Market Conditions: Prices Back to 2005, or Nearly Peak Levels in “Core Locations”
According to Crain’s, 120 condos out of 500 have gone under contract since coming back on the market early this year in the South Loop.
Related isn’t saying how many of the sales were in each building. It is selling units in Harbor View at 1901 S. Calumet, The Grant at 1201 S. Prairie and Adler Place at 1629 S. Prairie.
From Crain’s:
“We certainly thought there was going to be a strong reaction to this, with great pent-up demand, but not at this accelerated level,” Mr. Bailey said. “People are seeing the South Loop for what it is: an extremely vibrant and great neighborhood to live in.”
Related’s momentum offers another piece of evidence that the city’s condo market is pulling itself out of its funk.
The South Loop was hit especially hard: A Crain’s analysis last year found that more than half of the 44 boom-era condo projects in the neighborhood ran into financial trouble in the past five years, and a survey of large downtown condo buildings found South Loop owners lost 30 percent of their property value between 2008 and 2012, the worst performance of any downtown submarket during that time.
Now, with the market back on the upswing, Related is raising prices on its condos by about 10 percent, Mr. Bailey said.
“That hasn’t stopped demand from continuing. It’s terrific to be in this position,” he said.
If you didn’t buy last year, it sounds like you’re out of luck as some believe prices are back to their peak, or 2005 level, in certain locations.
Related’s pace is impressive, but not surprising to Marc Realty Residential Principal David Ruttenberg, who specializes in acquiring distressed condo projects, including a failed 94-unit development at 2300 S. Michigan Ave.
Mr. Ruttenberg says home prices have risen back to 2005, or nearly peak, levels in “core locations,” including parts of the South Loop, amid a sudden change in buyer philosophy.
“There’s more demand than supply, really, for newer assets,” Mr. Ruttenberg said.
Are prices really back to 2005 peak in the South Loop which, as the article says, saw a 30% decline during the bust?
And if prices really are spiking 20% or 30% why aren’t more accidental landlords getting out while the getting is good?
Sales surge at South Loop condo towers [Crain’s Chicago Business, David Lee Matthews, May 9, 2013]
I paid just over bubble pricing for my 2/2 in Fulton River. There is not enough inventory for the surge in buyers because of artificial low rates from the fed and the lack of new condos built other than ultra luxury trump and ritz-Carlton. Also, I thought it was ok to pay bubble pricing since Fulton River has come so far in the past six years.
“Also, I thought it was ok to pay bubble pricing since Fulton River has come so far in the past six years.”
I’ve been wondering who the heck is willing to pay these inflated prices and now I have my answer.
You’ve got to be kidding me, right?
You know that real estate has only one way to go- and it’s down. Right? That interest rates will rise when the Fed can no longer print a trillion dollars a year? That mortgage rates will go up making your condo less affordable for the next buyer.
Wow. I’m continuing to be stunned that 6 years after the worst housing bust in US history, buyers still aren’t afraid.
Mike HG – Do you have any friends or family of similar mindset looking to buy a one-bed in River North? I’d be happy to give them a deal at just bubble price for my place!
If the 120 units Sold/Under Contract is true, that’s quite the turnaround.
People have very short memories when it comes to negative past issues and tired of being unhappy and are grasping at anything to feel happy again. It’s still ingrained in the American mindset to view home ownership as success. I know owning a home was ingrained in my mind and most of my friends’ minds. Traditionally, owning property equals stability.
Never underestimate the desire of Americans to be positive about the future.
I trade interest rates for a living. The Fed has no plans to hike rates until at least 2015. While there are a few FED members who want to end the $85 billion a month in mortgage purchases, I think it will continue through tend end of the year. With Europe stuck in recession and China growth slowing, big dove Bernanke has no plans to ease up anytime soon. That means mortgages will make buying much cheaper than renting. I could pay almost $2100 a month to live in a 760 sq ft apartment with carpet and paper thin walls and baby size washer / dryer at Alta at K Station. Or I can buy a 2/2, rent out the parking for $300 a month, rent out the second bedroom to my friend for $1000 a month, and only have to pay about $730 a month to interest only mortgage / assessments / taxes / insurance / utilities. Plus I’ll throw an extra $2000 a month at the principal. With no new planned condos or conversion of apartments to condos on the horizon, it’s a matter of supply and dand in the downtown neighborhoods. I cannot speak for the outer city hoods, but downtown Chicago is thriving right now. With stocks at a high and only going higher with easy money from the FED, the rich and upper middle class will be buying.
Market has picked up for sure but at least for the properties I have been watching in SL, we are not back to bubble prices. My favorite north-facing 02 units in MP West are now priced in 700-800K range. They sell in high 600K to mid 700K. They used to be priced over a million at some point. Although I think they were ok selling them in 800-900K range even then. So yes the properties are finally selling, but the prices are still much lower than the pick.
Fred, contact a realtor and see what they have to say about your place. Might as well try, right? My brother tried selling his 1 bed with parking last summer in River North and would only have taken a 7% hit on it but the appraisal came in low so the buyer couldn’t buy it. He instead rented it out for $2250 a month. I am almost sure he could get the same price for what he paid in 07 this summer if he lists again. Also, find a hot realtor. They seem to sell at higher prices since all the guy realtors want to make a deal with them.
“rent out the parking for $300 a month”
I call bullshit on getting $300/mo for parking in Fulton River.
While I agree about it being cheaper to buy than rent, what you have to look at are the conditions when you want/need to sell. Sure you have a 2/2 which is a hell of a much better idea than a 1/1 as far a buying you more staying time. But bringing homing a lucky lady late one night from Bull&Bear or Social25 and all of the sudden your 2/2 becomes fully occupied. Say your theory about interest rates staying relatively where theyre at until 2015 is true, what happens after that? In order for someone to buy your place and have the same monthly nut, that 400k is now $353,125 and thats only a 1% increase in rates.
I got two spots in the deal.
“Fred, contact a realtor and see what they have to say about your place. Might as well try, right?”
If you don’t ask, you can’t sell.
I always said that the market would bounce off the bottom after reaching the bottom in 2013-2014. Basically the bottom was last year or early 2013 and we are definitely off the bottom. Paying bubble prices for housing is something only a trader or finance person would do. For the rest of the world, we are still looking for deals that make sense.
Inventory will increase its just a matter of time.
“You know that real estate has only one way to go- and it’s down. Right? That interest rates will rise when the Fed can no longer print a trillion dollars a year? That mortgage rates will go up making your condo less affordable for the next buyer”
Jeez Sabrina, this is just as stupid as saying that real estate only goes up!
And guess what, when rates go up that means wages, and inflation is up too, so prices will be higher or stable (my guess is higher since thats what the banking, realtor and government cartels all want)
After 9yrs, my old neighbor sold his 2/2 for what he paid for it in Old Town. Closes in 2 weeks.
“You know that real estate has only one way to go- and it’s down. Right?”
I’m hoping prices have stabilized in the Chicago market. When interest rates rise, it will be slow and gradual. Enough to contain prices but not high enough to deflate prices.
I don’t mean to gloat, but I will. I purposely waited and timed the bottom nearly perfectly and bought into a great community. For all the $hit people have given me all over the years I seem to know what I’m doing, at least in this aspect of my life.
There is so much money sloshing around right now its crazy. Stock market at all time highs despite 7.5%+ unemployment (and much higher if you look at people who dropped out of work force and would come back if they could). Rates at all time lows and credit spreads nearing all time tights (with all in yields at their lowest in history because of the low treasury rates). The Fed has created another bubble – which was their goal. I don’t think Chicago prices go down again until we see new condo buildings being built – that will indicate the top. I think Mike HG is looking at his investment more as a carry trade – he is greatly reducing his cash flow (thereby increasing his carry) and is banking on prices being stable or being able to “get out” if need be. There is nothing wrong with this but it is riskier than buying on a dip – which psychologically is very hard. Almost nobody buys at the bottom because they are too scared and then they all sit on the sidelines waiting for prices to fall again (a phenomenon called price anchoring). It is very difficult to overcome these inherent biases. I do think Sabrina has a valid point in questioning back to bubble pricing but “the math” does favor Mike HG regarding cash flows with rates so low and rents so high. If rents stay high / rates stay low is another question that even nobel laureates argue about. And we haven’t even opened the can of worms is the top 5% of Americans’ net worth increased by 20% over the last few years while the bottom 50% has seen the opposite happen.
Wish I had the down-payment to buy a place last spring / summer. I would have saved 10% on my purchase price 🙁
Just curious MikeHD, what does a 2/2 in your building/area go for these days… and compared to the absolute bubble prices of a few years ago?
Yoss – I think you are right on in your assessments. What will happen regarding your last point?
I agree sarahs, it’s something that is being ignored by everyone. In my mind the growing income disparity in the US is very alarming. No one seems to care or talk about it.
Jay, you can get a compact, new 2/2 for as low as 299k in Fulton River.
http://www.redfin.com/IL/Chicago/660-W-Wayman-St-60661/unit-703B/home/13091952
A lofted 2/2 in a nicer, older building along the river for 444k.
http://www.redfin.com/IL/Chicago/165-N-Canal-St-60606/unit-714/home/12765636
A top of the line 2/2 in the crown jewel of Fulton River for 550k
http://www.redfin.com/IL/Chicago/333-N-Canal-St-60606/unit-2302/home/12631859
An above average 2/2 in a gated community.
http://www.redfin.com/IL/Chicago/501-N-Clinton-St-60654/unit-2805/home/12632542
Or a boutique low rise 2/2 for 345k.
http://www.redfin.com/IL/Chicago/324-N-Jefferson-St-60661/unit-206/home/40511806
I’m not giving out my exact building, but the prices throughout Fulton River are doing quite well in comparison to other neighborhoods because the neighborhood has grown and become so much better than the sea of parking lots and industry that dominated it in the early 2000’s.
“I agree sarahs, it’s something that is being ignored by everyone. In my mind the growing income disparity in the US is very alarming. No one seems to care or talk about it.”
Very true. The have nots will soon be robbing the have in an increasing alarming rate. WE>ME
“I agree sarahs, it’s something that is being ignored by everyone. In my mind the growing income disparity in the US is very alarming. No one seems to care or talk about it.”
Yeah, there just aren’t enough of the top 3-5% to buy all of the properties at bubble prices – these are the individuals whose wealth has increase signifcantly in the rising stock market of the past 4 years. I read a quote today that only 52% of American familiies own any stocks at all, which includes investments in their 401k’s or IRA’s. The people at the top have done really well and will continue to do so. The boomers are hanging on to their jobs/positions for as long as they can. The work the Fed has done has actually increased tax collections by helping reinflate the stock market and housing market at the top which will lower deficits, but also lower the standard of living in the US compared to other nations, which is not good in the long run.
The very best locations will sell at bubble pricing now though, especially those that have improved in terms of amenities since 2006. South Loop still has a ton of shadow inventory. I know of 4 friends who are renting out their condos right now who still think they are way underwater from 2005 and 2006 purchases. They all used funky mortgage products too, and had to put more money in to refinance them in the past year or so.
I believe taxes will go up further. It won’t be through an absolute rate rise (which happened recently as we went from 35% to 39.6% top marginal rate) but through less transparent means. These will include limiting deductions to 28% (so if you have $100k in deductions as a top payer you will lose out on 39.6 – 28 = 11.6% of the 100k = $11.6k effective increase), eliminating the cap on wages eligible for SS tax (currently around $100k IIRC), means testing SS payments and instituting a minimum tax rate on wealthy individuals (the Buffet rule). Initially this will not hit the $200-400k households but as with the AMT (which first hit only a handful of people when instituted) inflation will mean eventually those households will be hit. I think there will be some cuts in entitlements but not until the economy recovers some (stock market does not equal economy).
“You know that real estate has only one way to go- and it’s down. Right?”
Ha, classic. Glad I didn’t listen to you a year ago..
“I always said that the market would bounce off the bottom after reaching the bottom in 2013-2014”
Uhh, you did? What about everything going back to 1992 prices?
“What about everything going back to 1992 prices?”
Just talking his book.
I’m a “have not” and I don’t see us “have nots” revolting any time soon.
“I’m a “have not””
No, you’re a “have less”. You ‘own’ real estate and a car. You have a steady job, that pays a salary, benefits and doesn’t invoilve manual labor. You have retirement savings.
The “have nots” have none of those things.
“I’m a “have not””
What you lack is not means, it is perspective.
No, Jenny is right. The haves own virtually all the wealth in the county. The have nots are the other 95% who own nothing but debt. Jenny may have an office job but she has a mortgage and a car loan and no security. If the masses truly understood how much wealth the top 10% owned they’d all be hanging from trees up and down western ave. but they don’t and they puppet back “you’re just jealous” or “that’s Obamas socialism” or “why punish hard work”. Meanwhile the top 10,000 families gobble up all the new wealth created. And people call it capitalism. I call it the early stages of feudalism.
“95% … top 10% … top 10,000”
Which is it HD? What’s the relevant marker for the ‘haves’?
I realize that I will never be a 1%er. I’m not willing to work THAT hard and I wasn’t born into wealth. I don’t care how the ultra-rich live. Despite the poor economy and widening income gaps, the “have nots” actually have it pretty good compared to most of the rest of the world.
Barring extreme disability, almost anyone in this country can choose not to be destitute, so the “have nots” don’t rebel or revolt.
HD – Its not the “haves” fault that the majority of Americans chose to present value their future earnings to buy new cars / run up credit card debt and buy their granite counter top / SS appliance pads at bubble prices. I have no sympathy for white collar workers who didn’t plan ahead.
http://www.taxanalysts.com/www/features.nsf/Articles/C52956572546624F85257B1D004DE3FC?OpenDocument
“Despite the poor economy and widening income gaps, the “have nots” actually have it pretty good compared to most of the rest of the world.”
In a general sense, yes, that’s true. A lot of our poor/low income have indoor plumbing. However, the gap is shrinking as the income for our poor is dropping. From US News, the inflation-adjusted average earnings for the bottom 20 percent of families have fallen from $16,788 in 1979 to just under $15,000, and earnings for the next 20 percent have remained flat at $37,000.
So, 40% of american families are bringing home less than 40k a year and that’s probably a two income household with dependent care expenses.
Yeah, blame the victims. Great logic! Do you want a nobel prize for your ingenious observation?
” yoss (May 10, 2013, 1:29 pm)
HD – Its not the “haves” fault that the majority of Americans chose to present value their future earnings to buy new cars / run up credit card debt and buy their granite counter top / SS appliance pads at bubble prices. I have no sympathy for white collar workers who didn’t plan ahead.”
looking to buy:
So, 40% of american families are bringing home less than 40k a year and that’s probably a two income household with dependent care expenses.
A significant number of that 40% is probably single-parent (mostly single mother) families. That doesn’t detract from your larger point, though.
Blaming credit card/granite countertops/new cars is just an excuse to let all the rich people (10%) keep all the money they’re amassing to the exclusion of every one else.
That’s EXACTLY what they want you to think.
And they keep amassing more and more money.
It feels pretty shitty to realize you’ve been manipulated, right?
vj, you and I are in agreement on something, for once.
http://www.forbes.com/sites/moneywisewomen/2012/03/21/average-america-vs-the-one-percent/
“The 1 percent are executives, doctors, lawyers and politicians, among other things. Within this group of people is an even smaller and wealthier subset of people, 1 percent of the top, or .01 percent of the entire nation. Those people have incomes of over $27 million, or roughly 540 times the national average income. Altogether, the top 1 percent control 43 percent of the wealth in the nation; the next 4 percent control an additional 29 percent.”
“From US News, the inflation-adjusted average earnings for the bottom 20 percent of families have fallen from $16,788 in 1979 to just under $15,000, and earnings for the next 20 percent have remained flat at $37,000.
So, 40% of american families are bringing home less than 40k a year and that’s probably a two income household with dependent care expenses.”
