Population decline in Chicago and Illinois

[Erica Rodriguez]

Hello everyone,

I'm a newbie real estate investor in the beginning stages of saving money for a down payment on a multifamily buy and hold. I'm currently looking at the area surrounding the Garfield Park Conservatory. There are obviously issues with the area (crime, violence), but at this stage I'm looking at investing from a 40,000 view. One of my high level concerns is population decline in Chicago and Illinois. 

I'm trying to remain optimistic that the population decline is a good thing because it may increase the chance of finding a good deal. However, the cynic in me says that state corruption and tax increases is going to continue to drive people to move out.

Any insights on what this means for investors?

[Joey Nakayama]

I've lived in Chicago almost my entire life. It's a city of extremes. There are areas that are booming like I've never seen before, and there are areas with entire blocks of vacant lots and abandoned buildings. The same stark differences exist between neighborhoods in terms of crime rates, income levels, etc.

Because of this, I find many of the "40,000 view" stats about Chicago -where the all of the extremes are averaged together and presented as simple data- almost meaningless. Even neighborhood-specific data can be misleading if you don't understand the dynamics. For instance, some gentrifying areas actually see population loss as multifamily buildings are converted into SFHs and apartments that used to house entire families are rehabbed and rented to a couple roommates. 

You just have to know the neighborhoods.