Home prices in Evanston have risen over the past year, despite a nationwide decline and consistent property tax increases.
The average three-bedroom house sold for $500,000 in 2007, compared to $490,031 in 2006, according to the Multiple Listing Services of Northern Illinois, which accounts for all home sales in Evanston. Similar increases were consistent in nearly every category from one-bedroom condominiums to five-bedroom houses.
Lin Ewing, real estate agent for Baird & Warner Residential, attributes Evanston’s relative stability to its intangible appeal as a neighborhood.
“People move to Evanston for a community,” Ewing said. “It’s an affluent area.”
She went on to contrast Evanston with a different type of real estate market, in which people look for larger houses at cheaper prices in areas with less density. Evanston’s Midwestern location has also helped to safeguard it from the national housing crisis, which Ewing said is “a coastal problem.”
Nationally, prices increased two years ago because there were fewer properties to be bought, Ewing said. After the market peaked, the mortgage industry made “bad loans,” including sub-prime loans, and owners were reluctant to settle for a lower sale price, which caused properties to become artificially overvalued.
But she said she now expects the pendulum to swing back toward stability for homeowners. The decrease in total sales from 2006 to 2007 might be the first sign that Ewing is right, since fewer sales means higher demand.
But some Evanston residents still remain uncertain about the status of the market.
“If I had to sell this house in the next three years, I’d be worried,” said Jane Baylor, who lives several blocks from Northwestern’s campus.
These fears might account for the fact that fewer total properties were sold in 2007 and the average amount of time that each was on the market increased in every category, except for one-bedroom condominiums.
Baylor said that the City Council’s propensity to increase property taxes, despite the area’s already high cost of living, might deter potential buyers from settling down in Evanston.
City Manager Julia Carroll included a 15 percent property tax leap in her proposed 2008-09 budget, which will be discussed by the City Council on Saturday. Last year, Evanston homeowners faced a 3.35 percent increase.
Most of the revenue from this year’s hike would add to the police and fire pension funds.
Carroll could not be reached for comment on her proposed budget Tuesday.
Some residents, especially those with long-term plans to stay in Evanston, are less critical about the tax increase.
“As a young resident who intends to live here a long time, I’m happy to support (the property tax increase) for services in the long run,” said Alison Mermel, who moved to Evanston fewer than two years ago.
The future looks promising for homeowners like Mermel, according to Ewing. She said she believes that next year will be strong one for the real estate industry nationwide.
“It’s simple supply and demand,” Ewing said. “I think we’ll have a great year because of the normalizing effect of the market.”
Reach Sean Walsh at [email protected].