I think that is not using the generally-used (for income demo purposes) definition of ‘family’, but I may be wrong. Do you have a link?
“vj, you and I are in agreement on somethin”
From Vlajos’s link: “In 2011 entry into the top 10 percent, where all the gains took place, required an adjusted gross income of at least $110,651.”
So, HD, when you say ‘they’ you’re talking about the 90%, right? Because you’re part of that top-10%.
“I realize that I will never be a 1%er. I’m not willing to work THAT hard ”
It’s not hard work that puts them in the top 1% All of us work very hard. It’s not 18 hours days toiling that makes someone rich. It’s connections, favorable tax policies, and a bit of luck (other than a wealthy family) that puts someone in the top 1%.
“If you didn’t buy last year, it sounds like you’re out of luck as some believe prices are back to their peak, or 2005 level, in certain locations.”
Good thing I bought at the right time. Of course to fit in around here I have to frame it as: I totally planned to meet Mrs Icarus,get married and buy our house and everything timed perfectly in my Master Plan.
“A significant number of that 40% is probably single-parent (mostly single mother) families. That doesn’t detract from your larger point, though.”
Right it doesn’t detract from my larger point. I think it adds to it, becuase I believe a single mother should be able to support a family on one income without being in the low income category. The same way a man should be able to be a single dad and not be poor.
“A lot of our poor/low income have indoor plumbing. However, the gap is shrinking as the income for our poor is dropping. From US News, the inflation-adjusted average earnings for the bottom 20 percent of families have fallen from $16,788 in 1979 to just under $15,000, and earnings for the next 20 percent have remained flat at $37,000.
So, 40% of american families are bringing home less than 40k a year and that’s probably a two income household with dependent care expenses.”
If that isn’t evidence of LBJ’s “war on poverty” being a complete and total failure, I don’t know what is.
Anyways, the bottom 10% here in the US have better lives than 95-99% of the population on the entire planet. So its all relative
HD: Are you saying that nobody you know in the top 5 or 10% (I presume you’re at least in the latter, no?) has a mortgage or car loan?
It’s not the 1950’s with mortgage burning parties. If you make a lot, and can borrow a lot at a low rate (with most of the early years’ obviously allocated towards interest), doesn’t it make sense to hold a nice big mortgage for the interest reduction? Doesn’t it also make sense to have put down as little as possible, and pay as little as possible, and invest that money in something other than one’s residence?
Think about it. Say you’re making $500k-$1m/year toward the end of 2008, and you were looking to buy a place for $1.5-$3 million. Would the smart move have been to put as much down as possible in order to lock in the best rate at that time (or, better yet, buy the place outright)? Or, would the smart move have been to put down as little as possible, using some sort of adjustable product, and make the minimum payments (nearly all of which would be going towards interest)? In the latter scenario, you will have (i) enjoyed a significant tax deduction, (ii) been able to refi, if desired, either into an even lower rate adjustable or into a fixed, and (iii) could have put all the cash you could have otherwise put down and/or paid monthly into the stock market, which has done pretty well since then.
Assuming they don’t do away with it, I plan to make full use of the allowed lifetime mortgage interest tax deduction. Heck, I’d bet that lots of well-to-do old folks pass away with little equity in their homes. Not that this is necessarily my plan for the next 40-50 years, but I could certainly envision being as creative as possible in financing any primary and/or secondary residences, such that I allocate as little as possible of my earnings towards housing (or more precisely, towards servicing housing-related debt), and as much as possible towards investments, the kids’ educations and generally trying to live as enjoyable (at times luxurious and/or adventurous) a life as possible, and in “the end,” I’ll hopefully be able to pass on as much cash (or the like) as possible to my well-educated, well travelled and student loan-free adult kids, who shouldn’t be overly troubled by any battles waged for their parents’ home(s) by our mortgage and student loan lenders. *Again, that’s not my plan. Just spitting balling here as to how and why some folks with money might embrace debt.*
Homedelete, you need to look at wealth mobility rather than just the gap. Of the 1 %, what percentage of 1%’s are in that status over a year, 5 years, 10 years. Who cares if people make a ton of money compared to others, as long as everyone has a fair chance at it. Are you really going to complain that the uber rich guys that risked everything (jobs, gates, zuck for ex) don’t deserve what they have? If you are just complaining about a wealth gap then why don’t you simply just move to France where they tried and failed to tax millionaires at 75%. President Holland’s based his platform on a tax the rich socialist revolt. After just a short time period the citizens realized that the system is a failure and now his approval rating is appropriate with his ideas. Look at the great innovation that France has produced compared to the USA. Have you done or do anything to justify being compensated like the 1%?
Is this the same Sabrina that ran the blog when it first started?
France is working on Fusion power, so they have that going for them…
“Heck, I’d bet that lots of well-to-do old folks pass away with little equity in their homes”
Guess you don’t know any truly well-to-do folds…… most have multiple homes paid off and their houses represents a very small percentage of the net worth.
As someone who has been around for longer than most of you (my guess) I can assure you that the average American is way better off than they were in the 50s. Consider all the technological changes that have benefited them. You can’t just look at income: http://online.wsj.com/article/SB10001424127887323468604578249723138161566.html
“Doesn’t it also make sense to have put down as little as possible, and pay as little as possible, and invest that money in something other than one’s residence?
Think about it. Say you’re making $500k-$1m/year toward the end of 2008, and you were looking to buy a place for $1.5-$3 million. Would the smart move have been to put as much down as possible in order to lock in the best rate at that time (or, better yet, buy the place outright)? Or, would the smart move have been to put down as little as possible, using some sort of adjustable product, and make the minimum payments (nearly all of which would be going towards interest)? In the latter scenario, you will have (i) enjoyed a significant tax deduction, (ii) been able to refi, if desired, either into an even lower rate adjustable or into a fixed, and (iii) could have put all the cash you could have otherwise put down and/or paid monthly into the stock market, which has done pretty well since then. ”
This sort of pay the minimum attitude has gotten lots of people into trouble. You will be basically renting from the bank, never paying anything off. If you can save up considerable sums on the side consistently, I have no issue with that approach, but when people “pay the minimum” and have no savings, who is supposed to bail them out someday? Some of the most successful people I know finanically in their mid 30’s happen to own real estate, but saved the most amount of money when they were renting. I know 2 traders who rent who are worth more than $5M each and have never owned real estate. They don’t like the lack of flexibility and housing is such a small portion of their income. They have no desire to be “tied down” to a mortgage payment from a bank. Another trader I know paid cash for his condo and prepays his assessments annually to his condo associaton, because he doesn’t want to have to deal with monthly payments of anything. The main sources of his income are his annual bonuses and investment income.
Current pricing has turned into a situation where many young families have to utilize ARM’s or other non-comforming loans in order to “buy in” to the area/neighborhood/school district they want.
“the bottom 10% here in the US have better lives than 95-99% of the population on the entire planet”
Considering that only about 95% of the planet lives outside of the USA, I’m tired of hearing that BS. The bottom 10% here certainly are better off–in a material comfort sense–than something like 1/2 of the world, but beyond that it gets murky.
“have to utilize ARM’s or other non-comforming loans ”
ARMs are very, very standard products. ARMs are often ‘confirming’ products. Demonizing ARMs is silly.
“ARMs are very, very standard products. ARMs are often ‘confirming’ products. Demonizing ARMs is silly.”
How about interest only jumbo ARM’s? I know of 3 friends who had to use these on recent purchases. They could not afford the 30 year fixed payment.
Are jumbo ARM’s back into the mix for RMBS? What about interest only jumbo ARM’s? If not, I do not consider them conforming loans because they would have to be held on the bank’s balance sheet.
Annony’s logic is sound. The biggest issue I see though is that 80% of people aren’t disciplined enough to manage their mortgage debt in that way though. Generally, younger buyers should be carrying mortgage debt to maximize their savings/investments, especially with rates being so low.
As you get older and more settled with retirement in sight, then I think it makes more sense to start discharging the debt so you aren’t burdened with high fixed costs and lower income coming in.
However, some people just like not having a mortgage even if you can build a strong financial case to carry one.
“How about interest only jumbo ARM’s?”
No, those aren’t.
But you wrote “have to utilize ARM’s or other non-comforming loans” which was overly generic–like saying “have to utilize short-term loans and other usurious products” when you mean, specifically, “pay day loans”.
Interest only stuff is rare these days. First, the conventional i/o loans are basically priced to discourage them and the guidelines have been tightened up so much that you really do need to be pretty well off to even qualify (I believe you need 30% equity now on conventional i/o products).
What is even funnier though is that Illinois has SB1167 which is a stupid predatory lending law that requires borrowers to get financial counseling if they want an ARM less than 5 years, a loan with i/o, or neg am. However, since the market has already curtailed most of these products, the only people who can get them tend to be 1%ers. The last client that got flagged for the credit counseling was a partner at a Top 3 strategy consulting firm.
Of course, all homebuyers essentially pay $150 more in title fees due to the cost of complying with the worthless law on every transaction.
“*Again, that’s not my plan. Just spitting balling here as to how and why some folks with money might embrace debt.*”
Or more accurately embrace equity. Who the hell cares under what asset class the equity sits on a balance sheet. And who the hell prefers illiquid equity over liquid equity. I’ve said this over and over again. It’s not about preferring one class over another because g’ma and g’pa told you to. It’s about simple efficient unemotional allocation of assets.
“It’s not hard work that puts them in the top 1% All of us work very hard. It’s not 18 hours days toiling that makes someone rich. It’s connections, favorable tax policies, and a bit of luck (other than a wealthy family) that puts someone in the top 1%.”
HD.. some people are just simply a lot sharper tools than you.. Always appeared to me most people were just standing still. Of course I went to work after 6 bong hits every morning, so everything seemed to be standing still…
“Interest only stuff is rare these days. First, the conventional i/o loans are basically priced to discourage them and the guidelines have been tightened up so much that you really do need to be pretty well off to even qualify (I believe you need 30% equity now on conventional i/o products).”
I think they were all 7 year jumbo ARM’s with 20 to 30% down payments. The spread between the interest only and amortizing loans was not that much (0.2% or so). Don’t think any were 1%ers.
I got a 7 year interest only arm at 2.5%, with years 8, 9, and 10 also being interest only but with the rate adjusting. I had to put down 30%, jump thru some hoops, make animal baloons, and kiss ass for 60 days to get it. The government is getting rid of them next year though because they think you don’t know what is best for your financial situation.
“Considering that only about 95% of the planet lives outside of the USA, I’m tired of hearing that BS. The bottom 10% here certainly are better off–in a material comfort sense–than something like 1/2 of the world, but beyond that it gets murky.”
http://www.globalissues.org/article/26/poverty-facts-and-stats
* Almost half the world — over three billion people — live on less than $2.50 a day
* At least 80% of humanity lives on less than $10 a day
* 783 million people do not have access to safe, clean drinking water, and 2.5 billion people live without proper sanitation.
* 25% of the worlds population lives without electricity
*in 2008 17% of all people on earth practice “open defication”
Yeah, real murky right there…
“Or more accurately embrace equity. Who the hell cares under what asset class the equity sits on a balance sheet. And who the hell prefers illiquid equity over liquid equity. I’ve said this over and over again. It’s not about preferring one class over another because g’ma and g’pa told you to. It’s about simple efficient unemotional allocation of assets.”
Ze, basically agree with you but do have a couple comments. Little confusion with your commentary above, real estate is an illiquid asset class, but the equity is liquid. We have multiply properties which are paid off but have lines of credit on them that we can tap.
Regarding inequality, I could rant about Chicago’s own subprime queen Penny Pritzker and the advantages that elites such as she have with grandfathered tax haven status and crony favors from those they push up the food chain that have nothing to do with risk; instead I’ll defend the poor who have it so good in this country, by pointing out the substandard slip through the cracks health care system our crony capitalist economy has in comparison with the rest of the developed world, which serves to push more underinsured bankrupted citizens into poverty when they are unlucky enough to be users of the system. The Rube Goldberg approach taken with Obamacare will just delay the single payer option that has proven best elsewhere. For the poorest, access to health care is on an emergency basis, which results in more babies dying on their first day of birth than in any other industrialized country. I suppose that could be considered a feature of the system, decrease the surplus population and all that. It seems some think us looking a little third world is no big thing.
oh, forgot link to that dead baby stat:
http://www.myhealthnewsdaily.com/3804-baby-first-day-deaths-rankings.html
Sonies, interesting statistics, and good to keep in mind always. However, is it safe to conclude that you have nothing to complain about if your employer cuts your compensation in half? After all, you’re still doing well by global standards.
“Ze, basically agree with you but do have a couple comments. Little confusion with your commentary above, real estate is an illiquid asset class, but the equity is liquid. We have multiply properties which are paid off but have lines of credit on them that we can tap.”
LOL… I like that. What you are doing is leveraging the balance sheet. Bit of a semantics and FASB issue we are playing with. Think of it this way. Cash and securities are almost perfectly liquid. The credit you have a line on can be taken away and I have seen it happen many times. You are putting two pieces together, pairing them up, and making it one, when you decompose the position “Technically” the asset and equity in the asset “itself” is illiquid.
Hope that made sense.
I’d much rather have real equity not in real estate that is liquid than “equity” taken out of lines of credit. 2 very different things.
Also, I heard that these jumbo ARM’s can be done with 10% down (not sure of the lender, but just heard this from my mortgage broker this week). Not an interest only Jumbo arm though.
“* 783 million people do not have access to safe, clean drinking water, and 2.5 billion people live without proper sanitation.
* 25% of the worlds population lives without electricity
*in 2008 17% of all people on earth practice “open defication””
Yeah, they’re all clearly in the bottom 50%. Of 3 Billion people.
Of course, here in Chicago, we live without “proper” sanitation, too.
And $10/person/day is close enough (considering it’s a PPP standard) to the ‘Deep Poverty’ definition to be compared–and that 6.6% of America. So, 6.6% of America is in that bottom 80%. While still probably being ‘better off’ in material goods; which is pretty damn murky.
Why you toeing the line for a bunch of save the world hippie socialists, Sonies?
Ze, mortgage, no mortgage, doesn’t really matter.
It all about net worth and return on investment. And if your home as an asset represents less than 10% of your net worth what does it matter.
“And if your home as an asset represents less than 10% of your net worth what does it matter.”
If that holds true (and it very rarely does.. and if it does, congrats are most certainly in order), no real argument from me short of a technical one. Ze couldn’t care less.. Now the person who types behind Ze is an anal retentive bastard and he can’t help himself as seeing it as multiple pieces. Particularly if you exercise the line of credit which would then give you asset+cash-(liability equivalent to cash) maintaining equity position unchanged…
“I’d much rather have real equity not in real estate that is liquid than “equity” taken out of lines of credit. 2 very different things”
Dave M………….. LOL
“*in 2008 17% of all people on earth practice “open defication””
Just what I needed to read while eating dinner…Thank you!
Ze, the lines are used when the right investment comes our way, never never to buy junk.
” ‘I always said that the market would bounce off the bottom after reaching the bottom in 2013-2014’
Uhh, you did? What about everything going back to 1992 prices? ”
If indeed HD predicted “everything going back to 1992 prices”, he was prescient:
http://1.bp.blogspot.com/-t1S1avRkkSI/US0OJD1MtrI/AAAAAAAAZGY/TVAqd-WG-t0/s1600/RealPricesDec2012.jpg
“Ze, the lines are used when the right investment comes our way, never never to buy junk.”
My first boss said to me one day. Every year when you get paid, take X% of it and just go out and piss it the fuck away. Have a blast and then just forget about the fact you were completely irresponsible with your money, but remember all the fun you had doing it, and remember that’s why you want to keep making money……
Glad he told me that…
Now my dog needs to go out looking for her friend the Capybara and have some acai… Peace!
