Where are the best bargain-priced homes in this battered real-estate market? Two sales in the city of Chicago can help answer that question. On an oversize lot in the South Shore neighborhood, a 90-year-old stucco bungalow recently updated with stainless-steel appliances, granite countertops, and a stylish paint job was sold this past May for $230,000.

That same month, $230,000 also bought a house in Avondale (on the city’s Northwest Side, between the more expensive Irving Park and Logan Square neighborhoods). A foreclosed property with a grungy stucco exterior, the house needed some work inside as well: As the listing sheet  put it, "A little TLC will go a long way." Translation: "Yuck."

Although both houses sit in attractive parts of town, the Avondale house is no steal, once you figure in the many thousands of dollars a rehab would likely require. The renovated South Shore house, already modernized, turns out to be the bargain, even though it is a little pricier than its immediate neighbors (most of them not yet brought up to date). And as it turns out, the South Shore stands out as one of seven city neighborhoods (along with seven suburbs) where today’s house hunters can find the best residential values.

Everybody who is looking for a home these days expects to find a once-in-a-decade bargain—and shoppers can, given the surfeit of unsold homes to choose from and the ongoing downward tilt of real-estate prices. But a superlow price isn’t the only criterion for calling a house a bargain. That’s where I come in.

Each week I roam the city and suburbs looking at real estate; over the past year I have looked closely at some 300 homes—and that doesn’t include the thousands of other places I casually observed as I traveled around. Using my years of experience, as well as the expertise of local sales agents, I have pinpointed 14 areas that, because of prices and other advantages—such as schools, parks, transportation, shopping, and dining—are bargain havens. Not all of these places have the same advantages, which is why I have highlighted the pluses and minuses for each area. (In some instances, where schools and other "advantages" are neither better nor worse than the norm, no comment is warranted.)

As you will see, many of these places benefit from their adjacency to a proven, popular, and often high-priced community. Each of these 14 neighborhoods and suburbs is a viable "off-brand" alternative that will likely grow steadily in value as the market makes its slow return to normalcy. Give them a few years and these places may be just as magnetic as the area’s more established—and more expensive—residential destinations.

For more detailed information on the price of real estate in these and more than 270 other neighborhoods and suburbs, see Chicago‘s annual real-estate chart.

Illustration by Harry Campbell

CITY NEIGHBORHOODS

ALBANY PARK
Situated roughly between Foster and Montrose avenues on the north and south, and Kedzie Avenue and the Chicago River on the east and west

In the 1890s, some big investors converted farmland northwest of the city into a residential area by stringing streetcar lines out to what is now known as Albany Park. In this century, there has been a different kind of conversion going on, as rental apartments were remade into spacious condos. "For a while prices kept going up and up," says Suzy Thomas, a Rubloff Residential Properties agent who has sold some of them. "Now we’re back down to what you would have paid in 2004 and 2005."

Most condos here—the majority are in vintage buildings, though there are a handful of new ones—sell in the middle to upper $200,000s, even for three-bedroom units. And with the Brown Line terminus at Lawrence, and the Edens Expressway to the west, transportation remains an asset in this neighborhood brought to life by streetcars.

PLUS: Quiet streets, the North Park University campus along Foster Avenue, and the North Branch of the Chicago River winding along the neighborhood’s northern edge
MINUS: Bargains on single-family homes are rare; for the most part, houses either sorely need rehab or, having been renovated, are saddled with a big price tag.

CITY NEIGHBORHOODS

BEVERLY
Situated roughly between 87th and 107th streets on the north and south, and Beverly and Western avenues on the east and west

This corner of the Southwest Side, with its hilly terrain, village atmosphere, and rich history and architecture, used to be something of a private enclave. Not anymore. "There was a time when most of our buyers were people who had grown up here," says Bernadette Molloy, who heads up Molloy & Associates. "But that’s changed. There are a lot of buyers who are new to Beverly"—people eager to snap up some of the neighborhood’s housing bargains.

