Rated the third most populous city in the United States behind New York City and Los Angeles, Chicago is a home to over 2.7 million people. With the population growing at half the national rate for years now, the number of tourists and visitors has significantly increased too. Since 2014, Chicago has witnessed a little over 5% growth in the number of visits. The traffic of people that the city has attracted has nourished not only the economy as a whole but also Chicago real estate in particular. Meanwhile, the population dynamics have caused property prices to go down below the income level, thus offering real estate investors an opportunity in Chicago real estate. In the upcoming years, Chicago real estate predictions expect a 4% increase in home prices. The increase will be slow and steady, thus encouraging real estate investors to take a share either today or in the near future.
Job growth will additionally contribute greatly to Chicago real estate. As job cuts, particularly across the manufacturing jobs, are to be expected, higher growth in wholesale and retail trade, business services, and healthcare is also expected. The income of the general population will shift from high to low levels, impacting real estate investment in the long run. People will not likely be capable of affording a single family house and will thus further opt for apartments. This is also true given the increasing population of ages between 20 and 29 (constituting 18% of the population) who are typically first-time home buyers.
Whether you want to diversify your investment portfolio through the traditional means or Airbnb, Chicago real estate remains to be a hub for all real estate investors. But there remains an important question for all real investors looking towards Chicago real estate opportunities: What are the best locations for property investments within the city? Here we have formulated and proposed the 5 best neighborhoods for investment in Chicago real estate.
1. West Town
Located to the south of Wicker Park and the east of Humboldt Park, West Town is drawing in a lot of attention. Enjoying a moderately humble price increase of 12%, West Town is attractive for homebuyers and real estate investors alike. Although the median resale price of homes is within the higher brackets ($790,000), the neighborhood’s attractions and amenities make up for the high price. Location is not only attractive to potential homebuyers but to real estate investors as well. Selecting a rental property in a location surrounded by amenities and facilities will yield higher returns, as it will be appealing to more tenants. Additionally, considered a safe neighborhood, West Town has a local crime rate – 60% lower than Chicago’s average. The neighborhood has a livability score of 77 out of 100.
2. Logan Square
Logan Square has greatly benefited from the rise of the neighboring towns like Bucktown and Wicker Park. Although less jammed than nearby areas, Logan Square enjoys a wide range of amenities and attractions. If you are looking to diversify your investment portfolio in Chicago real estate, Logan Square poses a great potential. With renters outnumbering homeowners, a rental property ownership and management could bring about big gains. With the above-the-average rental prices and comparably low median resale price of $525,000, Logan Square makes a profitable investment opportunity viable. Additionally, the neighborhood has witnessed only a 3% increase in prices in the last couple of years, which is less than the city’s overall growth. Expect to pay about $375,000 for a two-bedroom condo and a little less than $1 million for a house here.
3. Jefferson Park
Located on the northwest side of the City, Jefferson Park is a more affordable option as compared to Logan Square. After an increase of 5% since 2016, the median price of a single family house is $230,000, much lower than in other towns. Being a transportation hub and having an array of amenities places Jefferson Park at the forefront of a buyer’s market. Additionally, areas such as Jefferson Park, West Town, and Humboldt Town enjoy lower prices as compared to others. It is recommended that you invest in them before their prices catch up to the city and national average.
4. Mount Greenwood
According to Niche, Mount Greenwood is rated the fifth safest neighborhood in Chicago and the seventh best to buy a house in. Located about 14 miles away from the Westside of Loop, Mount Greenwood is a home to over 20,000 people. The median single family home price is $220,000, a 7.7% increase from early 2016. The neighborhood, moreover, remains to be a lot cheaper as compared to other nearby areas. In addition, Mount Greenwood offers a strong investment potential given its low crime and foreclosure rates. The fewer foreclosures the town has witnessed recently indicate that home prices haven’t decreased a big deal after the recession. Or it could be that home prices have recovered a bit better. The neighborhood is located near Morgan and Beverly, who have excellent public school system that Mount Greenwood is benefiting from.
Uptown is one of the best investment location in Chicago real estate. Famous for its jazz scene, Uptown is representative of Chicago’s rich history and ethnic diversity. Extending to the north to Hollywood Avenue and the south to Irving Park, Uptown is a home to 13 neighborhoods. More expensive as compared to other neighborhoods, Uptown has a median single family house price of about $850,000. The town certainly enjoys one of the highest price increases (of 22%) of the past three years. However, the town’s location on the lakefront and near amenities has further advanced the its investment potential.
Although prices in real estate are increasing, buyers in Chicago continue to pay much less than they did years ago. Chicago’s neighborhoods are vibrant for their lakefront parks, fine dining opportunities, and shopping centers. The low crime rates the city possesses have further encouraged people to relocate to Chicago. If you are looking to relocate or buy a real estate investment property, Chicago is certainly your destination.
Visit Mashvisor to learn more about investing in Chicago real estate and to explore available properties in the top neighborhoods!