A Good 2021 for the Rogers Park Residential Market
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You wouldn’t think a global pandemic, the sudden evaporation of 25 millions jobs, and massive social unrest in the wake of the killing of George Floyd could do anything good for the real estate industry.
Well, take the last 18 months as proof that predicting the future is harder than it looks.
We all now know that, despite the initial calamity of the pandemic, millions of households – many of them making good salaries – kept working from home, and kept getting paid. But the stay-at-home mandates meant they had nowhere to spend their money.
So what did these remote workers do? Well, at first, they mostly ordered lots of stuff on Amazon. But then, many of them decided the pandemic was an excellent excuse to either fix up their current homes or go find a new, bigger one.
Thus began one of the biggest and most surprising booms in residential real estate we have ever witnessed. In fairness, this boom did not happen everywhere, and did not extend to all property types. Downtown Chicago was and remains a place that buyers have either fled, or are still largely avoiding. Fortunately, the downtown rental market has fared much better.
But it was the suburbs that really took off. A whole lot of people decided a house and a yard looked really attractive after being cooped up on the 25th floor of a small downtown condo for three or four months with no place to go and nothing much to do.
In Rogers Park, the housing market in 2021 has been neither as strong as most of suburban Chicago nor as weak as the city’s downtown. According to Connie Abels, long-time RPBG Director, 2021 was a great year for residential real estate in the neighborhood, but with some important caveats.
2021 was a great year for residential real estate in the neighborhood, but with some important caveats.
The year started off with a bang with high volumes of sales during the traditionally busy spring season. Connie describes the spring season as sort of a two-in-one – combining all the sales of the previous spring that everyone missed with the current spring that broke the dam.
After the frenetic spring, summer and fall remained strong. As we now head into the pre-holiday winter season, things have slowed down – typical for this time of the year.
Connie says that, even though the neighborhood did well over the course of 2021, it did not see the rapid price appreciation we’ve all been reading about in Crains. And different types of residential properties performed differently, due to changing tastes in what buyers want.
Not surprisingly, single family homes, two to four-flats and larger condo units did the best. Post-pandemic buyers in Rogers Park are looking for more space at an affordable price. Connie has seen many long-term owners in the neighborhood sell their properties to move to warmer climates. Some of these sellers have downsized to rental units in the area to keep a foothold in Chicago and stay close to friends. Other have simply left the region entirely.
New buyers coming into the neighborhood are typically other North Siders who want more space at an affordable price. Many of these people are leaving smaller units in higher-priced neighborhoods like Edgewater and Uptown to get more bang for their buck in Rogers Park. Appropriately priced units are selling quickly, but Connie says properties will sit on the market if they are priced too high.
Prices in the neighborhood are only marginally higher than they were before the pandemic began – a contrast to many other neighborhoods that saw significant appreciation.
According to Connie, the sweet spot for buyers in 2021 was single family properties in the $500,000 to $700,000 range and two to four-unit buildings in the $600,000 to $800,000 range. Larger condo units on lower floors also sold well. But smaller units on upper floors were harder to move.
Many of the buyers of two to four-unit properties are multi-generational occupants. This is something of a return to the Chicago of old, and a surprising change from the investor-buyers who had been purchasing these small multi-units before the pandemic set in. Connie speculates that rising taxes and regulation of rental properties is pushing investors to look elsewhere, while extended families appreciate the flexibility that comes with putting different generations on different floors while still keeping the family all in one place.
Perhaps the biggest take-away from Connie’s experience over the past year is the simple fact that prices in the neighborhood are only marginally higher than they were before the pandemic began – a contrast to many other neighborhoods and suburban communities in and around Chicago that saw significant appreciation. Prices aside, the neighborhood saw high sales volumes and good demand as people continue to search for more space and more privacy.
All in all, Connie says she had a fantastic year and is optimistic that the 2022 spring season will bring more of the same. As we all know, Rogers Park is a great value, offering excellent transportation, Lakefront beaches and parks, and lower prices than comparable locations to its north and south. Given all the dire predictions just 18 short months ago, it’s hard not to view the recent performance of the Rogers Park residential market as a success – and a relief. Fears of a repeat of the last recession simply have not come to pass. This is certainly something to celebrate.