Early this past summer, I walked through a 78-year-old five-bedroom brick-and-stone house whose plaster crown moldings and limestone fireplaces had been enhanced by central air conditioning, backyard landscaping, and other renovations. The place was priced at $889,000, easily half what you would expect to pay for this much grace and space on the North Side or the North Shore.

Large or small—and Beverly has both—the housing here is still a great deal, even after a few years of what Molloy calls "big inflation, for us." Recently, prices have come back down a bit. East of the Metra tracks and south of 99th Street, there are blocks of nice houses from the early 20th century that, when they come on the market, are mostly priced under $400,000. 

PLUS: Cultural events at the distinguished Beverly Arts Center; the peaceful Dan Ryan Woods
MINUS: Despite some promising new shops, the more typical retail outlets are the small, dated shops along Western Avenue.

CITY NEIGHBORHOODS

BRONZEVILLE
Situated roughly between 31st and 47th streets on the north and south, and Dr. Martin Luther King Jr. Drive and the Dan Ryan Expressway on the east and west

If any Chicago neighborhood is poised for greatness, it has to be Bronzeville, with its vivid history, stunning 19th-century homes, easy access to the Loop and expressways, and a revivified Illinois Institute of Technology. The neighborhood has been on the rise for more than a decade, and yet it is still possible to buy here at very reasonable prices. Chalk that up in large part to the numerous vacant lots, which ensure that the demand for new homes can’t outpace the supply, since there are always more lots to develop. Still, those lots make some anxious house hunters wary. "People can be unrealistic about how fast things should happen here," acknowledges Michelle Browne, a Rubloff agent who works in the neighborhood. "Lincoln Park did not become Lincoln Park in five years."

Bronzeville was a bleak place in 1987, when Joe Davis moved into a row house on 44th Street (next door to the one where Louis Armstrong had lived in the 1920s). "There was gunfire every night," says Davis. "Now you see people out walking on the sidewalks in the evening."

Since he is moving out to care for an elderly relative, Davis has listed his 3,000-square-foot home for sale at $299,000. It needs a gut rehab that might cost as much as $150,000. In the end, for about $450,000—the starter price for a bungalow in some other city neighborhoods—a new owner would have a four-story gem. There are similar bargains throughout the neighborhood, as well as lots of new, low-priced construction.

PLUS: Smacked once by flippers and speculators in the recent boom, Bronzeville has become a buy-and-hold neighborhood.
MINUS: Pockets of unimproved housing and empty lots

CITY NEIGHBORHOODS

HUMBOLDT PARK
The eastern section of the neighborhood, bounded roughly by North, Western, Chicago, and Kedzie avenues

At Café Colao on Division Street in eastern Humboldt Park, they serve a great ham-and-cheese sandwich called the Matamonchi ("kill the munchies"). The neighborhood itself is something of a sandwich these days, pressed between the superpopular Wicker Park neighborhood on the east and, to the west, the amazing park that gives this neighborhood its name. 

Nice place to live? Oh, yeah. Along with the park and Wicker Park’s hot nightlife, there are the shops and restaurants along Division Street, known here as Paseo Boricua, an acknowledgment of the area’s big Puerto Rican population ("boricua" refers to the original inhabitants of Puerto Rico, which was called "boriken" in precolonial times). Older graystone and brick multi-flat buildings, along with a good dose of newly constructed and rehabbed condos, are all priced well. It’s easy to find a condo below $200,000. "If you’re paying $450,000 in Wicker Park, you’re going to pay $300,000 for the same thing in Humboldt Park right now," says Karen Biazar of North Clybourn Group, who has been selling homes in both neighborhoods for more than a decade.

Biazar’s company is also putting up several new condo structures in the neighborhood. She says that zoning for new multi-unit buildings on the main streets allows for wider floor plans than the norm.

