Remember 1984? The Dow Jones average was 1,154, compared to a sky-high 10,791 in 2004.
A gallon of gasoline for your brand new $20,000 Corvette cost $1.10 in 1984. Today, the sticker price on a new ‘Vette is about $60,000, and gas is $2.29 a gallon.
A new house in Chicago’s Lincoln Park neighborhood was priced around $800,000 in 1984 – if buyers could swing the payments on a 13.5 percent mortgage. Twenty years later, that same house went for $2.5 million, but the interest rate was an affordable 5.75 percent.
Despite the relatively low rate of inflation during the past 20 years, if you bought residential real estate in Chicago’s Gold Coast or Lincoln Park neighborhoods during the early ’80s, it was like putting money in the bank.
That, in a nutshell, is the conclusion of a recently completed study of Gold Coast residential sales between 1984 and 2004 by veteran Realtor Louise Study Lefkow, author of “The Study Study of Residential Real Estate,” now in its 20th year of publication.
Here’s a Lefkow snapshot of four Gold Coast homes that have sold multiple times over the past two decades:
A single-family home on North Astor Street sold for $525,000 in 1984, then was resold for $1.825 million in 1995. It was sold again in 2004 for the exceptional price of $4.04 million.
In 1990, a single-family home on North Dearborn Parkway sold for $595,000, then was resold for $975,000 in 1995. It resold again in 2003 for a whopping $3,062,500.
A home on West Scott Street sold for $530,000 in 1995, then was resold for $1.25 million in 1999. It was sold again in 2003 for $1.9 million.
In 1991, a home on West Cedar Street sold for $420,000, then was resold for $995,000 in 1996. It resold again in 2001 for $1.9 million
“A look back over the past 20 years of reports demonstrates that Chicago, the heart of the Midwest, has maintained price stability and falls in the middle of fairly priced U.S. cities,” Lefkow observed in the report.
“Additionally, Chicago’s market has realized steadily rising home values,” said Lefkow, who sold more than $19 million in real estate in 2004 and is celebrating her 10th anniversary with Rubloff Residential Properties as one of the company’s 10 top sales associates.
“Twenty years ago, there were only a few select neighborhoods where one would find substantial housing options,” Lefkow reported. “Today, there are many more options because the number of prime neighborhoods has dramatically increased.”
Twenty years ago boundaries of the “Gold Coast” were Oak Street to North Avenue and Lake Michigan to Clark Street.
Now, the Multiple Listing Service (MLS) boundaries of the Gold Coast/Near North extend south to Randolph and west to Orleans, Lefkow said. The area includes part of Old Town and Lincoln Park as well as parts of both River North and the Loop.
“The Gold Coast’s boundaries have expanded along with the creation of new neighborhoods in which distinctive properties may be found,” Lefkow said. “Realtors and buyers have pushed the parameters of desirable markets, encouraging developers to build in old neighborhoods now transformed by the competition for renovated homes and new construction,” the study noted. Here are highlights of the 2004 Study Study of Residential Real Estate, an analysis of the marketplace covering 12 Chicago neighborhoods:
Gold Coast / Near North. Thirty-six single-family homes were sold in 2004, with a median price of $1.41 million. Sixty-one percent of the homes in this area sold for more than $1 million. In addition, 1,198 condominiums were sold, with a median price of $740,000, and 28 percent were priced at more than $1 million.
Lincoln Park. A total of 208 single-family homes were sold in 2004 and had a median price of $1.24 million. Sixty-seven percent of the homes were closed at prices higher than $1 million. About 361 condominiums were sold at a median price of $610,000, and 42 percent of them were more than $1 million.
Lakeview. Some 166 single-family homes were sold in 2004, with a median price of $899,450. Forty percent of the homes sold for more than $1 million. In addition, 334 condos were sold, with a median price of $580,000. Only 1 percent was priced at more than $1 million.
“In the new millennium, housing prices should continue to outpace the cost of living index,” Lefkow predicted.
Real estate columnist and media consultant Don DeBat has written about Chicago-area housing and mortgage markets since 1968. He is chief executive officer of DeBat Media, Inc., www.dondebat.net.