Market Conditions: March Home Sales Fall 6.5% YOY But Median Price Keeps Rising

As expected, March sales fell 6.5% year over year as weather, tight inventory, higher prices and higher mortgage rates bit buyers.

From the Illinois Association of Realtors:

“The city of Chicago saw a 6.5 percent year-over-year home sales decline in March 2014 with 1,819 sales, down from 1,945 in March 2013. The median price rose to $237,000 versus $187,000 in March 2013, an annual increase of 26.7 percent.”

Historic data courtesy of G:

City of Chicago condo/TH/SFH closed totals March
year/closed/median/% REO-Short Sales
Year Closed Median %REO/SS
1997 1,226 $126,875
1998 1,540 $137,003
1999 1,766 $152,125
2000 1,793 $167,500
2001 1,800 $195,000
2002 2,112 $210,000
2003 2,261 $225,000
2004 2,772 $244,950
2005 2,822 $271,125
2006 3,000 $275,862
2007 2,399 $285,000
2008 2,098 $300,000
2009 1,219 $217,000 37%
2010 1,860 $207,750 38%
2011 1,481 $163,763 49%
2012 1,630 $170,500 44%
2013 1,894 $187,500
2014 1,819 $237,000

“Relative to the number of homes available for sale in the marketplace, Chicago is still selling more homes than it did this time last year,” said Matt Farrell, president of the Chicago Association of REALTORS® and managing partner of Urban Real Estate.

“Most of the transactions which closed in March are homes that went under contract in January and February, despite the inclement winter which definitely impacted an already anticipated slower winter market,” Farrell added. “Buyer demand continues to outpace available inventory; Sellers looking to make a move should be jumping off the fence now while buyers are still able to capitalize on attractive interest rates.”

Did he just say “buy now or be priced out forever”?

Farrell is correct that March sales would have gone under contract during the worst of the winter. But mortgage applications have been at 18-year lows for weeks which indicates that future sales will also be slower than a year ago.

Soon, no one will be able to blame “the weather.”

The rising median home price is also interesting. Remember, the median just tells you what mix is selling. It doesn’t tell you that prices are actually rising.

With mortgage rates about a percent higher than a year ago, and home prices also higher, there are less sales on the lower end of the market which is most impacted by an increase in the monthly mortgage payment.

Is Farrell right that you should buy now or you won’t be able to afford to buy later when mortgage rates are higher?

And what about sellers? Isn’t the window going to close for sellers as well?

Illinois median home prices increase in March; Number of home on market improves, but inventories remain tight [Illinois Association of Realtors, Press Release, April 22, 2014]

 

499 Responses to “Market Conditions: March Home Sales Fall 6.5% YOY But Median Price Keeps Rising”

  1. I’m back from Asia and I’m wearing my winter coat again.
    WTF???
    But it’s nice to be back in the windy city. Just in time for the Blackhawks and Bulls.
    What neighborhoods should I be checking out for the housing boom? If the weather improves, I’ll go out and see what is going on and do some new posts.
    Is the market as hot in places like Beverly and Old Norwood Circle as it is in River North?

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  2. Median price rises while volume drops precipitously (18 year low in new mortgage applications is a harbinger of things to come); this is exactly the same pattern as 2006-2008; as volume drops, median price rises; and fair soon, prices will plateau as continues to drop…and then crash as volume drops further with the first minor drops in median prices. This crash won’t be as bad as the previous crash, but the foundation has already been laid.

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  3. lots of stuff being built on Chicago ave and the Cabrini area, no clue about the rest of town, but my guess is that Beverly still sucks.

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  4. “2001 1,800 $195,000″

    That’s the last kinda normal year with similar sales. Now, what’s the constant dollar (CPI) value of that $195 in 2014?

    $260,180.

    So, even with the farcical indicator that median price is, and the huge bump (based primarily on product mix) over last year, we’re about 10% below 2001.

    Well, you say, 2001 was a huge bump over 2000, and probably not attributable to a mix change. Ok, then, $167,500 in 2000 is $229,840 in 2014 dollars–so we’re a bit overheated (based on Anecdata median) compared to 2000. And we’re somewhat more bubbly compared to 99, 98, 97. But, thus far, as indicated by medians, we’re still in a ‘normal’ amount of a resi RE recovery. Not that “as indicated by medians” means much of anything, but the realtards want us to think it does.

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  5. “Did he just say “buy now or be priced out forever”?”

    No, he said the inverse corollary–“Sell now, or get less next year.”

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  6. I’m rooting for Pilsen to finally improve this year.
    I’ve noticed a dearth of inventory in my neighborhood, University Village, and am seriously thinking of selling and possibly moving to Phoenix, where I could get a house with a pool for the price of my condo.

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  7. “possibly moving to Phoenix,”

    Phoenix?? I mean, youre getting old, but youre not that old.

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  8. In Phoenix your water bill alone will be as much as your assessments and taxes here combined!

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  9. I’d have a pool for my dogs if I moved to Phoenix. A pool! I don’t know how that city/state is financially stable considering all taxes/fees are cheaper and they have just as many corrupt politicians as Illinois.

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  10. The grass is always greener somewhere else….except in Phoenix where there is little grass, only desert scape……
    The only way I would move to a lower cost environment at this point in my life is if I had a steady source of income or savings independent of a job. Like if my mortgage were paid off, and I had a pension + social security + a hefty boomer sized 401k balance, I could retire somewhere warm and still maintain a decent quality of life.

    But on the otherhand, when my wife had her baby, I ran into an 88 yo man in the elevator of NW hospital downtown who said he was visiting his 1 day old great granddaughter . He said he lived across the street in some high rise. Now that seems like an appealing lifestyle for an elderly person. No need for a car, walk everywhere, world class doctors right across the street, access to restaurants and cultural activities … climate sucks.

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  11. when you’re 88 how much time are you spending outside anyway?

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  12. ” a hefty boomer sized 401k balance”

    What? The average $125k boomer 401k? Even 4x average is $500k–which is $20k/year, which (with SS) moves one from catfood to early bird specials, but still is living in a rented manufactured home not on the coast.

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  13. “a rented manufactured home not on the coast.”

    HEAVEN!!!

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  14. http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?_r=0
    look at the photos; such a difference from Chicago

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  15. As long as people keep voting against there economic interests, because of legal abortion and gays, income disparity will only get worse.

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  16. “As long as people keep voting against there economic interests, because of legal abortion and gays, income disparity will only get worse.”

    Oh boy….

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  17. “I’ve noticed a dearth of inventory in my neighborhood, University Village, and am seriously thinking of selling and possibly moving to Phoenix, where I could get a house with a pool for the price of my condo.”

    Phoenix prices are falling again and inventory is up like 30%. It will be a good time to buy there later this year!

    I was watching that HGTV show Property Virgins the other day and they had a bunch of first time buyers looking in Savannah. It just seemed so cheap to me compared to Chicago and what I have to pay in the GZ. It gave me second thoughts (and I wasn’t even here all winter!)

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  18. “lots of stuff being built on Chicago ave and the Cabrini area, no clue about the rest of town, but my guess is that Beverly still sucks.”

