What's a deal?
One of the most basic but easily forgotten rules in searching for real estate deals is that it's not a deal if you don't want to live there. "Live," it should be noted, is present tense. Considering how your home's value might appreciate and where an up-and-coming neighborhood might go is fine, but if you don't feel comfortable in a neighborhood today, you should not bank on liking it tomorrow. Neighborhoods generally change the way continents shift, so slowly movement is imperceptible.

A homeowner who bought a house near Wilson Avenue 10 years ago recently complained that prostitution and drug deals were big business near his home. He was disgusted by the trash on the streets and shocked by the size of the homeless population, the number of SROs in Uptown. These facets of the neighborhood were plainly visible when he moved in, but he chose to ignore them, thinking Uptown would soon gentrify and problems would disappear. In fact, these problems have shrunk in Uptown, but they have not gone away and perhaps never will. The real problem is that he did not buy in Uptown, but in some imaginary neighborhood, a mental landscape he created with the help of real estate brokers and developers.

If you want to buy a new home, whether something built from the ground up or a thoroughly rehabbed condo, and you need to find a deal, you should keep a map of the city handy. Keep track of where the developments that fit your budget are located, and patterns will start to emerge. You may notice that you can't afford a two-bedroom condo anywhere along the lakefront between the Loop and Peterson. You'll also start to notice the neighborhoods where prices are reasonable and development is occurring. The two do not always intersect. Belmont-Craigin, for example, has comparatively low prices, but not much is being built there.
Once you've decided on your housing needs and the areas you can afford, visit the neighborhoods and walk the streets. Enough parts of the city have projects underway and affordable prices that you should be able to find a deal to suit you.

The lake effect
One way to think of Chicago's housing boom is to picture rings of development emanating from the Loop. Throughout the '80s and '90s, distressed land around the city's center, much of it vacated by industry, has been redeveloped. Whole new neighborhoods have been carved in the South Loop, the West Loop and River North. The rings continue to spread, now affecting the Near South Side, the Near North Side and the Near Northwest Side. It follows then, that the closer you look to the center of these concentric circles of development - the Loop - the higher prices tend to be. The other major factor to consider is the lakefront, which works in a similar way. Generally, the farther you look from the lake, the lower prices tend to go.

These principles are far from absolute. Lincoln Park is much farther from downtown than the South Loop but it's also far more developed and settled and much more expensive. Sauganash and Edgebrook, on the far Northwest Side, have evolved like suburbs though they fall within the city limits. Land is scarce in these desirable neighborhoods and when something does get built it's usually at a high price point.

The broad areas where you will find significant building, including condo conversions and affordable prices, are the Near South, the South Side and the Near Northwest Side. Buyers also can find deals on the far North and Northwest Side of the city, but there tends to be much less product to choose from in these neighborhoods.

Near South
Deals are becoming harder to find in the South Loop, much harder than even a few years ago. Loft and townhome projects have been filling in the gaps between the larger communities of Printers Row, Central Station and Dearborn Park, which have provided a foundation for the neighborhood. The largest loft development, for example, is now Dearborn Tower, 1530 S. State. The 317 units in this project average more than $200,000, with some units priced significantly higher.

The South Loop, however, remains less expensive than the West Loop or River North, two other booming nearby neighborhoods. That's partly because the area remains low on density and amenities, although population and convenience have been growing each year. New lofts, condos and townhomes have sprouted on nearly every block, while a new Dominick's at Roosevelt and Canal has made the area more livable.

Deals to watch for include Legacy Development's One East 15th Place, a new highrise with condos priced from the $130s to the $320s. For a brand new downtown highrise with great views, these units are priced competitively. Both Bank Note Place, 1910 S. Indiana, and Ravinia Lofts, 2024 S. Wabash, offer brand new loft condos in the mid-$100s. Millennium, a 32-unit townhome project with a creative design, has prices starting in the $280s.