PLUS: Humboldt Park, which provides the neighborhood with its name, has an enormous, picturesque lagoon, a gorgeous triple-arched waterfront pavilion, broad lawns, and big ball fields.
MINUS: This year there have been several instances of violent crime in the neighborhood, and many blocks have a weedy look. The area is improving incrementally, however, particularly on its eastern edge, near Western Avenue.

CITY NEIGHBORHOODS

KENWOOD
Situated roughly between 43rd Street and Hyde Park Boulevard on the north and south, and Lake Shore Drive and Cottage Grove Avenue on the east and west

A few years ago, Michael and Angela Clark were living in a Rogers Park condo when Michael started selling real estate in Kenwood. In 2005, the couple headed south themselves, trading their three-bedroom condo on the North Side for a historic three-story graystone with more than twice the square footage, plus four fireplaces and a yard. They got it for $275,000—the price of their condo—although they have since spent $100,000 on renovations.

Though Kenwood feels as if it has been preserved in amber, it’s not trapped in the past. In fact, with its mix of old mansions, medium-sized homes, and vintage multi-flat apartment buildings (some of them converted to condos), it’s on the brink of recapturing its reputation as a fashionable, high-end neighborhood. Perennially undervalued, Kenwood saw steady price inflation in the boom years, especially as people found themselves priced out of Hyde Park, the neighborhood to the immediate south.

But the neighborhood still has a way to go before it falls off the bargain list. (The fact that Barack Obama lives in Kenwood has boosted the area’s visibility but doesn’t seem to have affected real-estate prices.) The entry-level price for a habitable two-bedroom condo, says Clark, an agent for Exit All Pro Realty, is about $175,000. In May, an extensively rehabbed four-bedroom red-brick Victorian row house was sold for $375,000. Try that on the North Side.

PLUS: Lots of 19th- and early 20th-century homes, many in relatively good shape thanks to a strong local preservationist spirit
MINUS: There are very few shops or restaurants within Kenwood’s borders; most people head downtown or south to Hyde Park for shopping and dining.

CITY NEIGHBORHOODS

PORTAGE PARK
Situated roughly between Lawrence and Belmont avenues on the north and south, and Cicero/Milwaukee avenues and Narragansett Avenue on the east and west

In Portage Park, as in other neighborhoods, one of Chicago’s most reliable real-estate traditions—buying a two-flat and using the rent on one unit to pay most or all of the mortgage—was pushed aside during the late lamented housing boom. Now that tradition has returned.

"Two-flats have gone down 20 or 30 percent," says John Maloof, a Century 21 Grande agent, "so they now make economic sense again." In Portage Park, prices for two-flats had surpassed $500,000; now, Maloof says, they have retreated back into the high $300,000s. "That’s where they should be," he says. "They are great investment property."

Mostly a neighborhood of two- and three-flats, Portage Park also has tree-lined stretches of bungalows (also good buys here) and single-family houses on its oldest blocks, northeast of Irving Park Road and Laramie Avenue. Maloof also notes that, because there was a great deal of speculation here during the boom, the neighborhood has experienced "a lot of foreclosures." He says that many of those foreclosed properties have already been rehabbed (or partially rehabbed)—which means some homebuyers can get a bargain price without incurring additional costs for renovations.

PLUS: The namesake park, whose swimming pool was built for the Pan American Games in 1959 and used for the U.S. Olympic swim trials in 1972
MINUS: Another neighborhood short on dining and shopping

CITY NEIGHBORHOODS

SOUTH SHORE
Situated roughly between 67th and 79th streets on the north and south, and Lake Michigan and Stony Island Avenue on the east and west

When Michelle Obama was growing up in South Shore in the 1960s and ’70s, the working-class neighborhood had been hit hard by the decline of Chicago’s steel industry. The enormous lakefront steelworks south and east of the neighborhood had long employed many locals; now it has been in disuse for almost two decades.

Today, plans are in the works to create new residential neighborhoods, along with retail outlets and maybe a dock (for ferries traveling north to Navy Pier), on the old steelworks grounds—and a major beneficiary should be South Shore. "This is the last lakefront neighborhood that is underserved," says Sherell Slaise, who, with Sarah Ware, sells property with the Carter Ware Group.

