Q: Dennis, we live in Rogers Park and there’s a house that has us scratching our heads. It’s on a busy street, in a little cluster of houses when everything else on the street is businesses and apartment houses. A really ordinary street. The house looks kind of pretty but nothing special.
Well, they put it on the market this spring, and when I looked it up online, they wanted almost $850,000 for it! That seemed like lunacy.
They put the price lower a couple of times, and the last time I looked it up, it was just below $750,000. That still seems like a lot for a house on a busy street in Rogers Park. We like living here, but it’s not Andersonville or Lake View. That house doesn’t have closeness to the beaches or the El to brag about.
Is there something I’m not seeing about this house that makes it worth that much?
A: Susan, I think the only thing you’re not seeing is the sellers’ hope for a solid return on their investment.
I’ve looked into the house and I agree that the pricing has been overly optimistic. The sellers and agent may have realized that, too, because earlier this month, the house was taken off the market after four months on.
(I’m not including the house’s address or listing because I don’t think it’s fair to blackball the sellers.)
In 2001, according to the Cook County Recorder of Deeds, the eight-room house, built in 1901, was sold for about $280,000 to rehabbers who in spring 2003 re-sold it for a little more than $625,000. If you were in the neighborhood at the time, you might have scratched your head at that price, too. But it appears the rehabbers had done the house up in a big way. According to this summer’s listing, the house was almost entirely redone inside. The kitchen and three and a half baths were completely new, with splashy appliances and cabinetry and, in the master bath, a whirlpool tub and a glass-booth shower. There’s a security system, a three-car garage, and efficient modern water heaters and climate-control systems. Interior walls were removed on the main floor to open it up into a contemporary floorplan. I checked out the exterior cladding; much of it seems to have been replaced, either at the time of rehab or later.
Although as you note, the beaches and the Red Line—two good plusses for Rogers Park—aren’t close enough to count, the home’s location at the south edge of Rogers Park may have helped: in 2003, buyers may have believed that the exciting growth of Andersonville and Edgewater would soon reach this house.
For whatever reasons, the home went for over $625,000 at the time, when the average price for a Rogers Park house was $326,592, according to the chart we published that year (which is not archived online). We reported then that Rogers Park’s houses had doubled in value since 1994. They’d go up another 52 percent by 2007, to $497,819.
But then the bubble burst. In 2012, the median price of a home in Rogers Park was 28 percent below where it had been in 2007, as reported in our April 2013 charts. And while there’s been nice price improvement during the hot stretch in 2013, prices are still far below where they were in 2007. Case-Shiller’s latest report says that in July, Chicago homes were worth 0.53% less than they were ten years earlier, at about the time these sellers bought their home.
It’s not clear what further improvements these sellers have done in the years since buying from the rehabbers, so I don’t know their total investment in the home. Regardless, I’d say their price was overly optimistic, and as I’ve pointed out, the fact that the home is now off the market suggests they saw that, too.