    There are lots of flippers in Norwood Park. Average price seems to be over $400,000 now. Is that sustainable for that neighborhood with that high school? I wonder…

    The downtown seems to have surpassed bubble pricing and is now in a world of its own. I don’t understand why all those accidental landlords aren’t selling now. They can finally cash in.

    But, from my observations of the near north side like LP and Lakeview, it seems much, much slower. Not as many properties selling immediately. Some properties even just sitting there. Maybe they are overpricing, I don’t know. I only just got back into town so I’ll have to check out some open houses to see.

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  19. “Now that seems like an appealing lifestyle for an elderly person. No need for a car, walk everywhere, world class doctors right across the street, access to restaurants and cultural activities … climate sucks.”

    They’ve actually studied this. There are more super-agers (i.e. those who live to be 100) in the Midwest then in warm climates like California or Florida. They aren’t sure why but the study cited:

    1. Those in the Midwest are near their family and studies have shown you live longer if you’re near friends and family (i.e. loved ones.)

    I also wonder if it isn’t BECAUSE of the weather that Midwesterners are just hardier. My grandmother is 90-something and was still shoveling her sidewalk this winter in Michigan (even though I yelled at her for doing it.) She’ll only do it when its like 5 inches or less. She says it’s “good exercise.” She also still plants flowers on her deck every spring (although she has recently hired a local gardener guy to help her.)

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  20. “when you’re 88 how much time are you spending outside anyway?”

    My grandmother is in her 90s and she still golfs 9 holes 2 times a week in the spring/summer and fall. In the winter, she plays on a local bowling league which bowls once a week.

    But I think downtown/city living for the elderly is fantastic. Actually, some of the River North and Streeterville buildings are full with the Greatest Generation. Go check out some buildings in the Gold Coast as well. It’s a fantastic place to age. There’s taxis and public transportation for when you can no longer drive, the hospital is nearby, you can get food delivered, there is no shoveling or lawn maintenance.

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  21. They have a bigger safety net in many countries. They’re not going without healthcare or childcare like we do here.

    “The crisis had no effect on our lives,” Jonas Frojelin, 37, a Swedish firefighter, said, referring to the global financial crisis that began in 2007. He lives with his wife, Malin, a nurse, in a seaside town a half-hour drive from Gothenburg, Sweden’s second-largest city.

    They each have five weeks of vacation and comprehensive health benefits. They benefited from almost three years of paid leave, between them, after their children, now 3 and 6 years old, were born. Today, the children attend a subsidized child-care center that costs about 3 percent of the Frojelins’ income.

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  22. I really love how stupid fucking liberals try and justify higher taxes for the rich and socailized medicine and all that garbage and then compare the united states with its practically open immigration policy, to countries like switzerland, finland, denmark, where the only way you can become a citizen there is to have literal shitloads of cash (many hundreds of thousands of dollars), oh and you have to be white, and a certain religion and yeah that would totally fly here…

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  23. “look at the photos; such a difference from Chicago”

    Well, one of the families lives in a ‘exurban’ (to the extent that makes sense in Sweden) small town, and the other lives in a ‘suburban’ borough of Gothenburg, along the ring road. In a (veryvery) rough comparison to Chicago, which adjusts for the relative size of the two cities, one lives in Sandwich, and the other lives in Elmhurst/Highland Park/pick your 294-burb.

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  24. http://www.thelocal.se/20140219/swedens-population-booms-after-immigration-spike
    Sweden has a large and growing immigrant population. Most are coming from poor countries, Somalia and Syria. Somalians certainly aren’t white. And neigher are christian.

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  25. http://www.businessinsider.com/sweden-politics-immigration-and-population-ageing-present-policy-challeng-2012-8
    “The second main population development has been the rise in immigration. Since the 1970s, the vast majority of non-Nordic immigrants have been political asylum-seekers and their families, particularly from the Balkans, Iraq, Iran and the Horn of Africa. Currently around 15% of the population were born abroad. Statistics Sweden projects that this proportion will increase and level out at around 18% in 2020.”

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  26. “compare the united states … to countries like switzerland, finland, denmark”

    Do you suppose that’s why the article Chichow linked to used examples from Sweden, with its much more liberal immigration policies? And otherwise mostly talked about Canada, which *also* has much more liberal immigration policies than the 3 you cite? Or do you just like tossing out strawmen?

    Sure, the US compares favorably in all aspects to South Sudan, Uzbekistan and he Central African Republic (or is it back to “empire” this week?). So?

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  27. Oh, also:

    “oh and you have to be white, and a certain religion and yeah that would totally fly here…”

    About half our country would *love* that, It’s the “stupid fucking liberals” who wouldn’t let it fly.

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  28. It would be difficult to replicate Sweden or Switzerland in the United States. There’s a tremendous amount of cultural hegemony among the less than 10,000,000 inhabitants in Sweden or Switzerland. Unlike here, I go to the Target in Niles and suddenly I’m transported to the third world….where no one speaks English natively, they have hoards of illegitimate children, and they look at me like I’m the freak.

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  29. http://en.wikipedia.org/wiki/Norwegian_Vietnamese

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  30. Ask the Swedish or Swiss how they feel about the immigration…..

    http://www.reuters.com/article/2013/05/27/us-sweden-riots-idUSBRE94Q0E620130527

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  31. http://en.wikipedia.org/wiki/Chicago#Demographics
    45.0% White (31.7% non-Hispanic whites);
    32.9% Black or African American;
    13.4% from some other race;
    5.5% Asian (1.6% Chinese, 1.1% Indian, 1.1% Filipino, 0.4% Korean, 0.3% Pakistani, 0.3% Vietnamese, 0.2% Japanese, 0.1% Thai);
    2.7% from two or more races;
    0.5% American Indian.

    so 78% white and black

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  32. http://en.wikipedia.org/wiki/Oslo#Demographics

    32,000, or 70.4% of Oslo’s population is ethnic Norwegian, an increase of 6% since 2002 (409,000).[98] Oslo has the largest population of immigrants and Norwegian-born to immigrant parents in Norway, both in relative and absolute figures. Of Oslo’s 624,000 inhabitants, 189,400 were immigrants or Norwegian-born to immigrant parents, which is 30.4 per cent of the capital’s entire population.

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  33. “Sweden has a large and growing immigrant population. Most are coming from poor countries, Somalia and Syria. Somalians certainly aren’t white. And neigher are christian.”

    well watch over the next 25 years as their socialist experiment goes down the shitter then

    but please compare the percentage of those immigrants to the US. Please i would love to know the percentage number of white educated immigrants entering the united states compared to the rest…

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  34. ” Of Oslo’s 624,000 inhabitants, 189,400 were immigrants or Norwegian-born to immigrant parents”

    But Sonies wants to talk about 3 *other* countries.

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  35. Yeah uneducated immigrants live in the urban center, what a shock…

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  36. “Please i would love to know the percentage number of white educated immigrants entering the united states compared to the rest…”

    You mean, compared to the number entering switzerland, finland, denmark?

    Denmark–“Immigrants and their descendants from non-western countries constitute 6.5 per cent of the Danish population.”