I paid cash for my new car last Oct cuz the finance guy pissed me off by trying to slip in an extra $1500 extended warranty. So what if they were offering 1%, he pissed me off, and I walked in the next morning, whipped out my checkbook and told him “no dice, take off the warranty, and oh yeah, I’m paying cash”. Pissed him off. It was a beautiful thing.
Sold my house in March, had lots ‘o cash, as I hate debt and kept re-fiing down as interest rates dropped, and kept throwing buckets of extra money on the mortgage. While other folks were going to Hollywood with their equity – buying up nice cars, additions, vacations, I just kept tossing more on to my mortgage.
Now I’ll be paying cash for a sweet condo overlooking the lake, plus all my upgrades. Also, banking 80k out of that house sale. I’m paying cash cuz I don’t like all the fees that lenders charge to get a loan. Fees add up, plus, as I said before – I hate debt. So, screw you, to the car finance guy and the banks. No fees, no interest, nada. I’ll keep my cash to myself, thankyouverymuch.
Could I have leveraged that 30k from the car into the stock market? Yep. Could I leverage my condo cash into the stock market? Yep. But in these dicey economic times, I love the idea of a gorgeous car and upgraded condo paid for. Done. People that think the present roaring stock market aka casino is just gonna roll, are clueless. So, as we have seen, the market can tank, your holdings are worth 30% less PLUS you still have a car loan and mortgage. Not the plan for me.
There’s a certain buddhistic calm that comes from money in the bank aka no debt!
I once had an African american tell me “we can’t get the same jobs as you whites” and he had a point. the system is pretty rigged, and there’s an awful lot of luck involved too. I’m not bitter, I do better than most, but I’m not going to make excuses for the system. I too have the Buddhistic sense about my situation in life. but giving all the wealth to the top .01 doesn’t make it right. tax the heck out of the , discourage them from gaining that much in the first place. to deny the inequalities exist or to rationalize their existence because its too hard to remedy doesn’t make it morally ok.
I always said it was going back to the 1999 nominal prices (on average) and I was pretty much right. That’s why I timed my purchase so well.
homedelete “tax the heck out of the , discourage them from gaining that much in the first place” sigh… do people really actually believe this out there? If there is no incentive to get rewarded for your risk and work, than why bother doing it? This logic is what is killing the american entrepreneurial spirit. Did you know that the income tax was not in place until 1913? The US existed perfectly fine without an income tax for 140 years.
btw, HD, the US also is already the most progressively taxed nation in the world
“I could rant about Chicago’s own subprime queen Penny Pritzker and the advantages that elites such as she have with grandfathered tax haven status and crony favors from those they push up the food chain that have nothing to do with risk”
I’d like to point out that Penny Pritzker was a big Obama supporter and is in favor of higher taxes and wealth redistribution (sarcasm in case it’s not obvious).
Where do people get the notion that the economy is a zero sum game? Did Mark Zuckerberg, Bill Gates, and Steve Jobs TAKE wealth away from others or did they CREATE it? Is everyone else poorer because those guys got rich? In fact, everyone else is better off because of those guys – even without them making a dime more. And how is taking money away from these guys going to improve everyone else’s life at the bottom?
Frankly, this whole notion that the universe is supposed to be fair and that some governmental body is going to decide what is fair scares the hell out of me and should scare the hell out of everyone else.
Those tech moguls might have created their own wealth in a more or less legitimate way, but what about the wealth created on Wall Street by financial elites vested with immunity from fraud prosecution in our two tiered justice system? It seems easy for some, who may benefit from the fraud indirectly, to ignore it.
I like the Jeffrey Sachs rant from last week (the whole conference, “Fixing the Banking System for Good” from April 17, 2013 is worth watching):
http://www.youtube.com/watch?v=hCCr-uiqtAY
“what about the wealth created on Wall Street by financial elites vested with immunity from fraud prosecution in our two tiered justice system? ”
I think the rumors of this are enormously exaggerated. I see insider traders prosecuted every day. I see people who fudged financials put away. No one gets away with that kind of stuff on a significant scale. However, if you are looking for someone to put away for the housing bubble that’s a different story. Everyone wants to blame someone because it will make them feel better. However, the truth of the matter is that most of the blame can be put on politicians who decided that everyone should own a home, the easy money policies of the federal reserve, and the millions of people who took on more debt than they should have and want to blame someone else for their poor judgment. I’ve seen the aftermath of people who got in over their heads and frankly a lot of those people should be in jail for destroying bank property.
I’m tired of hearing about how we should throw a pity party for people that are underwater or have had their house forclosed on. They should have put more money down on their house, rented for another year, or not have gotten such a big house. Their are risks and rewards with buying a house and you are the one who signed the mortgage documents. America needs to start holding people responsible for their actions.
“America needs to start holding people responsible for their actions.”
It’s too late for this. Everyone has already done the short sale (or are in the process of doing it.) And since you can buy another property just a mere 3 years after doing it- why wouldn’t you do it? You’d be a fool not to.
“However, the truth of the matter is that most of the blame can be put on politicians who decided that everyone should own a home, the easy money policies of the federal reserve, and the millions of people who took on more debt than they should have and want to blame someone else for their poor judgment.”
Gary- you’re honestly saying the bankers had nothing to do with what went on?
My god.
It’s a complete myth that higher taxes kill the entrepreneurial spirit. If that were true, that California and NY, with some of the highest taxes in the country, should be business wastelands. And they’re not. So don’t use that nonsense cliche argument and expect it to work.
The fact of the matter is that your corporate overlords own damn near everything. I have decided for myself that this is not a good thing for our society. The corporate overlords pay nearly zero tax, and their owners pay somewhere in the range of 18% taxes or less due to all their loopholes and deductions. They own a good chunk of the country and they have inordinate amount of undue influence on the politics of the country.
Then they teach you that taking even a dime of money away from them is “socialism” or “redistribution” or “obama marxism” and “those people earned it” or “you’ll kill innovation”. These are all just excuses you hear parroted so they uber rich can keep all their money at your expense. They’ll send your jobs overseas. The government will be forced to tax you higher because companies like google, GM, GE pay zero federal income taxes. And the executives who run these cmopanies pay lower tax rates that people like you or I because of tax loopholes.
Of course a good chunk of the country thinks this is OK because it’s marxism to make any changes to prevent the uber-rich – who collectively own or control over half the assets in the country – from hoarding all their money and keep it to themselves. They’ve been brainwashed to believe that its OK for the uber-rich to effectively be our overlords.
It’s basically a different twist on the same argument that ‘our king serves by divine right”. HOw can you argue with that? Or how can you argue “the rich earned their money?”
Except if neither are true.
“People that think the present roaring stock market aka casino is just gonna roll, are clueless. So, as we have seen, the market can tank, your holdings are worth 30% less PLUS you still have a car loan and mortgage. Not the plan for me.”
If the stock market is a casino (that no one is playing, by the way, as the percentage of Americans who own stocks is at a 15 year low even as the markets are at all time highs), then what is housing? It’s an even bigger gamble.
” I see insider traders prosecuted every day. I see people who fudged financials put away. ”
Martha Stewart?
What about the that criminal CEO of countrywide ?
“It’s not hard work that puts them in the top 1% All of us work very hard. It’s not 18 hours days toiling that makes someone rich. It’s connections, favorable tax policies, and a bit of luck (other than a wealthy family) that puts someone in the top 1%.”
HD, I knew you were cynical but I didn’t know you were THAT cynical.
There’s no doubt that the top 1% has a lot of inherited wealth in it. But why shoot for the top 1%. I’m perfectly happy being in the top 3% to 5%. That ais a fantastic life where you can travel the world, afford the car you want, the house you want, the neighborhood you want, the best schools you want. That is doable for every single American. It’s not that hard really. And no- you don’t have to have “luck.” Why not invest $500 a month for 25 years in the stock market? You’d be in the top percentage brackets if you did that.
Money is power. It IS possible to accumulate it even if you have a “normal” job. Instead of living in the GZ, you live outside of it. Instead of living in Glencoe, you live in Flossmoor. I could go on and on.
“Where do people get the notion that the economy is a zero sum game? Did Mark Zuckerberg, Bill Gates, and Steve Jobs TAKE wealth away from others or did they CREATE it? Is everyone else poorer because those guys got rich? In fact, everyone else is better off because of those guys – even without them making a dime more. And how is taking money away from these guys going to improve everyone else’s life at the bottom?”
I’m amazed that seemingly smart people buy this BS. I guess too much Fox News does this to a nation. Sure reall industries with tangible products create wealth, but most 1%ers are not in business of creating products. They launder money and cook books. Manufacturing is going down here. The income gap is widening. I have to agree that we are going back to serfdom.
“You know that real estate has only one way to go- and it’s down. Right?”
“Ha, classic. Glad I didn’t listen to you a year ago.”
I feel sorry for anyone who is buying investment properties right now. I still believe that if you’re buying a single family home or other property in which you’re going to live there 10 years or more and raise your family- that you should just do it and move on with your life. I’ve said that for several years now.
But the investors are just part of the speculation. And we’re about to enter a very dangerous phase of this “recovery” now. The Fed is reinflating. It won’t be able to control the outcome as we are now already witnessing lotteries again in California, house flipping in Florida, private equity firms buying up hundreds (thousands?) of homes in the south suburbs of Chicago, and scary things like 30 people bidding on a million dollar house with outdated bathrooms.
Even better- someone wrote me about an all cash offer on a cinderblock duplex down listed in the $600,000s in the GZ. They are WAIVING the inspection. On a duplex down.
WTF!
It’s going to end very, very badly. I feel sorry for you Chuk.
“Sure reall industries with tangible products create wealth, but most 1%ers are not in business of creating products.”
A huge percentage of the 1% is still in finance, despite 2008. Finance doesn’t create real wealth.
And you’re wrong about manufacturing miumiu. Of course American companies make things- they just have it manufactured where it’s cheaper (see the Apple model of profitability.) Innovation is still happening in the United States. You could argue we’re still the leader. And no one can invent consumer products the way Americans can. We love to buy so we love to invent.
By the way, there are no better success stories in America than what has been done with companies like Forever21 and Panda Express over the last 40 years. That’s the American Dream in action.
” I see insider traders prosecuted every day. I see people who fudged financials put away. ”
“Martha Stewart?”
“What about the that criminal CEO of countrywide ?”
Is Martha Stewart the problem we’re really talking about though? No.
Why didn’t anyone at JPMorgan or Deutsche Bank go to jail? These are the guys who nearly bankrupted the country.
The big banks need to be broken up. Before the recession, there was a law that no bank could have more than 20% of the mortgage market. That is now allowed. It is insanely dangerous. Why aren’t we going back to the previous standards now that the “emergency” is over?
Dont Forget:
1) Obama ordered the banks to lend to people with credit scores <600
( yes I know its the s o s but thats up to you at the voting place)
2) all those laws that forced banks to either go through the courts or stop forclosing for the 2012 elections
are now back to being able to claim homes that were not paid for etc
they will need to dump many of those properties
in a normal market some win, some lose
in these regulated ( know the difference between laws and regs , pleasssseeeee) times
the game is to buy votes and then scapegoat the banks
rinse and repeat
“you’re honestly saying the bankers had nothing to do with what went on?”
They were more incompetent than malicious. I just have a problem with the notion that somehow executives made a killing losing money and destroying their own companies.
“The fact of the matter is that your corporate overlords own damn near everything. I have decided for myself that this is not a good thing for our society. The corporate overlords pay nearly zero tax, and their owners pay somewhere in the range of 18% taxes or less due to all their loopholes and deductions….The government will be forced to tax you higher because companies like google, GM, GE pay zero federal income taxes. And the executives who run these cmopanies pay lower tax rates that people like you or I because of tax loopholes. ”
OK. There’s a ton of misinformation in here, most of it propagated by the mainstream media and this mantra is really wearing on me. It is simply not true that the wealthy in this country pay a lower percentage of their income in taxes than the rest of us. There is a ton of data that proves that we have a seriously “progressive” tax system.
As for the corporations…all 3 of those companies DO pay income tax, though Google pays a really low rate. And to the extent that corporations don’t pay it the government gets it in the second round when capital gains and dividends are taxed – double taxation.
“most 1%ers are not in business of creating products. They launder money and cook books.”
Talk about BS. Show me the data. I know a ton of 1%ers and that’s not how they made their money. I don’t know anyone who made their money this way.
“Manufacturing is going down here. The income gap is widening.”
And why is this happening and what is the solution? It’s happening because we need fewer manufactured products as a % of our total consumption and because we have a huge skills gap in this country. And how do you solve this?
I started looking at buying a place recently since it seemed like prices (and interest rates) had been low enough to make it attractive to buy a higher-end place. But the price part of that analysis has gone out the window. In some parts of the market, the entire price correction of 2007-12 has disappeared in less than a year, with prices zooming up 20-30% in about six months in many cases.
One view, I suppose, is that the price correction was not really a correction, but that bubble prices really did reflect value, and the last six years represented an artificial depression of prices. If so, then the spike in prices could stick.
But if you think the drop in prices after 2007 was truly a correction — i.e., a return to prices that better reflect some underlying fundamental value — then it’s hard to explain the recent spike in prices by reference to any change in the fundamental value of real estate. (It’s not like they recently discovered a vast oil deposit underneath near northside Chicago condos recently.) That 2/2 condo in Wrigleyville that was 1200 square feet in 2007 is still 1200 square feet, the commute to the Loop is pretty much the same, and Cubs fans still pee on the sidewalk now and then. It’s not like any of that changed suddenly within the last year.
Is it possible that much greater price volatility is simply the new norm for the real estate market? If so, unless you urgently need to buy something right now, wouldn’t it be better to just sit and wait for the next steep drop in prices? Who buys stocks right after the market surges 20%?
Sabrina, can we get back to discussing the real estate market and not your far left wing progressive polical spew? Ill find another website to visit if you’re going to try and lecture / indoctrinate me like a child. Your the moderator, not a guest poster.
And if we are going to bitch, why don’t we get the federal government totally out of housing and let each state set its own rules and regulations. This way we can let the 50 states experiment and find out what rules work and what rules hinder the market.
California is in one of the worst shape out all the states. People are flocking out of the state and moving towards tax haven states like Texas. Look it up because it is true. HD, you should look at a demographic breakdown of who is in the 1% since you hate them so much. Financial people make up a small percentage of the group, while doctors, lawyers, small business owners, make up the vast majority. Yes, taxes DO have a big impact on innovation. Until China started embracing a free society and capitalism, what great things did they produce? All their ‘innovation’ came from espionage of the western countries. When china started implementing a policy that allowed the farmers to keep and sell some of their crops what happened? They went through an economic boom.
It’s sad, you hate these 1%’s but these are the people that kicked your ass in school. Studied harder than you, worked more than you and simply are much more smart than you. They got 1600’s and went to MIT, Cal Tech, Harvard and the like. They sacrificed a large percentage of their lives studying or going into debt (med school, law school, business start ups etc) and are now seeing the fruits of their laboring after years and years of sacrifice. If you told them that they should make half of what they are making now do you think they would have taken the hard road to get where they are? Is it worth it for a doctor to postpone their lives, essentially give up their prime years (20’s) to go into serious debt and work 48 hour shifts non stop only to find out that their job won’t even cover their education debt? All people are driven by incentives.
Yes there are a few outliers to each case, but they are far from the norm, and from what you are saying you believe the groups that are 3,4,5 standard devs from the mean should punish them.
Stop blaming
http://blogs-images.forbes.com/timworstall/files/2011/12/Table2.jpg
“Yes there are a few outliers to each case, but they are far from the norm, and from what you are saying you believe the groups that are 3,4,5 standard devs from the mean should punish them.”
That sentence describes HD’s Buddhistic Philosophy to a T
“Manufacturing is going down here. The income gap is widening.”
And why is this happening and what is the solution? It’s happening because we need fewer manufactured products as a % of our total consumption and because we have a huge skills gap in this country. And how do you solve this?