Slaise could also have said that the neighborhood was underpriced. Last spring, a nicely maintained red-brick bungalow was sold for $179,500; another oversize bungalow on a corner lot went for $250,000 in February. And in April, a 12-room red-brick house built in 1911—this one in the pretty, landmark Jackson Park Highlands—was sold for $610,000. Each of these sales was a remarkable bargain; prices like these on comparable properties in Hyde Park or on the North Side haven’t been seen since the beginning of the millennium.

PLUS: Rainbow Beach, with dramatic views of the skyline and places to picnic, swim, and kayak; the beautiful South Shore Country Club, now a Chicago Park District facility
MINUS: Shopping options are thin, though that deficiency could be overcome with the future development of the steel land; in the meantime there are new big-box stores sprouting up on Stony Island Avenue, and Hyde Park has good restaurants.

SUBURBS

AURORA
Counties: DuPage, Kane, Will, and Kendall
Population: 170,855

Housing bargains in Aurora are concentrated in the city’s northeastern portion, which is situated primarily in DuPage County (in the vicinity of Westfield Shoppingtown at Fox Valley) along the western boundary of the always desirable Naperville. 

"Cross Route 59 [from Aurora into Naperville] and you will pay 10 percent more," says Heide Fralic, a Coldwell Banker Primus agent who sells in the area. A prime example is a ten-year-old 11-room 3,053-square-foot custom house with views of a nature preserve. In April, the place sold for $435,000, one of half a dozen roughly comparable homes that sold in the same price range this spring.

Prices have dropped about 7 percent this year, Fralic says, and the number of home sales is down about 29 percent. "But we still have a thriving market here," she says. "There are still transferees and growing families looking for homes, and what they see here is good."

PLUS: An Aurora address may have less cachet, but that doesn’t diminish this area’s terrific access to stores, expressways, and commuter trains. The new Metea Valley High School, the newest and youngest sibling of the highly regarded Waubonsie Valley and Neuqua Valley high schools, opens in fall 2009.    
MINUS: Because Aurora has less industry than Naperville, property taxes are about 10 percent higher west of Route 59.

SUBURBS

CLARENDON HILLS
County: DuPage
Population: 8,570

Its streets curve around and over hills, its teensy downtown has some fine new restaurants (Scapa, Soul, and Maijean), and its housing is a healthy mix of new, old, and older. Clarendon Hills is the little-village suburb many people who leave the city covet, but they usually find it only after checking out its more expensive neighbor, Hinsdale.

Clarendon Hills, says Bryan Bomba, a Re/Max Elite agent who has represented several newly built homes there, is "the Hinsdale experience at a better price point." Your housing dollar buys as much as 15 percent more interior square footage in Clarendon Hills, he estimates, and the lots are bigger, too. What’s more, builders have found the zoning to be slightly more permissive: "You can do the same square footage in two stories instead of the three" that you would need in Hinsdale, Bomba says.

On the other hand, that looser rein does mean that, unlike in Hinsdale (where virtually every new residence is a gem), there are a few clunkers among the new houses here. While Clarendon Hills has a significant number of big new replacement houses—particularly south of the Burlington Northern Railroad tracks—there are many intact original homes selling for between $300,000 and $700,000.

PLUS: Most Clarendon Hills residents can send their children to the stellar schools in Hinsdale District 181.
MINUS: Property taxes are about 10 percent higher in Clarendon Hills than in Hinsdale. On top of that, Bomba says, resale values on the new homes in Clarendon Hills might take a harder hit during the ongoing real-estate downturn than in better-established Hinsdale.

SUBURBS

DES PLAINES
County: Cook
Population: 57,008

Like their Chicago cousins, the condos that have sprung up around downtown Des Plaines over the past decade "don’t seem to be moving as quickly as we had hoped," says Debbie Geavaras, a Baird & Warner agent in the town. "That’s because there’s a lot of inventory. It’s nice inventory, but buyers are overwhelmed with possibilities."

