In the last post we took an overall look at how neighborhoods grew, or not in 2022. There were 8 communities that did not see growth in 2021, but did see growth in 2022. This chart shows how each of those communities changed over the past two years

With an additional 43 units closed in 2022 over 2021 South Shore clearly saw the most growth. Lets see if we can figure out what is driving the growth in these neighborhoods? Are there big developments? Should we expect this growth to continue through 2023?
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This is an image of an interactive map I’ve made on Google. The grey boundaries are each of the 77 communities in Chicago. The white boundaries are the neighborhoods on today’s list and the black markings are a few areas of interest that encourage development including the 606 trail and the Obama Library.

Except for Hermosa all of the neighborhoods that saw new growth in 2022 are in the south side. Hermosa is directly west of Logan Square and it sits at the west end of the 606 trail. The area of Logan Square includes the Bucktown neighborhood, which has been under heavy development and pushing west for decades. Here is an interesting article about the history of Bucktown.

On the Southside we can see Pullman and Burnside adjacent to each other. Pullman might have one of the richest histories of any neighborhood in Chicago. Here is a fascinating article about how it came to be and where it is heading. These two areas didn’t see wild growth in 2022, but it is a notable sign of the hard work and effort organizations like Chicago Neighborhood Initiatives has put into the area since it formed in 2010. Creating an emerging area from one that was stagnant as recently as the 1990s.

Mount Greenwood sits off on its own surrounded by suburbs, much like O’Hare. I’m not finding any major development happening there and there were only two additional closings YoY. Overall it looks like it’s been pretty steady over the past year.

The other four areas, South Chicago, South Shore, Greater Grand Crossing, and Auburn Gresham share borders moving south and west from the South Shore neighborhood; which had the greatest growth by far. Except for Greater Grand Crossing the other three are priority communities for the initial phase of Invest South/West, a community development initiative that has, since 2019, assisted in committing over $2.2B in investments in 10 community areas in the south and west sides. Disinvestment in these areas has been a concern since at least the 1970s. Here is an article I found from 1974 discussing the concerns of the day and ways in which the neighborhood could thrive.

It’s fascinating to see that even in the mid-70s people were talking about ways to grow these neighborhoods that align with the efforts that are being made today. The common understanding is when a neighborhood has gone stagnant it needs a significant investment to help draw more investments, which bring in jobs, amenities, and encourages residents to move in and stay. While they worked on this in the 1970s it continues to be a big effort. This is a great article that explains how residents are working together today, 50 years later, to bring the goals reported in the 1970s to fruition.

In my last post we were just starting to explore what seemed to be growing neighborhoods, according to the 2021 year end report. Since it was nearing the end of 2022 we were able to look at how they were fairing and found that year over year they had all dropped in units sold. Now that the annual report is out for 2022 we can easily see which neighborhoods did see growth in 2022. It will likely surprise no one in the real estate industry that the number of neighborhoods that had more closed sales in 2022 vs 2021 dropped dramatically!

In 2021 there were a total of 60 neighborhoods that saw a growth in units sold. This is looking at the official 77 community areas of Chicago. In 2022 only 17 neighborhoods saw more closed sales than they had in 2021! The exciting questions are, did these communities also see growth in 2021? If so how much? If not why the sudden spurt of growth? Also, what has been going on with the 17 neighborhoods that did not see growth in 2021? Let’s dig in!

Nine communities saw growth in both years. Eight communities saw growth in 2022 after seeing a decline in 2021.

Nine communities did not see growth in either year.

In the upcoming posts this year let’s explore the communities that saw growth in 2022, but not 2021. Are there any big developments occurring that could be spurring this growth? Will they continue to grow in 2023? We will also take a look at the ones that have not seen growth in either year. Are those communities stable or shrinking? If the latter is there something that might be driving the home sales down? Finally we will dig into each of the nine communities that saw growth in both years. Has this been ongoing? Is it something that might continue throughout 2023 and into 2024? What investment opportunities do each of these communities hold? Stay tuned!

When asked what the hottest opportunities in Chicago are the first thing I want to know is what is your motivation? Are you looking for a place to live or somewhere to invest? If you are looking for a place to live then we need to discuss your lifestyle habits, wants, and needs. If you are looking for a place to invest then we need to discuss your investment goals. Are you looking for an up and coming neighborhood? How long do you plan to hold the investment? Do you want a neighborhood with a lot of growth potential or do you want something that is well-established, but may still yield a nice return when you go to sell.

If you do a search for the hottest neighborhoods in Chicago you will find lists assuming you are looking for a place for yourself to live. A lot of the old favorites show up, these are neighborhoods that have been under heavy development for decades. Some are well established and some are rather newly established, by which I mean you will find locals who claim to be pioneers of the neighborhood. Always hot neighborhoods such as these include; Hyde Park, Irving Park, Lakeview, Lincoln Park, Logan Square and Bucktown, Roscoe Village (North Center), Pilsen (Lower West Side), West Loop (Near West Side), The Loop, Streeterville, River North, Gold Coast, Old Town (all four in the Near North Side), Andersonville (Edgewater), West Town and Wicker Park, Printer’s Row, South Loop (both in the Near South Side), and Bridgeport. That’s not even an extensive list.

Looking at the 2021 Annual report we can see nice growth in all of these neighborhoods. The change from 2020 in total closed sales ranged from 14.3% in Irving Park to 95.6% in the Loop! With a median showings per listing ranging from 4-6 among all of these neighborhoods. With a high range of closed sales for YOY and very few showings it is clear these neighborhoods were high in demand for 2021. Next, let’s see how they are doing now YOY.

Interestingly, over the past year all of these neighborhoods have seen a drop in units sold. I actually ran these numbers about two months ago and in updating them for today I found the number of units sold dropped even more from an average change YOY of -8.98% to -14.68%. Even though the number of properties selling has been dropping, overall, these areas are still looking desirable with low market times of under 3 months and a high percentage received of original asking price, 95% or more. These are neighborhoods I would suggest one consider if they are looking for a stable investment. They are well-developed with sustained interest. In these locations we can find properties that will rent easily, but won’t change dramatically in value from year to year.

The 2022 Annual Report should be available before my next blog post. From it we can use the same data to find neighborhoods that are steadily growing and find out what other investment opportunities there might be for different strategies.