North Side Chicago Is One of the Most Celebrated Real Estate Markets in the Country. Here's What You Should Know Before You Buy
Lincoln Park. Logan Square. The Gold Coast and the Magnificent Mile.
Chicago's North Side represents some of the county's most dynamic neighborhoods. And the high-end luxury real estate here is in high demand. Everything from cottages and bungalows to classic Windy City Graystones and opulent highrise condos garners lots of attention from would-be buyers.
That high-demand means the most desirable homes in the most desirable locations field multiple bids well over asking price. But North Side real estate is about more than the right home in the right neighborhood—although that certainly is a large piece of the puzzle. Several other factors play a role in steering your house search in a positive direction.
To ensure your new home investment is a solid one, here are three things to know before buying property in North Side Chicago.
Have an Idea of What You Want
We've already given it a cursory mention, but North Side Chicago homes offer homebuyers a lot of choices—from the type of home to the lifestyle it and the surrounding neighborhood offer. To keep your new home search on track, the best strategy is to take some time at the onset to key into what you're looking for.
Location
It's an oft-repeated rule of real estate, but it proves accurate time and again, especially in a market as diverse as Chicago. Few criteria will narrow your North Side search more than where you want to live. Is it the tony, well-heeled streets of Lincoln Park? The serene but centrally located Gold Coast? The free-spirited vibe of Wicker Park? Or the food and entertainment scenes of River North or West Loop?
Beyond the atmosphere and local amenities (or building amenities if you're taking the condo route), where you want to live or invest in will drive the answers to the questions posed below. If a neighborhood you love doesn't have the essential amenities you want, it's good to have a plan B in mind.
Type and Style
Think of it as a showdown between condos, townhomes, and single-family. After location, the type of property you're seeking will quickly narrow your search even further. Each home type has positives and negatives, with several of these based on whether you want a place to live or an investment property.
Style gets into the finer points of the property you're targeting. There's a lot of variance in Chicago housing. Historical, decades-old mansions and Graystones. Ultra-modern finishes to spec condo and penthouse properties. There's also the option of modest and simple single-family cottages. Of course, they’re not all in one place. While you don't need to be married to one set style, it's helpful to keep a style guide in mind as it can dictate not just location, but also price.
Price
When considering luxury North Side real estate, you've already accepted an outlay of at least $750,000, if not more. Of course, the sky's the limit—if you want it to be—and there is some genuinely rarified air available in the Chicago housing market, both at ground level and in the city's numerous highrises.
To maintain a focused search, it's advisable to have a budget in mind and stick to it throughout your home buying process. Consider demand, too and, if possible, allow yourself some cushion or wiggle room should the perfect property come along and you're able to go slightly above asking price.
Type of Investment
One final point in regards to knowing what you're looking for includes the type of investment you're making. If you're seeking a permanent residence, it might be worth the effort to rent for a few months in your neighborhood of choice or in the style of home you want prior to buying. There's no better way to reinforce your wants and needs or realize you want and need something else before committing to a purchase.
If you're aiming for an investment property, Chicago is an often stable and reliable renters market. The story is similar with luxury rentals. But while lucrative, a little extra legwork is required to land an investment in a high-demand area with in-demand housing.
Homeowner Associations
Widely prevalent throughout Chicago and a feature of practically every luxury Chicago highrise, home- or condo associations and their requisite fees are a part of the North Side Chicago home buying experience.
Dues
Dues serve a purpose. They help cover general maintenance or the maintenance of common areas and amenities. They cover service costs, such as trash removal, water, and sewage. They're used to pay building insurance and provide exterior upkeep or pest control. However, the higher up the luxury ladder you climb, the more you can expect to pay in dues. Average condo fees run anywhere from as low as $100 up to $500 per month. Based on amenities, common areas, and services provided, the highest-end properties include fees reaching $1,000 or more.
Rules and Regulations
The other side of the HOA or COA equation is the rules and regulations that come with living in a multi-home or association-controlled environment.
If you're a first-time buyer, it's good practice to familiarize yourself with an association's limitations before you buy. For most owners, the regulations are hardly ever a factor. Some associations can be extremely restrictive. Others take a more laissez-faire approach to oversight. Both can result in an unpleasant living experience—for you or your renters.
While less common in single-family homes, if your new home search focuses on luxury mansions or Graystones, it’s worth a look to verify if there's a neighborhood association attached to it. Usually, it's advertised upfront, and you can review the policies before making any purchases.
Another aspect to consider with single-family or townhomes is whether your shortlist includes any historical residences. While restrictions vary between cities and neighborhoods, a historically significant home could carry even greater limitations, including those placed on improvements made to the house.
If you're buying more for location and less for aesthetics, it's worth consideration and should be part of your due diligence.
Plan for the Future
Chicago's landscape is in constant motion, including its real estate market. What might be a truism today could end up being a distant or forgotten memory a few days later. This isn’t meant to scare you off from buying luxury North Side property. Far from it actually, as North Side real estate remains a solid investment.
What it does point out is that things change, and to ensure you're making the most lucrative investment possible it's wise to plan ahead. After all, it's not just the market that changes—your plans may shift too.
Evolution of the Neighborhood
Market research is a vital part of any new home search. Not only do you want to know the area's historical market performance, but you also need to understand where it is now and where it might be going.
In addition to underlying financials, scrutinize a neighborhood's long-term desirability. Beyond its current and future proximity to public transportation, great schools, or highly-trafficked commercial or business districts, perform a deep dive into any future construction or significant development plans for the area. Your condo might have million-dollar views today, but a new highrise could take them away and devalue your home.
Similarly, single-family developments are not without their neighborhood tug of wars. Research anything that might be on the books for future improvement and weigh its impact on your purchase. Some projects, like multi-family housing, could devalue your investment. Whereas others, like a new access point for mass transit, could enhance it.
In either case, you also need to understand the property tax situation in your target areas. Yes, this should be part of your general upfront budget planning (along with HOA dues), but Chicago's property taxes are notoriously volatile. Exuberant increases can severely limit your flexibility with the property down the road.
Future Use
Not to throw a wrench into the whole "know what you want" aspect of your North Side property search, but your current plans should include your future plans. You are looking at living in or renting out your North Side home now, but life might throw you a curveball and require reevaluation.
If you believe you'll rent the home out in the future, build in those plans now. Some highly desirable properties might have limitations on rentals—capping the number of rentals to a certain percentage. Opting to rent at a time when caps are maxed out could leave you holding the keys to an empty home.
On the other hand, if you're investing now for a future forever home later, add that to your list of considerations. Weighing permanent residence and investment potential together will make your home search more challenging. But it's also a wise approach to limiting your future homeownership burdens through your current income-generating property.
Interested in purchasing luxury real estate in Chicago and seeking information on your favorite North Side neighborhood? Whether you're buying—or investing or selling—allow Tom Bakritzes, the
Chicago realtor you can trust, to be your guide to luxury real estate in the Windy City.