    Just a question of whether Mexico counts a ‘western’ country, or not.

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  37. gringozecarioca on April 24th, 2014 at 1:46 pm

    “Just a question of whether Mexico counts a ‘western’ country, or not.”

    Nope.. Mexico is in South America.

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  38. gringozecarioca on April 24th, 2014 at 1:48 pm

    …come to think of it.. The USA has never lost a war so that means Canada has been part of the US sine 1812.

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  39. D’Ze’ing

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  40. “The USA has never lost a war so that means Canada has been part of the US sine 1812.”

    Then we’d have to deal with the Quebecois, and poutine wouldn’t be weird. Also, we wouldn’t have any basis to deport Beiber.

    But yes, funny combo. Like Brasil and trying to quickly build soccer stadia that won’t fall down–you guys need to hire the Qataris to hire the Indians to risk life and limb to get it done.

    Also, aon, how were the thongs today?

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  41. I did a post that digs deeper into that spike in median home prices. What a crock – and the Trib keeps talking about it like home prices are up that much: http://www.chicagonow.com/getting-real/2014/04/why-you-shouldnt-care-that-chicago-median-home-prices-rose-in-the-last-year/

    I know. I’m beating a dead horse.

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  42. I think people might find this interesting:
    http://www.chicagobusiness.com/article/20140419/ISSUE01/304199982/trixie-and-chad-have-kids
    I thought the demographic info was interesting – 1200 more kids in LP since 2010 and 4k fewer 25-44 yr olds. Guess they are all moving to RN.

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  43. gringozecarioca on April 25th, 2014 at 11:35 am

    “trying to quickly build soccer stadia that won’t fall down”

    This place is just not meant to function properly… also bit of a powder-keg these days, they were tearing up Copacabana pretty well 2 nights ago..

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  44. Yeah, LP has sucked for quite some time for the 25-44 crowd trying to pack into 4 into an apartment. Kids these days are much poorer, which explains why that post-college cohort is moving further north and west and northwest to places like logan, UK, edgewater, etc.

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  45. From my understanding, Pilsen has already exploded.
    Anyone else on board the Pilsen train?

    -Y

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  46. ” the 25-44 crowd trying to pack into 4 into an apartment.”

    You know a lot of 30+ y.o. singles living 4 to a not-4-bedroom apartment? You know any 40 y.o. singles living four to a not-4-bedroom apartment?

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  47. I’ve known of quite a few under-30’s but older than 25 cramming into coach homes, or duplex downs, ups. usually have 3-4 bedrooms. It’s really not all that different than their days living in the frat house

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  48. I’m not sure if I could live in Europe unless I was very wealthy. They seem to be able to do without even the simplest of amenities – dishwasher, in-unit washer/dryer, parking spaces, central air, etc…. Also, what’s with their automatic cars? When I’ve driven in Europe, the cars I rented seemed like the “automatic” mechanisms were just thrown on.

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  49. Two quick questions: Say you’ve got a century-old red brick SFH, and no garage. You’re about to build a garage off the alley/in the back yard. The back yard faces the back of a 2-story office building. The garage is going to serve as a wall/fence for about two thirds of the rear perimeter of the property

    1) For roof style and material, do you:
    A) Go with a hip style roof (similar to the house), and use siding (to be painted, or coated with a “stain-like” paint to compliment the fence)? Due to the garage pad being about two feet lower than the yard, this option, with 8 foot garage walls, would put the gutter line at about 6 feet; or
    B) Go with a flat roof (as is the norm on most other houses in the neighborhood), and use brick on the wall that faces the yard/house (and siding on the other walls)? With this option, the brick wall would be about 9 feet above the yard (9 foot wall in back, sloping down to 8 at the alley, with a 2 foot wall built along the roof line).

    2) The service door (that one walks in/out of) will face north, and won’t be visible from most of the yard or house. Assuming there will be one window, should it be located on the brick wall, or also on the north wall?

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  50. yes build a garage

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  51. “1) For roof style and material, do you:”

    Hip roof, BUT taller walls, and overbuilt, so you can use the ‘attic’ for off-season storage of your seasonal gear.

    Also: congratulations on the house. How much over ask did you have to go?

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  52. Have the garage extend as far as possible along length of the property lines. Have the red bricks in the front of the garage match exactly the house. Put two windows in the garage that face towards the house. Don’t worry about how the sides look, but make sure that everything looks nice when you look out of one of the house’s windows.

    Add extra security in the garage, perhaps a heart beat sensor so when you pull in, you are alert if a creeper is hiding inside.

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  53. For question #2, remember that windows and doors remove usable wall space inside your garage. Something to think about if you are also considering adding a party door to the garage.

    Besides, won’t you just want to install a deck above the garage too?

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  54. Steve Heitman on April 28th, 2014 at 9:04 pm

    “But, from my observations of the near north side like LP and Lakeview, it seems much, much slower. Not as many properties selling immediately. Some properties even just sitting there. Maybe they are overpricing, I don’t know. I only just got back into town so I’ll have to check out some open houses to see.”

    Really? A broker friend had 60 groups come through his LP townhome this past weekend. 9 offers after 2 days on the market. Another partner had an open in the West Loop and went through 50 brochures in a 3 hour open house. 7 offers in a 2 hour open house.
    Sales are down because there is no inventory. Prices are up because there is no inventory and HUGE buying population. No one is selling because they know there is a serious push on Chicago as a place to live. Don’t believe me? Look at all the bars, restaurants, and hotels going up in River North, West Loop, and the North Side. Boom town is here to stay and renting is not an option. Anyone want to rent a 2 bed, 1100 sq ft condo at Webster Square? Asking price $3,700 per month. Welcome to boom town!

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  55. Steve Heitman on April 28th, 2014 at 9:13 pm

    “I thought the demographic info was interesting – 1200 more kids in LP since 2010 and 4k fewer 25-44 yr olds. Guess they are all moving to RN.”

    Does this answer your inventory question in LP, LV, Roscoe, and Lincoln Square? 25-44 year olds move often. Families with kids do not. Condo buildings being torn down to be single families. Single families being town down to build larger single families. A standard city lot on Mohawk just went under contract for $1.3 million!

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  56. ” A broker friend had 60 groups come through his LP townhome this past weekend. 9 offers after 2 days on the market. Another partner had an open in the West Loop and went through 50 brochures in a 3 hour open house. 7 offers in a 2 hour open house.”

    I don’t know if they intentionally priced this stupid low to generate high interest or if they just didn’t know what they were doing but I think this is a bad idea. You don’t get good price discovery because all the buyers have not had a chance to look at it. If you want to auction your property you don’t need a realtor you need an auctioneer and you should be paying your realtor a lot less for a lot less work.

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  57. gringozecarioca on April 29th, 2014 at 10:03 am

    “there is a serious push on Chicago as a place to live”

    With the new proposed tax rates.. i’d be gone…

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  58. Case Shiller index has Chicago condo and townhome prices up 17.1% from Feb 2013 to Feb 2014. According to a crains article, some Chicago zip codes are almost back at bubble pricing. Low inventory and low mortgage rates have wanna be buyers scurrying around for a deal.

