the market, are sold off-market. At the same time developers are into condos now. These are 3-5 unit buildings, duplex downs, duplex ups, and large simplexes. They sell in the $500,000 range.
This is well above what Mike himself paid when he bought a year and a half ago. “It shows what pricing looks like now for condos (especially new ones).”
A lot of condo buyers are in their mid-thirties here, while couples in their 40s buy single-family homes. They have a good income, can afford to pay $1 million, but not, say, $2–3 million over in Lincoln Park.
Here’s a look at the West Town neighborhood sales in 2016.
|Property Type||Avg. List Price||Min. Price||Max. Price||Avg. days on market||Total Sales 2016||Price Change from 2015||Sales Change from 2015|
|Single Family Home||$1,351,955||$339,900||$3,999,000||79||263||-6%||85%|
As Mike said, there are still many condos to choose from, but single-family homes and especially multi-unit properties are rarer. Sales this year in single-family homes were up and prices down. This suggests their value may have reached a ceiling for now.
Prices have been growing steadily in West Town. In fact it’s hard to argue that the neighborhood is still up and coming. Parts of it, like East Ukrainian Village, have definitely “arrived.” This will push prices whether you rent or buy in West Town.
“It all depends where you are,” Mike said.
As in most Chicago neighborhoods, “prices change as you move east towards Downtown or west toward Humboldt Park.”
The far eastern part of West Town is comparable to the Loop and its environs, both in price and feel, but the western part is completely different, more akin to Logan Square or Bucktown. Tri-Taylor is the most affordable part of West Town.
Renting in West Town
We have seen that rental prices are rising faster than home prices in the city, and so it is generally a better bet to buy at this time. We talk about this in our general rundown on renting or buying.
In West Town, one problem with renting is finding a place. “There’s not a ton of rental development going on here like there is Downtown,” Mike said.
The market is more geared towards buyers there.“Developers here still focus on condos,” he continued. “It’s a slower rental market. The neighborhood is quieter, with lots of schools and parks, so it’s mostly families with kids moving in, those kinds of clients are more likely to buy.”
“Younger people want to live in Wicker Park, where lots of people rent.”
Since there’s not the same kind of nightlife in West Town as River North or Wicker Park, there’s not as much demand.
On the other hand, “Since it’s really not as popular a neighborhood to rent in, prices are more reasonable than West Loop or River North.” But it’s still not cheap. A nice 2-bedroom condo will run you around $2K a month.
Rents around West Town
|Rental Cost Averages|
|Type||Wicker Park||Ukrainian Village||West Loop||University Village|
|Type||Near West Side||Noble Square||East Village||River West|
There’s usually a specific reason people rent versus buy in West Town. “They’re between selling one place and buying another,” Mike said, “or they want to be near 290 to commute out west.” Most people renting out their place are either soon-to-be sellers or accidental landlords, because they can’t sell their place yet.
“One client was looking to buy but it was taking quite awhile to find the right fit, so we found them something in the area to rent. It makes it easier to look to buy if you live in the neighborhood already.”
Rising rents downtown have a domino effect on rents all over the city. “You see it in the progression into the West Side, prices rising from Wicker to Bucktown to Logan to Humboldt. Logan Square is so hot, now people move to Avondale, or Irving Park.”
A Bit Rich
So with single-family homes going for a cool million-and-a-half in West Town, we asked if there is any fear of a bubble?
Though there’s no denying the market’s high, Mike thinks its growth will continue apace. “Open land is always coming up, so there’s still room to grow. Developers will continue to come in and build on the success of the area,” he said.
Still, “it has backed off recently from the crazy pace of the last year,” he said. “It’s calmed down since the election and with winter coming on. It’s a better time for people looking for a deal. You’ll find sellers a bit more negotiable now than any other time of the year.”
Pricing Trends Hold Steady
As for bubble fears, he didn’t expect the growth to stop anytime soon.
“As soon as homes come on the market, or if there’s an open house, you get multiple offers,” he said. This pushes prices over list.
“I always try to counter that by seeking off-market opportunities for my clients. I had one guy who got a place for a reasonable deal off-market. I knew the seller’s agent so I got lucky. In that case he paid nearly list price, which does scare some people off,” he said. “But right now list price is a good deal in West Town.”
“If you want to get gains out of your place and when you sell one day, get the equity out of it, you’re not going to get that in Lincoln Park or Lake View because they’re just too established,” he said. (It does seem like the landlords are really making money in those neighborhoods.)
“[Lincoln Park and Lake View] will appreciate with inflation, maybe 2–4%, while over here it’s more likely to be around 7–8% because there’s still so much more space to develop.”
The whole West Side is growing, with various initiatives to help develop North Lawndale and other neighborhoods, and tech companies moving into the Fulton Market District and West Loop. “Lincoln Park is old money, but new money is coming here.”
All data from the MLS. Rental data from Domu.
More insights from Mike Opyd.
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 West Town at our site.