Evanston housing market remains hot after a chaotic year – Evanston RoundTable

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A few months ago, my roommate and I started looking for a new apartment and contacting property agents because our lease was ending on June 30. 

At the time, I was not particularly worried about the search or our ability to find a place to live. Just a year ago, the local rental market was still overrun with vacant apartments that owners and agents were desperate to fill. In the early summer frenzy of 2021, the two of us were able to snag a relatively cheap unit, and the building owners also were offering two months rent-free as an incentive to fill their empty rooms. 

Going into our summer 2022 move, we – perhaps naively – figured that it would be just as easy to find a new place as it was last year. After all, the pandemic was still impacting people’s everyday lives, and the market was still facing uncertainty for the future. 

The 1900 block of Orrington Avenue.

But what we ended up finding was the complete opposite. Units were flying off the proverbial shelf, many even for 10% or 20% above asking price. Time and time again, we would tour an apartment with a property agent only for that agent to notify us almost immediately afterward that someone else had rented the unit. 

“I haven’t seen anything like this in 10 years,” one of the agents said. 

As it turns out, renters and buyers across the country, including Evanston, have experienced the same rude awakening that we did this year. Two years into the pandemic, people, especially millennials, are buying up homes in droves after saving for several years.

Meanwhile, supply-chain issues and construction delays have led to a housing supply that cannot keep up with demand. As one local real estate agent, Michael Thomas, told me, this year is the first time many agents and housing experts can remember seeing homes in Evanston sell for well above asking price amid bidding wars among potential buyers. 

Housing and COVID-19

The story of how the housing market reached its current condition really starts out with the COVID-19 pandemic upending daily life for everyone in March 2020, according to Bob Parris, a managing broker with Manchester Realty in Evanston. 

Bob Parris. Credit: Manchester Realty

During 2020 and 2021, the pandemic presented a sudden and drastic disruption to the economy and all kinds of normal market forces, which led to uncertainty and people saving money, waiting to buy a house or refusing any kind of long-term leases, Parris said. That situation led to landlords offering incentives like more amenities or discounts to get people to rent their units. 

But this year, after going through multiple years of remote work possibly in a small apartment, young families especially have driven high demand for single-family homes with more space in suburbs like Evanston. Plus, students, young professionals and people making a life change like getting married or living alone for the first time are all competing for a limited number of apartments in the city, as well.

“That has put massive pressure on the apartment market and the housing market for single-family homes,” Parris said. “People like to say that Evanston is unaffordable, and there’s something that politicians should do about it or something developers should do about it, but I think people do what they can to make things better or to offer housing or to find solutions for people, but the pandemic wasn’t anybody’s fault. It’s led to a lot of unusual things.” 

Still, Evanston remains a very attractive place for people to live, with a vibrant community of students, young families, professors, artists, writers, retirees and more, according to Thomas and Parris.

Nowadays, Parris said, Evanston has a few main housing markets – one for apartments with amenities like in-unit laundry, central air and parking, one for cheaper vintage units without those services, one for high-technology luxury apartments and one for single-family homes. 

All of those markets except for vintage apartment units are essentially full right now, especially single-family homes. As a result, the homes that do go up for sale often require bids above asking price to complete a successful purchase, Thomas said. 

“It’s certainly an issue for the buyers who lose out on properties,” he told me. “Depending on the home, the location, the price point, you can still have multiple offers on a property, and it goes 10% or 15% higher than the asking price. That’s still happening.” 

Northwestern’s impact

The Evanston housing market will always be unique, though, because having a major research university in town helps build up some resistance to the raw market forces and trends that impact other cities without colleges, according to Parris.

For example, no matter what the economy is experiencing at any given time, middle- and high-income researchers, professors, students and other academics will always be coming to Evanston for jobs or an education at Northwestern, so their demand for housing will remain stable. 

But students, graduate assistants and professors constantly moving in and out of the area can have the unintended consequence of changing the makeup of a block or a neighborhood because those people are not familiar with Evanston or have not lived here before, Parris said. He specifically recalled a time when landlords started to rent out houses to students on a low-income block slightly farther away from the campus than most students usually live.

“As a result of that, the prices of those properties started to rise, and it forced out people who had lived in the community on that street because the prices got too high,” Parris said. “I watched one block change dramatically over a period of 10 years. Mainly, it started with renting to students, and now, there’s some students left, but mostly, it’s a single-family neighborhood full of families paying high prices for housing.” 

A similar dramatic increase in home and rental pricing is also happening right now in the 5th Ward as Evanston/Skokie District 65 prepares to build a new, state-of-the-art kindergarten-through-eighth-grade school in the neighborhood. In recent months, City Council members and others have brought up concerns about gentrification in the neighborhood and pricing out long-time residents, but Parris said that ship has already sailed.

“Prices are already going very, very high in the 5th Ward, and I think it’s going to be a popular destination for any family,” he said. “There’s nothing that the city can do to affect market forces and the desire of people to improve themselves and to live in a nice neighborhood. I don’t think there’s anything the city can do about that.” 

Affordability and availability 

Ultimately, one of the primary reliable ways to improve equal access to fair housing at an affordable price is to increase housing density, according to Robbie Markus, the vice president of the worker-owned Evanston Development Cooperative, which is focused on building up Evanston’s capacity of climate-resilient affordable housing. 

Structural insulated panels, pictured here on an Evanston Development Cooperative jobsite in Evanston, can be one way to align an ADU project with climate action goals. 

But new homes are generally not being built in Evanston right now, and supply-chain issues related to the pandemic have disrupted construction and also made it more difficult and expensive to renovate your own home or apartment, too. Plus, the city simply does not have much space to build high-rise apartment buildings for low-income renters, and the buildings like that already in existence are primarily luxury units that go to high-income renters. 

As a result, the Evanston Development Cooperative is working to build accessory dwelling units (ADUs), which are parts of a single family home typically converted into an apartment in order to increase housing density and affordability. 

“If you look at the zoning map, the majority of this city is zoned single-family only, except for an ADU,” Markus said. “So how can you add supply in a city like this? We’re so landlocked. You’ve got a lake one way, Skokie the other, Chicago the other and Wilmette. We’re already built up, and that’s part of the challenge.” 

Moving forward, city staff, leaders on the City Council and committees need to address complex policy issues if they want to actually change the affordability and availability of housing in Evanston, according to Parris. In the past, those kinds of conversations have been “aspirational,” he said, but there is some evidence of improvement. 

For example, a new housing subcommittee has spent time over the last year talking about landlord licensing and registration, as well as the rule prohibiting more than three unrelated individuals from living in a unit or house together. But one of the main issues, Parris said, is that the city wants to make Evanston more affordable while preserving the current value of people’s homes because people should have the right to cash out if their property has drastically increased in value over the years. 

“There’s no huge master plan to make Evanston affordable, and that’s mainly because if you own your home for 20 years, and you can sell it for $800,000, and someone creates policies that are going to lower the value of the home, you’re going to be pretty upset,” Parris said. “You worked hard for it, you paid the mortgage all these years, it’s a big part of your wealth. Why would you suddenly sell your house for less? The market says sell your house for as much as you can get for it. That’s just the market.”

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August 31, 2022 at 06:54AM

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