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  59. Buy a place within 2 miles of the central business district and stay for a long time, you’ll probably make a lot of $$$ going forward

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  60. @ annony –

    Congratulations on the new house, and few thoughts when I built my garage:

    I went with all brick as my first thought was I didn’t feel like painting siding, and my previous wood garage began having structural/mold/rot/rats chewed thru the siding, etc., problems over time. It’s not a controlled environment like your house is, and it’s subject to the harsh weather elements that are Chicago. Also, you’d be amazed by how many times the garage will get hit from garage trucks, neighbors, yourself, and brick holds up to that alley abuse. It did cost more, but it does looks better and the insulation (heat, cold, rats) it provides is amazing too. Also insulate the roof heavily as that along with the brick walls, basically give me a heated garage in the winter; the heat from the car engine always keeps the garage above freezing even when it’s bitter cold outside. You can visit the brick yards on south Ashland and pick out palates of old brick to match your existing house style – the price is about the same as new/sterile brick.

    I did two windows facing the rear of my house – they add much needed natural night to the interior of the garage, and I open them in the summer. I had a brick knee-wall built the full width of my garage (under the windows) that is filled with dirt for planting: two small trees, boxwoods, and a planting base for vines that cover the wall – climbing hydrangea that wont hurt the brick or get too out of control. The knee-wall also serves as seating, and the whole thing looks like a New Orleans courtyard. My door has one of those emergency exit bars that’s great for opening the door when your hands are full of groceries – just push it open with your hip. I’ve had no problems with a flat roof (I had it silvered), and one day you may want to put a deck up there. 6 feet gutters are too low, and the garage walls should be higher and in proportion to your house. Don’t skimp on a low HP garage door motor, they never last as long and you need the power to open a heavily insulated door (the more insulation the better) – I learned that after replacing a small motor after just 3 years. Pitch your floor just slightly to the main garage door opening; I got tired of stepping in melted snow water in my old non-pitched garage floor every time I got into/out of my car. Stupid stuff, hope it helps.

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  61. “With the new proposed tax rates.. i’d be gone…”

    An extra mil on the tax rate would drive you away? $500/year on a AV of $500,000 (ie, about a 5% increase)?

    The thing that should drive one away is what happens when they ‘fix’ the *rest* of the pensions, particularly at the state level. Of course, what kills me about the discussion of the state budget is the “how will everyone deal with the cuts in state services” and, while I know many of them are societally valuable, I don’t know when I last interacted with “state government services” other than the SOS office for DL and plates. IL state government is largely a non-entity for me, other than as a source of funds for local government activities, and a collector of income taxes.

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  62. gringozecarioca on April 29th, 2014 at 12:54 pm

    Anon.. I saw proposed at 6.9, if I remember correctly, when I was in Chicago it was 3. So yeah, send me down to Tejas. Great food, big houses, fake breasts, and guns, what more could one want out of life.

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  63. “I don’t know when I last interacted with “state government services” other than the SOS office for DL and plates.”

    You don’t use interstates? Or any state route such as LSD or North Ave? You use dozens of state services on a daily basis.

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  64. ” IL state government is largely a non-entity for me, other than as a source of funds for local government activities, and a collector of income taxes.”

    That’s pretty much how the low/no income states operate and they like it that way.

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  65. Illinois should abolish its public university system. If you want education beyond high school you can do it on your own dime. You might be able to convince me to keep city/community colleges, but no 4 year degrees. Think of how much money the state could save on current and future liabilities.

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  66. The state of Illinois owes UIUC nearly a billion dollars of unpaid bills… as of right now UIUC is over 60% privately funded as it is, so it woudln’t take too much to make it private eventually

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  67. What’s even more nonsense is that UIUC is real big on attracting foreign students who study learn – and despite paying a full tuition (even though the true cost is always subsidized to some extent by the tax payers) – leave and return home to some other country to compete; or worse, they come here to spy and steal our secrets.

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  68. Steve Heitman on April 29th, 2014 at 2:39 pm

    “I don’t know if they intentionally priced this stupid low to generate high interest or if they just didn’t know what they were doing but I think this is a bad idea. You don’t get good price discovery because all the buyers have not had a chance to look at it. If you want to auction your property you don’t need a realtor you need an auctioneer and you should be paying your realtor a lot less for a lot less work.

    Gary, the highest offer was 5K under the list price. It was not under priced…

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  69. “send me down to Tejas. Great food, big houses, fake breasts, and guns, what more could one want out of life.”
    I’m in Dallas now – on my way back. 75 degrees and sunny. 6 lane roads with no cars parked on the side. No income tax. And, yeah, that other stuff. Loving it.

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  70. “Gary, the highest offer was 5K under the list price. ”

    Well, that is indeed odd. 7 – 9 offers and the highest is under the list in a highest and best situation. I’ve seen properties go above list with only 3 offers when interest is as high as you said it was.

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  71. The various taxes in this city are insane. I spent some time looking into Phoenix and their property taxes are incredibly low. My relatives pay less than I pay and their house is worth 3x the price of my condo. They don’t have to pay for city stickers or license plate stickers for their cars. There is no sales tax on cars. They do have to pay yearly tax on cars as property, but it works out to be far less than here. Their state income tax is far less than ours, even for the highest paid workers. Also, there are no disgusting hipsters in matchstick jeans riding bikes everywhere.

    I don’t understand how Phoenix can be so much cheaper than Chicago when their politicians are just as corrupt and they have a ton of poor people.

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  72. I would guess that some of it has to do with climate differences. There is no snow to plow, no salt to buy or salt/plow trucks, no damage to streets from heavy plows and freeze/thaw cycles, no heating bills for government buildings. Cost of living is lower so they pay government employees less. They also probably have a properly funded pension system and I would bet are giving very little services to all those poor people. Even the poor people require fewer services when the temperature doesn’t get down to -7. It all adds up.

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  73. Steve Heitman on April 29th, 2014 at 9:44 pm

    Gary,

    Dallas? Really? 100+ degrees for 5 months out of the year is worse than winter we just had.

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  74. “Dallas? Really? 100+ degrees for 5 months out of the year is worse than winter we just had.”
    I grew up there. I’ll take the heat any day. Can’t stand the cold. And for the record…average highs do not exceed 97 during the summer. And it’s a dry heat :)

    When I was a kid we played outside all day without sunscreen and without water bottles and my house only had 2 window units in it. Today everything is air conditioned. In fact, I had to wear my coat in the airport.

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  75. So I’m rarely hot in Dallas but in Chicago during the winter I’m never warm. I have to keep my house at 68 to keep the bills reasonable. The restaurants and bars are all drafty. And what’s with the public bathrooms? They’re like meat lockers. Is there a reason they don’t put heating vents in them? And it takes forever to get your heater going in your car. And then there is the snow and slush to navigate. There is no heat equivalent to snow and slush. And then you get salt all over the place. I went 4 months without washing my car this winter because it never stopped snowing.

