I’ve previously written about all the new development in Chicago’s East Village and Ukrainian Village but until last night I hadn’t figured out how to succinctly demonstrate exactly what has been going on in those West Town neighborhoods and what the impact on the real estate market is. Finally I decided to look at the trend in average sale prices of single family homes as an indication of how the mix is shifting over time. As you can see the graph below sums it up very nicely. The trend over the last 2 years has been fairly dramatic as older, cheaper homes are being bought and torn down to be replaced by homes worth 4 – 5 times as much.
I’m not bothering to show the trend in average condo prices because there is none. After all, it’s not like people would buy and tear down cheap condos to build nicer, more expensive ones.
Please note that I am not claiming that these average prices give any indication of overall home price changes in East Village and Ukrainian Village. As I’ve pointed out many times before, metrics such as average or median prices are often misinterpreted by the media that doesn’t understand that the impact of mix shifts dwarfs any price changes that we are likely to see. The trend above is clearly driven by mix shifts*.
Meanwhile developers continue to pump money into the neighborhood. The East Village Association has been reporting on Chris Fifield’s planned development on the north side of W Chicago Ave between 1822 – 1850. The original proposal envisioned 63 rental apartments on top of 14,000 square feet of rental space with construction starting in May or June of 2013. The rental apartments would be a mix of studios, 1 bedrooms, and 2 bedrooms. However, at the most recent association meeting Fifield discussed revisions that would more than double the retail space to 35,000 square feet. Unfortunately, Trader Joe’s will not be one of the retail tenants but, based upon the development renditions, it looks like many attractive people will be milling about so that’s a plus.
And right across the street at Wood and Chicago a building was torn down to create an empty lot surrounded by a fence that is covered with a green fabric and is falling apart. The address is 1801 W Chicago. I have been unable to figure out what is going there. I don’t see any construction permits filed yet.
*It’s actually a bit more complicated. Without knowing what’s going on in a neighborhood you can’t necessarily interpret an upward trend in average or median prices as an indication that the stock of housing is improving. For instance, it could just be that people who own homes at the lower end of the spectrum are unable to sell because they are more underwater than people at the upper end. So the mix shift of what sells does not necessarily reflect a shift in the mix of housing available in a neighborhood.
Full Disclosure: I moved to East Village back in July but that doesn’t change the data. After all, why do you think I bought here?