2010 was not kind to condominiums on Chicago’s Far North Side: Our two northernmost neighborhoods, Rogers Park and Edgewater, both saw condo prices decline steeply. For Rogers Park, it was a steep decline for three quarters — it’s 36% lower than last quarter and 52% lower than the same quarter a year prior. The last several years have seen a steady decline in selling prices for these condos, from a median of about $225,000 in 2007 to under $100,000 in 4Q 2010.
Rogers Park was caught in the middle of a condo boom of courtyard building conversions when the market crash hit, prompting stories like this one that make any condo owner shivver. Edgewater, which has the more stable Andersonville within its boundaries, has held value better over the years. It fell just 14% over the last quarter. At $171,500, the median selling price of a condominium is 36% lower than it was a year ago.
See side-by-side charts for condo market conditions in both neighborhoods back to 2007 at Lakeshore Analytics.
Jeff Baird is a real estate valuation consultant based in Chicago. He founded Lakeshore Analytics to bring comprehensive, understandable housing data and analysis to Chicago-area readers. The site features a blog with free market news and charts, summary data on 20 top neighborhoods, and quarterly data subscriptions.
The median prices are meaningless. They are heavily influenced by the mix of housing sold. The analogy I’ve used in the past is that if meat prices are constant but more people start buying hamburger instead of steak then the median price per pound goes down even though prices haven’t changed.
The only thing meaningless about median prices, Gary, is your simplistic and wrong-headed approach to them.
If the sample is large enough, the median is not a meaningless number. You just need to careful what you interpret it to mean.
It is, as Gary pointed out – without being aware that he’s contradicted himself – a reflection of what price range people are buying in / what’s selling.
If the median in one area is significantly higher or lower than the median in another area you’ve learned something meaningful about price levels in the respective areas.
If the median in an area rises and volume remains the same, it indicates more buyer activity at the higher end of the market.
If the median list price in an area is $500K and the median selling price is $350K, there’s a meaningful gap between what sellers are offering and what buyers are buying.
And so on.
Joe, I agree that you can draw certain conclusions from median prices but it’s a statement like “both saw condo prices decline steeply” that you can’t make based upon this data. You can say median prices declined but not that PRICES declined.
I’m not surprised, unfortunately, that prices are dropping in Edgewater. I have the feeling that the area is degentrifying or deteriorating (or at least gentrification has stalled) to a greater or lesser extent. The economy has really hurt people there. I also suspect that too many buildings were converted to condo when they would have been better off staying as rentals.