When I moved to Chicago’s East Village neighborhood a little more than 3 years ago teardowns and vacant land were still relatively cheap compared to the higher income areas of the city. But since then I’ve seen land values skyrocket as ever more expensive new construction homes are being built here. The rise in prices has been truly incredible.
Noah Properties has been one of the biggest developers in the area during this time period and perhaps their best buy was 1848 W Erie, which they got as a short sale for $160,000 in March 2011. On that lot they built and sold a home for $790,000, which then resold 2 years later for $895,900.
Noah Properties also bought 1854 W Erie as recently as March 2012 for only $190,000 on which they built a home that sold in September of that year for $878,500.
Fast forward to the last couple of months where teardowns in the neighborhood have jumped to as high as $460,000. When I saw these recent transactions close I wasn’t 100% sure that they would be teardowns so I waited for the construction signs to appear in front of the properties. Here are the recent examples:
- 1929 W Erie sold for $460,000 and has a Noah Properties sign out front
- 1736 W Erie sold for $460,000 and also has a Noah Properties sign out front
- 1622 W Erie sold for $450,000 and was clearly listed as a teardown. It was purchased by an Eric Flanagan and there is still no sign of a teardown. It could be an individual planning on building a custom home there or I guess there’s a slim chance that Eric plans on rehabbing it.
What’s driving these higher prices for land in East Village? It’s the ever increasing price of the new construction single family homes being built and sold there with some recent homes going for as much as $1.3 MM – e.g. 531 N Marshfield, a 4200 sq ft home with 6 bedrooms and 3 1/2 baths on a slightly smaller than standard city lot. And there are others close behind that one. Check out my Chicago new construction map to see what kind of homes have sold where and for what prices.
Some Listing Agents Leaving Money On The Table
In light of all these new highs being hit for teardowns I am shocked to see some teardowns going for what I believe is way below market. The most recent example was a teardown on a 25 x 120 lot at 2020 W Ohio that just closed at $335,000. Listed at $350,000 it went under contract in 3 days. What were they thinking?
Sure, that block is not quite as nice as the Erie blocks above but it’s pretty darn close. And it may be a tad west of Damen but the income demographic on the west side of Damen has historically been almost identical to the demographic on the east side there. And they have been building $1MM+ homes west of Damen as you can see from looking at my map.
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider’s view of the seamy underbelly of the real estate industry, or you just think he’s the next Kurt Vonnegut you can Subscribe to Getting Real by Email. Please be sure to verify your email address when you receive the verification notice.