The recent transformation of the town’s once-drab downtown into a stylish, walkable hub—complete with an array of new restaurants and stores, a modern public library, and a Metra station—may help clear up that logjam. Meanwhile, sales of the town’s existing houses are cruising along. "There’s less inventory to compete with, so [single-family] homes are selling better," Geavaras says.

Des Plaines is still a solidly middle-class suburb, so most houses are selling for less than $300,000 (although some outliers go for over $700,000). In June, a three-bedroom ranch built in 1961 and overlooking a park on the northern edge of town (farthest from O’Hare noise) went for $296,000. A 45-year-old four-bedroom split-level with a family room addition and other renovations went for $295,000. (It was a little closer to O’Hare, but still not in the loudest part of town.)

Geavaras says prices have slipped below 2005 levels in Des Plaines. That’s not great news for older owners looking to retire on the proceeds from their homes, but for the wave of new young buyers who are headed for Des Plaines, it’s helpful. "I’m definitely seeing people find very good bargains," Geavaras says.

PLUS: Downtown dining
MINUS: The noise from planes in and out of O’Hare, particularly on the suburb’s south side

SUBURBS

DOWNERS GROVE
County: DuPage
Population: 48,995

The grand old Tivoli Theater and the red-brick and terra cotta train station in the center of Downers Grove have gained several new neighbors in the past decade: condo buildings, airy new retail spaces, and a big municipal parking structure. The same sort of thing has happened along many of the town’s residential blocks, where newly built houses have been tucked among existing homes.

The town already had a heterogeneous mix, everything from ornate Victorians to low-slung ranch houses. The newcomers have mostly come in a few notches higher than their older neighbors, but those new residences are suffering most during the real-estate downturn. In early summer, I wandered onto Bryan Place, a short street northwest of the downtown area that has been made over with nine new houses by assorted builders. Five of them were occupied, and the other four—complete, ready for occupancy, and all priced around $700,000—were sitting empty. Of course, an overload of new houses, with their relatively reasonable prices marked down by tens of thousands of dollars, makes this town a magnet for bargain hunters.

PLUS: The well-performing Downers Grove North High School, the 135-acre Lyman Woods Forest Preserve, and transportation. Downers Grove sits at the junction of I-88 and I-355, and on top of that, says Bomba, "my train-snob clients love the excessive number of express trains" headed into Chicago during the morning rush hour.
MINUS: Some streets have developed a discordant look, with large new houses squeezed between and towering over older, more horizontal residences.

SUBURBS

FOREST PARK
County: Cook
Population: 15,321

A town once known for having fewer living residents than the dead bodies in its six cemeteries has really come alive in the past five years. A whole new zone of hipness has developed along the short downtown strip of Madison Street, which, along with some funky restaurants, now features a wine store (HouseRed), a stained-glass studio (Two Fish Art Glass), and a cooking school (Flavour).

Along with the retail action came a residential boom, which continues today—not surprising when you consider the 10 percent (and more) differential between Forest Park and its high-priced neighbors, Oak Park and River Forest. But residents here can easily enjoy Oak Park’s shopping and culture, and downtown Chicago is a quick commute via the CTA’s Blue Line and the Eisenhower Expressway.

During the boom, homebuyers found the houses in or near the middle and north end of town the most desirable. Perhaps too desirable, suggests Laura Talaske, a Gloor Realty agent working in both Oak Park and Forest Park. "There was such a run on Forest Park," she says. "A lot of speculators and investors came in, and the market got hotter and hotter until prices were approaching Oak Park’s. All of a sudden [in 2007] it had gone too far and people started to pull back." That led to a price deflation of about 20 percent, Talaske says.