Nailed it, The income gap is widening because technology is allowing a few smart people to be able to do the work of a large group for far cheaper. With the technology boom, the world is going through ebb and flows right now as economies adapt to this. Similar to the industrial revolution, those resistant to this change sound like a bunch of Luddites.
““A huge percentage of the 1% is still in finance”
“most 1%ers …. They launder money and cook books. ”
“Why didn’t anyone at JPMorgan or Deutsche Bank go to jail? These are the guys who nearly bankrupted the country. ”
“The corporate overlords pay nearly zero tax, and their owners pay somewhere in the range of 18% taxes or less due to all their loopholes and deductions”
Ze thinks you made the career path clear… Go into Finance, cook my books and decide for myself how much I earn, destroy the company, pay little or no taxes on my ill-gotten gains, all with no worry of ever having to go to jail!…
Now do I really have to get a 1600 on my SAT’s, go to Havhad or MIT, and give up most of my life to do this (although happy to waste my life, no way am I givin it up) ??? If not….. sign me up!!
“I’m a “have not” and I don’t see us “have nots” revolting any time soon.”
Jenny, you could be a “have more”, but you’re not willing to either A) make more money or B) compromise on location. I really don’t mean any offense. I’m just basing this on statements you’ve made. Either you’ve got to work harder or get a different job or get a second job to have the place you want in a convenient GZ location.
Or, you could move further out and have a larger house with a yard at a price you are comfortable with. I’m not saying to move into a bad neighborhood. Just keep your mind open and perhaps be a little more flexible on your commute. Chicago is a BIG city with many options. Or stay where you are and appreciate that even though your apartment is not that big, that you enjoy other benefits like being close to downtown, taking trips and buying gadgets.
I think you are a little spoiled and you are heavily influenced by your friends who make way more money and who sound superficial and entitled. Just block it all out, look deep in your heart and focus on what’s important to you instead of trying to keep up with them or comparing yourself to them and coming up short.
nice rant, inquisitive. I think that entire speach was a talking point on foxnews last night. I feel bad you believe that nonsense. meanwhile, the 1% keep the vast majority of the country’s wealth. you parrot the lines they want you to say. it makes it so much easier for them to keep all their money when people like you believe it’s ok.
I occasionally check the market for 60616 and 60605, and particularly the area around Dearborn Village at 18th and State (State to Clark, 18th to 19th). The whole inventory at Dearborn Village has dried up, and from basic Redfin stats for 60616 and 60605, it looks like inventory is way down from a year ago, sales are basically flat or better, prices (media psf) are up just a bit, and inventory overall looks to be 5-6 months. Much much improved from a year ago.
One thing that I did notice interesting (to me) in the past few weeks is that homepath has several price reductions in 60605. I’m thinking thats countertrend in a good market, but it may be significant as an early warning sign.
Inq: bush and Kerry (1%ers) kicked my ass in school? Have you seen their grades? Gate and zuc dropped out!
“Kerry (1%ers)’
Kerry was NEVER a 1%’er until he married Teresa Heinz. He was a 95%’er (or whatever his Senate salary would have afforded him.)
W also went to the ivy league in a different era- when the gentleman’s “c” was much more common and business school was NOT the thing you did (in the 1970s.) They couldn’t give away MBAs back then.
But there are certainly still legacies being admitted to the prestige schools. JFK Jr. to Brown and the entire Trump family to Penn are just two examples. Chelsea Clinton had her pick of schools but apparently she also had the grades.
“The whole inventory at Dearborn Village has dried up, and from basic Redfin stats for 60616 and 60605, it looks like inventory is way down from a year ago, sales are basically flat or better, prices (media psf) are up just a bit, and inventory overall looks to be 5-6 months. Much much improved from a year ago.”
Gary has some good data about inventory in his blog posts. It is at a record low city wide. That varies by zip code, of course. But condo inventory was at 3.1 months in April- I think his graph said. SFHs weren’t much better.
Lawyers make no money Inquisitive. Just ask HD. That’s why applications to law schools are FINALLY declining and law schools are cutting back on their entering classes. There simply aren’t enough jobs. The average salary is something like $50,000 and the debt load is too high. The only 1% lawyers are those who started working at the big city firms like 20 years ago and made money when the money was good. These days, the Gen X lawyers, are all being de-equitized. Sure- the non-equity partners can make $250k a year. But is that 1%? Seems like that’s more like 3% or so.
And the situation for doctors isn’t that much better. Why go to all those years of schooling and debt to make $100,000? Yes- many docs make only $100,000. I know project managers at big companies who make more (with no advanced degrees and they were making it by their early 30s.)
“Sabrina, can we get back to discussing the real estate market and not your far left wing progressive polical spew? Ill find another website to visit if you’re going to try and lecture / indoctrinate me like a child. Your the moderator, not a guest poster.”
I can post all I want Mike HG. That’s the beauty of it when you run the blog. And you think I’m left wing? On what planet?
I would be so happy to have the government out of housing. But me thinks you wouldn’t have gotten your loan for your bitchin fulton condo that you share with your roommate without it. You see- they’re guaranteeing 80% of the loans right now. Without the government we don’t even HAVE a housing market. And without interest rates at these artificially low levels- we don’t have ANY sales. And the Obama Administration wants to open up the spigot some more! They want to make it even EASIER for those with challenging credit to get loans. Because that’s what we need right now. More people who shouldn’t be buying- buying.
The states are in NO capacity to back anything with mortgages. You’re nuts!
And, by the way, each state DOES have its own housing regulations you nitwit. It’s only the loans that are federally guaranteed. Foreclosure processes, real estate licenses etc. etc. are all state by state.
“It’s happening because we need fewer manufactured products as a % of our total consumption and because we have a huge skills gap in this country.”
No, this actually isn’t true. The consumer is 70% of the economy right now. It’s ALL about the consumer. But you wouldn’t have that $2.00 pack of 10 Bic pens without it being made in Vietnam. Our economy has been changing- for years- from one of manufacturing to one of services. As someone else said- it’s akin to when we went from agriculture to industrial. In 1950, something like 40% of Americans still worked in agriculture. Today it is 2%. I don’t hear anyone crying about it because the economy adjusted.
“It is simply not true that the wealthy in this country pay a lower percentage of their income in taxes than the rest of us.”
The truly wealthy don’t pay “income” taxes. They don’t have “income.” They have assets. That’s what gets people confused. That’s why Mitt Romney’s tax rate for some of the years he never revealed was probably under 10%. He has good tax attorneys who use the proper shelters and he has little actual “income.”
The income tax laws really nail the upper middle class. Those are the ones who rely on “income” to manage their lifestyles.
“I just have a problem with the notion that somehow executives made a killing losing money and destroying their own companies.”
The one guy who nearly brought down the whole system still lives in a $10 million (or is it higher?) London rowhouse. Sure, he lost his job. But what did he care. Never went to jail. Never has to work again. What did he care if his bank went under? They paid him like $50 million in bonuses before the whole thing blew up.
I have never until now seen Sabrina post so many back-to-back posts. I think the low inventory levels and lack of interest in RE lately have gotten her a bit stir crazy as of late.
Don’t worry Sabrina when the $85B/month stimulus is cut we might see some financial train-wrecks in real estate yet!
“The income tax laws really nail the upper middle class. Those are the ones who rely on “income” to manage their lifestyles.”
Waaahhhhhh! The upper middle class can afford to use various legal structures to reduce their federal income tax burden if they so choose.
But yeah the system is completely stacked against them & others I will agree & admit. Look at how much in our society is means tested to get a glimpse of communism at work in America. Means testing is everywhere and it’s wealth redistribution.
“each state DOES have its own housing regulations”
No meaningful effect on lending. Check what happened in ’04 (’05?) when Georgia tried to impose stricter lending standards–the national banks whined to the OCC, and the state regs got overruled.
“The truly wealthy don’t pay “income” taxes. They don’t have “income.” They have assets.”
Threshold for being in top 7% by net assets: almost $900,000. And that’s nowhere close to the 1% threshold–average for top 7% is over $3m. Cite:
http://www.pewsocialtrends.org/2013/04/23/a-rise-in-wealth-for-the-wealthydeclines-for-the-lower-93/
How many years of making a 93d percentile income (prob around $175k, current $)–w/o going above 95th–does it take to accumulate a $900k (current $) net worth? Assume starting with some educational debt, no unusual stock market/real estate luck, no extreme frugality nor sprendthriftness. Probably 20+ pretty discliplined years (or 15 very disciplined), no? And don’t fight the hypo. (How many years of the ‘1%’ income of ~$350k to get to that $3m, which is not more than top 3%? Again, 20+, right? And that’s assuming staying at the 1% level for 2 decades, which is a feat itself)
It ain’t about income, it’s about assets.
“How many years of making a 93d percentile income (prob around $175k, current $)–w/o going above 95th–does it take to accumulate a $900k (current $) net worth? Assume starting with some educational debt, no unusual stock market/real estate luck, no extreme frugality nor sprendthriftness.”
That’s a great example. The people I know in this situation are saving $50K per year and most of it through tax favored vehicles like IRAs and 401Ks. If you do that you can hit 900K in much less than 18 years. But how many people are smart enough to do that? That’s the problem. Now add in to that picture that these same people will probably inherit 1 – 2 MM from parents that shared the same value system and they’re doing OK.
“It’s happening because we need fewer manufactured products as a % of our total consumption and because we have a huge skills gap in this country.”
“No, this actually isn’t true. The consumer is 70% of the economy right now. It’s ALL about the consumer. But you wouldn’t have that $2.00 pack of 10 Bic pens without it being made in Vietnam. Our economy has been changing- for years- from one of manufacturing to one of services. As someone else said- it’s akin to when we went from agriculture to industrial. In 1950, something like 40% of Americans still worked in agriculture. Today it is 2%. I don’t hear anyone crying about it because the economy adjusted.”
We actually agree 90%. The agriculture to industrial analogy is exactly the one I use. Granted that a lot of the manufacturing is done overseas but I don’t lament that in the least – work should be done where it can be done most efficiently. But even without outsourcing manufacturing productivity has risen dramatically just as productivity benefited agriculture so those jobs are going down. This has allowed us to reallocate our spending to more services. Today we consume way more medical services and more information services than we did 50 years ago so manufactured goods are definitely down as a percent of our consumption. And in some cases information services have replaced manufactured goods. We no longer manufacture LPs and the production of CDs is way down and will eventually disappear. People used to have tape recorders and turntables and giant speakers but those are gone. Video conferencing is eating into travel. Fax machines are becoming obsolete and demand for the US Postal Service is down. Better logistics planning should reduce transportation costs and the manufacturing that goes with it. We are consuming less energy as a percent of our GDP so that represents less manufacturing of energy infrastructure goods. Cars last much, much longer than they used to for a variety of reasons. The decline of manufacturing is inevitable and a good thing. I am baffled that people don’t understand that.
It’s not doctors and lawyers at the top of the food chain, not even close. It’s inherited wealth and its the money guys, specifically hedge fund managers. And the issue is tax loopholes. Anyone that dismisses the carried interest tax loophole is clueless. The uber wealthy do NOT pay their fair share. First of all, there are trillions parked in off shore accounts. That’s TRILLIONs, where no tax is collected. There is a damn good reason Romney didn’t release his returns and that’s it. Secondly, hedge fund managers are the very top of the food chain, they own eye-popping wealth. I have a friend, who has a four year degree from U of I. He inherited, see, there’s that word again, a nice chunk of change from his dad. He now owns and runs a hedge fund in NY. He lives in a 9 million dollar home. No one on this board will EVER live in a 9 million dollar home. His tax rate is a flat 15%. That’s it. Then his deductions come off of that. He pays well under 10% in taxes. That is a fucking tax loophole and a huge one. Now, look at your tax rate. Seriously, figure it out. Now, compare, over a lifetime, how much more money you would have if you were taxed the same. But you’re not, now are you? Now think about all the very concentrated wealth which has a shit load of wealth off-shore or think of the minuscule tax rates the hedge fund managers pay. Any person that buys into the “oh just work a little harder” theory is a fool. The game favors the uber wealthy. So, no it’s not “doctors and lawyers” that are the uber wealthy. Lets try to keep our eye on the ball here. Lets try to focus on where and why the wealthy receive such favorable tax treatment, if they pay taxes at all. It’s simple fucking math.
” He pays well under 10% in taxes. That is a fucking tax loophole and a huge one. Now, look at your tax rate. Seriously, figure it out.”
So change your damn profession and stop complaining…
“It ain’t about income, it’s about assets”
True. True!
It’s about exponential growth on assets (ROE – non-taxable)… Like Bri says.. you can get rich by simply saving and not dying. Although like my Dad said.. you want it while you’re young and can enjoy it…
What an insane comment. It’s called “how bout we dump the tax loophole”? Ah, always the folks who will continue to defend the uber wealthy and volunteer to pay more taxes to assure the uber wealthy continue to amass even more wealth. I’m bitching because its unfair and I’m not interested in paying more taxes because a hedge fund manager is taxed at a flat 15%. “Stop complaining”. Spoken like a good little sheep, gringo.
“The game favors the uber wealthy.”
Always has, always will…. since time immemorial
” Spoken like a good little sheep, gringo.”
Baaaaahhhh!! Baaaaaahhhh!!! I agree it’s unfair. Also unfair I cant dunk a basketball… Now time for me to go graze on some grass…
For crying out loud. Stop with the anecdotal crap. Here is the data: http://www.nytimes.com/interactive/2012/01/18/us/effective-income-tax-rates.html People with higher income pay higher taxes. If you want to be outraged get outraged over the fact that 47% of the households in this country pay NO income tax but get to vote on how the income taxes are spent. I’m not suggesting that they shouldn’t be able to vote but come on…NO income tax? Now that’s an abomination.
And by the way…a lot of people at the bottom and at the top are the same…just in different years. If you want an anecdote I can give you one. I know someone really well who is well off by anyone’s standards but actually got money FROM the government one year – not just a refund…I’m talking negative taxes. He was one of the 47% that year.
The tax code is a disaster as anyone who has ever done their income taxes should know. Try accounting for wash sales with shorts and longs and options on the same stock. Try accounting for the capital gains on publicly traded partnerships. Then there is the AMT and the kiddie tax and the rules around taxes on trusts and the foreign tax credit and what happens to a living trust when the beneficiary dies.
“First of all, there are trillions parked in off shore accounts. That’s TRILLIONs, where no tax is collected.”
Anyone who is a US citizen who is hiding money offshore is taking a huge risk these days with the mandatory reporting of overseas accounts via FBAR form. The penalty for failing to report is surrender of 50% of discovered assets if caught. And Swiss banks are now co-operating to catch tax cheats.
“It’s not doctors and lawyers at the top of the food chain, not even close.”
Doctors are close. Its one of the few careers where you can guarantee to get to that 350k/year level mentioned by anon(tfo) above. They’re not hedge fund manager or pro athlete rich but they can certainly get there. And those that start their own practice can make a killing. Even retired army docs have hidden swiss accounts.
http://www.bloomberg.com/news/2013-03-12/u-s-tax-cheats-picked-off-after-adviser-mails-it-in.html
“Doctors are close. Its one of the few careers where you can guarantee to get to that 350k/year level”
Only problems for docs are late start, bc of school, and (for most) debt bc of school. If you’re 32 and $400k in the edu loan hole, that delays things quite a bit.
“The people I know in this situation are saving $50K per year and most of it through tax favored vehicles like IRAs and 401Ks”
1. You know a meaningful number of people saving 30%+ of gross? Aka, 50%+ of post-tax?
2. If ‘most’ of that is 401k/IRA, then $900k face /= Net asset of $900k.
“add in to that picture that these same people will probably inherit 1 – 2 MM from parents that shared the same value system and they’re doing OK.”
Back to it not being about income.
” If you’re 32 and $400k in the edu loan hole, that delays things quite a bit.”
