Neighborhood Highlight: Bronzeville and Southshore
Chicago Neighborhoods Spotlight
By Kevin Itima
You may know Bronzeville and Southshore as the childhood homes of Barack and Michelle Obama, respectively. But there’s a lot more to be discovered in these distinct areas. Here’s what you need to know about investing in these two Chicago neighborhoods.
Bronzeville: One of Chicago’s Up and Coming Neighborhoods
Bronzeville is a South Side neighborhood that has already seen significant turnaround. Thus, rents and property values are higher than they once were. Pressure from high rents and property values in the nearby areas—namely, Downtown and Hyde Park—have created a significant demand in Bronzeville.
Rental prices in Bronzeville are attractive to many Chicago residents. The average rent for a 1-bedroom apartment is $1,059 in Bronzeville, while a larger apartment will range anywhere from $1000 to $1700. Not to mention, Bronzeville balances affordable rents with a good location. It is a large neighborhood located at a prime location near the city’s lake. The neighborhood contains many beautiful historical architecture, various restaurants, coffee shops, public libraries and more. Many areas of Bronzeville are also known for their safety.
Bronzeville offers a combination of recently-built condos and recently-renovated historical homes. Currently, we would recommend it as a good place for you to invest in real estate. Property values and rents will continue to go up for the foreseeable future.
Southshore: Is It Smart to Invest Here?
Southshore was once a thriving neighborhood, but currently, it’s struggling in the world of real estate. Southshore has been slated to turn around for years due to its proximity to the lake, but it has yet to do so. In fact, its population is now declining as residents seek safer neighborhoods. It is located just south of Hyde Park and Woodlawn, but its proximity to these desirable neighborhoods hasn’t yet made it a popular place to live.
Investors are very rigid in the type of return they are looking for due to the risk of having a property in the area. When investing in this area, you risk having renters with lower credit scores, lower median household incomes, higher eviction rates and more.
Instead of investing in Southshore properties, many are choosing to invest in Woodlawn or Bronzeville if returns are not high enough to meet average cap rates.
However, being right on the lake or butted up against Woodlawn and Jackson Park changes pricing considerably. A property might technically be in the Southshore neighborhood, but its specific location could make it much more desirable to renters. This once-vibrant neighborhood does still have some bright spots, so you might find a diamond in the rough.
What Are the Comparisons Between Bronzeville and Southshore?
When you compare the cap rates, price per unit, and other stats between these two neighborhoods, you will notice a significant difference. Bronzeville’s average price per unit is 42% higher than Southshore’s average price per unit and its GRM is 24% lower than Southshore’s. However, its cap rate is about 50% lower than Southshore’s cap rate.
If you are interested in investing in a more desirable and lower-risk neighborhood, you may want to go with Bronzeville. But if you’re willing to take on some risk and potentially be a part of Southshore’s turnaround, you can invest in properties there. Please contact Root Realty if you are interested in potentially investing in one of these two neighborhood spotlights.
All rent images referenced in this article were obtained from rentometer.com.
Sales data referenced in this article was obtained from MLS.com.
Key words: Bronzeville, Southshore, Chicago Neighborhoods, Real Estate Investments