It's the right time to buy.
After seven long years of falling prices in the Chicago area—with median house values down a gut-wrenching 38 percent at the end of 2012, according to real-estate research firm Zillow—"we think Chicago has hit bottom," says the company's chief economist, Stan Humphries.
If you're renting an apartment in the city, this could be the best time to switch to a mortgage. In Chicago, over seven years, you can pay 50% less to buy a place than to rent it, according to the real-estate website Trulia. Go here to precisely calculate your potential savings.
Ready to invest in your first home in Chicago?
If you have the typical first-timer’s budget—say, less than $200,000—and you want to stay in the city, you will be looking mainly at condos. Three Northwest Side communities are your best bet because (a) prices there have dropped significantly, (b) the housing stock is solid, and (c) they are near trendier neighborhoods, which should help boost property values as the housing market revives.
Heart set on a house? You may be better off leaving Chicago—but you need not go far. Take a look at these three suburbs in Cook County. They all have good public transportation into the city, and offer median prices below $200,000.
In the City
Median condo price: $118,000 (down 56 percent from the peak)
This historically Polish neighborhood is more diverse and vibrant these days. Granted, nearby Logan Square has more dining, shopping, and nightlife—but it also has pricier homes. Buy in Avondale and you get easy access to those perks while spending about half as much. To get even more for your money, stay away from new construction. And since the housing stock here can vary widely from block to block, spend time walking the streets where you’re thinking of buying, advises Chris Chesne, a Redfin agent on the Northwest Side. “Remember you’re not only buying a home, you’re buying a neighborhood,” he says. Chesne also notes a rising trend in Avondale: folks buying two- or three-flats and renting out the additional units (often to other family members) until they become financially able to convert the building into a single-family home.
Median condo price: $91,000 (down 57 percent from the peak)
With Park Ridge next door, this hidden gem on Chicago’s northwestern tip offers the best of both urban and suburban worlds. “This is a very dynamic community,” says Chesne, “close to the train and with lots of [restaurants and retail] on Northwest Highway. And it’s less expensive than getting into Edgebrook or Sauganash.” (On the city charts, those two areas are parts of Forest Glen, where condo prices are double those in Edison Park). Focus on the midcentury buildings—distinguished by their unusual brick patterns and cinder-block cutouts—for deals on two-bedroom condos with balconies.
Median condo price: $62,000 (down 68 percent from the peak)
Once-sleepy Portage Park is heating up, courtesy of places like the Portage, an upscale three-year-old restaurant on Central Avenue. Condos sell for less than in Avondale and Edison Park—and you can actually swing a bungalow for under $200,000. (Look west of Central and south of Irving Park Road.) At that price it will likely need updating, but, Chesne says, there can be significant savings through the state’s property-tax assessment freeze program. Go to chicagobungalow.org.
In the Suburbs
Median house price: $162,000 (down 41 percent from the peak)
Like nature? You’ll love this western suburb, which is home to Brookfield Zoo and a stretch of the Salt Creek forest preserve. You can easily find a brick bungalow or a postwar Georgian for under $200,000, though the best deals are short sales or foreclosures that may require fixing up.
Median house price: $190,000 (down 43 percent from the peak)
This northwestern suburb boasts an excellent public library, good schools, a thicket of restaurants and stores, and a Metra stop (39 minutes to Chicago). Check out the recently built townhouses near downtown, which have been priced to move. “I’ve handled lots of short sales and foreclosures [in Des Plaines] recently,” says Jason Schram, a real-estate lawyer with an office there. Older ranch houses and split-levels are also a good value.
Median house price: $160,000 (down 47 percent from the peak)
A lower-cost alternative to neighboring Oak Park, this village holds its own, thanks in large part to funky Madison Street, which is loaded with boutiques, galleries, and restaurants—and there’s a CTA Blue LIne connection to Chicago. For about $160,000, you can find charming older brick houses and newer raised ranches.