400k in debt? Maybe if you’re living it up in River North doing rails with your non-existent free time.
“$161,290 – Average educational debt of indebted graduates of the class of 2011.”
http://www.ama-assn.org/ama/pub/about-ama/our-people/member-groups-sections/medical-student-section/advocacy-policy/medical-student-debt/background.page?
Doctors are one of the few remaining professions that are grossly overpaid for what they do.
“2. If ‘most’ of that is 401k/IRA, then $900k face /= Net asset of $900k.”
Its funny you mention that. My pa is near that level and doesn’t comprehend that if your huge 401k balance needs to be run through the tax grinder to figure out how far from the cool MM you really are. And this is someone who used to crunch #s for a living. I keep telling him to start taking distributions now but to no avail, he doesn’t want to pay the tax on it (which will be due eventually).
He did not get to that level from a mere 10-20 years of saving try decades of maxing it out
Bob: “Doctors are one of the few remaining professions that are grossly overpaid for what they do.”
Would you rather the money go to the hospital administrators who make hundreds of thousands, to millions, of dollars a year? The non-profit hospitals have administrators that make millions a year.
Gary: two wrongs don’t make a right. Under taxing the 47% or the top 5% doesn’t make it right what’s happening.
I’m not a socialist, it’s just that the system is broken and has concentrated the wealth in the hands of the few. I’d like everyone to have a chance to succeed but the current system makes it extremely difficult. Class mobility is at an all time low, and it’s more likely that someone from the middle class will be downwardly mobile rather than upwardly mobile, and as the middle class is squeezed.
“The penalty for failing to report is surrender of 50% of discovered assets if caught.” Thats willfull failure and it’s 100k or up to 50%. Just failure is 10k. THen there is also the 8938 to file. I sometimes want to just send in my passport and say goodbye, but my passport allows me to bring in through customs tons and tons of crap on shopping trips.
” I keep telling him to start taking distributions now but to no avail, he doesn’t want to pay the tax on it (which will be due eventually).”
I got matched 100% going in, no tax. So when stopped working drained it out as fast as possible for 10% penalty and much much lower tax rate.. still laughing.
” sometimes want to just send in my passport and say goodbye,”
You’d better have some lead time for that scenario, as the look-back period for surrendering citizenship to avoid taxes is 10 years iirc.
“as the look-back period for surrendering citizenship to avoid taxes is 10 years iirc.”
Never said to “avoid” taxes… It’s to “avoid” having to deal with paperwork going forward for a place I never intend on living in again. Otherwise it’s my entire life of annual filings which seem unnecessary.
HD, sigh… You still don’t get it and all you do is complain. If the tax code was truly unfair than the statistics would SHOW IT. The top 1% pay FAR more their share in income taxes than their net take of income. They pay more in taxes at a higher rate on avg than their net take of income. If things showed other wise than the income tax rolls would show it. If anything, the IRS reported statistics show that it clearly isn’t fair for the 1%. I’m not sure what you define as fair but if a small percentage of people take x amount and they pay 1.5x amount into the system while a large percentage of people pay 0, is that fair?
You cite all these random famous politician sons/daughters as students that didn’t deserve to be in certain schools. Again, as I clearly said before, you think that the examples that are 3,4,5 STANDARD DEVS from the mean are the norm. While unfair, they aren’t the norm. please understand that. If you still don’t get it, how many wealthy powerful political families are out there? Under 250? Well there you go, 250 families have things good while the other 311 million + people in the US do things as most others do. Hopefully that puts things in perspective for you.
You also cite gates and zuck as reject bum drop out students. They got into Harvard on merit for a reason…
In what world did it become such a terrible thing to get rich and amass wealth? If you don’t like this idea, why don’t you move to a better society that has these values? You also should note that Russia recently dropped their tax rates to a flat 15% and there income tax gains were far far higher after the decrease. France on the other hand saw a sharp decrease after Hollande’s income tax increase.
Singapore has a flat 15% and is the strongest economy in the world. In fact it is so easy to file taxes there, that you have a post card where you simply fill out your total income. Deduct the income by 15% and send in the 15% income check. It takes about 10 seconds to file income taxes.It’s also quite fair, since regardless of income, EVERYONE is paying 15%. The most fair system simply would have EVERYONE pay a flat rate. Everyone puts in an equitable %. You can’t argue that it is truly ‘fair’ otherwise. So in this current system where the USA is the undisputed most progressively taxed nation in the world where the the 47% pay 0 or <0 it is still unfair. Actually you are right, it isn't fair. It isn't fair for the top 10% that are burdened with all the taxes.
USA was founded on the ideal of taxation without representation. Now we have a crisis where there is no taxation but plenty of representation. HD stop bitching and complaining. You cite random examples that are 5,6 standard devs from the norm and base all your logic on that. Give me hard evidence otherwise and stop being influenced by these sob stories where 1,2,3,4,5 people out of 311 million cheat the system.
” If you do that you can hit 900K in…”
If you have $1,000,000 saved, and it earns (conservatively) 2.5% interest, that savings will pay you $25,000 per year, or just over $2,000 per month and it’s taxable. I know some public school teachers who are in their 50’s, with 30 years in, who get pension that pay better than that per month! So, only the lucky private people can amass $1 million in savings, or you can get a Gvt. pension.
Saving $50K per year in a 401K is great thing to do, and it can compound etc. but that’s not how the 1% does it. Some of these people are high IQ and innovators, work hard, etc. but a huge proportion of them are indeed total shysters and shylocks with a different set of morals, a differently wired sense conduct, etc. A great case study is to look at the 10 year chart for Chicago-based Strategic Hotels ((BEE) -NYSE. Stock was in the low $20’s during the bubble in 2007, crashed to $2, losing millions in shareholders’ value, and then the “CEO” Larry Geller, a shyster, exploits his failure as a leader, and concocts this “stock performance” pay scheme whereby he gets millions if he lifts the stock from the crapper level of $2. So, he rides this stimulus wave, whereby the Fed going bonkers trying to make sure their tribe and friends don’t get bankrupted. No chance the Fed is going to let their crony shyster cousins go down, their system crash. So Geller gets the stock “back” to $8, which is less than 50% of what it once was, and now he’s a hero? He also recently stepped down on a sexual harrassment suit from a female employee. Scumbag. only the 1% shysters know how to get rich based on failure and low morality. Like George Carlin said “it’s a club, and you ain’t in it”.
For most CEOs at local real estate investment trusts, 2012 was a good year in terms of compensation.
The heads of four Chicago-area REITs took home larger paychecks last year vs. 2011, according to an analysis of the companies’ proxy statements. Leading the way was Laurence Geller, the former president and CEO of Strategic Hotels & Resorts Inc., who earned $20.6 million last year, more than five times his pay in 2011.
Mr. Geller’s pay swelled because of a $16.5 million incentive payout he earned through a program Strategic set up in 2009 to award executives based on stock performance. Mr. Geller, who resigned from Strategic in November, declined to comment through a spokesman. A Strategic representative also declined to comment.
Read more: http://www.chicagorealestatedaily.com/article/20130506/CRED02/130509850/strategics-geller-tops-list-of-highest-paid-local-reit-ceos#ixzz2T7GV8m43
If you want to be in the 1%- start a business. As simple as that. That has been the tried and true method for all of time.
“You cite all these random famous politician sons/daughters as students that didn’t deserve to be in certain schools. Again, as I clearly said before, you think that the examples that are 3,4,5 STANDARD DEVS from the mean are the norm. While unfair, they aren’t the norm. please understand that. If you still don’t get it, how many wealthy powerful political families are out there? Under 250? Well there you go, 250 families have things good while the other 311 million + people in the US do things as most others do. Hopefully that puts things in perspective for you.”
A lot of the “top” schools have admitted they have a quota system for families that are prominent and for those who have money. Duke was featured a few years ago for this very practice where it admitted that it went on. If you donate a certain amount, your kid will get in. Why is this surprising to anyone? The universities have plenty of quota systems. There is a huge number of seats reserved simply for legacies, for instance. They have a set number they’d like to admit from North Dakota (if they can find them) or who were home schooled. Ditto for athletes. They need lacrosse players, after all. There are simply too many factors that get people in.
Certain schools are also better known for having relaxed standards- Brown, for instance. It’s not surprising JFK Jr. went there. A host of the old money families all send their kids there too. At least one admitted on that great documentary from a few years ago called the One Percent that they did nothing in school but Brown let them stay there because their family gave money. But all the top schools aren’t a joke. You don’t see too many kids with famous parents going to University of Chicago, for instance, unless they earn their way in. Same with Stanford.
”sometimes want to just send in my passport and say goodbye,”
Hasn’t this been a record in recent years? Or is that just this year? It was recently in the news because the government releases the names of those who give up their US citizenship.
”If you’re 32 and $400k in the edu loan hole, that delays things quite a bit.”
“400k in debt? Maybe if you’re living it up in River North doing rails with your non-existent free time.”
Bernanke has testified that his son will be about $400k in debt by the time he graduates from medical school Bob. That includes undergrad loans.
His son will take decades to get out from under that debt. It will impact his entire life (and that of his family.)
http://www.bloomberg.com/news/2013-04-11/medical-school-at-278-000-means-even-bernanke-son-carries-debt.html
The scary ones are those who go to St. Kitts to go to vet school. They leave with $100k to $150k in debt (not including undergrad loans.) Average salary is like $50,000 – if they can even get a job (apparently we have too many vets in the country.) They are doomed, basically.
“Doctors are close. Its one of the few careers where you can guarantee to get to that 350k/year level””
Who? Please list the specialities where you are “guaranteed” $350,000 a year.
The internal medicine doc isn’t, that’s for sure. The family practitioner isn’t. How many cardiologists and dermatologists do we need? Are OBGYNs making $350,000 a year? All my doctor friends aren’t poor, but they’re not 1% either.
“That’s a great example. The people I know in this situation are saving $50K per year and most of it through tax favored vehicles like IRAs and 401Ks.”
Do they own their own business? Maximum into a 401k is, what, $17,500 this year? IRA is $5500, right? If both husband and wife did it you’re close to $50,000 but you don’t get the tax shelter for the IRA if you’re doing the 401k.
And I would be SHOCKED that someone making $175,000 is putting that much away. Maybe if they live in Birmingham or Nashville and have lower housing costs.
How many people on here know anyone who is actually maxing out a 401k for both them and a spouse? It’s highly unusual, actually, even in the higher paying professions like doctors/lawyers.
“I have never until now seen Sabrina post so many back-to-back posts. I think the low inventory levels and lack of interest in RE lately have gotten her a bit stir crazy as of late.’
Nope. Just seeing total insanity in the housing market right now. People waiving inspections all over the place, even in the suburbs on houses with basements. It’s not rational. And it’s only going to end one way- badly.
I’ve thought about shutting down this site soon- but now I’m thinking I should keep it going because the next big crash is going to come sooner than we know. But it may take awhile (another year?) before the speculation really gets out of control. Not sure I want to run this site for another year. I have better things to do. But I may turn it over to a forum site, like some of you have suggested.
Yes, inquisitive, the concentration in wealth in Russia is terrible. It’s not all that different here.
We have a dispute as to what the 1%’s ‘fair share is’
Meanwhile, again, your arguments are nothing more than a twist upon ‘ the king serves by divine right’ aka ‘they earned it’ so it’s OK.
And the rich continue to amass trillions, while 1/4 kids under 18 is on food stamps…
keep parroting the same lines over and over again, the 1% loves it!
You keep parroting the same lines, Inquisitive. The louder you yell them, with fox news blasting in the background, doesn’t mean it’s true.
here’s an article by Forbes, talking about the income disparities between the uberwealthy and everyone else.
http://www.forbes.com/sites/moneywisewomen/2012/03/21/average-america-vs-the-one-percent/
What about the fact that the walton (wal-mart family) own and controls more money than the bottom 30% of all Americans.
And that’s OK, right? Because ‘they earned it’. Oh wait, they didn’t. Their father earned it and the son sent plenty of good paying american manufacturing jobs to China, and pays a ridiculous wage to it’s employees, and puts local small businesses out of business when it enters a market, and demand favorable tax treatments for local stores when it enters towns, etc.
Inquisitive, there’s nothing wrong or ‘un-conservative’ about the questioning the ridiculous concentration of wealth in America today. The fact of the matter is that the playing field isn’t level, it’s not even close to level, and the small corporate overlords take the lion’s share of all new wealth to the exclusion of everyone else.
This is wrong, totally and completely immoral and goes against conservative and republican values, but the country has been so blindsided by these interests that we have naive fools parroting the very same beliefs that maintain the status quo for the 1%.
Just wait until they sell you out too.
“The Fallacy of Hard Work
It’s a common belief in America that all people have the same opportunity for success as the top 1 percent. Most people consider success to be a by-product of hard work, and hard work is something that Americans are extremely familiar with. In fact, Americans have increased productivity by 80 percent since 1979; unfortunately, their income hasn’t risen accordingly, if at all.
The average worker in an American company makes substantially less than supervisors and executives. In fact, corporate executives make 62 times more money than an average worker in bonuses alone, not counting the executive’s actual salary. For every corporate bonus, the company could have paid 62 employees. In fact, incentive pay actually rose 30 percent from years before the recession.”
http://www.forbes.com/sites/moneywisewomen/2012/03/21/average-america-vs-the-one-percent/
“It’s going to end very, very badly. I feel sorry for you Chuk.”
Why would you feel sorry for me? I’m not the fool that is still renting.
“You know a meaningful number of people saving 30%+ of gross? Aka, 50%+ of post-tax?”
I don’t need to. My point was that it’s not that hard at that example income bracket to save that much money if you lead a reasonable lifestyle. The problem is that way too many people live a “better” lifestyle than they should.
“Gary: two wrongs don’t make a right. Under taxing the 47% or the top 5% doesn’t make it right what’s happening.
I’m not a socialist, it’s just that the system is broken and has concentrated the wealth in the hands of the few. I’d like everyone to have a chance to succeed but the current system makes it extremely difficult. Class mobility is at an all time low, and it’s more likely that someone from the middle class will be downwardly mobile rather than upwardly mobile, and as the middle class is squeezed.”
But the problem is that everyone is focusing on the top 5% and few people are talking about the 47%. What’s the issue here? It’s a lot more palatable to focus on a minority. In reality there’s more revenue potential with that 47%.
I don’t see why we should have a problem with wealth concentration. Let’s not focus on equality of outcomes but rather equality of opportunity. If we have an opportunity equality problem then let’s focus on that. Class mobility may be an issue but I don’t see much discussion about that. I see all the discussion about the outcome. I want to know why we have a huge skills gap. I also believe the labor market is seriously broken but I’m not quite sure what to do about that. Companies have their heads up their asses about who makes a good employee.
“Do they own their own business? Maximum into a 401k is, what, $17,500 this year? IRA is $5500, right? If both husband and wife did it you’re close to $50,000 but you don’t get the tax shelter for the IRA if you’re doing the 401k.
And I would be SHOCKED that someone making $175,000 is putting that much away. Maybe if they live in Birmingham or Nashville and have lower housing costs.
How many people on here know anyone who is actually maxing out a 401k for both them and a spouse? It’s highly unusual, actually, even in the higher paying professions like doctors/lawyers.”
I do know such people but I wasn’t claiming that all of their savings were in retirement plans but a significant portion is. There are also 529 plans out there. But I’m glad you brought up lower housing costs because that’s key. These people DO NOT live in the big cities. I think living in a big city without getting compensated for the higher cost of living is a huge mistake that a ton of people obviously make. If you want to save the big bucks and not live in squalor you have to live in a lower cost area.
“And that’s OK, right? Because ‘they earned it’. Oh wait, they didn’t. Their father earned it and the son sent plenty of good paying american manufacturing jobs to China, and pays a ridiculous wage to it’s employees, and puts local small businesses out of business when it enters a market, and demand favorable tax treatments for local stores when it enters towns, etc.”
