WSJ: The Gold Coast is Where Home Prices are Still Hot
The Wall Street Journal has an article today called, “Where Home Prices are Still Holding Up” about what neighborhoods in major cities are still hot.
Chicago is one of the cities that is highlighted:
It’s a mixed picture in Chicago’s downtown area. A flurry of condominium building has kept prices down on much new construction. At the same time, some established apartment buildings are still seeing buoyant prices, even as properties spend more time on the market. The Carlyle, a 1960s-era glass-and-concrete tower along the city’s prized Gold Coast neighborhood, recorded the highest price ever — $2.4 million — for one of its “C”-tier units earlier this year, for example.
Jim Kinney, president of Rubloff Residential Properties in Chicago, says “80% to 90% of the buildings along the Gold Coast achieved a record sales price in the last year.” The older buildings are often in blue-chip locations and are generally cheaper, per square foot, than new units.
Bargains abound in Chicago’s periphery. Seven miles south of the Carlyle is Bronzeville, a gentrifying community that during the housing boom was a favorite of buyers who couldn’t afford Chicago’s glitzier core. Just last month, a bank that owns a foreclosed duplex in Bronzeville dropped the asking price to just $85,000, from the January listing price of $129,900. The owners who lost the property originally paid $330,000 in November 2005, about a year before the Chicago market peaked.
But beware: Prices may be stagnant or worse for a long time to come. “Because of the huge inventory, it will take years to recover,” says Christina Miller, a Rubloff agent, citing periphery neighborhoods such as Wicker Park, Ukrainian Village and Bucktown.
Chicago’s desirable North Shore suburbs are, for the most part, doing well. Median prices in Evanston, Wilmette and Winnetka, all hugging Lake Michigan’s shoreline, are up over the past year to varying degrees, though sales volume is down sharply, according to a Zip Code analysis by DataQuick. Sellers are receiving about 89% of the list price, according to March data from the North Shore-Barrington Association of Realtors. That’s down from about 95% at the peak of the market.
In upscale Highland Park, about 25 miles north of downtown, prices are down more than 6%. But that average is being skewed by a high number of sales of low-end homes, some forced by foreclosure.
Where Home Prices are Holding Up [Wall Street Journal, May 20, 2008]
That unit in the Carlyle was #14C. It looks like it was renovated by the flipper.
#14C listed 2/2/06 $1,499,999
#14C purchased 5/1/06 $1,380,000
#14C listed 4/23/07 $2,950,000
#14C listing canceled 11/28/07
#14C listed 2/5/08 $2,750,000
#14C sold 5/16/08 $2,400,000
It looks like the flipper was fortunate, based on these two current listings:
#17C sold 1/30/98 $649,000
#17C sold 8/2/05 $935,000 (looks like it was to a flipper)
#17C listed 11/16/07 $1,899,000 reduced to $1,799,000
#17C expired 3/17/08
#17C listed 3/18/08 $1,749,000
#17C listing since reduced to $1,699,000
#26C sold 9/22/94 $760,000
#26C listed 5/15/08 $2,300,000
Both of these units are listed as having high-end renovations, which was also the case for #14C.
Obviously, the “highest price ever” will not be attained by these C-tier units. So much for the “buoyant” prices.
“Chicago’s desirable North Shore suburbs are, for the most part, doing well. Median prices in Evanston, Wilmette and Winnetka, all hugging Lake Michigan’s shoreline, are up over the past year to varying degrees, though sales volume is down sharply,”
This writer understands very little. Sales volume is “down sharply,” yet “for the most part” the North Shore is “doing well?”
Highland Park is off WAWWWAAAAYYYY more than 6% from the peak which was well over a year ago. What these sorry analysts never take into account is the massive impact tear-downs (and additions) have on median prices along the north shore. There are significant pockets of relatively modest homes spread all across the town. When someone tears it down or puts on a 1500 sf addition the result is a much higher eventual sales price that has nothing to do with the stregth or weakness of the housing market. Median price is useless, a Case-Schiler type index would have Highland Park down well into double digits. Outside of the occasional unique home/small subdivision, the same goes for Lake Forest, Lake Bluff, Deerfield, and Libertyville. I think the market clearing price for the massive inventory in these towns would shock even the housing bears here.
John
Um, I think everyone on this site is a housing bear. It’s just a matter of degree.
The “good” neighborhoods will always hold up. Take the long view.
BTW: There is one vacant parcel in the gold coast at 50(?) E. Scott. Does anyone have any history on it? Rumors are that the Pritzkers are building a mammoth mansion there……
The Pritzkers are responsible for taking parts of Lincoln Park (via the Latin School) and Grant Park (via the Children’s Museum) from the public. Not surprising they want to wreck the Gold Coast, too.
Do others understand the article to indicate that prices in Ukranian Village and Wicker Park will remain the same — but not necessarily decline?
It’s difficult not to be a housing bear if you see the crazy stuff that I’ve seen.