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Don't Say the R-Word

By Margaret Lyons in News on Jan 22, 2008 4:50PM

Photo by SFMoe

In case there were any lingering skeptics, this recession thingy is for real.

The accelerating recession oddly coincides with the release of Forbes magazine's list of "America's Most Lucrative Neighborhoods," which includes Wicker Park near the top of the list. With a 1,870-percent increase in median home sale price since 1990, Wicker Park's property value appreciation has been faster than just about anywhere in the country. Maybe we can finally stop attaching the word "bohemian" to the neighborhood now.

And what about that deteriorating housing market we keep hearing about? Sure, we're supposed to be falling victim to a big, bad housing recession, but cranes still dot the skyline, and more large construction projects are currently underway than Chicago has seen in decades. According to a recent article in Crain's, though, we should now start to see a sharp slowdown in new construction, judging by declining 4th quarter sales figures. Construction fell off by 25 percent in 2007, and this could just be the beginning; home prices could drop another 10-15 percent, on average, Global Insight economist Patrick Newport told the Trib last week.

There's reason to believe that the real estate market will again stabilize in 2008, though, as many potential home buyers have opted to save their money this year; and it's possible that that restraint could be transformed into increased demand in the coming year. If that doesn't pan out, let's just hope that people run and buy houses with their $300-800 stimulus rebates. -- Mark Boyer