Falling Home Prices Also Hit Chicago's University Village

We live in University Village (love it here) and judging from some of the marketing material that we get in the mail from certain real estate agents you would think that this area has not only been immune from falling home prices in Chicago but that the homeowners here have been making a killing when selling their homes. Of course, it’s a lot of marketing hype. It is true that there is brisk demand for certain home styles – often resulting in multiple offers – but at what price? Of course, I had to pull the home sales data for the last year to check. The table below shows all the University Village home sales for the last year where I was also able to obtain previous sale data.

As you can see:

• Out of the 29 home sales shown, 9 (almost 1/3) were either foreclosures or short sales.
• Just about everyone who bought after March 2005 lost money (every home sale in red)
• Even some of the people who bought in 2003 and 2004 lost money

Now, notice that these sales are dominated by the mid-rise condominium units at 1524 and 1525 S Sangamon and 811 and 833 W 15th Street. If you look at the data closely you will see that these mid-rise units have been more susceptible to price erosion than the condos and townhomes on the ground:

• The two units purchased in the last 5 years that did not lose money were walk-up condos
• Almost all of the short sales and foreclosures were in the mid-rise buildings
• All the money losers purchased prior to April 2005 were in the mid-rise buildings.
• About half of the mid-rise units purchased prior to April 2005 were money losers

I think there are two reasons that the mid-rise units have experienced more price erosion. First, they are more of a commodity product. Second, their assessments are much higher than the larger homes on the ground. A 1600 square foot condo listed in the low 300s at 811 W 15th Street will carry a $600+ monthly assessment. Compare that to a $300 assessment for a 3000 square foot townhome that would sell in the 600s.

Anyway, University Village is a great place to live – close enough to downtown to be really convenient but far enough away to be a bit quieter. And those that bought, literally on the ground floor, in the early years of the development actually realized a fair amount of appreciation.