The Next “Hot” Neighborhood (Chicago, Cicero: townhomes, neighborhoods, to buy)

[BRU67]

Bridgeport, Pilsen, Avondale, Humboldt Park, Uptown, Logan Square, Ukrainian Village, River North (??) are already hot neighborhoods. Certainly in terms of property values. You cannot buy a rental property in those areas under 6 units and earn revenue from it because there will be too much speculation built into the price. I guess that's how I define "hot."

And as far as I can tell, COVID-19 has not slowed this down very much, if at all. That might change if this goes on longer but I wouldn't be banking on everybody moving out to the country.

[fusillirob1983]

Originally Posted by BRU67

Bridgeport, Pilsen, Avondale, Humboldt Park, Uptown, Logan Square, Ukrainian Village, River North (??) are already hot neighborhoods. Certainly in terms of property values. You cannot buy a rental property in those areas under 6 units and earn revenue from it because there will be too much speculation built into the price. I guess that's how I define "hot."

And as far as I can tell, COVID-19 has not slowed this down very much, if at all. That might change if this goes on longer but I wouldn't be banking on everybody moving out to the country.

What are your thoughts on this question from the OP's post: "My question is, what’s the next place that will hit the nitro button and undergo and accelerated development phase. Becoming a yuppified, hipster, wealthy enclave?"

I'd be curious your thoughts as you're looking at it a bit differently as an investor/property owner. Some of those properties I think are beginning to meet the OP's criteria, but as you're suggesting, many have some leading indicators like the speculative purchasing and a little bit of new development but still on the edges of area like Wicker. Some of those have been undergoing becoming more wealthy/hipster/yuppified for the past 5-10 years, depending on the neighborhood, IMO.

[jfre81]

Originally Posted by japster28

Avondale

No


Please



I like my rent where it is


Go up to Six Corners with that please kthx

Originally Posted by BRU

And as far as I can tell, COVID-19 has not slowed this down very much, if at all.


I wouldn't be banking on everybody moving out to the country.

On the contrary, I've been trying to promote the idea of my mom coming up to stay with me here in Avondale/Belmont Gardens for a few months, instead of in the small-town MAGA pit in Texas where she's holed up inside all day because people won't mask up and until last week were packing bars like the Super Bowl was on or something. People here are mostly doing the right thing, and it's why we can safely and steadily go about reopening.

[ChiGuy2.5]

Urban living isn't necessarily falling out of favor but DENSE urbanized living is definitely falling out of favor. I can't imagine having to live in my 1 bedroom condo in a 55 story highrise during the pandemic. People are now made aware of a totally different issue they could face living amongst one another.

Because of this, I would agree that the suburbs are going to see a significant uptick in interest. I think people are going to prefer to be living "less dense" and likely desire outdoor space, etc. All of this is not cheap or readily available in the city so I think you'll see them out in the burbs.

[Master Jay]

ChiGuy2.5, right on! And trust me, when I was biking the weekend all over those Chicago neighborhoods that border Lincolnwood, Skokie, Niles, and Park Ride, I totally agree.

That is certainly where I do plan to move, WHEN I move down here!

If there's any spots left for me!!

[BRU67]

Originally Posted by fusillirob1983

What are your thoughts on this question from the OP's post: "My question is, what’s the next place that will hit the nitro button and undergo and accelerated development phase. Becoming a yuppified, hipster, wealthy enclave?"

I'd be curious your thoughts as you're looking at it a bit differently as an investor/property owner. Some of those properties I think are beginning to meet the OP's criteria, but as you're suggesting, many have some leading indicators like the speculative purchasing and a little bit of new development but still on the edges of area like Wicker. Some of those have been undergoing becoming more wealthy/hipster/yuppified for the past 5-10 years, depending on the neighborhood, IMO.

Complex question! So I'm going to do a whole separate paragraph to answer...

I don't know.

I'm not trying to be a smarty britches, I really don't know. There's too much uncertainty nationally and, quite frankly, I'm pretty nervous about the Chicago residential rental real estate market. There is a growing contingent of City Council members (not a majority but not far from it) and state representatives like Will Guzzardi and Delia Ramirez who have adopted the "housing is a human right" mantra and are for things like rent control, rent forgiveness and eviction moratoriums if there's hardships, and unfunded mandates like mandatory air conditioning. These measures will quickly cause the market to hit a breaking point and values to collapse if there is ever enough support to push all of them through. 10 years ago, I'd have said this is a crazy idea. Today, I'm not so sure.

