It's been a couple of years since I have reviewed University Village* condo and townhome prices. Over the last year or so I've been monitoring the sales flow there and I've been intrigued by how much of the available inventory has been overpriced and consequently has languished on the market. Occasionally I'll see a transaction cross at a higher price but, viewed in isolation, those anecdotes don't really tell you what's going on. So you need to step back and take in all the data.
University Village Condo Prices
The graph below looks at the price per square foot of University Village condos over time. The decline after the housing bubble burst is clear and there is a fairly rational turnaround starting sometime in 2013 which continues until this day. However, prices haven't quite returned to their bubble highs and quite a few condos there continue to sell below their original purchase price.
What's really interesting is some of the outliers. For instance, there was a sale on September 15, 2017 at an unusually high price/SF but that was for one of the smallest condos in the neighborhood at 630 square feet. We often see higher per square foot prices on smaller units simply because there appears to be a base value to living in any particular neighborhood that is unrelated to the size of the accommodations.
In the most recent sale on December 4 we hit the lowest price/ SF in quite a while because it was a foreclosure.
University Village Townhome Prices
On the other hand townhome prices in University Village have followed a much stranger course. The also drifted downward until 2013 but then suddenly jumped back up. However, if you look at the graph below it appears that since that initial jump they have been drifting lower, with more recent sales "averaging" lower than the bubble highs.
One of the extenuating circumstances of the last year or so is that the final phase of new construction finally kicked in after taking a multi-year break waiting for the housing crisis to end. You can see some of those sales circled in red in the graph and, obviously, they are occurring at higher prices/ SF because of their current finishes. The finishes in the older units are now very dated and cheap looking by comparison so I have to believe that the shiny new units are diverting demand away from the older units.
Interestingly, a few of the new sales occurred at much lower prices/ SF than the rest. I flagged one below that closed on September 7, 2018 just below $258/ SF. I haven't seen the unit and I'm not sure where exactly it's located in the development but I do wonder if it had a bad location - e.g. right on Halsted.
As I mentioned above the finishes on the older University Village units are quite dated at this point and they look rather cheap. I wonder if the ever rising cost of renovation will keep them from ever returning to their former price levels.
*University Village was the name given to the new development/ neighborhood built by the South Campus Development Team starting around 2002. It was bound by the Dan Ryan to the east, the railroad tracks to the south, Morgan Street on the West and Roosevelt to the North. How, Why, and When the media starting extending the boundaries to Ashland I have no idea but west of Morgan is a totally different vibe.
#UniversityVillage #Condos #Townhomes
Gary Lucido is the President of Lucid Realty, the Chicago area's full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider's view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.