Boom. That’s the sound coming out of the South Loop right now, as highrises shoot up across a neighborhood that scarcely existed 30 years ago and until recently still looked like a former industrial wasteland dotted with trendy loft developments and small pockets of townhomes.

By New Homes’ count in October 2005, there were 16 highrises being marketed in the South Loop to an eager reception from young professionals and empty nesters. Being a younger, less established neighborhood than areas like Lincoln Park or even River North, the South Loop is still a more affordable real estate option, but the price index is creeping up all the time as buyers decide they like the idea of living so close to the city.

The median condo price rose from $284,000 in 2003 to $299,000 in 2004, and by September 2005 it had easily hurdled what for some buyers is the psychological $300,000 barrier, with a median asking price of $320,000.

Significantly, the neighborhood welcomed its first ultra-luxury development in the form of One Museum Park in 2005, when some of the units there sold for more than $500 a square foot, the current industry yardstick.

A survey of highrises that were being marketed in November 2005 but had not yet built, indicates that buyers looking to pay less than the $200,000 mark can find one-bedroom, one bath condos at developments like the contemporary, glassy Vetro, where $172,900 fetches a 523-square-feet condo, or the art-deco-inspired Astoria Tower, where units start in the $160s.

At developments like The Enterprise Companies’ Museum Park, a collection of mostly sold-out high rises and townhomes in the Central Station neighborhood at South Indiana Avenue, prices are higher than average, with the area boasting prominent lake and Museum Campus views. But apparently demand remains high there too. At opposite ends of the price spectrum, The Enterprises’ newest developments, One Museum Park and 1400 Museum Park were still selling in November 2005. At 1400 Museum Park, one-bedrooms were fetching in the $250s. At One Museum Park, prices ranged from the $450s to $4.5M for a penthouse pad.

At the top end of the range generally, South Loop buyers wanting more space and a three bedroom pad, or a penthouse-style condo, should expect prices in the $600 to $900 range. Vetro, for instance, is offering a 2,067-square-feet penthouse for $958,900.

See our highrise guide for profiles of pending developments like Burnham Pointe, Astoria Tower, Vetro and Library Tower.

In the resale market, some young couples are opting to buy older housing stock in areas like Dearborn Park, the South Loop’s first planned residential communities, built in the 1970s.

Investment condos

Another big trend is for parents of college-aged children to buy a highrise condo as an investment opportunity, installing their child in the unit while they attend one of the many institutions based in the neighborhood.

Naperville residents Nancy and Brian Powers bought a two-bedroom, two-bathroom condo at 1111 S Wabash with the ultimate goal of using it as a fun in-town residence, but meanwhile son Justin, who attends nearby Columbia College, is living there.

While two large student housing developments recently opened in the South Loop, the Powers’ say that dorm fees for the newly constructed highrises are not cheap and it made sense to buy instead.

Another student is leasing the condo’s second room, already helping to defray costs, and while they have no plans to turn the unit into a rental property when Justin graduates, the option is always there, particularly with such a high student population in the area.

So what do we see on the horizon for the South Loop? More of those towering highrises, and more price creep for now, as developers keep finding useable plots of land.