Buying on Northside (Edgewater, Rogers Park) in winter? (Chicago, Lincoln: sales, real estate)

[thesilo]

Hey all -

I am a single male looking to buy a condo on the Northside (Edgewater, Rogers Park). What are people's thought on purchasing in that general area with these two caveats: 1) It's the winter, so presumably the stock isn't great this time of year, and 2) The neighborhoods probably aren't the trendiest. In regards to point one, it seems this cuts both ways - there's less available, but what is available may be cheaper (than it typically would be). Not sure if this sort of logic actually holds in reality, but this is what I've heard and seen to a certain extent. As far as these two neighborhoods and the upper Northside in general, I'm comfortable with them and like what they offer. That aside, any reason to believe properties in these areas will lose value or not break even in the next decade or so? I've looked at various reports and comps, and no red flags have popped up.

A little about me: I work full-time and earn a full-time salary and also am a student (getting a decent stipend each quarter). I was approved for a $235,000 loan. My upward limit for a place is just about $275,000, and I've seen a handful of properties on the Northside that I've liked that are in that range (looking at 2-bedroom condos). I'm looking to purchase and sell after 5 years (minimum), and can't see myself staying longer than 10 years. I'm in a housing situation right now which is compelling me to go ahead and make a purchase, which is to say I'm going to make an earnest effort to find something solid this winter and put in an offer, rather than wait until the Spring when more units will come online.

Thanks for any thoughts!

[MarianRavenwood]

Here's my thoughts:

1. Yes, in general fewer people buy and sell in the wintertime, but that's just a statistic. It does not mean you will be the ONLY buyer on the market. I started my home buying process in mid-December, and made an offer the day after Christmas. Who does that?!? Well, apparently one other person at least, because someone else made an offer the same day. The other buyer wanted to play hardball with negotiations. Maybe they thought wintertime gave them more leverage, who knows, but the bottom line is my offer beat theirs. So I win .

Prices don't fluctuate THAT much from one season to the next, only a few thousand dollars (if that). It's not like sellers all drop their prices once the thermometer starts to dip, and then raise them again in the spring. Frankly it doesn't matter what something was listed at last summer, or what it could be sold for next summer. All that matters is what you want to pay for a particular property, at the time you want to make an offer.

I think you've kind of missed the boat I think on 'winter' season in the real estate world. To the extent that there is any marginal advantage in winter, you need to be looking between Thanksgiving-Christmas, and going through the loan process in January. At this point, you probably won't close on a condo until late March if you are lucky and make quick decisions. That's spring.

2. Rogers Park and Edgewater are definitely not the hottest neighborhoods right now. But not all buyers are looking for trendy. Some buyers want quiet neighborhoods with good schools, or easy commuting options, or roomier homes. It certainly wasn't a term that came up in my criteria. So just because a neighborhood isn't the trendiest, doesn't mean you will get a good 'deal' or have more negotiating power. If you want buying power you would need to look at neighborhoods that literally no one else wants to live in.

Since you are considering selling in five years, I think you need to look at not just what kind of deal you can get when buying, but also what kind of deal you can get when you sell. Home values in RP and Edgewater don't rise that rapidly, and real estate is a long con--if you want to make a profit you need to buy and hold for ten or twenty years. In five years, you may make a modest profit from RP or Edgewater, or you may just break even.

If you find a good agent, they should be able to discuss these considerations with you and help you decide if these neighborhoods are the best choices given your goals.

Good luck with your first home!

[NealIRC]

You been to the Damen silos in Pilsen?

[chet everett]

Originally Posted by MarianRavenwood

Here's my thoughts:

1. Yes, in general fewer people buy and sell in the wintertime, but that's just a statistic. It does not mean you will be the ONLY buyer on the market. I started my home buying process in mid-December, and made an offer the day after Christmas. Who does that?!? Well, apparently one other person at least, because someone else made an offer the same day. The other buyer wanted to play hardball with negotiations. Maybe they thought wintertime gave them more leverage, who knows, but the bottom line is my offer beat theirs. So I win .