People love to bash Walmart but the fact of the matter is that this company has done more to make life better for the masses than most other companies. They have pioneered entire new ways of managing the supply chain and driven huge inefficiencies out of the system, bringing costs down for the average American. This is why people can make the same or less money than they used to and still enjoy the same or better standard of living than before.
Personally I don’t care that small businesses got driven out of business because obviously the customer felt that they weren’t providing the value. They were inefficient and those resources could be better deployed elsewhere. And if their wages were so ridiculous then why are people lining up to take their jobs when they open a new store? Maybe we need more companies offering those ridiculous wages to solve the current unemployment problem.
And why shouldn’t manufacturing jobs transition to lower cost countries? Again that helps support our standard of living at ever lower costs and allows countries to focus on what they do best. Besides, those jobs will eventually come back as our energy costs decline and we become more competitive and China’s wages rise, which is already happening.
Again, the real issue here is one of skills and an inefficient labor market. There is no conspiracy of the rich, regardless of what great press that generates.
“Gary Lucido (May 12, 2013, 11:18 pm)
“You know a meaningful number of people saving 30%+ of gross? Aka, 50%+ of post-tax?”
I don’t need to. My point was that it’s not that hard at that example income bracket to save that much money if you lead a reasonable lifestyle. The problem is that way too many people live a “better” lifestyle than they should.”
Oh, so it’s bullshit, and you don’t know *anyone* making $175k HHI and saving $50,000 a year, even tho you claimed you do. And now you claim that it is ‘easy’ to do so. Show the budget that makes it “easy”, without living like fucking hermits, and assuming no family money helping out, and with either student loans or kids sometime in the 15+ years of saving that $50k/year.
“We have a dispute as to what the 1%’s ‘fair share is’”
Whatever you obtain is yours. That seems fair. Not for me to determine what “fair” is, and why does “fair” always denote taking something from someone.
‘they earned it’ so it’s OK.”
I go with they “obtained” it, so it is OK… I think you should begin a campaign against lottery winners.. it is very unfair.
Sabrina: “That’s why Mitt Romney’s tax rate … was probably under 10%. He has good tax attorneys who use the proper shelters….”
fyi: Forbes published a great 3700-word report explaining how the Pritzkers pioneered the development & deployment of off-shore-trusts to avoid taxes:
“[A.N. Pritzker] took the family fortune from $250,000 in the 1920s to an estimated $2 billion at his death in 1986. The net worth his heirs reported to the IRS at the time: a remarkable $25,000.”
http://www.forbes.com/forbes/2003/1124/142a_print.html
The Pritzker’s tax adviser was a man named Burton W. Kanter, a Chicagoan (now deceased) whom the New York Times described as:
“one of the nation’s most prominent tax lawyers, [he] spent a career pushing the limits of the tax laws…. He pioneered the use of foreign trusts to reduce taxes. He lectured for decades on his creative tax structures at the University of Chicago Law School….”
http://www.nytimes.com/2005/07/12/business/12tax.html
So, it’s possible that Romney’s off-shore-trusts were merely patterned after the innovative legal structures originally developed by Burton Kanter for the Pritzkers.
“and you don’t know *anyone* making $175k HHI and saving $50,000 a year,”
I do. My point was that I don’t need to know a ton to know it’s possible. Think about it. That leaves 125K for living expenses and taxes. They live in a 300K house with 3 bedrooms and 2 1/2 baths. At 3.5% their monthly payments are only $1100/month or 13K per year. But how many people who make that kind of money are going to live in a 300K house? That’s my point. They should be they don’t.
“That leaves 125K for living expenses and taxes. They live in a 300K house with 3 bedrooms and 2 1/2 baths. At 3.5% their monthly payments are only $1100/month or 13K per year.”
Of course it’s possible to save that much on that salary- but most people don’t in that bracket. This is why I said if you made that and lived in a lower cost city like Nashville, Wilmington South Carolina, Birmingham, Des Moines etc. you could still buy the $300,000 (which would be a pretty nice house) and have money left over for everything else.
This is the problem in some other cities. On $175,000 you buy the house in San Francisco bay area but that is ALL you EVER buy. No college savings for the kids. Little retirement. You hope and pray that what happened in the last 30 years with housing prices there happens again so that you have a big enough asset to retire on.
Why don’t we just ask on this site? No matter what your income is- are you maxing out your 401k at work? Heck- it’s “possible” to do it even if you make $70,000 a year. You just have to keep your other expenses down.
I’m curious. How many here max it out? And how many are maxing it out for themselves AND a spouse?
I’m talking just about the work 401k (not a separate IRA or anything else.)
I max out my 401k and my wife max’s out her 403b account. About 230k HH income. When my wife stopped working for about 5 years when we had kids, we were at around 120K HH income, and I stopped contributing entirely to my 401k during that time. We had to dip into savings just to pay monthly bills.
Max out both me and my husband.
“My point was that I don’t need to know a ton to know it’s possible.”
Yeah, and we all know someone (within a couple degrees) who founded a billion dollar company before they turned 30. Just because it is *possible* doesn’t make is applicable to a ‘typical’ person.
As a follow-up, yes we do but for the majority of American’s this is not the case.
Most Americans live well beyond their means and are not even coming close to funding their retirement.
“But how many people who make that kind of money are going to live in a 300K house? That’s my point. They should be they don’t.”
Whats the point of making that kind of money if you are not going to take advantage of the benefits it affords? I would much rather die flat broke having seen every corner of the world, stayed in the finest hotels, eaten at all the finest restaurants on the planet, and accomplished all my life goals than to die with a billion dollars in the bank having only eaten the McD’s dollar menu in a cramped house in a dumpy neighborhood and never leaving the county. If I could live my desired lifestyle on $20k/yr I would pick up a low paying/low stress hobby job and not deal with the stress and BS involved in a 6 figure job.
“Whats the point of making that kind of money if you are not going to take advantage of the benefits it affords?”
But if you want to add a million to the 1 or 2 million you’ll inherit from your parents, you need to make that much in order to save enough.
Fred. your argument contains a false dichotomy. it’s not living lavishly or eating at McDonald’s. the ‘In between’ is a 3\2 for $300k in the suburbs. I’m pretty much the example. I live just fine meanwhile.
“But if you want to add a million to the 1 or 2 million you’ll inherit from your parents, you need to make that much in order to save enough.”
I don’t understand this statement. I hope my parents die broke having accomplished all their life goals and don’t leave me a dime. How does theoretical inheritance at all play a role in my point?
“homedelete (May 13, 2013, 10:50 am)…I live just fine meanwhile.”
Then why do you complain so much?
My wife and I both max out IRAs and 401Ks and my brother and sister do the same. In addition my brother is funding a 529. When my parents had a business they actually created a defined benefit pension plan for them and their employees so that they could reduce their corporate taxable income.
In my own case I’m actually consuming taxable savings to allow me to live while funding the IRAs and 401Ks. It’s all about minimizing taxes.
funny how social commentary on the gross inequality in America today is ‘complaining’. haha!
“Whats the point of making that kind of money if you are not going to take advantage of the benefits it affords? I would much rather die flat broke having seen every corner of the world, stayed in the finest hotels, eaten at all the finest restaurants on the planet, and accomplished all my life goals than to die with a billion dollars in the bank having only eaten the McD’s dollar menu in a cramped house in a dumpy neighborhood and never leaving the county.”
And this is the problem. Because Fred wants to live like this and then he wants to complain that the rich have all the wealth and he needs to take it away so that the government can give him more social security and medicare.
Fred, unless companies fix their hiring practices by the time you are 50 you are going to see your employment opportunities shrivel up. You will be making a fraction of what you once did and you might develop a health problem that severely limits your ability to work.
The biggest financial mistake that most people make is that they assume that they will always make as much money as they are now. I always assumed it was all going away tomorrow and sometimes it did. And my parents, thank god, lived the same way and so will my kids.
“How does theoretical inheritance at all play a role in my point?”
Sorry; remark based on whole thread. If you skipped over large parts, you would (a) miss the point of that comment, and (b) be smarter for it.
” I hope my parents die broke having accomplished all their life goals and don’t leave me a dime”
Here is another fallacy. This statement would make sense if you EXACTLY knew your life expectancy and your future medical costs. However, those are key random variables. Therefore, you need to save for….what…2, 3, 4 standard deviations in those variables? Therefore, if you plan correctly the majority of people should be leaving their kids with the money they didn’t need when they didn’t hit the 4 standard deviation event.
I think it’s apparent that the one course that should be mandatory in high school is basic financial planning.
“The biggest financial mistake that most people make is that they assume that they will always make as much money as they are now.”
If most of America didn’t do that, there’d be far less corporate profit sloshing around for you to achieve investment returns on.
What do you think would happen if all Americans (under 60) suddenly started saving 1/3 of HHI up to $200k? And started living ‘within their [left over] means’?
“What do you think would happen if all Americans (under 60) suddenly started saving 1/3 of HHI up to $200k? And started living ‘within their [left over] means’?”
I’ve actually given this a ton of thought. The economy has to equilibrate eventually. What happens is twofold. First, more resources go towards investment – e.g. infrastructure, long life capital goods, R&D. This is why we have a crumbling infrastructure. Second, eventually the consumption in old age replaces the lost consumption in youth. What will happen in the current mode is that as our youth ages their consumption is going to plummet.
Aesop figured this all out long ago: http://www.eastoftheweb.com/short-stories/UBooks/AntGra.shtml
I work at an investment fund and everyone here pays normal federal income taxes – no carried interest BS. All investment bank / trading employees at Goldman / DBAB / etc also pay normal federal income tax rates. Carried interest is not responsible for finance types accumulating wealth. What is responsible is the availability of leverage in all areas and the abundance of capital (money) sloshing around that needs to be invested. I think most disdain for the system (in general) comes from it being opaque. It is similar to the phenomenon of people who wait in long lines being very upset but if you tell them how long the wait will be (even if its the same amount of time) they are just as happy as people in a shorter line. Unfortunately tax deductions / credits are politicians’ main way of returning favors for support so it is unlikely to change in the near future. My personal opinion is the best way for tax reforms and the country in general is term limits for Congress / Senate.
“My personal opinion is the best way for tax reforms and the country in general is term limits for Congress / Senate”
No, the best way is to require that virtually all spending/taxes/etc beyond some baseline (say, whatever is necessary for debt service plus X% for Medicare/Social Security/food stamps/Etc; and Y% for defense/courts/prisons, and Z% for basic research/infrastructure/whatever else is an on-going, generally agreed thing at a generally agreeable level) are required to automatically sunset, so that the reauthorization MUST be voted on regularly. Baseline is that ALL income is OI for tax purposes.
Require ‘single issue’ laws, like in Illinois, so that there won’t be *unrelated* pork attached to, say, a highway bill, or an authorization for new aircraft carriers.
Really, a greater revolving door in Congress will just make a greater revolving door thru lobby firms, and the lobbyists will become those with the institutional knowledge of where the fat bodies are buried.
homedelete (May 13, 2013, 11:20 am)
funny how social commentary on the gross inequality in America today is ‘complaining’. haha!
If you want to see real gross inequality go to India…..
http://www.huffingtonpost.com/2008/01/29/richest-man-in-india-buil_n_83910.html
“If you want to see real gross inequality go to India…..
http://www.huffingtonpost.com/2008/01/29/richest-man-in-india-buil_n_83910.html”
Two wrongs don’t make a right.
He’ll need those three ‘safe rooms’. I hope he finds a use for them when the mobs arrive with pitchforks.
“anon (tfo) (May 13, 2013, 12:17 pm)
No, the best way is to require that virtually all spending/taxes/etc beyond some baseline (say, whatever is necessary for debt service plus X% for Medicare/Social Security/food stamps/Etc; and Y% for defense/courts/prisons, and Z% for basic research/infrastructure/whatever else is an on-going, generally agreed thing at a generally agreeable level) are required to automatically sunset, so that the reauthorization MUST be voted on regularly. Baseline is that ALL income is OI for tax purposes.”
The problem is the “baseline” level of spending is subjective.
“Require ‘single issue’ laws, like in Illinois, so that there won’t be *unrelated* pork attached to, say, a highway bill, or an authorization for new aircraft carriers.”
So Illinois government should be a model for the US?
Regarding taxes my personal opinion is reduce tax rates slightly (5% or so), remove all personal deductions and treat all income including cap gains and passive income the same. Reduce the inheritance tax rate but make it applicable to everything and make nothing exempt (no trusts or insurance BS to dodge taxes). So many constituencies would be pissed off by that it would never happen.
“The problem is the “baseline” level of spending is subjective.”
The problem with term limiting everyone is that the new group just gets to blame the old group all the time. Term limit spending, make the Congresscritters take a stand *for* the spending (or tax, or tax break) on a regular basis.
“So Illinois government should be a model for the US?”
Of course not, but single issue bills substantially reduces the amount of poison pill amendments and hidden pork, which are two big problems at the Fed level.
“He’ll need those three ‘safe rooms’. I hope he finds a use for them when the mobs arrive with pitchforks.”
Apparently, didn’t move in:
http://www.dailymail.co.uk/news/article-2053231/Worlds-expensive-house-Antilia-Mumbai-lies-abandoned.html
Also, seems that the dirt it’s on is worth maybe $100mm, and the building is something like 400,000 SF–how do you spend nearly $5,000 psf on *anything*? (basically, I think the $1b or $2b numbers are bs).
I agree term limits aren’t going to completely solve the problem – but I think its a step in the right direction. I am worried less about incoming politicians slacking off and blaming outgoing ones than I am about two fundamentally opposed parties agreeing on a non-malleable baseline spending number. Congressional terms should be increased from 2 yrs because now half their time is spent campaigning. By term limits I don’t mean 1 and done. I mean no more than 2 consecutive terms. But there is no easy (or even clear) solution so nothing will change anytime soon. I guess this reenforces Ze’s opinion to just use the current system to your advantage.
Anon, check out clios son…..
http://www.youtube.com/watch?v=CQpeHibyDog
bet he is a better driver too.
“check out clios son”
*He* wouldn’t be terrified of driving on Western!
“a non-malleable baseline spending number”
Not ‘non-malleable’; just not subject to re-authorization on a 1/2/3/whatever year cycle–still subject to increase, reduction, cancellation. There is a need for some level of certainty, and policy would be improved if the ‘certains’ had a clearly defined cost as income tax at X%, and everything else costs more. And we couldn’t get to that baseline until after we work thru some portion of the accumulated debt.
“Sabrina (May 13, 2013, 8:33 am)
Why don’t we just ask on this site? No matter what your income is- are you maxing out your 401k at work? Heck- it’s “possible” to do it even if you make $70,000 a year. You just have to keep your other expenses down.
I’m curious. How many here max it out? And how many are maxing it out for themselves AND a spouse?”
My spouse and I max out our 401ks. Including 401k contributions, we end up saving about 50% of our pre-tax income.
Yes, we have significantly higher HHI than the $175k example discussed earlier, but I have maxed out my 401k contributions since I was 22 years old, and my spouse has done the same at least as long as we’ve been together, so maxing out the 401k is certainly possible for non-high-earner, even if they do live in expensive urban areas.
The high HHI helps a lot, but we also don’t spend like we’re “entitled” to a certain lifestyle simply because we earn enough to technically afford that lifestyle. I read “The Millionaire Next Door” when I graduated from college and it made an impression. If I ruled the world, that book would be required reading for high school juniors.
2012 retirement plan contributions for Ze and spouse.. $0
When I graduated college I read some book by some guy named Aesop and there was the coolest grasshopper…
“we end up saving about 50% of our pre-tax income”
So, you end up spending about 15% of your gross income? Which is about where we’d be at to save 50% of gross, after paying fed/state/local taxes and with maxing pre-tax accounts.
