If you read the title of the blog it can easily look like I'm about to start bragging about my hometown city. While I do love this place and think it's amazing, that is not what I want to talk about.
Let's start with Bravo. Yes, the TV station. Have you ever watched any of the Million Dollar Listing shows that run all year long? My guess is you at least have seen a few. For the record, I love them, I think they're entertaining as hell! At some point during the show, the agents will be negotiating with either another agent or a seller about the price of the property. As funny as it is to hear them go back and forth, there is one thing that is constantly talked about: COMPS. A "COMP" is just another word for a comparable property. Meaning that they are comparing the house they are representing to another one to determine price. While arguing you will hear them say something like "the house down the street sold for $1,000 a square foot." Then you will see them calculate the price in their head based on the size of the property. This is where Chicago is unique.
WE DO NOT CARE ABOUT PRICE PER SQUARE FOOT!!!
This is something that not a lot of people know about here. Chicago instead bases their price off what other similar properties are selling for, not the price per square foot of them. Please keep this in your mind as it is very important. Chicago has 77 different neighborhoods and it would be impossible to do price per square foot for each. Not to mention many neighborhoods have neighborhoods within that neighborhood i.e. Wrigleyville is really a smaller neighborhood within the larger Lake View neighborhood.
I really want you to understand this. It is important when you are considering what offer prices to put in on properties. Your agent should run what is called a Comparative Market Analysis or CMA on any property you are interested in making an offer on. This CMA will compare the subject property to similar ones in the area. The CMA should give you a range of the value of the property.
So when you are "running numbers" and creating your excel spreadsheet analysis please do not look a the square footage in terms of pricing. Yes, its good to know the size but that is only one factor that goes into figuring out a price. Also, as you will see by the example on
NOTE: The only time we do calculate price per square foot in Chicago is in new construction and luxury high-rises like The Waldorf Astoria.