Second-year in the College Emily Brice thought it might be wise to forgo the traditional apartment search in lieu of something more permanent upon moving out of the dormsher own place. So, seeking to avoid inattentive landlords and gain more personal jurisdiction over her living arrangements, as well as turn her living environment into a real investment, Brice strongly considered purchasing a condominium in Hyde Park.
"I considered buying a condo to be both a great investment and a way to avoid dealing with the hassles of renting," Brice said. "The real estate management companies in the area are pretty notorious for treating students badly, so I wanted to steer clear of renting if possible."
Although she ultimately decided to rent from a small independent property manager, Brice said she felt that owning a condo could have proved viable, both from a personal and financial standpoint.
"I do feel that property in Hyde Park will appreciate in the coming years," she said. "While I know that the current real estate bubble will probably burst soon, I am certain that an area like Hyde Park will continue to appreciate. In particular, I think we are already seeing an expansion of the H.P. real estate market into less traditional areas like Woodlawn."
Local real estate agent Jean Greave said she agreed with Brice's statements as more students look for places to buy in Woodlawn. "The fact that a lot of the stuff in Woodlawn is new and Hyde Park is becoming crowded right now leads to the interest in Woodlawn," Greave said.
Greave estimated the average cost of a two-bedroom condo in Woodlawn to be around $140,000 per year, with a five percent down payment for someone with a good credit history.
Gabe Bugajski, a first-year in the College, is still on the prowl for his own condo. He said that he sought to avoid forking over a monthly rent to a landlord that he would never see again by essentially becoming his own landlord.
"The main point of buying the condo is to avoid paying or wasting rent on an apartment," Bugajski said. "If the market stays strong, then I will be able to buy the place and sell it when done for the same price or a little more than now."
Bugajski also said he anticipates that property in the Hyde Park area will appreciate in the coming years. Bolstering his faith in the success of property is "the University of Chicago's increasing appeal in the academic community and the local community through community projects, safety, and business," he said.
Even students from other universities have given thought to joining the Hyde Park condo fray. Ravinder Sahota, a master's student in economics at the University of Illinois-Chicago, said that the rise in downtown property values coupled with the abundance of on-street parking in Hyde Park drove him to initially consider purchasing a condo on the South Side.
"I looked at a few places in Hyde Park, including 5300 South Shore Drive," Sahota said. "Hyde Park condos offer an alternative to the high price of living downtown because of the ease of commute up the renovated Lake Shore Drive."
Sahota added that the advantage of on-street parking is significant when considering the downtown alternative, as most downtown parking spots now sell for about $70,000. He said he took issue with the excess of money that he felt was simply being washed down the drain.
"No matter what, dwelling costs money," Sahota said. "In the last two years, I have paid $15,000 to live at [my downtown apartment]. I have nothing to show for it. Buying a condo for living at least allows the owner to have equity."
In contrast to Brice and Bugajski, however, Sahota said he thinks that buying a condo as an investment in the current real estate atmosphere might have the tendency to backfire.
"Many people are being trapped by no-interest loans, hedging on the idea that the condo they just bought will appreciate 10 percent in the next year, when in actuality, if sold, won't even cover the closing costs paid when they bought the place," Sahota said.
Greave disagreed, characterizing the eventual profit for a condo in Hyde Park or Woodlawn as "good," adding that "once a student is done living there, they could be making a 20 to 25 percent equity."
"It's a win-win situation for a student or parent looking to invest," she said.
The information outlets for real estate purchases, as well as the level of helpfulness they provide, are as varied as the condos themselves. Bugajski said that although he has yet to discuss his purchasing plans with an actual realtor, he would make the first contact for the next place he is considering. "I have made myself an informed potential buyer through talking to upperclassmen and through online listing services," Bugajski said.
Brice said she found a Hyde Park real estate agent through a personal friend and was "very pleased with him," adding that many building owners are leery about selling to students because of the potential risk implied in the payback of a loan.
"Many condo buildings or co-ops in the area are strict about letting students in, even if parents are willing to back them up," Brice said. "Several buildings rejected our applications simply because we were students, despite the fact that in every other respect my roommates and I would have been good prospects."
Sahota characterized the current real estate atmosphere as a buyer's market, given the low interest rates and future abundance of housing options in the city. He cited the "abundance of cranes scattered from 53rd all the way up to Hollywood Avenue" as a reason for the property glut.
Despite the inducements that may drive students to consider their own condo as a housing option, certain hindrances remain.
"Because of the large investment it takes, most people have a hard time affording it, or the financial backers (the good old parents) are unwilling to bankroll that kind of living arrangement," Bugajski said. "I have talked to quite a few upperclassmen who thought it was a good idea, but because of financial issues, were unable to afford it."