“Why don’t we just ask on this site? No matter what your income is- are you maxing out your 401k at work? Heck- it’s “possible” to do it even if you make $70,000 a year. You just have to keep your other expenses down.”
Both my husband and I have for the last several years, although I had a few years when I did not contribute the max amount a little while back.
” I read “The Millionaire Next Door” when I graduated from college and it made an impression.”
Bingo! Never read it but don’t need to. I know exactly what it says. I have an uncle that is 92 years old. The guy drove a truck locally. His wife was a hair dresser in her basement for years. I think she only went as far as the 6th grade. I’m pretty sure he did not go to college. A few years back he showed me his brokerage statement – 1.5 MM. It’s all about compounding and tax minimization and not living in high cost areas. I could go on and on and on and on.
“So, you end up spending about 15% of your gross income? Which is about where we’d be at to save 50% of gross, after paying fed/state/local taxes and with maxing pre-tax accounts.”
Yeah I did some rough numbers just now… I think we actually spend closer to 20% of gross but we’re in the ballpark of your back-of-the-envelope math. We do not have kids, which helps.
I recently overhauled my company 401k and in the process took a look at our employees’ contribution rates… shockingly low in relation to salaries. I wonder if that would change if I handed out a copy of Millionaire Next Door to everyone.
“I recently overhauled my company 401k and in the process took a look at our employees’ contribution rates… shockingly low in relation to salaries. I wonder if that would change if I handed out a copy of Millionaire Next Door to everyone.”
You should try it. My parents had a business and I got to hear all the stories of how their employees mismanaged their finances. They had more education than my father and came from better economic circumstances than he did and made the same amount of money that he did when he was in their position. They spent every dime they had. Went drinking every weekend, got in bar fights with knives, landed in the hospital or jail. My father bailed them out of jail more than once. Very few of them bought the company’s health insurance plan, choosing instead to go to the county hospital – and this was in the 60s.
“My parents had a business and I got to hear all the stories of how their employees mismanaged their finances. They had more education than my father and came from better economic circumstances than he did and made the same amount of money that he did when he was in their position. They spent every dime they had. Went drinking every weekend, got in bar fights with knives, landed in the hospital or jail. My father bailed them out of jail more than once. Very few of them bought the company’s health insurance plan, choosing instead to go to the county hospital – and this was in the 60s.”
Wow, that’s super interesting. Would you mind elaborating on it? Where was this company located? Where did the employees live? In what parts of town were these tavern knife-fights? Sounds interesting…you could make your own Chicago “bronx tale” script. More info please!
I’ll guess bridgeport
“Wow, that’s super interesting. Would you mind elaborating on it? Where was this company located? Where did the employees live? In what parts of town were these tavern knife-fights? Sounds interesting…you could make your own Chicago “bronx tale” script. More info please!”
🙂 Perhaps you are being facetious but I want you to know I’m not making this up. It was Dallas. My parents owned an automobile body repair shop so they employed bodymen and painters. I don’t remember the exact money these guys made but I do remember it was considered good for the times but these guys had a lower socioeconomic upbringing, as did my father. Obviously this occurred in the seedier parts of town but what I never understood was at that time bars were outlawed in Dallas so I’m not sure where these guys were drinking. Maybe it was only outlawed in north Dallas. But I remember one of these guys getting stabbed in the thigh or his side and him being out of work for a while.
“at that time bars were outlawed in Dallas”
Probably more than you care to know about it:
http://lakewood.advocatemag.com/2010/09/23/dallas-drinking-problem/
Oh People…
Remember what I told you years ago. Buy a property that has utility in a great location and you will be fine. I find it funny that renters are paying up to 1.5 times what it cost to own. Unless rents go down, most that is purchased today will cash flow for years to come. Why do you think there are no more sellers? With interest rates so low, why would anyone ever sell?
In a couple of years, rents in prime areas WILL be going down, due to the oversupply of apartments being constructed at this moment.
“Unless rents go down, most that is purchased today will cash flow for years to come.”
There are at least 5,000 more apartments still to come over the next year and probably more than that as the lending/speculative machine keeps churning.
So we’ll have 10,000 new apartments or something like that. How many do you think are needed? Yeah- rents are going to go down. Although, I could also see a bunch of the buildings get converted into condos (happens every cycle) but that will take renters out of the pool too.
Also- how high do you think rents can go? It’s not an infinite number. Incomes aren’t rising. You can’t get blood from a stone.
Oh Sabrina, incomes are rising for the people who are renting these “prime location” apartments. I think we all understand that income inequality is rapidly moving professional wages higher, while driving working class wages lower; the end result is the government reporting of flat income levels across the board – a distorted piece of date. The outcome is that professionals living in the “prime” areas of Chicago will continue to pay higher and higher rents, and the working class in the outlying areas get squeezed. Just look at what has happened in the past 5 years. The stock market has doubled which created mass amounts of wealth; Homeowners with equity have been able to refinance and cut their monthly payments in half. The rich are getting richer and the poor are just plain screwed. Sorry but it is true.
On the new rentals coming to market, who cares? It is 10,000 units spread all over the city; most in less than true “prime’ areas. I am sure you will say the city’s population is declining and there is no way all this new construction will be absorbed. The truth is, the prime areas of the city are growing and becoming in higher and higher demand. The decline in city population comes from the poor running to the burbs to avoid the 10% sales tax. Was this the plan the whole time? Maybe it was…
I am sure most of your followers not only rent their homes (making the rich richer), but avoided thus stock market run because they thought the end was surly near! Optimists often win…
“income inequality is rapidly moving professional wages higher, while driving working class wages lower; the end result is the government reporting of flat income levels across the board – a distorted piece of date. The outcome is that professionals living in the “prime” areas of Chicago will continue to pay higher and higher rents, and the working class in the outlying areas get squeezed. Just look at what has happened in the past 5 years. The stock market has doubled which created mass amounts of wealth; Homeowners with equity have been able to refinance and cut their monthly payments in half. The rich are getting richer and the poor are just plain screwed. Sorry but it is true.”
All predictable too. It’s been clear for awhile that the Unites States is becoming Brazil – North. That’s not a good thing either.
I just thought of something. You are now claiming that rents are going to come down along with housing prices. Where should we all live while we wait for your predictions to come true? Should we sleep in our cars? Good stuff Sabrina!
I am not saying this income equality is fair in anyway. It is unfortunate that many of the middle class jobs have been outsourced or eliminated through innovation, but it is reality and it is not going to change. Perhaps rethinking wealth distribution may be in most people’s best interest; this cycle will continue until someone makes it stop.
“Oh Sabrina, incomes are rising for the people who are renting these “prime location” apartments. I think we all understand that income inequality is rapidly moving professional wages higher, while driving working class wages lower; the end result is the government reporting of flat income levels across the board – a distorted piece of date.”
No they’re not. The rental market is 20-somethings. They have massive school debt- even those who are doctors, lawyers, MBAs. Newly minted lawyers at large law firms (those on the highest end of the pay scale) haven’t had a salary increase since 1999. LITERALLY. That’s when first year salaries went up to $150k-$160k and they’ve been stuck there ever since. (At some firms, they even lowered them about a decade ago.) When you factor in inflation, those Harvard law grads are making significantly less than their co-horts just 15 years ago. Sad, but true. And unfortunately for them, the price of getting the law degree has skyrocketed in that same amount of time so instead of graduating with $100k of debt like 15 years ago, they’re graduating with $160k of debt now.
Learn your market if you’re going to be a landlord Steve. Incomes for the upper middle class (those who can afford $3 a square foot for “luxury” apartments) are NOT rising. They’re falling.
“Also- how high do you think rents can go? It’s not an infinite number. Incomes aren’t rising. You can’t get blood from a stone.”
1) the markets are going to go parabolic soon, there will be a double top, then a decent sized correction. Chicago may very well be developing a perverse “urban” class, like NYC or parts of SF, LA…where you have this cult of “income” brainwashed types who never grow up. They will live downtown, in their tiny apts. or condos, never have kids, they’ll have some dogs, and they’ll keep the California Chardonnay business in good shape. Nobody normal lives at Alta K Station. What kind of people base their lives on the East Bank Club? It’s a bizarre weird cult.
“I am sure most of your followers not only rent their homes (making the rich richer), but avoided thus stock market run because they thought the end was surly near! Optimists often win…”
Most people who check in here regularly actually are now owners Steve. They bought when prices in places like Lincoln Park plunged down 20% to 30% – something you said could NEVER happen. Just like you’re saying right now that the supply of renters for luxury apartments is endless.
Don’t make me laugh! I’m so glad you’re back here to provide some much needed entertainment once again.
“haven’t had a salary increase since 1999. LITERALLY. That’s when first year salaries went up to $150k-$160k and they’ve been stuck there ever since.”
This is incorrect. The ’99 bump was to $125k.
I don’t know anyone in Lincoln Park who made a intelligent purchase back in 2005 – 2007 and lost 20 – 30%. Sure there were a few but there were also many who just refinanced and cut their payments in half. I think what I said back in 2007 was to buy a Lincoln Park property with utility and you will be just fine down the road – location location location! I think you will agree that today that statement has proven itself true.
I would also further disagree with you and side with Helmethofer. Downtown Chicago is becoming more and more like San Fran and New York. There is a large class of urban dwellers that think the suburbs are for dying and the city is for real living. Why do so many pay so much in Manhattan when they could cross the bridge to New Jersey and pay so much less? The answer is that people actually appreciate what is outside of a property as much as what the property itself has to offer.
“Most people who check in here regularly actually are now owners Steve. They bought when prices in places like Lincoln Park plunged down 20% to 30% – something you said could NEVER happen. Just like you’re saying right now that the supply of renters for luxury apartments is endless. ”
Well maybe you could convince all your buyers to take their 30% profits and list their properties. we sure could use the inventory Sabrina…
“I don’t know anyone in Lincoln Park who made a intelligent purchase back in 2005 – 2007 and lost 20 – 30%. Sure there were a few but there were also many who just refinanced and cut their payments in half. I think what I said back in 2007 was to buy a Lincoln Park property with utility and you will be just fine down the road – location location location! I think you will agree that today that statement has proven itself true.”
How many people do you know in LP? 1 or 2?
Come on Steve. Don’t make me gag. You’re going to bring back G to these pages just so he can list a gazillion closed sales of people who bought in 2005-2007 and have lost 20% to 30%. Sure- there are a few who didn’t lose quite as much. And there are others who lost more. There are many who are accidental landlords dealing with the overflowing toilet phone calls in the middle of the night. Don’t try and rewrite history. LP got hit (and continues to get hit actually.) Not many people still selling for a gain even today.
And no- I’m not going to go through all the current listings to show you all the homeowners who are still losing their 20%.
“I would also further disagree with you and side with Helmethofer. Downtown Chicago is becoming more and more like San Fran and New York. There is a large class of urban dwellers that think the suburbs are for dying and the city is for real living. Why do so many pay so much in Manhattan when they could cross the bridge to New Jersey and pay so much less? The answer is that people actually appreciate what is outside of a property as much as what the property itself has to offer.”
We’ve been discussing this for days Steve. The difference between Manhattan/SF and Chicago is that there are endless parking lots where you can build highrises to support that demand. Hell- how many high rises were built during the housing boom in just the downtown area? 40? 50? Maybe more? (including 2 of the tallest residential buildings in the United States.)
Now they’re at it again. 10 or more high rises going up right now. Plenty of available land. Heck, there’s that huge track on the south branch of the river that was supposed to get developed just south of Congress Parkway. They can put in another 10,000 units in just that area alone.
So just stop.
Oh- one other thing. How many years has it been since you made your “predictions” that homes wouldn’t lose their value in LP? It’s been 6 years.
Sure- if you hold 10 or 20 years- maybe you won’t “lose” money.
LOL.
Don’t make me laugh.
Every single neighborhood in the city of Chicago lost value during the bust. Every single neighborhood had foreclosures and short sales. Even the most luxury of buildings had foreclosures. Or maybe you just like to forget about the actual facts.
“haven’t had a salary increase since 1999. LITERALLY. That’s when first year salaries went up to $150k-$160k and they’ve been stuck there ever since.”
This is incorrect. The ’99 bump was to $125k.
So when did the $150k-$165k happen? It wasn’t after the tech bust. It was only because of the San Francisco/Silicon Valley firms and their desperation for lawyers that the salaries increased nationwide at all.
It certainly wasn’t after 2003.
anon(tfo)- salaries haven’t gone up for a good ten years then. And they’re not likely to go up for a good 5 or so more (maybe another ten years) given the over supply of lawyers. Wow. Think about that for a minute. Lawyers could have stagnant salaries literally for 20 years. LOL.
The 1999 raise was the really dramatic one. That happened because of Silicon Valley firms losing out to internet companies. I just looked it up. The bump up to $165k happened by 2003.
So- please forgive me. Lawyers have only seen declining salaries for 10 years now. Not 14 years. LOL.
Think about it. No pay raises in 10 years.
The average cost of law school tuition at a private school has gone from $23,000 a year in 2001 to $40,500 a year in 2010.
Average debt in 2001 was $70,000. Average debt in 2011 was $125,000.
http://www.nytimes.com/2013/01/31/education/law-schools-applications-fall-as-costs-rise-and-jobs-are-cut.html?partner=rss&emc=rss&_r=1&
Then add on the declining salaries and it’s no wonder law school applications are down about 50% since 2004.
And the stock market crashed as well Sabrina. But guess what, those who did not panic sell did not lose money in the stock market or in the real estate market. You keep referencing those those that bought in 2005 – 2007 and then had to quickly sell the following few years. Who would buy a property for a hold time of 2 years? Those who did made a bad choice and paid for it. Those who purchased a property for a longer term are just fine and have saved $1,000’s over the cost of renting. Also, how many of these big losers bought that terrible block new construction that littered Lincoln Park? These properties are tear-downs in 20 – 30 years and they will continue to depreciate until they are leveled. These properties are only good for rentals and eventually will be worth land value before they are to be torn down.
Who the hell would call south of Congress a “prime” area? Maybe you are not understanding what good locations are and what outlying locations are. I refer to good locations as Lincoln Park, Old Town, River North, and the Gold Coast. These are prime locations and they have no vacant land. Living south of congress might as well be as far as Oak Park to many.
So what are the annualized salary increases for attorneys over the past 20 years? I bet they beat the national trend?
“And the stock market crashed as well Sabrina. But guess what, those who did not panic sell did not lose money in the stock market or in the real estate market. You keep referencing those those that bought in 2005 – 2007 and then had to quickly sell the following few years. Who would buy a property for a hold time of 2 years? Those who did made a bad choice and paid for it. Those who purchased a property for a longer term are just fine and have saved $1,000?s over the cost of renting. Also, how many of these big losers bought that terrible block new construction that littered Lincoln Park? These properties are tear-downs in 20 – 30 years and they will continue to depreciate until they are leveled. These properties are only good for rentals and eventually will be worth land value before they are to be torn down.”
Fed ZIRP policy is what saved these people’s asses. Fed exists to save their cousins in these locales.
“So when did the $150k-$165k happen? It wasn’t after the tech bust. It was only because of the San Francisco/Silicon Valley firms and their desperation for lawyers that the salaries increased nationwide at all.
It certainly wasn’t after 2003.”
Um, yeah, it was. $160k for first years was a Jan-07 thing. And Simpson Thacher (a NYC firm) started the whole thing.
But only a small number of Chicago offices ever matched that scale; then there are more with the $160 start and severe compression after.
Cite: http://legalpad.typepad.com/my_weblog/2007/01/quinn_matches_a.html
“So what are the annualized salary increases for attorneys over the past 20 years? I bet they beat the national trend?”
For the relative handful of lawyers working at the 200 largest firms in the country? And comparing to the median income? Sure. For your median lawyer, and compared to the top echelon of doctors, or accountants, or MBAs? No way.
So it’s all how you frame the question.