South Side
As you move south of Cermak, prices again begin to fall. The South Side has been underdeveloped since white flight scarred so much of its housing, but many strong neighborhoods have survived and developers are paying new attention to this part of the city in neighborhoods ranging from Bronzeville to Hyde Park to Chesterfield. The reasons - lower acquisition costs, more available land and an under-served market with pent-up demand - are apparent. These conditions have existed for a long time, but builders no longer have to take it on faith that they can sell homes to the south.

Two of the best test cases are the Colonnade and Arbor Estates, by developer Ronald Gibson. Arbor Estates includes 21 townhouses ranging from 2,200 to 3,000 square feet, with three or four bedrooms and 2.5 baths. Prices start in the $260s. The Colonnade, a condo conversion at 3700 S. King Drive, has sold most of its units without advertising. Prices start in the $90s for one-bedrooms and begin around $110,000 for two-bedrooms, according to Yvonne Newberry, a sales agent with AMS Realty.

South Commons, an 886-unit community on South Michigan Avenue between 26th and 31st streets by the Habitat Company, has been well known on the South Side as a strong rental complex. The success of the rentals has carried over into their new life as condominiums, hundreds of units sold in the last two years, according to Sales Director Marsha Bynum. One look at the South Commons price range - starting in the $70s - explains the fast sales pace.

Lake Shore Pointe, 7032 South Shore, is an 87-unit development by Shore Bank Development, an arm of South Shore Bank. These condos and townhomes have prices starting in the $120s.

Near Northwest
Like the South Loop, the Near Northwest Side is not the haven for housing deals that it once was. Prices have increased rapidly in neighborhoods such as Wicker Park, Bucktown and East Village, and some observers wonder whether the numbers have become inflated in what are often gritty urban locations.

Fortunately, development has pushed to other corners of the Near Northwest Side as land costs have gone up in Wicker Park and Bucktown, and as loft buildings have become harder to find. Neighborhoods such as River West, Logan Square and Avondale are now host to a spate of conversions and even some loft and townhome development.

Humboldt Park, which developers are struggling to rename "West Bucktown," has been especially active lately. Metropolis, 1935 N. Fairfield, has 115 lofts with one or two bedrooms and one or two baths, priced from the $160s. Buck City Lofts, 1733 N. Rockwell, is a 79-unit loft conversion priced roughly from the $140s to the $300s.Townhouses also have become popular in "West Bucktown," forced west by exorbitant land costs (and small availability) to the east. Dubin Residential's Buck Townes, 2555 W. Moffat, has two- and three-bedroom townhouses priced from about the $270s to the $320s. Bucktown 1800, 1823 N. Talman, has townhouses from the $300s and single-family homes from the $400s.

Remember that despite their names, all of these projects are in Humboldt Park, not Bucktown. The neighborhood has many advantages, including lower prices and the beautiful park itself, but it's also grittier than the enclave of boutiques centered around Damen Avenue that makes up Bucktown proper.

Far North /Northwest Side
One trick in finding where the deals are is to find where the deals aren't and look a little to the north or west. Not long ago, Ravenswood offered spectacular single-family homes at a fraction of their cost in Lakeview or North Center, and in a neighborhood every bit as solid and pleasant. That's no longer the case, but Ravenswood Manor, Albany Park and Irving Park, to the west, are still comparatively affordable. Much of Uptown and Edgewater once offered good housing value but both have become inflated. Rogers Park, however, is undergoing something of a conversion boomlet on the city's northern edge.

Old Irving Village and Old Irving Pointe have been popular developments both because of a comparatively low price point and because there has been so little building in the stable northwest neighborhood of Irving Park. Old Irving Village, 3801 N. Milwaukee, has 40 townhouses with two or three bedrooms and 2.5 baths priced from about the $280s to the $320s. Old Irving Pointe has three- and four-bedroom single-family houses with three baths starting roughly in the $290s.

Rogers Park may be the last affordable piece of lakefront Chicago on the North Side. Keller Williams Cardinal Realty has been selling a variety of conversions in the area, including the Berkshire, 1517 W. Jonquil. The 23 condos in this development are priced in the low $100s for units with one or two bedrooms and two baths. Abels Realty, run by Rogers Park expert Connie Abels, has long been a force in the neighborhood and represents a string of affordable conversions for sale at any given time.