It’s not a surprise that downtown home prices are expensive, but Chicagoans are paying a lot more than other cities. The difference in median sale prices between downtown and surrounding neighborhoods is about $675,000 and the highest in the country, according to a report from real estate site PropertyShark.
The report looked at 2018 residential transactions in family homes, condos, co-ops, and townhouses in 34 of the largest U.S. cities. It found that downtown’s median sale price was a whopping $900,000 versus the $225,000 for the rest of the city. Chicago’s nearly $700,000 gap was far greater than the next highest cities Philadelphia ($407,000) and Boston ($369,000).
Lower sale prices in neighborhoods outside of Chicago’s downtown might be caused by a lag in development after the 2008 recession, according to the report’s author Eliza Theiss. But downtown was already about half-a-million dollars more expensive than the rest of the city in 2008 and has only become more costly since.
“In 2007, before the bottom fell out, Chicago’s median sale price was $245,000 and we haven’t seen that high of a median since,” Theiss wrote in an email. With a high tax burden and declining population, the city’s overall median home price likely won’t return to that level soon, the report said.
The low median home sale price is slow to grow, and that could be because of significant neighborhood disinvestment on the South and West sides which has lowered home values. There are also very few affordable options in the comparatively small downtown area, which raises the median sale price there.
While this year’s price difference is alarming, the gap was even larger in 2016. That year, the difference hit a record $805,000, according to Propertyshark analysis.