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If far from the best of times, neither was it the worst of times on the local real-estate scene. Although it took longer to sell a house and profit margins were generally smaller than a year ago, homes continued to sell, defying the glum mutterings of some discouraged sellers. “The entire market is not in the toilet,” says Thaddeus Wong, the head of the Chicago real-estate agency @properties. “But a lot of sellers like to point to [the market’s collapse] as an excuse when their house is not selling.”
The charts provide a comprehensive dissection of the cooling market in house sales in Chicago and the six-county metro area. In Chicago’s 11th annual look at the region’s real-estate sales, this is the first time our charts—compiled using data supplied by the Multiple Listing Service of Northern Illinois (MLSNI)—have reported widespread drops in all three major indicators: house prices, number of houses sold, and days on the market.
Let’s begin with the most significant number: prices. Average prices of single-family homes fell in almost one-third of the city neighborhoods and suburbs tracked by the chart. Factor in those areas where prices stayed flat or nearly flat—that is, with an increase of less than 2 percent—and the figure rises to include more than half of all the 281 neighborhoods and suburbs. What’s more, compared with last year, in nine out of ten areas, fewer homes sold during the 12-month period covered by the chart, July 1, 2006, to June 30, 2007. And in almost as many areas, homes this year spent more time on the market before selling than they did last year.
In Chicago, 25 of the city’s 77 neighborhoods saw house prices take a downturn. The once-hot Lincoln Square—where average house prices topped the $1-million mark for the first time last year—took a significant hit, with house prices dropping by 32 percent. Sales of condos and townhouses—what the MLSNI classifies as attached housing—did remain steady there.
But it is important to add a little perspective: As with most other neighborhoods and suburbs, Lincoln Square still shows substantial appreciation in the value of homes since 1994: 331 percent. In fact, as the chart demonstrates, even with recent downturns, most Chicago neighborhoods have experienced triple-digit increases since 1994—which is why many analysts are referring to the current market shakeup as a “correction,” a paring back of house prices to more realistic levels.
There were a few bright spots in the city. A number of up-and-coming neighborhoods, such as Logan Square, showed double-digit increases since last year, as did several South Side neighborhoods, including Beverly, Bridgeport, and Pullman. Though prices fell by 8.44 percent in the Loop, the neighborhoods bordering downtown did well. The Near West Side led all neighborhoods and suburbs with a 72.55 percent increase in the price of single-family (or detached) homes, albeit with only 36 sales. (By comparison, nearby West Town had 158 sales and a very healthy 18 percent increase.) The Near North, South, and West sides saw attached-housing sales remain steady, with more than 6,500 sales of condos and townhouses. Prices rose as well, with the Near North Side leading the way with a nearly 11 percent upswing.
“We’ve had a sustained demand for condos, and I think we will continue to see some upward movement there,” says Gail Lissner, a vice president with Appraisal Research Counselors, the Chicago-based real-estate consultants. She attributed some of the gains experienced by condos to the simple fact that there has been “a lot of new construction,” while noting that some of this year’s condo sales “may have gone under contract last year.” Lissner expressed surprise at the lower average sale price in the Loop. “That’s a very strong market,” she insisted.
In the suburbs, no consistent patterns emerged. At the upper end—that is, where average house prices exceeded $1 million—five towns saw prices drop (Glencoe, Kenilworth, Northfield, Oak Brook, and Winnetka), while three saw them rise (Burr Ridge, Hinsdale, and Lake Forest; with only eight sales between them, pricey Bannockburn and Mettawa did not have enough sales for us to provide a percentage increase). Of course, a few high-end sales can give any suburb’s average house price a significant boost: Highland Park, for instance, had the top two house sales in the region over the past 12 months, giving the average price in that suburb a boost of nearly $100,000 and a price increase of 15 percent. (See Deal Estate, “Declining Fortunes.”) Without those two sales, the annual increase for the town would have been only 6.2 percent.
In the southern suburbs, a cluster of lower-end towns showed a nice bump: Dixmoor (a 21 percent increase), Phoenix (28.74), and Steger (16; the average house price among all three of those suburbs was $116,434). The suburban leader was horsy Wayne (just east of the Fox River), with a 23.77 percent price increase; in McHenry County just south of the Wisconsin border, Hebron had the biggest suburban decrease: 26.06 percent.
Illustration: Heads of State