“Chicago is finished. It’s a new world now, in this city, be prepared to collaborate with perverts, homos, weirdos, jews, upstart latino marxists, and red-haired lesbos like that one in NYC who wants to challenge bloomberg. Only a pervert would think the heitman-world is progress.”
If you want to be around perverts spend your time around economically challenged white men. They are the ones that seem to dominate the sex offender database. Bet you don’t find to many Jews and Homos on it.
“If you want to be around perverts spend your time around economically challenged white men.”
Just a question of what sort of trailer park you prefer–serial killer, child molester, or generic meth head. Strangely, even those places manage to trade ownership fairly easily, albeit at low per pad prices.
Like HH proved, the stats never lie. The Jews and Homos have undue influence at the Ivies… (My calc of 10% general population gay +100% of Yale is gay.. suggests 20% of Ivies are gay)
and poor white christian males control the sex offender list…
The numbers are what the numbers are… Guess us Jews avoid the list by getting our tension out producing porn.. Everyone knows how we love the law, finance, real estate, and making porn… (of course we make that porn for Bob to watch.. coming soon is my Game of Thrones XXX version I am producing just for him)
“Um, yeah, it was. $160k for first years was a Jan-07 thing. And Simpson Thacher (a NYC firm) started the whole thing.”
My friends were all lawyers in San Francisco in early 2000s. Third years there were making $185,000 by 2003. I don’t recall it being NY firms that raised the second time. I lived through all the salary increases with them. The reason it even went to $125,000 in the first place was because Gunderson raised in Palo Alto. Then Brobeck tried to raise only its Palo Alto office but San Francisco went bananas and demanded the same pay. So Brobeck raised all of its offices from $85,000 for first years to $125,000. Once Brobeck, which was a national firm, did that, all the other SF/SV firms had to do it. And then NY had to do it because they couldn’t pay less than California firms (the horror!).
I couldn’t remember when the second round of pay raises happened but I texted my friends this morning and they said early 2000s. Only a few Chicago firms ever matched all of the increases. Many could barely afford the initial $125k.
So, yeah, it’s been 10 years since any lawyers at the large law firms have had ANY pay increases. That’s kind of stunning but I guess they should be glad if they still have jobs.
Cite: http://legalpad.typepad.com/my_weblog/2007/01/quinn_matches_a.html
“So when did the $150k-$165k happen? It wasn’t after the tech bust. It was only because of the San Francisco/Silicon Valley firms and their desperation for lawyers that the salaries increased nationwide at all.
It certainly wasn’t after 2003.”
The base pay was like $150,000 in 2003 era in Silicon Valley/SF. Trust me. Maybe they didn’t go to $160k until later but it was just $10k. Associate salaries have been stagnant for a decade. And with inflation eroding it- it really means lawyers have seen significant salary reductions during that time period.
“You keep referencing those those that bought in 2005 – 2007 and then had to quickly sell the following few years. Who would buy a property for a hold time of 2 years?”
Nope. People who bought in 2009, 2010 and 2011 are mainly losing money (depending on location and whether or not it’s a SFH or not.) Again, only someone like G with the data could give us all the stats. In case you haven’t noticed Steve, prices were in a free fall for the last 3 years. Homeowners are still in a world of pain and nothing you say can change that.
The average time in a loft condo is like 3 years. The average time in one of those 1 bedrooms or 2 bedrooms condos is probably around the same. Sure- some people buy SFH to live in for longer. But there are job transfers and other things that cause people to move. The average American, before the bust, moved every 7 years.
So what are the annualized salary increases for attorneys over the past 20 years? I bet they beat the national trend?
No. Attorneys make squat money (as a whole- as a group.) Even the big firm lawyers don’t see increases. Salaries were stagnant from like 1989 (the prior big boom years in the legal profession) until the next round of pay raises 10 years later. Normally, you might think that salaries are due for another big increase right about now (given the cyclical history of it) but there is simply too much supply and not enough demand. And billable hour rates can only go so high.
“I refer to good locations as Lincoln Park, Old Town, River North, and the Gold Coast. These are prime locations and they have no vacant land.”
Yes there is. Plenty. Gee- should we go over ALL the development that is going on there right now? Should I show pictures of every single parking lot in River North? Ride the Brown line sometime. Empty lots all over the place.
By the way- you can tell the market has changed when the trolls come out to play. They’ve been missing for the last 3 years as prices plunged and everyone got wiped out. Now they’re back! Hooray!
Is Sabrina a disgruntled attorney who didn’t get a raise for 10 years?
Let me know when those south of congress condos are ready so I can scoop one up and finally live in the ideal location. LOL!
The ISBA did an income benchmarking survey in 2004, the first survey of it’s kind since 1984, and they discovered that the average Illinois attorney salary has increased 1% a year between 1984 and 2004. The upper echelons of the profession, which includes the equity partners at teh biggest firms, have done very well. This mirrors the rest of teh corporate america. A lot of that income comes from stagnant salaries among associates and the de-equitizing of partners.
Patent lawyers seem to be doing well these days, the ones I konw are living like the ibankers of the dot com boom…
Okay Sabrina. You have me convinced and I plan to sell my home I purchased in 2008 today. I will also sell the other 3 investment properties I purchased over the past few years. My single family, and the investment properties, would / do cash flow like crazy, but you are right that the attorneys (representing all of the professional) are loosing big time and soon will all move to Schaumburg. The city is not worthy of higher prices become the urbanization that is occurring can’t continue. All those new buildings are just too much as the city has never handled expansion well (skyline looks just like it did in 1990).
I am now predicting that prices are headed back to 1993 when you could buy a single family in Lincoln Park for $300k. The city is the same place today as it was in 1993 and I feel I should not pay anymore. A $300k home would cost us all about $1,500 per month (depending on taxes), and this is more than anyone should have to pay to live in the best area in a city that has not changed over the past two decades.
I am with you Sabrina. This whole market is rigged and we are going back to 1993 levels where today’s income levels would support just about all of us to live anywhere we would like.
Thanks HD! The exact point I made above on incomes in general. The top end is doing better than ever while the bottom end is getting squeezed (who needs the lower half of the attorney spectrum anyway). The end result is the income stream looks flat when it is far from flat for the top 20 percent. Sabrina, where do you think the top 20 percent live?
The irony of a slimeball realtor feeling superior to an attorney who isn’t part of the top 20%. Sabrina, it might be time to shut ‘er down. Cribchatter had it’s heyday but now that SH is back, it’s all over.
“The base pay was like $150,000 in 2003 era in Silicon Valley/SF. Trust me.”
Excuse me if I do not. The raise from 125 to *135* for 1st years didn’t even take place until Jan 1, 2006:
See, eg, http://www.infirmation.com/bboard/clubs-fetch-msg.tcl?msg_id=002vkn
“now that SH is back, it’s all over”
You’re just worried he’ll out you from your time when he was your manager valeting cars in the Triangle.
So, yeah, it’s been 10 years since any lawyers at the large law firms have had ANY pay increases. That’s kind of stunning but I guess they should be glad if they still have jobs.
It’s been 10 years since the salary structure has been increased, but it’s simply untrue to say that lawyers at large firms haven’t had ANY pay increases. Associates aren’t staying at their first year salaries for 10 years, they are moving up the payscale ladder – i.e. $165K 1st year; $175K 2nd year, etc.
“So what are the annualized salary increases for attorneys over the past 20 years? I bet they beat the national trend? ”
For the 0.2% or so who are big firm equity partners, this is true. It’s not the same for the rest of the world of attorneys.
“It’s been 10 years since the salary structure has been increased,”
No, that’s incorrect. The salary structure last went up in 2007, which is no-small-part of why many firms laid off *dozens* in 2008. Had structural cost been 15-20% lower, fewer would have lost their jobs as quickly as they did.
“So, yeah, it’s been 10 years since any lawyers at the large law firms have had ANY pay increases. That’s kind of stunning but I guess they should be glad if they still have jobs.
It’s been 10 years since the salary structure has been increased, but it’s simply untrue to say that lawyers at large firms haven’t had ANY pay increases. Associates aren’t staying at their first year salaries for 10 years, they are moving up the payscale ladder – i.e. $165K 1st year; $175K 2nd year, etc.”
I thought we were talking about at a specific level. Of course, they had bumps as they moved up, but the bumps aren’t really more than before unless you are talking about equity partners at big firms, which is a really small proportion of all attorneys in the country and in Chicago too. And in that big firm equity partner group, less than 1/3 in the city.
“No, that’s incorrect. The salary structure last went up in 2007, which is no-small-part of why many firms laid off *dozens* in 2008. Had structural cost been 15-20% lower, fewer would have lost their jobs as quickly as they did.”
Some of the firms reduced their salary structure too at that point. But overall, they significantly reduced the number of new hires and summer interns. The legal profession is a horrible career choice to make a ton of money without the very creme of the crop law school pedigree, considering the level of student debt needed to get through at most schools.
I thought we were talking about at a specific level. Of course, they had bumps as they moved up, but the bumps aren’t really more than before unless you are talking about equity partners at big firms, which is a really small proportion of all attorneys in the country and in Chicago too. And in that big firm equity partner group, less than 1/3 in the city.
We were, but that’s not clear from a statement like “it’s been 10 years since any lawyers at the large law firms have had ANY pay increases. “
It is a stupid argument. Yes there are too many attorneys in the country. The result will be the best make the money and the rest do not. Every successful attorney I know is crushing it right now; regardless of the 100 hours per week they are slaving away.
The average nationwide salary for a real estate broker increased by from the $40k range to the $45kk range this past year. I pretty much would guarantee this increase is no indication of what is happening to the top tier of Chicago brokers.
“Bet you don’t find to many Jews and Homos on it.”
are you kidding me? Ze is wrong.. homos are vastly over represented in abuser stats, and so are Jews on a per capita basis. Don’t forget about the high level of inbreeding that occurs in the fastest growing segment of the jewish population: orthodox jews. It’s legal to marry your cousin in NY, NJ, and CT (because somebody wants it that way), but not in KY or WV.
How about the yuppie jogger (prolly one of those narcisscist lawyer “I’m training for a marathon”, “I have to shave minutes off my time this year”, “I only buy meat at Whole Foods” types) who was forced to give a BJ just off LSD at 2900 South?
http://www.suntimes.com/news/crime/20047253-418/alert-issued-after-male-jogger-sexually-assaulted-on-south-side.html
“Sabrina (May 15, 2013, 7:57 am)
The average time in a loft condo is like 3 years. The average time in one of those 1 bedrooms or 2 bedrooms condos is probably around the same. Sure- some people buy SFH to live in for longer. But there are job transfers and other things that cause people to move. The average American, before the bust, moved every 7 years.”
This is interesting and I think attitudes towards housing have changed because of the crash. Those “starter” apartments are no longer being purchased – people are renting them instead. It used to be about a break even proposition to buy one then sell 2-5 yrs later vs renting but after so many losing significant amounts of $$ on them in the bust they are not viewed as stable. When we talk about “the market” and GZ vs. non-GZ on this site we tend to lump SFHs in with the 2/2s. In the GZ we are still far away from bubble pricing for those 2/2s that should be rentals (and that is where the majority of the accidental landlords are now) but back to bubble pricing on the 3-4BRs and the SFHs.
I am very happy about all the new rental buildings being built – I want to see more density and more people living downtown because it makes the experience better for everyone. I wouldn’t be upset to see the rents moderate and more people move downtown.
@ Sabrina
With all due respect, I’m not sure about some of your statements.
The 160k bump was in 2007 which makes it not 14 years ago, not 10 years ago, but 6 years ago.
http://economix.blogs.nytimes.com/2012/07/16/the-toppling-of-top-tier-lawyer-jobs/
And I’m not sure about the “no pay raises” since the associates generally go lock step with their graduating year as a 2nd 3rd 4th etc. in terms of increases.
One other point on education in the next post (link mod restriction)
“Sabrina (May 15, 2013, 12:20 am)
The 1999 raise was the really dramatic one. That happened because of Silicon Valley firms losing out to internet companies. I just looked it up. The bump up to $165k happened by 2003.
So- please forgive me. Lawyers have only seen declining salaries for 10 years now. Not 14 years. LOL.
Think about it. No pay raises in 10 years.
The average cost of law school tuition at a private school has gone from $23,000 a year in 2001 to $40,500 a year in 2010.
Average debt in 2001 was $70,000. Average debt in 2011 was $125,000.
http://www.nytimes.com/2013/01/31/education/law-schools-applications-fall-as-costs-rise-and-jobs-are-cut.html?partner=rss&emc=rss&_r=1&
Then add on the declining salaries and it’s no wonder law school applications are down about 50% since 2004.”
(redoing post due to link mod)
@ Sabrina
With all due respect, I’m not sure about some of your statements.
The 160k bump was in 2007 which makes it not 14 years ago, not 10 years ago, but 6 years ago.
http://economix.blogs.nytimes.com/2012/07/16/the-toppling-of-top-tier-lawyer-jobs/
And I’m not sure about the “no pay raises” since the associates generally go lock step with their graduating year as a 2nd 3rd 4th etc. in terms of increases.
One other point on education in the next post (link mod restriction)
“Sabrina (May 15, 2013, 12:20 am)
The 1999 raise was the really dramatic one. That happened because of Silicon Valley firms losing out to internet companies. I just looked it up. The bump up to $165k happened by 2003.
So- please forgive me. Lawyers have only seen declining salaries for 10 years now. Not 14 years. LOL.
Think about it. No pay raises in 10 years.
The average cost of law school tuition at a private school has gone from $23,000 a year in 2001 to $40,500 a year in 2010.
Average debt in 2001 was $70,000. Average debt in 2011 was $125,000.
(removed link: reference it prior)
Then add on the declining salaries and it’s no wonder law school applications are down about 50% since 2004.”
@Sabrina Education Point:
It’s not a fair comparison to say pay (entry for that matter) is stagnant and law tuition has doubled because
its not just law tuition. As you yourself have said, the cost of education far has outpaced inflation (2:1 ratio)
http://www.freakonomics.com/2011/10/27/cost-of-college-on-the-rise-again/
“Sabrina (May 15, 2013, 12:20 am)
The 1999 raise was the really dramatic one. That happened because of Silicon Valley firms losing out to internet companies. I just looked it up. The bump up to $165k happened by 2003.
So- please forgive me. Lawyers have only seen declining salaries for 10 years now. Not 14 years. LOL.
Think about it. No pay raises in 10 years.
The average cost of law school tuition at a private school has gone from $23,000 a year in 2001 to $40,500 a year in 2010.
Average debt in 2001 was $70,000. Average debt in 2011 was $125,000.
(link removed; reference prior)
Then add on the declining salaries and it’s no wonder law school applications are down about 50% since 2004.”
additional link for education costs
http://www.forbes.com/sites/steveodland/2012/03/24/college-costs-are-soaring/
ps have you thought about changing the threshold for embedded links? maybe even just to 2 instead of 1?
“I want to see more density and more people living downtown because it makes the experience better for everyone.”
Someone is bullish on Chicago, it’s not Rachel Shteir, but there’s always someone in RE that is willing to gamble.
An Australian investor paid more than $1 million for a bank-owned South Loop property
Mr. Drapac said the firm was drawn to Chicago because of its similarities to the urban renewal that Melbourne experienced in the late 1990s and early 2000s. He sees the most opportunity in the South and West Loop.
“There are two forces at the moment: one is a recovery from the crash and two is a rapid and continued urban renewal process,” he said. “We believe that those markets will outperform the broader market and believe there’s a lot of value in buying assets in those locations.”
Read more: http://www.chicagorealestatedaily.com/article/20130514/CRED03/130519920/australian-investor-buys-south-loop-development-site#ixzz2TNvEY4ly
“…I only buy meat at Whole Foods” types…”
I only buy meat at Whole Foods too!
(Family packs or sale items.)
Sometimes Trader Joe’s as well 🙂