Downtown condos for $56,000? It happened just 10 years ago... With all the
housing and economic experts gazing into their crystal balls for 2005,
now may be a good time to reflect on what was happening in the Chicago
real estate market 10 years ago. So, settle back and ponder what a
difference a decade makes. When this writer
drafted the first City Homes column for New Homes in 1994, benchmark
30-year fixed mortgage rates averaged 8.75 percent and were inching
toward 9 percent. Home buyers needed incomes of $46,200 to qualify
for a $100,000 home loan on a typical $125,000 house with a monthly
payment of $1,078. At River Plaza,
a highrise condominium conversion at 405 N. Wabash in River North,
you could buy a studio for $55,900, and a one-bedroom unit for $97,500.
A deluxe two-bedroom residence was priced at $184,500. Buyers also
received a free membership at the Lakeshore Athletic Club – a
$500 value. Today, benchmark
30-year fixed mortgage rates average 5.77 percent, and many would-be
home buyers are wringing their hands and regretting that they didn’t
lock in the rock-bottom 5.21 percent rate in June of 2003. Despite recent
increases, a 5.77 percent home-loan rate is very near the 40-year
historical bottom of the market in volatile mortgageland, experts
say. Rates have averaged anywhere from 5.21 percent to 8.75 percent
over the past decade. Back in 1994,
Chicago was called the “Second City,” but there was no $475
million Millennium Park or “Bean” sculpture, and sooty Michigan
Avenue south of the Chicago River was far from a hot condominium conversion
market. The Museum Campus was pure PR, State Street was dying and
Mayor Richard Daley’s dream of rooftop gardens and landscaped
boulevards was just beginning to sprout. In 1994, a two-story
home with three bedrooms, two baths and 1,740 square feet of living
area at developer Ron Shipka’s new Landmark Village development
was priced at $229,000 in a sleepy blue-collar neighborhood named
Roscoe Village. Today, Shipka’s Enterprise Development is one
of Chicago’s biggest developers with upscale highrise projects
like the planned 67-story One Museum Park, where condos with lake
views range from $500,000 to $1.5 million. At the other end
of the spectrum in 1994, activist and grass-roots developer William
Lavicka was moving a vintage three-story Victorian mansion at 229
S. Ashland around the corner to a vacant lot at 1505 W. Adams in the
Jackson Boulevard Historic District on the Near West Side. Preservationist
Lavicka, who believes every old brick building in Chicago is worth
saving, restored the mansion and put it on the market for $600,000. Today, Lavicka
recently completed the transformation of a former German Lutheran
church at 31st and Racine in Bridgeport into a luxury single-family
home. His current project is the restoration of a mansion near 33rd
and Calumet in Bronzeville, on the Near South Side. The transformation
of Old Town during the last decade has been no less dramatic. In 1994,
developer David “Buzz” Ruttenberg raised eyebrows when he
announced the 39-unit Schiller Place townhome development, at 1440
N. Wells, where units were priced from $297,000 to $400,000 only a
couple of blocks east of the infamous Cabrini-Green public housing
project. That was just
the start. During the past few years, developer Dan McLean’s
MCL Companies staked out a tract at Division and Sheffield near a
brand new Dominick’s and built Old Town Village East. The builder
soon followed with Old Town Village West, in the shadow of Cabrini-Green.
Today, condos at the project are priced from $285,900, townhomes start
at $665,900, and single-family homes go for $822,900. Next year, North
Town Park, a 680-unit mixed-income residential development is planned
nearby on an 18-acre former Cabrini-Green site bounded by Division,
Oak, Larrabee and Orleans. Development partners
Holsten Real Estate Development Corp., Kimball Hill Urban Centers
Inc. and Cabrini Green New Beginnings plan to build about 285 for-sale
townhomes and condominiums and about 395 rental apartments in mid-rise
buildings. Townhomes are expected to start at $200,000, while condominiums
are projected to start at $175,000. And by the time
all of this is finished, Old Town might have to be renamed New Town. |