According to the Encyclopedia of Chicago, the Gold Coast is referred to as “a stretch of expensive lakefront property in the 1920s occupied by the city’s wealthiest residents which brought forth a new architectural style, the luxury apartment building.” Although the name implies a sizable area, the Gold Coast is actually a small area generally bounded by Lake Michigan on the east, North Avenue on the north, Clark Street on the west and Oak Street on the South.
Based on the first six months of 2012, the densely populated Gold Coast was clearly golden in its real estate performance, outperforming the broader Chicago market by a wide margin.
Since the Gold Coast is known for its luxury apartment, condominium and cooperative buildings and is densely populated, the best way to assess its market performance is to look at attached housing (condominiums and cooperatives). In the first six months of 2012 there were 172 transactions of attached housing with an average sale price of $521,119 according to MRED (Midwest Real Estate Data). Given the past several years of anemic real estate performance, this is a notable amount of valuable activity in this small area.
Although the 2012 performance statistics sound impressive, those numbers pale in comparison to the first six months of 2013, where 206 transactions have already occurred with an average s percent greater volume. Clearly, times have changed for the better.
So what is the financial impact of that activity? In the first six months of 2013, based on the average sale price and number of transactions, approximately $124.9mm in real estate transactions occurred, a notable increase from approximately $89.6mm in the same period in 2012. For anyone who has recently been shopping for a condominium in the Gold Coast, it is no surprise to hear them describe this market as hot.
The average number of days on market for a new listing has dropped precipitously, hence the ‘act fast’ mantra of many Realtors counseling their buyer clients. Those Realtors specializing in this golden area are extremely busy and even looking to hire new agents on their team to handle the resurgence in activity.
If you are wondering how the performance of the Gold Coast stacks up, look at a comparison with the broader market in the City of Chicago. Attached housing in the first six months of 2013 in the City of Chicago experienced a 21 percent increase in total transactions (7,560 per MRED), on par with the Gold Coast.
During these six months, the average sales price in the City of Chicago increased 9 percent to $308,850, an impressive performance given the abysmal results from the past couple years. Compared to the 17 percent increase in average prices in the Gold Coast, that 9 percent for the City looks bland.
Truly, the Gold Coast is golden in its real estate performance.
Guest Blogger Michael Hobbs, (SRA, LEED, GA), president, PahRoo Appraisal & Consultancy is covering the ‘State of Chicago Real Estate’ in a series of posts. For more information, he can be reached at 773.388.0003.