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  76. ” There is no heat equivalent to snow and slush.”

    um… drought? And dry heat in texas? GTFO its not lousiana but its humid as hell when that gulf moisture blows your way

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  77. “Anon.. I saw proposed at 6.9, if I remember correctly, when I was in Chicago it was 3. ”

    Ah. Income tax. Yes, that has been proposed, starting at $180k or something, but requires a constitutional amendment. I think of that as an Illinois tax, rather than a Chicago tax, but I can see why you conflate the two.

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  78. “You don’t use interstates? Or any state route such as LSD or North Ave? You use dozens of state services on a daily basis.”

    Interstate maintenance is primarily funded with Federal Gas Tax dollars; the Tollways are user funded. LSD is a US highway, not a state route. The State involvement in IDOT controlled roads within the city is mainly an impediment to improving usage of the R-o-Ws.

    And, anyway, I don’t *ever* recall seeing a IDOT vehicle out patching potholes or repaving the street on North Ave or LSD–it’s *always* CDOT or a private contractor. Which goes back to the State being merely a conduit for doling out funding.

    So, what else you got, Fred-the-future-pensioner?

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  79. Apparently they put the kibosh on the progressive tax rate (thank goodness)
    http://www.illinoispolicy.org/press_releases/progressive-tax-hike-defeated-in-legislature-illinois-policy-institute-statement/

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  80. I am not a future pensioner as I do not for any government agency at any level nor do I work for any private company contracted by any government agency. I just believe it is a fallacy when people claim that they are not receiving any benefits from government, especially when they use it as an argument to cut government spending (ala tea party libertarians.).

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  81. ….all I know is that I will never receive a pension, so I don’t think it’s fair to ask me to contribute to the system. I would be fine contributing to the pension fund, if I was going to get a pension one day, but all I have is a 401k that will never equal the millions of dollars that long-living pensioners receive.

    At the very least, they should move the government employees to 401ks…. They should also ask parents of CPS students to contribute to their kids’ education.

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  82. Good news sonies, thanks for posting.

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  83. ” I just believe it is a fallacy when people claim that they are not receiving any benefits from government”

    Strawman. That’s not *at all* what I said.

    “especially when they use it as an argument to cut government spending”

    Another strawman. I never called for a cut in government spending; I’m merely recognizing the reality of the shift in spending toward the current and future retirees. I also noted that–for me–the state is basically a mechanism for collecting and distributing cash to local agencies (eg CDOT and their private contractors, CPS, etc) whose services I *do* find myself using.

    And, I assumed you must be a pensioner, bc ” You use dozens of state services on a daily basis”–with no recitation of any *actual* state service–is the type of argument that the state employees make. And it carries little weight with me, admittedly sitting in my rather privileged little world on the northside.

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  84. “They should also ask parents of CPS students to contribute to their kids’ education.”

    Um, they do. Wanna see the canceled checks?

    I mean, I get that you object to teh poorz, on principle, but what’s someone on public assistance, living in public housing, supposed to contribute financially to the schools (beyond their poor child who comes with certain funding ‘tags’ that increase state and federal $$ for the school)? I don’t get it.

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  85. People who can’t afford kids, shouldn’t have them. Although, I suppose we have to help the poorest of the poor. There is no reason for middle class parents to expect their kids to get a free ride.

    Anon, I am actually curious, how much does the average parent contribute to the CPS school each year? I was under the impression that everything was free, down to even the text books and those horrible see-through backpacks.

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  86. “I never called for a cut in government spending;”

    I admit that the government spending part was meant as an aside and not towards you specifically. It was actually directed toward the Libertarian-Tea Party Jenny’s of the world who do not believe in paying for anything for which she does not receive direct benefit. She believes that she shouldn’t have to pay for CPS because she does not have any children. This is also why she does not want to contribute to the pension mess even though those employees were promised a contribution to the fund by their employer (the citizens of the state of Illinois) and their employer (the citizens of the state of Illinois) did not fulfill that promise even though the employees made their part of the contribution as required. This would be no different than a 401k plan with an employer match, only the employer never made the match, but the employee is still promised the amount of money as if the match had been made. If the government (the citizens of the state of Illinois) had been fulfilling its promise over the last 30 years, the government (the citizens of the state of Illinois) would not be in this scenario. Illinoisians have been paying artificially low taxes because instead of covering our entire costs of doing business, we have been mortgaging the future by not making required contributions to the pensions. If we had been making those contributions (paying the full cost of doing business), we would not have a mortgage bill due.

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  87. “Anon, I am actually curious, how much does the average parent contribute to the CPS school each year? I was under the impression that everything was free, down to even the text books and those horrible see-through backpacks.”

    Define ‘average parent’. Do you mean: what is aggregate $$ ‘contributed’ (in various fashions) by parents to all CPS schools divided by the number of “parents” (counting only one “parent” per set of siblings)? Or the ‘median’/typical? Those are certainly pretty small numbers. Our school raises several hundred dollars in cash *per kid* every year–and there are a number of schools that raise more than that, and far more that raise basically zero.

    “down to even the text books” Yes, the text books are “included”.
    “those horrible see-through backpacks” Never see’em in my hood.

    While it is likely that there are some kids at the handful of schools closest to me who get donated school supplies, and there are certainly some families who do not bring in the full amount of the requested “shared’ supplies, I am not aware of who they are, and the fact that many of the parents send in somewhat more than the amount on the supply list (eg, if it asks for 20 pencils, but the pack we buy is 24, 24 go in to class) and are generally happy to replenish covers for those who bring nothing. And that sort of ‘donation’ isn’t part of the $$ I reference above.

    But yeah, at the crappiest of the crappy schools, that crap is ‘free’–but even then, the teachers are out-of-pocket for a lot of things, basically being surrogate parents for some of the ‘not free’ part of CPS.

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  88. I meant the average middle class family, sending one kid to a magnet school or other top CPS school. Do CPS schools ever go after alumni for donations? I’m bombarded all the time from my former schools asking for donations and they raise a ton of money that way.

    I don’t understand why people who can’t afford to buy pencils for their kids, have kids in the first place.

    I guess I take this somewhat mean/non-bleeding heart stance because I’m not wealthy, but am too rich to qualify for aid of any type. When property taxes go up, I think, “Oh, great, now the new car I have been putting off buying is going to be put off even further.” When income tax goes up, I think, “That could have been a European vacation.” Then, I get angry because I’m giving my money to services I will never use and to people who are a lot wealthier than me. The average pensioner probably makes a lot more than I make in a year and they are guaranteed yearly raises. Families send their kids to public schools, even though they can afford private schools and I’m forced to contribute. It irritates me that my friends have two kids in public school, when they make over $200k a year. Why should I contribute anything to their kids’ education or the education of any other of these pioneering liberal parents who think they are going to fix the world by sending their kids to public school?

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  89. “I admit that the government spending part was meant as an aside and not towards you specifically. [] This is also why she does not want to contribute to the pension mess even though those employees were promised a contribution to the fund by their employer”

    Indeed, if you unpack what I did say, it implies an acknowledgement that the pensions are going to be ~50% of the state budget, and that I don’t see what I lose (hyperbole, natch) if the state fires basically all of the state employees (which, btw, would *substantially* reduce the pension deficit, which is based on *expected* future benefits).

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  90. “I am actually curious”

    I am curious too.

