I'm just a guy who has 6 rental units in two properties in West Pilsen (Near the Damen Pink Line station). I not an expert by any stretch. Your question is specific to Pilsen and I've been watching the market since I moved from Wicker Park in 2001 so I feel like I should share my thoughts.
The area is changing in a similar pattern to that I saw over my 12 years in WP and the property values until the mortgage crisis were rising at a reasonable rate, but they've dropped considerably since 2008. Maybe 30-40%. The charts that they have for the area on Trulia seem pretty close to what I've seen in the market. At the moment the prices seem to have bottomed out and are beginning to climb, at least for single family and smaller buildings. I don't know if this is because of the difficulty in securing loans for larger, income property at the moment or reluctance to risk further decline. But I do know that the prices for 2 to 4 unit buildings at the moment is ridiculously low. You can get a fixer upper 4 flat for the same price you would pay for a 2 BR condo in University Park a mile away. The building stock is good in the area and the transportation is also very good, 20 minutes to the loop on the pink line or 30 minute by bike if you prefer. I also have been seeing a big shift in just the last 6th month in the tenant mix from UIC students and hispanic starter families to Art Institute students and their friends. I'm pick tenants very carefully for those that I feel secure will take as good care of the apartments as I would and with minor exceptions I haven't had any trouble finding good tenants as long as the rent is reasonable and I've been able to raise my rents somewhat even in the downturn. The one key difference I see to Wicker Park is that when I first bought there (WP) most of the multi unit building were not owner occupied and generally not taken care of well until they were bought and renovated, in Pilsen the majority (maybe) of the building are smaller 2 and 4 flats that are owner occupied and reasonably well cared for at the moment the residents are working class nice people who watch things. When I moved there in 2001 I felt safer in Pilsen than I had in WP.
Well I ramble and I'm too tired to clean this up. If you think the market has bottomed it's a good place to buy if your going to live there it's an even better time to by. Whether it's a good investment depends on what you mean by an investment. Good luck to you.
To add just a bit to this thread. I find myself agreeing slightly more with Dp2 here than anyone else, although Phil's general information about historic real estate value appreciation sounds reasonable.
To kind of restate what the previous answers did in slightly different terms; the answer to your second question is a personal one. Not knowing your financial situation no one on this forum could adequately address that question for you.
I'd suggest speaking with a highly competent mortgage lender, and one way to judge their level of competence is if they are asking you about your future plans or just talking to you about rates. Investments are specific to a time in your life and your own personal financial goals. While owner-occupied real estate is not only an investment, it can be one of the more if not most important investment decisions that you make in a lifetime. Start with a mortgage lender or financial planner (and I can recommend a few lenders if you need one), and go from there.
Only you can determine what makes a smart investment for you, and anyone who tries to answer your first question definitively might as well be telling you what temperature it's going to be on 29 April 2016. No one can predict the weather (or pricing trends) that accurately. Historical trends are really your most reliable guide with regard to pricing (and making sure that you adjust for the recent bubble and panic in housing pricing).
Good luck to you.
Broker Associate, Sudler Sothebyâ€™s International Realty
3934 N. Lincoln Av. Chicago, IL 60613
773-418-0640 (cell) 312-577-0985 (fax) 773-244-9900 (off)
Phil, I'm originally from the Midwest, I invest in commercial and residential real-estate in multiple markets, and I know a lot more about the Chicago metro market than you'd like to give me credit.
A home (whether rented or owned) is NOT an investment by definition, because it's a necessity. (Please examine the link below for more info.) Talk to any financial planner worth his/her salt, and s/he will tell you to invest using any money you have left over after having paid for all of your necessities, and after having made the appropriate contributions to your savings.
You're free to think of a home as an investment as did many of the people who are in over their heads now did, or you can learn from their mistakes. While it's true that homes tend to appreciate in value over time, that annual appreciation isn't guaranteed. Many people today got killed speculating that prices would continue to escalate, and they used their homes like ATMs. Knowledgeable real-estate investors won't purchase any properties based upon speculation; we buy them based on the numbers. There's no such thing as "falling 'in love' with a property"; there's no emotion(s) involved in the decision to purchase or not. It's nothing personal; it's strictly business.
Buyers shopping for homes want to fall in love with them, and they care about things like the schools, quality of life, color of paint on the walls, etc. Investors buy for only one reason: to make money. I hope that you can see that the goals are different.
You'll need to decide for yourself whether it's a wise decision for you to buy a home now. Nevertheless, don't take my word as the gospel. Go attend one of the local REI clubs, and ask some of the investors there what the difference between purchasing a home and an investment property.
Whether you view your home purchase as an investment or not, that's up to you. Most people don't. The bottom line is that its an investment whether you like it or not.
As a Realtor myself, I'm willing to make sacrifices in order to make the most of my investment. This may mean choosing to live in an area I would not otherwise choose, or buying a property that needs more work than I'd really like to deal with. Fortunately my wife is willing to make the same sacrifices. Its worked very well for us so far.
You need to decide for yourself whats most important to you. Everyone's situation is different. I wouldn't examine it strictly from a financial perspective, but do recommend running some rent vs. buy formulas and going from there. If you see yourself staying put for at least 2-3 years, I would not recommend paying rent.
Lots of helpful information is available here: http://www.atproperties.com/section/buying
Pilsen is and has been an up and coming area for a while. As long as you want to live there it is a wise investment, but no one can predict exactly what the outlook is for the area or Chicago for that matter in the next 5-7 years. History in Chicago typically is 3-5 percent per year. In fact the only time in our history that it has been different is the 4-6 year bubble from 2001-07.
Buying a home is a wise investment and it gives you peace of mind if you can afford it.
Being counseled by a knowledgeable Realtor would be a wise decision.
Any more questions free free to contact me. I have over 20 years in the business.
There are several ways to answer your second question. Although you haven't stated whether you intend to buy a new home or an investment property, I'll focus on the latter, because I suspect you'll get a lot more feedback that will address the prior one.
Before I begin, I will state that I believe it's wrong for one to view one's home as an investment. That notion violates every principle of investing that I know--not that I claim to be an investing guru. For example, whether you own or rent your current residence, you have to live there.
Buying an investment property can be a very wise decision, but that will depend upon how you buy it. Any property in any location can be a good/bad investment. The way to determine whether a property is a good or bad investment is to 1) choose your exit strategy, and 2) to run the numbers and check to see if the results will apply to and work with your strategy. If not, then you could tweak those numbers to structure a deal that will work with your strategy (and make an offer based upon those results), or you can move on to another property.