Prices don't fluctuate THAT much from one season to the next, only a few thousand dollars (if that). It's not like sellers all drop their prices once the thermometer starts to dip, and then raise them again in the spring. Frankly it doesn't matter what something was listed at last summer, or what it could be sold for next summer. All that matters is what you want to pay for a particular property, at the time you want to make an offer.

I think you've kind of missed the boat I think on 'winter' season in the real estate world. To the extent that there is any marginal advantage in winter, you need to be looking between Thanksgiving-Christmas, and going through the loan process in January. At this point, you probably won't close on a condo until late March if you are lucky and make quick decisions. That's spring.

2. Rogers Park and Edgewater are definitely not the hottest neighborhoods right now. But not all buyers are looking for trendy. Some buyers want quiet neighborhoods with good schools, or easy commuting options, or roomier homes. It certainly wasn't a term that came up in my criteria. So just because a neighborhood isn't the trendiest, doesn't mean you will get a good 'deal' or have more negotiating power. If you want buying power you would need to look at neighborhoods that literally no one else wants to live in.

Since you are considering selling in five years, I think you need to look at not just what kind of deal you can get when buying, but also what kind of deal you can get when you sell. Home values in RP and Edgewater don't rise that rapidly, and real estate is a long con--if you want to make a profit you need to buy and hold for ten or twenty years. In five years, you may make a modest profit from RP or Edgewater, or you may just break even.

If you find a good agent, they should be able to discuss these considerations with you and help you decide if these neighborhoods are the best choices given your goals.

Good luck with your first home!

Generally there are folks that "get stuck" with a house when they move and they're most likely to feel desperation and accept the lowest offer before or maybe IMMEDIATELY following school break. Over the years, I've seen families with kids deal with bills / school / vacations. Of course this tends to apply most strongly to single family homes.

The smarter sellers tend to take the better properties off the market and though that still shows up in "listing history" the exposure that comes from relishing offsets that negative.

The low inventory that now exists is historically a part of the "spring ramp up" that can be an opportunity for the better homes and most prepared buyers to get a jump on the more traditional peak that happens as families think more about little league, school, and summer break...
In parts of Chicago where those factors are less important the pace of real estate sales is driven more by things like Super Bowl parties, Valentinrs Day dating and of course the St. Patrick's Day drunk-fest. The relative "meh" market in Rogers Park / Edgewater means that even those factors are less important.


The degree to which modestly attractively neighborhoods have "fewer buyers" is vastly different than going for a neighborhood that has nearly no buyers -- if you really want to take a chance on a place in an unpopular / unsafe area that would be totally different strategy than Rogers Park / Edgewater.

It make some sense with a timeline of only 5 years to pursue a property in more a fringe / longshot situation but the smarter move is almost certainly to use a modified "Property Brothers" strategy -- look for the worst units in Old Town, the Gold Coast, Lincoln Park or heart of Lakeview. Use a big part of your budget to fix the place up, take excellent care of it and in five years your low cost of purchase, good renovation and top notch location should ensure a profit...

[thesilo]

Wow, thank you all for your feedback! I had a feeling some of the rhetoric around seasonal buying was a bit overstated. I've been surprised to see how quickly units go (especially during the winter). You tend to think that a realtor saying "If you like it, you'd better put in an offer," is part of a selling strategy, and it may very well be, but it seems properties go from Active to Contingent to Sold pretty quickly. That combined with the limited stock has made the search, which I began in late October, pretty interesting. I imagine both those selling and buying during the winter might be in a somewhat unique situation.

At any rate, it's good to get more insights on the market and sellers/buyers mentalities and on some of these different neighborhoods. I didn't have a super informed opinion of Edgewater and Rogers Park, but enjoyed both during my limited visits. I guess it all really is just a matter of preference. On the Northside, I've been surprised to see how much properties can spike go from one neighborhood to a close neighboring community. So I can see your point about targeting lower quality properties in those hipper neighborhoods which may offer a better ROI, and I'm going to look into offerings in some of those areas too! Thank you all again for the responses!

[xsboost]

Edgewater has really started to change over the last 10 years or so. It's one of the areas where housing prices have been increasing rapidly. Andersonville, which is technically part of Edgewater, has been gaining in popularity.