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In Troubled Times, New Developments Don’t Always Equal Recovery

Construction of new housing developments in Lincoln Park reflect the neighborhood’s demand for single-family homes, but should not be seen as a sign of economic recovery, housing experts say.

Decline in housing prices shows there are still challenges in neighborhoods, even insulated ones like Lincoln Park.

There has been a significant price decline in the housing market in Chicago, said Sarah Duda, assistant director of DePaul University’s Institute for Housing Studies.

“Prices are a highly volatile thing to talk about,” she said.

The cost for single-family homes in Cook Country dropped by 37.1 percent when it reached the market peak for 2012, according to data from DePaul’s institute. There was only an 11.2 percent decline in an area that includes Lincoln Park and Lakeview – a small figure compared to the 72 percent in other county areas.

Representatives of the Belgravia Realty Group, the project developer for the new Lincoln Park housing development Montana Row, agree that demand is an important factor in the housing market.

“There is a market for single-family homes to buy in comfortable neighborhoods,” said Jody Williams, marketing co-coordinator for the Belgravia Group.

The 1500 block of Montana Avenue is a prime lot and a fabulous location that the Belgravia Group couldn’t give up, said Williams.

The 14 attached houses at 1512-46 W. Montana Ave. are all three-story, 3,200-square-feet attached homes, priced at around $1 million. Each house has four bedrooms, four bathrooms, two powder rooms, and garages for two or even three cars.

The housing plan was proposed to Ald. Scott Waguespack (32nd) as well as to the community who are generally pleased with the new addition, said Paul Sajovec, the alderman’s chief of staff.

Waguespack had the zoning restrictions changed on the once vacant lot so developers could enhance the community with new construction projects.

What it comes down to is an issue of demand. In insulated areas, there is less uncertainty, and so people are more committed to buying to homes, said Duda.

Affluent neighborhoods like Lincoln Park are seeing a higher demand for housing. Still, only about 10 percent of the housing in Lincoln Park are detached single-family homes, said Duda. Rentals will continue to be strong in the neighborhood because such a small percentage of people are looking to buy homes, she said.

Lincoln Park is a very insulated neighborhood and was not hit as hard by the most recent economic crash, however even in this neighborhood new housing developments like Montana Row can be taken as a signal of recovery, Duda said.

The Belgravia Group recently received a $6.2 million loan from Associated Bank to cover construction costs for Montana Row.

Construction of the row houses began in the summer and some units have already been sold. Residents will begin to move in February 2013.

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