Housing boom lifts sale prices in Chicago’s Chatham neighborhood – Crain’s Chicago Business

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This South Side neighborhood, long a Black middle-class stronghold, was hit hard by the foreclosure crisis. But now, homes are selling at prices not seen in years.

In late 2019, real estate agent Monique Washington told the owners of a house on South Champlain Avenue in Chatham that they could get something around $215,000 for their home.

Eighteen months later, a housing boom was on when the homeowners put their brick Tudor up for sale. It was on the market for seven days before going under contract to a buyer who in June paid $320,000, or about 50 percent more than Washington had estimated based on comparable properties less than two years earlier.

Had they put the house on the market back in 2019, “they would have missed out on this good time we’re having in the market,” Washington says. As it was, “they were very excited that this sale price meant they could pay cash for their next place,” she says.

Fueled by low interest rates and pandemic-driven trades for bigger housing that accommodates working and schooling from home, the current housing boom has lifted many segments of the Chicago housing market to new levels. Homes have sold for new record prices in the Beverly neighborhood and several western suburbs. The once-slumbering Lake Forest mansion market has roared back to life.

Here’s a measure of the lift in Chatham: In the year since the housing market turned up sharply, a dozen houses in the neighborhood have sold for $300,000 or more, a threshold that hadn’t been crossed in at least five years, according to Midwest Real Estate Data’s records.

It’s about time, according to Ald. Roderick Saywer, 6th, whose ward includes Chatham. “It feels like Chatham is finally catching up with other markets,” says Sawyer, who owns a home in Park Manor, just outside Chatham.

Chatham mostly lies between 79th and 95th streets and east of the Dan Ryan Expressway.

A longtime center of middle-class Black homeownership on the South Side, Chatham “has beautiful homes that you would see selling for twice as much, or more, in North Side neighborhoods,” Sawyer says. “That’s a discrepancy that has been consistent over the years, and we don’t need it to continue.”

The median price of a single-family home sold in Chatham in the first five months of 2021 was $212,000, up 52 percent compared to the same time in 2020—while sales dipped in the early months of the pandemic, prices didn’t. That’s far larger than the increase reported for any North Side neighborhood, most of which are up less than 20 percent. In Albany Park, prices are up 26.9 percent; in West Ridge, 16.4 percent; and in Belmont Cragin, 8.8 percent. In West Town, the median sale price is down by 2.6 percent.

Sawyer says many of the buyers in Chatham are young families coming out of condos and apartments in pricier neighborhoods. At Chatham prices, he says, “they can get a yard that’s big enough to put a swingset in.”

The timing of the housing boom has been fortuitous, as it follows a wave of foreclosure rehabs that refreshed thousands of homes in south suburbs and South Side neighborhoods, Chatham among them. Several of Chatham’s $300,000 sales have been foreclosure rehabs. Among them is a five-bedroom red brick bungalow across the street from the Tudor that Monique Washington sold. The rehabbers who picked it up for $125,000 in July 2019 sold it in November 2020, refreshed with new flooring, kitchen, baths and carpet, for $310,000.

Whether they have previous family ties to Chatham or simply come for the deep-rooted Black community, “once you’re here in Chatham, we’ve got you,” Sawyer says.

The buyers of the Tudor on Champlain had no ties to Chatham, says their agent, Michael Mensah of eXp Realty, but were looking for more space than they had in South Shore. When they went to look at the Tudor, “the neighbors were all out talking to them about Chatham, talking about the block,” Mensah says. “They liked that” and put in an offer.

Both Mensah and Washington declined to identify the buyers.

Not everyone is jubilant about fast-rising home prices in Chatham. Eli Washington is president of the Chesterfield Community Council, a civic group in the Chesterfield section of Chatham. He says he’s mindful of the years after the mid-2000s housing bust, when foreclosures were numerous in Chatham. In 2009, 4.2 percent of the property parcels in Chatham were in some stage of foreclosure, compared to 3 percent citywide, according to the Institute for Housing Studies at De Paul University. It wasn’t the highest figure in the city—in East Garfield Park, Englewood and Washington Park, at least 7 percent of parcels were in foreclosure that year—but for a neighborhood that had long been an anchor of Black homeownership, it was a worrisome time.

“What concerns me with these high prices is, will the homeowners be able to maintain those payments,” says Washington, who has lived in the community his entire 58 years. “It’s easy to buy now, but what if it becomes hard to stay?”

In a downturn, unemployment tends to go higher for Black and Latino workers. That’s one reason Chatham had so many foreclosures in the last downturn, and Washington says, “I wouldn’t want to see that happen again.”

One big difference between the last housing boom and this one is that while predatory lending and low-document loans were part of the fire in the mid-2000s, the fuel now is low interest rates that make homeownership inexpensive. If the economy continues improving as it has been, homeowners who bought when it was cheap to do so won’t be in as precarious a position as 2006’s buyers were.