And that's before we get to the anti-police climate which is causing crime to skyrocket and respect for property rights to diminish. This seems to be making communities on the "cutting edge" like EGP a lot more dangerous lately. That'll slow down gentrification almost for sure. And, of course, there's the state and City's nearly incomprehensible debt that someone's going to have to pay eventually. And as a few of you have implied in this thread, "anti-gentrification" zealots have many more sympathetic ears on City Council than they once did. So even if you pluckily defy the odds and hit pay dirt with your little two flat like in an uplifting Lifetime movie, you could have that dirt thrown right back in your face!

Sorry to sound so negative but I just have to call this like I'm seeing it when it comes to money. So in light of that, I'd tell investors to sit on the sidelines for awhile honestly. See how this shakes out. Even if Chicago has a sterling future ahead (and I really hope it does despite how the above might sound), there is going to be a downturn between now and then I bet. And if you just must buy something, do not look at whether the neighborhood may "pop" but, rather, whether the property can produce a revenue stream comfortably above what it'll cost to carry the building. That includes mortgage, property taxes, insurance, utilities, and maintenance.

[OyCrumbler]

Originally Posted by BRU67

Master Jay and I just had a discussion on this in another thread. EGP was over 91% African-American as of 2015, per census data. I do know that young investors have been eagerly buying over there since then and properties are surprisingly expensive now. So I'm not sure if there is now more diversity or if these purchases are being made by speculators waiting for it to "pop" (i.e. gentrify and push the poor people out so they can make a lot of money).

But for that to happen, yuppified hipsters (or whatever the OP is calling them) have to actually move to the area, not just pay $280,000 for a two-flat, put in some granite counter tops, and stick it on Zillow so they can get almost enough rent to cover the mortgage, property taxes and insurance until the big pay day. They'll have to actually physically move their as-es in there.

Will that occur? Well, census data showing 4.25% white as of 2015 isn't a great sign. Nor are the 30 dead and 117 wounded in the first six months of 2020 in Garfield Park. Personally, I'd buy in Little Village. It isn't any more expensive (it might be cheaper actually because it doesn't have the same hype among amateur investors) and I think it has a better chance at gentrification. It's also a lot safer. Sure, it has gang issues but nothing to the level of EGP.

I don't think EGP will see a marked change in demographics until about five years after both the Damen stop on the Green Line opens and the United Center develops some of its parking lots for mixed-use developments.

[dtcbnd03]

Originally Posted by OyCrumbler

I don't think EGP will see a marked change in demographics until about five years after both the Damen stop on the Green Line opens and the United Center develops some of its parking lots for mixed-use developments.

Agreed. EGP needs some mixed use, restaurants, bars, patios etc. to truly pop. There just isn't the retail strip there at all that exists in every other soon-to-be hot hood. On the other hand, EGP is the only hood north of 290 in any desirable distance to downtown with multiple train lines where you can get an all brick single family home for under $500k so pricing scarcity is driving the current pop.

As BRU67 said there is so much uncertainty right now. Commercial and Office landlords are getting crushed right now. I've noticed a big difference in high rise vacancies too (this will be my last year in a high rise 100% due to covid lockdown). Residential will remain strong because we have a housing shortage but the big question is the type of housing. It will shift to areas with more space and nice downtowns like outlier hoods in chicago, burbs and mid tier cities. Especially with remote working taking hold. Gentrification is typically driven by higher demand and costs pushing people to the next hood but I think all that halts in Chicago due to covid.

[jfre81]

Now I can see EGP as a place to be by 2030.

[BRU67]

Originally Posted by OyCrumbler

I don't think EGP will see a marked change in demographics until about five years after both the Damen stop on the Green Line opens and the United Center develops some of its parking lots for mixed-use developments.

No doubt that'll help, but is either in the bank? I think the Damen stop is pretty much a done deal but the UC has been talking about parking lot development for years. Hopefully it finally happens at some point soon.

Still, it can't be denied that the Near West Side Community Area has really taken off over the last decade. So that'll help spur development in EGP. If EGP does "pop," it'll happen in a fashion similar to that of the old Cabrini Green area of the Near North Side, where developers come in and build a bunch of new townhome and basically overwhelm the current demographics in the community. In this regard, EGP's population in 1950 was 70,091. In 2015, it was 20,656. So that implies that there's a lot of vacant land and abandoned buildings there, which can be torn down and redeveloped into new cinderblock townhomes and the like.

But unless you get crime under control, you can build all the townhomes you want but people won't move into them if they don't feel safe. When Cabrini was redeveloped in the late 1990s/early 2000s, a friend of mine was among the first to buy a new townhome there and the CPD was very, very aggressively policing the area, I distinctly recall. I'm not sure that would fly now. So it'll be interesting for sure.