Houses near the town’s epicenter still "pop onto and off the market," says Kris Sagan, an agent with Re/Max in the Village. Even with price reductions, the astonishing bargains found there six years ago have drastically diminished. Her advice: Shop south of the Eisenhower. While you will pay $400,000 and up in northern Forest Park, you can easily get into the southern half of town for about $200,000 to $400,000, she says. The houses there will be smaller, she notes, the walk downtown less charming, and the property may need updating. But the 16.5-acre Forest Park, with its aquatic center, tennis courts, and a new skate park, is nearby.

PLUS: Even the West Cook YMCA in Oak Park is decamping (in 2009) from that crowded village to Forest Park.
MINUS: If cemeteries freak you out, don’t bother.

SUBURBS

GENEVA
County: Kane
Population: 24,182

A trio of Fox Valley towns offer historic buildings, ample employment, healthy schools, lively downtowns, and easy train travel into Chicago—all at a genial, semicountrified pace. Of those three charming sisters on the Fox River—St. Charles, Geneva, and Batavia—the middle one has some of the best advantages, including the splendid Fabyan Forest Preserve, a former dairy farm and estate turned public park that has lovely gardens and footbridges, a towering windmill, and even a onetime bear cage that is now a picnic shelter. Homes in Geneva range from the mansions near the river to brand-new subdivisions in the sprawling Randall Road corridor. The mansions sometimes eclipse $1 million, but other homes in town, most built in the last 15 years, generally run from the high $200,000s to the high $400,000s.

Just beyond Geneva’s western boundaries, in Blackberry Township, lies the 650-acre Mill Creek. There the developer Sho-Deen has woven together houses, golf courses, and natural areas to create an organic extension of old Geneva (rather than another banal cornfield subdivision). The well-stocked Mill Creek Village Center provides a complementary retail option, while the two big golf courses, the swim club, the walking paths, and, in some areas, the big houses all in a row give the development a contemporary spin. Recent Mill Creek sales include $305,000 for a three-bedroom house built in 2005 in the neotraditionalist Pinehurst neighborhood, as well as $417,000 for a four-bedroom residence built 11 years ago near the Tanna Farms golf clubhouse.

PLUS: The strip malls along Randall Road are convenient sources of pretty much everything homeowners might need.
MINUS: The Randall Road strip malls exemplify the blandness that too often accompanies suburban sprawl.

SUBURBS

PALOS HEIGHTS
County: Cook
Population: 12,489

"Please don’t tell the Cubs fans about us," jokes Spero Speropoulos, a Re/Max Team 2000 agent, as we drive through Palos Heights. Indeed, North Siders might opt to trade in their Cub blue for the Sox’s silver and black once they see bargains like these: a newly built 3,600-square-foot brick-and-stone house with a three-car garage priced at $799,900; a turreted 16-room townhouse with a patio, a hot tub, and a big side yard going for $598,499; a modest 1,200-square-foot two-bedroom condo for $190,000 in a 1970s development that looks onto a wooded nature area.

For a relatively small community (about four square miles), Palos Heights has an unusually wide variety of housing sizes, styles, and ages. Prices too—although this being the south suburbs, the selection gets pretty thin when you pass $500,000. Properties that have sold so far this year divide mostly into two tiers: homes more than ten years old priced below $400,000 and those that are higher priced and newer. There’s a small surfeit of unsold houses in the latter category, "leftovers from the building boom," Speropoulos says, and builders may start offering rock-bottom bargains as the slowdown grinds on. We toured a 4,200-square-foot house with great details—such as the stone-edged interior doorways, the hand-scraped Manchurian walnut floors, and a two-story family room with soaring windows—priced at $889,000. Soon it might be an even better deal.

PLUS: Two good high schools (Stagg and Shepard) and lots of outdoor destinations: charming Lake Katherine, ringed by a trail that overlooks the Cal-Sag Channel; the wooded Tinley Creek bike trail along the western edge of town; and enormous swaths of forest preserve south of town and a few minutes west, past the town of Palos Park
MINUS: "The only thing missing," Speropoulos says, "is a juicy little downtown." Most of the shopping and dining around here is concentrated in the strip malls along Harlem Avenue and 127th Street.