Almost five years ago, Third Meridian Realty sold a new home on Sherman Avenue across from St. Francis Hospital for $504,000. This year, the South Evanston property was appraised at $750,000, said Susan McKenna, Third Meridian’s owner.
Low interest rates and a more competitive market caused property values to hurtle upward.
In the past three years, they increased by a third, according to a tax assessment completed in June by Cook County. The average price of a single-family home in Evanston last year was about $535,000, a 9 percent increase from 2003.
At this rate, a house’s value would double in less than nine years. Property values in Evanston rose 61 percent in the last five years according to a February article in the Wall Street Journal, an increase consistent with a growth rate of approximately 9 percent.
Property values in southeast Evanston are now “almost untouchable” because of the area’s proximity to public transportation and the lake, McKenna said. She and her husband will probably pay $700,000 to $800,000 for a property in that area, only to tear the house down. She will then build a new one on the land. Typically, she said, teardowns cost $250,000 to $300,000.
Increased taxes are a threat in parts of Evanston undergoing major reconstruction, said Evanston Township Assessor Sharon Eckersall.
Some houses purchased for less than $200,000 and are now selling “up toward $500,000,” she said. An increase of $100,000 in value adds about $3,500 in annual taxes, based on 2003 Evanston tax rates. Tax rates in 2004, which will be higher, will be released this fall.
“They’re going to be reassessed according to what they sold for,” Eckersall said. “I can see a lot higher taxes, probably double, if not more.”
Eckersall said she worries some residents would not be able to afford the increased rates, though she declined to name an area of town.
Value increases are not uniform across Evanston, Ald. Lionel Jean-Baptiste (2nd) said. According to a February study completed by Kane, McKenna and Associates for the City of Evanston, property values in some parts of west Evanston lagged behind the city’s average value for the past five years.
“The tax assessor will begin to catch up with this increased value and then taxes will increase for those who live in the area, many of whom are senior citizens who have had their homes over a long period of time and others who are of low income,” Jean-Baptiste said.
Last year 840 condos and 620 single-family homes were sold in Evanston, and 10 new condominium developments downtown “sold like crazy,” said Carol Prieto, managing broker for Prairie Shore Properties.
“We just had such an influx of people into these new developments,” Prieto said. “They’re coming into the city and also downsizing from other suburbs.”
The average price of a condo increased 6 percent to almost $271,000 in 2004, Prieto said.
McKenna said she does not think condo values will continue rising so quickly over the next few years because downtown Evanston “might just be beginning to be overbuilt.”
“Some of the resales in buildings that were built just two years ago are for less or slightly more than what they were paid for because there’s so much new construction,” she said.
The turnover rate in Evanston condos is high because buyers are confronted with unexpectedly high taxes, Eckersall said. Some condo residents must pay additional monthly fees for maintenance, she said.
“I think we’re probably going to see more condos coming back on the market,” she said.
Reach Tina Peng at [email protected].
