ABC News in Chicago reported on May 7, 2022 that “an analysis of property values reveals new insight about the real estate market on Chicago’s South Side, which is also home to some of the city’s largest new development plans.”
Apparently, the real estate market on Chicago’s south side can be summed up in one three letter word – “Hot!” Local realtors are reporting that because there is a lot of vacant property, there is a lot of opportunity for new development. This includes commercial, mixed use, and residential construction. The report shows lots of new townhomes, new condos, affordable housing, and single-family homes being sold at or above list prices. But here’s the catch – the prices are more affordable than what you would pay on the North Side of the city.
The ABC7 Data team began a study a year before the pandemic, compiling property values from 2019 to early 2022. “It found Near North Side properties tend to sell for more and are more often on the market. But Near South Side properties have had larger property value increases over the last three years, with the largest increase in the Oakland neighborhood. South Side properties also spend less time on the market.
And real estate on the South Side may benefit from new developments. Among them is a $3.8 billion redevelopment of the former Michael Reese Hospital site, with its own Metra stop.
There’s also the nearly $1 billion Obama Presidential Center, where President Obama has reportedly asked Tiger Woods to take on the Jackson Park-South Shore Golf Project. While it’s far from a done deal, Woods came back with a plan that combines the two courses into one championship course designed to bring PGA events.”
The increase in values is particularly impressive. Across the entire City of Chicago, home values have increased by 34% over the last five years, with a median value of $325,000.00. Of course, when you consider Chicago on a neighborhood basis, these values can vary greatly. Lincoln Park currently has a median value of $599,000.00. While southside neighborhoods like Kenwood, South Shore, and Woodlawn have lower values, it’s still amazingly strong – the south side’s median value is around $235,000.00.
There are other advantages to buying a home on the south side of Chicago. Back in 1893, the World’s Columbian Exposition (also known as the Chicago World’s Fair) was erected in the Hyde Park area. After the fair was over, this allowed the City to establish a tremendous amount of park space and transit lines for the surrounding communities. For example, the neighborhoods that surround the University of Chicago have beautiful Washington Park connected to the Midway Plaisance, which is connected with Jackson Park, leading to the Museum of Science and Industry and its campus, winding up at a well-developed lakefront area with parks and boat harbors. There isn’t an area like it anywhere else in the City. Indeed, in the wake of the development after the 1893 World’s Fair, 60% of Chicago’s landmass is on the South Side, but only 40% of the population live there. The more open nature of these South Side neighborhoods can be very appealing.
The redevelopment mentioned earlier is also a direct factor. Many South Side neighborhoods are thriving again after years of decline and neglect. This offers investors and entrepreneurs an opportunity to reprice and recharacterize property that has been undervalued or underused. These kinds of market opportunities are hard to find, and they give Chicago home buyers and business developers opportunities that may not be present in other real estate markets.
The increasing value of residential real estate on the South Side is also driven in part by the geography of the neighborhoods and how they’re situated around amenities such as mass transportation and access to Lake Michigan. Home buyers who work in Chicago’s Loop want a place where they can get away from the pressures of downtown, but still be close to services and the major attractions of the cities. Add the proximity to the Lake, and these South Side neighborhoods become more desirable because they offer the same kind of amenities as North Side neighborhoods, but at a much more reasonable price.
These real estate market trends have also led to a significant amount of diversity in the populations of the south side. Fine Dining and entertainment are finding their place. But the neighborhood “feel” is there. A generation ago, the values in these neighborhoods were declining, but all these recent trends and developments bring tremendous opportunities for someone to find not just a house, put a neighborhood atmosphere to call “home,” while having great investment value in the property, with lots of hope for future growth.
Antje Gehrken, president of the Chicago Association of Realtors, said the real estate market in Chicago will likely get some breathing room in the near future, meaning interested home buyers won’t have to decide so quickly and the bidding wars should slow down a bit. But this is all encouraging news for all of us who live and work in the Southland, and for those who want to live and invest in these communities.