Back in September Crain’s ran a story about how, in a survey of 65 downtown condo buildings, Appraisal Research Counselors concluded that on average prices in those buildings were now within 4.3% of their peak price/ sq ft. In related news there has been much debate on Cribchatter during the last year about whether or not the more affluent areas of Chicago are past peak pricing. While Sabrina, Cribchatter’s proprietor, maintains that these areas are past peak pricing I have been reluctant to make such a sweeping generalization.
That Cribchatter debate has come down to a discussion of specific buildings with each side presenting their own case studies. For instance, back in July I posted on prices in The Heritage at 130 N Garland, making the case that that building had really not seen great appreciation. But Sabrina pointed out that 340 On The Park, at 340 E. Randolph, has seen tremendous appreciation. So I decided to take a closer look at some actual data for that building.
Unfortunately, 340 On The Park is not as easy to evaluate as The Heritage because I don’t have as much detailed information on the floor plans and exposures. It’s spotty at best. So all I can do is plot all the data and draw some general conclusions and then try to fill in some details with specific unit sales. Herewith are the prices paid per square foot since 2007 when the building first went online.
It should be apparent in the graph above that prices at 340 On The Park have been steadily drifting upward during the entire aftermath of the housing bubble bursting – unlike pricing at The Heritage. However, three things that make this data difficult to analyze should also be clear from that graph above:
- Pre-construction pricing was a lot cheaper than subsequent sales
- There is a huge dispersion of prices at each point in time. This is due to the differences in the floor plans, with south facing units (view of the parks) commanding a premium over north facing units.
- Lower priced units have possibly appreciated less than higher priced units
Compounding the problem is the fact that the Blue Cross Blue Shield building to the west was expanded upwards a few years back and destroyed the west facing views (the building photo at the top of this post is from before the expansion). While this event was expected I’m sure there is a difference between knowing something is going to happen and actually having it happen – not to mention the fact that there is value in a temporary view while it lasts. This would have negatively impacted the pricing of the units affected by the expansion.
So I decided to dig a bit deeper and look at individual sales in the last year that could be matched up to prior resales – but not pre-construction sales.
As you can see these units all experienced some degree of appreciation regardless of when the prior sale occurred. And, in general, the more time that had passed the greater the appreciation. This result is consistent with regular appreciation over the entire time period and that is a very different picture than I have seen with other buildings I have analyzed.
#chicagorealestate #340OnThePark #ChicagoHomePrices
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.