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  91. jenny, we (the parents group) fundraise about $100,000-150,000 per year at our CPS non-magnet school. I have no idea what the average family gives though.

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  92. Also, from time to time teachers ask for school supplies like pencils, paper, pens, paper towels, ect. that we happily send in as do many parents. Like anon, I have never seen these transparent backpacks.

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  93. Shhh, no one tell jenny about the free breakfasts…

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  94. “I don’t understand why people who can’t afford to buy pencils for their kids, have kids in the first place.”
    I would guess that many of them are unintentional or had the means to buy pencils at the time of the child’s birth, but due to loss of job or other life event are no longer able to.
    “The average pensioner probably makes a lot more than I make in a year ”
    You are complaining that most people who contributed 8% of their paycheck for 40 years make more money than you? I certainly hope to be making more money in 30 years than I make now! I’m not angry at future me for making more money than now me.

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  95. “Shhh, no one tell jenny about the free breakfasts”

    Free for *everyone*, regardless of family income!!

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  96. Is Sabrina going to fix teh posting lag now that she’s back in the country?

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  97. “Free for *everyone*, regardless of family income!!”

    It’s hard to tell if she’ll be more upset about stuff being given to teh poorz or the likes of you. I guess she doesn’t have to choose. She’ll be pissed off about it all. That’s the singular genius of universal breakfast.

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  98. “You are complaining that most people who contributed 8% of their paycheck for 40 years”

    It wasn’t 8% in 1974. Indeed, it wasn’t 8% in 2008.

    And it’s not “the average” pensioner that makes a lot more than Jenny, but the all too common pension maximizer who makes 5x+ what Jenny does and makes the whole system look bad. There is *no* justification for pensions which start out higher than the highest salary even earned, but there are many who get that.

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  99. ” There is no heat equivalent to snow and slush.”
    “um… drought? And dry heat in texas? GTFO its not lousiana but its humid as hell when that gulf moisture blows your way”
    Drought doesn’t get in your shoes. And I’ve never seen anyone digging themselves out of drought. And drought doesn’t cause roofs to cave in and doesn’t have to be plowed.

    You’re thinking about Houston with the humidity. Dallas isn’t that bad. Houston is much closer to the gulf.

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  100. “It’s hard to tell if she’ll be more upset about stuff being given to teh poorz or the likes of you. I guess she doesn’t have to choose. She’ll be pissed off about it all. That’s the singular genius of universal breakfast.”

    Wonder if she’d be even more upset to know that some schools tried to reject it, but CPS forced it on them.

    Heard (may not be true) that the funding CPS gets from Feds for providing Universal Breakfast exceeds the cost of the program, so CPS comes out with extra $$.

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  101. “I have never seen these transparent backpacks”
    Only time i’ve seen them is I was riding the Orange line to midway and saw all the kids who go to Curie had them on
    sad to say the least…

    “Drought doesn’t get in your shoes. And I’ve never seen anyone digging themselves out of drought. And drought doesn’t cause roofs to cave in and doesn’t have to be plowed”

    yeah you just have dust storms (which are HORRIBLE) or die… quite the compromise lol!

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  102. Don’t think I ever saw a true dust storm the entire time I lived in Dallas – around 15 years.

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  103. How about a real estate post?
    http://www.chicagomag.com/real-estate/April-2014/The-Door-to-Desirable-Ravenswood-Manor-Is-Ajar-on-Richmond-Street/

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  104. They should just convert the pensions into 401ks and then offer 401ks to all current employees and be done with it. I don’t know why this sector of jobs gets pensions while almost no one else gets them.

    It is irritating that we have to pay for free breakfasts. Damn it. I don’t qualify for a free breakfast or free anything.

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  105. “Is Sabrina going to fix teh posting lag now that she’s back in the country?”

    Would it be possible to at least add post time to the homepage so at least we know how long it will be until we can view the entire comment?

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  106. Speaking of real estate, I’m pining over this home: http://www.estately.com/listings/info/700-south-campbell-avenue

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  107. “They should just convert the pensions into 401ks and then offer 401ks to all current employees and be done with it.”

    The current pension fund is under funded, meaning the government as agreed to pay out more money than it has. Converting to 401k does not change that. In your scenario, do the pensioners just not get the money they were promised, or does the state write checks to cover the difference?

    I agree that the pension system should be replaced by 401ks for current workers, but how do you handle current retirees?

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  108. Nice house but I’m not sure you would love the area, its rough, but i have a female friend who lives out there and has for a while. Definitely need a car for that area

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  109. gringozecarioca on April 30th, 2014 at 3:56 pm

    “Damn it. I don’t qualify for a free breakfast or free anything.”

    Jenny.. you must be kidding.. HD was fairly obvious he would have been thrilled to buy you breakfast. ;-)

    As for baking ass hot or freezing ass cold. HOT , HOT, HOT…. I actually like running in the low 90’s… Over 100 and you just need some shade, pool, beach, ac. Freezing ass cold gets depressing. Then of course there is heat wave = girls in bikinis vs. freezing = girls in sweaters and scarfs and jackets doin ‘lil but gettin fat.

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  110. There are lots of pretty houses in that neighborhood. My concern is the safety and the lack of amenities (few restaurants, no Whole Foods/Jewel). My dogs would love having a huge yard though.

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  111. Nice article Vlajos. Looks like Eric Rojas has changed brokerages and has gone from Lincoln square to Ravenswood Manor as his prime neighborhood de jour.

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  112. http://www.ericrojasblog.com/?m=1

    Icarus, I don’t know who Eric Rojas used to work for but his blog seems to focus on Lincoln Square and other areas of the city.

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  113. E Rojas focuses on areas a bike ride from wrigley

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  114. “E Rojas focuses on areas a bike ride from wrigley”

    Too true.

    Soon**, he will focus on places less than a block from a Divvy station AND also a bike ride away from Wrigley.

    **when his kids are old enough to ride Divvys.

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  115. I can’t tell from this article if the poorz are better off or not…

    http://www.nytimes.com/2014/05/01/business/economy/changed-life-of-the-poor-squeak-by-and-buy-a-lot.html

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  116. I think I had a “G” sighting yesterday. In Park Ridge, Mercedes S550, black, IL license plate “G”. that was the plate: “G”. I looked around the inside the facility where the car was parked but I couldn’t determine who was “G”. There was a grungy computer programmer looking guy from the 1980’s with pocket protector and all sitting on a bench, skinny guy. Seems too risky to call yourself “G” on this forum and have a license plate with the moniker. But then again, maybe he wants to be found!

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  117. people want to leave illinois
    http://www.washingtonpost.com/blogs/govbeat/wp/2014/04/30/half-the-people-in-illinois-hate-living-in-illinois/
    I realize that is state vs. Chicago.

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  118. Good one! And see where Texas is? Q.E.D.

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  119. I’d say no, considering the only significant drop in prices is for shit you don’t actually “need” (with exception of housing and clothing, although I find it hard to believe that clothing costs have decreased… quality has certainly gone down the shitter, and clothing is more disposeable now thats for sure, shit just doesn’t last… but yeah DZing

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  120. “although I find it hard to believe that clothing costs have decreased”

    In real dollar terms (which is what that chart showed) they certainly have. But you don’t shop for clothing at the stores (walmart, old navy, target) that make that obvious, especially with kids clothes.

