Searching for stability in Chicago neighborhoods

A showplace in the 9900 block of Longwood Dr

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.

If you look over charts of real estate market metrics by neighborhood, you’ll see that some neighborhoods have been relatively stable over the last three years, while others have been on a roller coaster.

I wanted to see if there was a way to measure the frothiness of the market — the extent to which sales volume or prices were going up or down each quarter. Rather than compare market metrics today with some point in the past, I tried to measure how much market measures were going up and down on a quarterly basis over the last three years. In theory, charts with spiky, inconsistent shapes would be the least stable, while those that look smooth would be the most stable.

The results: West Town, Lincoln Park, and Lincoln Square are among the most stable neighborhood real estate markets in the city, if you take into account variations on sales volume and median prices for both condos and single family homes.

Looking only at condos, the prices have been most stable in Lake View and Uptown; sales volume has been most stable in Near North Side and Edgewater.

One surprising result: Beverly is among the most stable single family markets, but one of the least stable condo markets, probably owing to how few condos there are in Beverly.

A sortable chart of 20 top neighborhoods, plus a description of the calculation, is available at Lakeshore Analytics.

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