Sue Fox, @Properties. Direct 773.816.1788
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Archive for the 'Albany Park' Category
A pair of new statistics caught my eye this week, both suggesting that the era of rock-bottom real estate in Chicago is rapidly becoming a thing of the past.
First, the number of local homes (in the Chicago-Naperville-Joilet metro area) in foreclosure dropped 31.3% over the same time last year, according to the data firm CoreLogic. This stands to reason: With home prices climbing throughout the year, homeowners now stand a better chance of being able to sell or refinance their homes — instead of defaulting on their mortgages.
At the same time, thousands of cheap Chicago homes in need of repair — many of them foreclosures or short sales — are quickly being snapped up by investors, who usually pay cash. They are fixing them up (with new kitchens, baths, finished basements and sometimes new roofs and mechanical systems) and popping them back onto the market again just a few months later. And these renovated homes are selling quickly to buyers who don’t want to (or can’t afford to) do all that work themselves.
There were 2,235 single-family houses that were sold and then sold again within six months in the Chicago area from January to September, according to a new Realty Trac report, more than double the 1,086 homes flipped in the same period in 2012. This doesn’t even include the homes that took a bit longer than six months to renovate and sell.
I’ve witnessed an interesting trend emerging in recent months, just by watching my own buyers as they move through the home-hunting process. And now I have some hard data to prove it: Chicago buyers are increasingly buying single-family houses, often skipping right past the condo stage that was once the point of entry for first-time buyers.
Five to ten years ago, if you were a North side buyer approved for a loan of $200,000 to $400,000, your best option was often to buy a condo if you wanted to live in a lively neighborhood with plenty of restaurants and shops (and sometimes even the lake) within walking distance. The Loop, South Loop, River North, Bucktown, Wicker Park, Lincoln Park, Lakeview, North Center, Roscoe Village, Lincoln Square, Andersonville, Uptown, Edgewater — all of these areas were bursting with new condo developments that made the most of city living at prices that were affordable for first-time buyers. Most of these folks never even considered buying a single-family house.
But today, Chicago housing prices have fallen so far that decent 3-bedroom houses can now be had for the price of a condo. The demand for single-family houses has climbed rapidly, with 37 percent of Chicago buyers choosing a house in 2011, according to data gathered by the National Assn. of Realtors. Two years ago, only 27 percent of buyers made a similar choice.
Likewise, the appetite for condos has waned. Just 39 percent of Chicago buyers opted for a condo in a building with at least five units in 2011, compared with 54 percent in 2009. (The rest presumably bought townhouses, two-flats or some other type of residential property.)
Among my buyers, the shift seems to be happening because they realize that by compromising a bit on the neighborhood, they are able to find a house for $200,000 to $300,000. These houses generally are neither large nor new. They tend to be around 1200 to 1600 square feet (often a bungalow, a ranch house, or an A-frame home) and they often need some cosmetic updating, especially things like refinishing the floors and renovating the kitchen and baths. But they usually offer all the appeal of a single-family house — including a backyard, garage, and basement, while NOT including a condo association, upstairs or downstairs neighbors, or monthly assessments.
“I never dreamed we would be able to afford a house,” one of my buyers recently told me. But more and more buyers can — particularly if they are willing to look a bit further west than they may have lived previously. Instead of the neighborhoods mentioned above, areas like Irving Park, Albany Park, Avondale, Logan Square, Portage Park and Jefferson Park are now attracting Northsiders who want a house but may only have $250,000 or so to spend. At price points around $300,000 and above, you can sometimes find newly rehabbed houses with finished basements in these neighborhoods. There is literally nothing to do but move in (which, in years past, was often the appeal of many new and gut-rehabbed condos.)
Trying to make fast money by investing in Chicago real estate these days is like squeezing blood from a stone. But that isn’t stopping a few bold rehabbers from snapping up foreclosed houses, renovating them top to bottom, and popping them back on the market a few months later at double or triple the price.
I’m seeing this trend in otherwise sleepy neighborhoods like Irving Park and Albany Park, which boasts a lovely swath of vintage bungalows in its Mayfair area. Consider this renovated bungalow, located at 4839 N Springfield in Albany Park, which has 3 bedrooms (plus another one in the basement) and 3 baths. I chose this house as March’s Bungalow of the Month to call attention to the enduring phenomenon of house flipping.
The owner bought the house — a foreclosure — in July for $104,000, according to public records. It was a simple frame bungalow with white siding and black trim, being sold “as is” after spending three years on and off the market at steadily reduced prices.
Three months later, it was back on the market, totally renovated and set at nearly triple the price: $299,000. The exterior was now a soft gray with brown and white accents, the kitchen boasted dark (but plain) new cabinetry and stainless steel appliances, the floors had all been refinished and the walls repainted, the basement was finished with carpet, and the backyard now featured a new deck.
And the upgrades weren’t merely cosmetic. The house now had a new roof, HVAC system, siding and windows, electric wiring, and other improvements. There was also a new 2-car garage.
But the goal of any house flipper is to find a buyer, and in this case they have yet to do so. This bungalow has been on the market for five months now and the price has been cut twice, most recently to $259,000 last week. We will have to wait and see what the final sale price is to decide whether this was a wise investment.
Chicago is chock full of bungalows and other homes that are now languishing in foreclosure, or are trapped in a slow downward spiral as short sales. I see them in virtually every neighborhood these days, but they are especially prevalent on the South and West sides of the city. Even on the North side, you can find them in Rogers Park, Albany Park, Irving Park, Avondale, Portage Park, Jefferson Park… and the depressing list goes on.
I love bungalows, and I hate to see these historic homes abandoned and decaying. Now, this particular bungalow looks like it was stripped of whatever built-in bookshelves or hutches it once had, and it lacks a fireplace or any leaded glass windows. The new interior now has something of a generic, condo-ish feel and the finishes look like they came straight off the shelf at Home Depot. However, whoever bought and renovated this house did save it from a fate all too common these days in Chicago’s bungalow belt: utter neglect.
The new year is here, and Chicago’s classic brick bungalows — a beloved favorite of mine — are once again popping up for sale, at prices similar to those last seen five to ten years ago.
Here is a new listing that just hit the market this week: a 5-bedroom, 2-bath home on a 30-foot-wide lot near the river in Albany Park. Located at 4940 N Whipple, this 1921 bungalow features original woodwork and some updates such as newer electrical service, 3-year-old tuck-pointing of the brickwork, an updated garage, and a tankless water heater.
The large 17 x 16 foot living room is vintage bungalow style, with a (decorative) fireplace flanked by bookcases and topped with a lovely leaded glass window. The rear panels of the bookshelves appear to be made of beadboard, giving them a classic look. There is also a formal dining room and hardwood floors throughout the house.
The bungalow, described in the listing as “deceivingly large,” features three good-sized bedrooms on the main level, and two large rooms on the second floor. The basement is partially finished. But some areas need work, including the kitchen, which has outdated cabinetry and white appliances.
Priced at $349,900, the house sits on the eastern edge of Albany Park, right beside Lincoln Square. If you would like to see this bungalow, or any other home, please give me a call at 773-816-1788.
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