    The ‘designer’ stuff has generally gone down in quality, too, and hasn’t gone down in price (as much, at least), but there’s a helluva lot more middlebrow ‘designer’ stuff available now than 30 years ago.

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  121. In the 1950s, people were spending about 13% of their income on clothing. Today, we only spend about 3%: http://qz.com/189904/the-case-for-fewer-but-better-clothes/

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  122. “In the 1950s, people were spending about 13% of their income on clothing”

    Bingo!

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  123. well people in the 50’s didn’t have much else to spend money on, not like they had car payments, student loans, or cell phones or internet or you get the point… but yeah I guess “designer” or non walmart shit quality has gone way downhill, and i’m mostly just talking about in the last 10 years or so.

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  124. Oh, and in the 1950s, people spent 13% on a whole lot less clothing–that’s why older houses have such tiny bedroom closets, there just wasn’t a need for more space, for most people.

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  125. Did people in the 1950s bathe every day? The lack of two full bathrooms in old homes is shocking.

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  126. “Did people in the 1950s bathe every day? The lack of two full bathrooms in old homes is shocking.”

    Yes Jenny, they just took turns. While you grew up with indoor plumbing as a given, just like today’s millennials grew up with google, wifi and social media, it wasn’t always so.

    http://www.plumbingsupply.com/pmamerica.html

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  127. ““In the 1950s, people were spending about 13% of their income on clothing””

    Womens and mens clothing uses less fabric and material today as compared to 1950, so it makes sense that clothes would cost less.

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  128. “Yes Jenny, they just took turns.”

    But how did they take turns when the inevitable bout of food poisoning happened? Did everyone just use the street gutter?

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  129. Clothes in 1950 was also made in America by union workers making a living wage and not by Bangladeshi children making pennies.

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  130. ehhhhhh

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  131. “Clothes in 1950 was also made in America by union workers making a living wage and not by Bangladeshi children making pennies.”

    You mean in a sweat shop by an illegal immigrant in the garmet district of new york? yeah, that’s what I thought.

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  132. I’m so done with the whole “I don’t have kids and don’t want to pay for other people’s!” schtick. That’s generally followed by the “My kids will be paying for your SS!”, quickly followed by “I’m not expecting SS to be around when I get old!”

    How much do I pay for my kids (just the older one right now) to attend CPS? For the tuition-based pre-K, we paid roughly $12K for the school year. Now, for K, we pay for all school supplies, plus several re-ups of supplies for the class, plus about $75 in school fees plus maybe $50-$100 for field trips. And probably $150 for materials for various projects. Oh, yeah, plus about $6,500 in property taxes, which are mostly used to fund schools and police. And I guess I pre-funded my kids’ education for years when I was paying property taxes when I didn’t have kids, or when I had non-school aged kids. And I’ll happily continue to fund public education when my kids are grown and no longer in the public school system. Maybe I should ask for some refund of my taxes, though, because I don’t really call the police or fire dept – why should I have to pay for them?

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  133. “people want to leave Illinois”

    I think if they polled most of the people living in the worst of the polar vortex states when it was fresh in their minds (and being someone who just came back to Chicago after 2 months- the weather still sucks and there hasn’t been a spring)- I think most of them would say “get me the hell out of here.”

    Real estate agents in Florida are saying there has been an influx of people from New Jersey and New York coming down and looking at property saying they just can’t take another winter in the Northeast.

    Poll a bunch of Californians after a big quake (like the 94 Norridge Quake in LA) and you’ll get the same answer about wanting to leave California (and actually about 500,000 of them DID leave after that quake.)

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  134. This spring has been ridiculous too. We have 4-5 days of terrible weather for every 1 nice day. It’s miserable. It’s early May and most of the trees still lack leaves!

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  135. “$75 in school fees”

    Ok, Blaine charges a ‘school fee’–who else? We don’t pay no stinkin’ fees.

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  136. Well california et. al is due for a big quake, and well most of the southwest is due for a big drought, and I sure as hell don’t like Floridians so yeah… Mexico? :)

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  137. “Well california et. al is due for a big quake”

    If by “et al” you mean “Missouri”, then I agree. New Madrid is due to pop any time. To the extent that such things are ‘due’.

    What part of CA is due for a big quake? There was a 6.8 (which is a big quake–bigger than Northridge) on the San Andreas 2 months ago–just happened to be offshore, so nothing much happened.

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  138. here’s the intelligence level of your average floridian

    https://www.youtube.com/watch?v=BQKK2xNKGF8

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  139. @Anon(tfo) – lots of the public schools have school fees – Burr, Nettelhorst, Waters, Burley, Skinner North, Skinner West, Ogden, and I’m sure many more. The only schools that I looked up that didn’t have a fee posted were Coonley and Lincoln. Doesn’t mean they don’t have one, just that it wasn’t posted on their website.

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  140. “lots of the public schools have school fees”

    Huh. Who knew?

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  141. Again, why aren’t these school asking more than a few tiny fees from middle class parents? Why aren’t they going after alumni for donations? If a school needs improvements, why don’t they ask parents or wealthy do-gooders to donate towards the computer lab, the new gym, the new art studios, etc? Why should people without kids have to provide anything to public schools beyond the basics (school room plus teacher) for the poorest families?

    Why do the teachers get paid so much when they only work 9 months out of the year? Why can’t the kids be asked to help clean the schools so they don’t have to pay janitors?

    Everyone has the potential to use the police, fire, parks, streets, street lighting, library, etc, etc. Not everyone has the potential to use a public school. I will never use a public school, nor did I go to one. I use a couple of things property taxes fund and I don’t have a problem paying for things that I could theoretically use one day (like hospitals for the poor).

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  142. gringozecarioca on May 5th, 2014 at 6:17 pm

    So no indirect benefit of living in a ‘burb with high property taxes and a phenomenal school district? Has no effect on the value of a home?

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  143. “Not everyone has the potential to use a public school. I will never use a public school, nor did I go to one.”

    By using the police, fire, parks, streets and library, you are using things maintained by public school grads–and think of how much worse they would be if those little people can’t read? And how many more teens dribbling balls that you would see around.

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  144. “What part of CA is due for a big quake? There was a 6.8 (which is a big quake–bigger than Northridge) on the San Andreas 2 months ago–just happened to be offshore, so nothing much happened.”

    You’re talking about the 6.9 quake 50 miles off the coast of Eureka which is at the northern end of the state near Oregon. It didn’t cause much damage but no one lives up there and it was 50 miles offshore.

    Both LA and SF are overdue for a big quake. The Hayward fault in the East Bay is the most dangerous of the Bay Area faults right now. But who knows for sure when it will blow. No way to really fix a time on these things. Anyone who lives in California who thinks they won’t get a big one is fooling themselves. But when I lived out there people used to mock me for being prepared. Good luck to them all.

