The demographics of Chicago’s Garfield Ridge neighborhood have been changing rapidly. From 2000 to 2010 Garfield Ridge lost nearly 20% of its White population and nearly a third of its Black population, while the Hispanic population of the neighborhood more than doubled.
Although the overall population of Garfield Ridge is approximately 8% Black, the population is not distributed throughout the community and parts of it appear to be starkly segregated.
According to the Census Bureau’s American Community Survey data, for example, the census tract bounded Narragansett Ave, Harlem Ave, 51st St and Archer Ave was 79% white, 20% Hispanic, 1% Asian – and 0% Black. That doesn’t mean that there were no Blacks in the area, only that there were not enough to round up to 1%.
A 5-bedroom, 3-bath, 2-car garage newly-built home at 5409 S Nashville Ave has just been listed for sale. Three of the home’s bedrooms are on the main level and two in the finished, walk-out lower level.
The home is listed at $399,900 – by far the highest price in the immediate area, and well above any recent sales.
These anomalous prices always arouse my curiosity, especially when they occur on the South and Southwest Side of the city. Is the seller expecting a segregation premium? Does new construction with what appear, without having visited the listing, to be mediocre finishes justify this price? Does a tight inventory situation account for the price? Or is some other factor at play?
Joe,
My guess is the biggest factor at play is the city worker residency rule. You couple that with the dearth of new construction in outlying areas that appeal to white city workers and you get this.
Something similar has gone in medium sized new construction developments that appeal to black city workers over the last few decades. Think Marycrest around 85th and Kedzie.
If the economy continues to pick up steam at a snail like pace I expect more infill housing like this will be seen in working class/middle class black and white neighborhoods on the outskirts of the city.
Although before the real estate economy tanked around 2007 I was aware of a whole lot of small builders putting up homes like this in built up suburbs like Oak Lawn, Burbank, Evergreen Park etc.
Some people want the size and amenities of new construction without the hassle of driving out to Greater Joliet. “Greater Joliet” may be an oxymoron.
Not everyone wants to live on the suburban/farmland frontier.
IP,
I understand the city worker thing and the attraction of new construction. What makes me suspicious here is the price point – it doesn’t seem to fit with either the neighborhood or the product.
Marycrest is a much more attractive development than this area, and current prices are well below this home. I did a video drive-around of the neighborhood in January of 2007:
Joe,
back before the latest real estate crash I saw homes larger than this being built on blocks in the greater Oak Lawn suburban area where the dominant style of home on the block were post WW2 ranches of about 900 feet or so. I’m talking 3500 sq ft and larger.
Smaller Irish and Polish builders were buying such ranches as teardowns at a quick clip.
The type of city worker, likely white or hispanic, who wants to live in Garfield Ridge is extremely unlikely to buy at Marycrest or in any other neighborhood they perceive as black.
The relatively few blacks who live in Garfield Ridge are likely in the CHA development just south of the Stevenson expressway and west of Cicero Avenue. So maybe your concept of a “segregation premium” has some validity.
The listing you linked to shows the property selling in January 2011 for 180,000. Now maybe the builder/seller will take less than the asking price and was just working for :”wages”.
My brother knows a group of Irish immigrant contractors who were/are building three to six unit buildings in Lakeview and points west and keeping them as rentals until the condo market improves. It was the only way they could stay busy and with low interest rates and a strong rental market they’ve done surprisingly well. It was either that or stay home with their wives.
I may be off on the details but the group of four includes a carpenter, electrician, bricklayer and plumber. Except for the fencing, drywall, excavation/concrete and painting they’ve literally done all the work themselves.
In a depressed construction market some guys just build and hope to make wages instead of the normal profit they might expect in better times.
Now I know virtually nothing about the Garfield Ridge housing market, but a price north of 300-350,000 dollars for new construction there would not surprise me. 400 grand does seem to be pushing it though.
IP,
That $180k sale involved two parcels totalling 12,000 square feet of land. This home is built on 3,750 square feet of land – less than 1/3 of the total.
Joe,
it’s 2am and you’re bringing facts into the conversation.
I’m going to go over to Cribchatter and pontificate over there.
Those folks don’t believe in facts. I think may of their regular posters are actually members of the Tea Party.
I believe I should be laying in my hammock in my backyard and enjoying the rapidly cooling weather. I’m too cheap to crank up the AC in anything under 98 degree weather. That’s why the Lord created basements and old couches.
I live in Garfield Ridge where this house is listed. I don’t understand this price along with you. I do know only a block or so away on the 5100 block of S. Normandy there is a simular looking house for sale at $350,000.
My property was just re-asessed at more than $100,000 less than it was 3 years ago.
All I have to say is good luck.
P.S.. MY TAXES HAVE INCREASED BY 20% IN THE PAST YEAR ALSO.
Isn’t that CHA development (rowhouses, if I remember right) now gone?