If you already own a home, the fact that prices are rising 5 to 7 percent a year is good news. But what if you’re looking to buy a house?
Then you just want that appreciation to slow down long enough to buy something and join the party. Super low interest rates have made homes much more affordable for the average Chicago family. On a combined family income of about $70,000 a year, with no debt, you can afford to buy a house that cost $220,000. The question is, what kind of house does that kind of cash buy?
“This development was built five years ago,” says Kevin MacDonald, Remax Center.
Let’s start our tour of $220,000 homes in Hainesville, Illinois, population 2,100. The ranch homes go for $220,000, but two story homes area already $50,000 more than that. Homes in Lake County are appreciating so quickly….
“She could probably turn around and sell it right now for $225,000,” MacDonald says.
Inside this ranch are three bedrooms, two baths, including a master bath with a soaker tub and a wide open floor plan.
“It’s got the cathedral ceiling with the dual skylight,” MacDonald says.
And a nice fireplace, a finished basement and a patio surrounded by beautiful landscaping. Who’s buying these homes?
“You see a little bit of everybody,” MacDonald says.
Young families with kids, investors and like the owner of this house, adult children living with their aging parents. If your $220,000 buys a newer ranch in Hainesville, it doesn’t buy nearly as much in downtown Streeterville, just steps away from Michigan Avenue.
“We would leave the house at 7 in the suburbs and get home at 7. And we only work like 9 to 5. So with all the commuting, we had no quality of life,” says Paul Westlake, owner.
Like many couples, Paul and his wife decided to live close to work. Since their jobs are downtown, they traded in a big house for a one bedroom condo that cost $220,000. After looking at most of the other homes in the neighborhood, they choose 211 E. Ohio.
“We liked the amenities here, we loved the location,” Westlake says.
Although small, Paul says the condo has everything they need, even room for his equipment. And the four hours of time they used to spend commuting is now spent making music and enjoying the neighborhood. Their agent, Bridgette Taylor says the price point is drawing a wide variety of buyers to Streeterville.
“We’re seeing a lot of empty nesters purchasing right now. Mom and Dad purchasing for their kids at Northwestern and some doctors,” says Bridgette Taylor, Baird and Warner.
But is is a good investment? How much more appreciation could you have in a one bedroom condo?
“It’s an established neighborhood that’s going to be around for a long time,” Taylor says.
Something that won’t be around for a long time is the house a developer purchased last month for $220,000 in Clarendon Hills with its broken steps and cracked paint, this house is destined to be torn down.
“The home is similar to several in the area. It’s a 1950s ranch, hardwood floors, plaster walls,” says Leslie O’Hare-Given, Village Properties, Inc.
That are covered with mold. The kitchen, bathroom and basement are, to put in mildly, disasters about what you’d expect from a home that was vacant for 5 years and has about 30 years of deferred maintenance. But once this house is torn down, the replacement home will cost a whole lot more than $220,000.
“In this section of town, it would probably go in the range of $600,000,” O’Hare-Givens says.
“Which means you’d have to have an income of almost $220,000 a year to buy it. What can you buy in other neighborhoods for that price? In Cary, you get a three bedroom home with an attached garage. In Hinsdale, it’s a small townhouse on the edge of town. On the southwest side of Chicago, near Midway Airport, its…
“A 3 bedroom brick home with a full basement, probably a bath and a half, maybe a side drive, maybe not, depending on lot size with a two car garage in rather good condition,” says John Kmiecik, Illinois Association of Realtors.
Who’s buying those homes? For the most part, all over the metro area, it’s first time buyers.
In almost every neighborhood and town we looked at for this story, there was something available at the $220,000 price point even if it was a small condo. So if you’re willing to trade space for price, you can live almost anywhere you want.
Paul Weslake www.jazzlake.com>
Century 21 Kmiecik Realtors 4355 South Archer Avenue Chicago, IL 60632 (773) 847-5100