    It won’t be the big quake that does the most damage, though. It will be living with the aftermath of having no water or electricity- possibly for weeks. The city of San Francisco has just 30,000 tents/sleeping bags at the ready but even the experts believe there will be at least 300,000 people homeless when they get the big one (meaning, their structures are unsound and redflagged and they won’t be able to go back inside.) Where will they all go? To Golden Gate Park like they did in 1906.

    I’d rather deal with polar vortexes- thanks.

    Oh- and if you really want to know the power of big quakes, go visit the epicenter of the 1906 quake if you’re in Northern California. You can go to the farm that started it all and still see the fence that remained standing even though the earth moved like 8 feet. Yes- 8 feet. But that was a massive quake.

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  145. “Well california et. al is due for a big quake, and well most of the southwest is due for a big drought, and I sure as hell don’t like Floridians so yeah… Mexico?”

    Mexico has huge earthquakes too. 10,000 people died in Mexico City in that big quake in the 1980s when buildings just collapsed. They’ve since constructed better but still. It also has hurricanes on both coasts. You might be okay in the center of the country though up in the mountain towns.

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  146. I at least get a pretty big heads up if a hurricane is coming… quakes not so much, I’m thinking carribean sea, island off of mexico… yeah that might work

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  147. I’m not sure if I could handle living in a tent city…actually, I am pretty sure I wouldn’t be able to take it. I’m not sure how many people in the bay area would be able to function in a tent city either.

    If there’s every a nuclear apocalypse, I hope I’m at the epicenter and just die rather than being one of the few left alive, without the internet or indoor plumbing.

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  148. “without the internet or indoor plumbing”

    Yes, living like it is 1875 (or 1955 in parts of Appalachia; or 2014 in much of India) is the worst outcome of a nuclear apocalypse.

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  149. hahahaha

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  150. http://online.wsj.com/news/articles/SB10001424052702303948104579534230618539424
    if the link doesn’t work then go to google news and search on
    “wsj The New Math of Renting vs. Buying”

    snippets
    “Buying is still cheaper in 34 metropolitan areas Deutsche Bank examined, including Cleveland, Chicago and Atlanta, though prices rose last year in those areas, as well.”

    “Even in a hot market, the math can be more advantageous for buyers who plan to stay put for a while, typically at least five to seven years. That should be enough time for market corrections to pass, says Landon Nash, a real-estate agent in San Francisco with national brokerage Redfin.

    Mr. Nash says he is telling would-be buyers in his area who plan to sell in fewer than five years that they run significant risk of selling at a loss. “We’re at the top of the market,” he says. “They might be better off as renters.”

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  151. Just posted my April update: http://www.chicagonow.com/getting-real/2014/05/april-chicago-real-estate-market-update-home-sales-falling/
    Sales continued to fall in April – down 5.5% but IAR will report a 7.9% decline. Inventory remains very low, though it’s rising slightly for condos. And market times are falling again. Low contract activity portends lower sales for the next month or two.

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  152. Hi Gary et al:

    Been lurking since I started shopping months ago. Curious what the collective wisdom says about my pet theory on Chicago real estate, that the market has bifurcated to an extreme degree, and whether data is available to parse it. Declining sales+increasing prices+relatively stable market times seems to me to equal a completed stagnant underclass of supply, combined with an extremely competitive overclass. Essentially: Chicago data is fucked because its aggregating extremely depressed areas with extremely competitive areas. I would hypothesize that the current 3-4 month supply is essentially a mix of 0 for healthy properties, and represents 100% perma-sales, properties either so bad or so over-priced that they will effectively never sell. I suspect that housing data in Chicago is less useful than almost anywhere else, and that national observers don’t understand our market because of it. Zillow/redfin continue to list Chicago as a “buyers market” which is absurd to anyone participating in it.

    Thoughts?

    I’m shopping almost exclusively on the near blue line for personal reasons, and haven’t seen what I deem to be a well priced property last for more than a day of showings. I would observe this level of competition is specific to multi-units, what I’m looking at, but I believe exists to a lesser degree for other property classes.

    It seems that no one is willing to pay for places that are more than 20% over priced (I didn’t see that as true 4 months ago). I think overpricing will be seen to be a critical mistake in 6 months, when the furor is no longer present.

    When does the supply dam break? The consensus was that increasing prices would increase supply, which I believed, but my new theory is that the price stagnation or slight decreases will open the flood gates of supply. Greed dictates that people want to wait for a ceiling so as to not miss out, but fear will dictate that act quickly when they see the market turning (ironically, accelerating the turn).

    Anyway, I was sick of reading stupid comments on the evils of public school, and want to turn the conversation back to my own education.

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  153. Interesting article, Gary. It will be interesting to see if the prices hold up. I see two recent sales in my neighborhood that went for way over what I would have expected.
    http://www.realtor.com/realestateandhomes-detail/1033-W-14Th-Pl-Unit-215_Chicago_IL_60608_M79446-03696?row=7
    and
    http://www.realtor.com/realestateandhomes-detail/1511-S-Peoria-St_Chicago_IL_60608_M74805-90648?row=1
    If prices keep going up like this, maybe I will just move to Phoenix and pay cash for a condo there.

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  154. Question about this property: http://www.redfin.com/IL/Chicago/2215-N-Clifton-Ave-60614/unit-2W/home/12570665

    Listing says “The taxes reflect current configuration as condo association, which will deconvert when sold.” How does that work? Did all the owners (20 units!) get together and decide to sell? Is the buyer actually buying each individual unit? Why does something like this happen? Lots of foreclosures in the building? (It’s idle curiosity on my part, I’m not interested in buying it, nor do I have $7M to spare!)

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  155. “Why does something like this happen?”
    Put on your Sunday Best, make an appointment with the agent and find out! Also remember that $7M is just the starting point, I’m sure you could talk them down 10% if you sign a contract today.

    On a serious note, it does seem like everyone got together and decided to see if anyone had interest in turning this into (or back into) a rental building. You’d undoubtedly have a plethora of DePaul students for years but at what cost?

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  156. Bad investment in my opinion overpriced, unless you are able to convert it into full student housing like 1237 is setup, much more profitable.

    My calculations
    1 br = ea @ ~1200 a month
    2 br = ea @ ~1500 a month
    24 parking spots = ea @ ~100 a month

    = $32,400 of revenue before taxes/upkeep costs.
    Mortgage would run you ~ 30-34k with 600k up front.

    It’s been on the market since 2013… so they could possible come down a bit but I don’t see a 10% decrease anytime soon.

    What are your takes?

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  157. “1125 Clifton”

    Wasn’t discussed much, but was featured here:
    http://cribchatter.com/?p=21639

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  158. Yury: “$32,400 of revenue before taxes/upkeep costs.”

    Listing claims: “Total Monthly Income: $50,200″

    At $32,400, it’s not a good investment, and $50,000 seems fantastical.

    “Mortgage would run you ~ 30-34k with 600k up front.”

    Who is making 5.25% investment property loans with 8% equity? Need to know, bc want to short their stock.

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  159. anon,

    That was pulled out of the ***, sorry for the low estimates.
    I’m guessing one would need a minimum of 20% down to make this deal happen.
    Even then, 1.5 mil down. 6.1 Mil financed at ~3%?
    What do you think a reasonable ARM rate for investment asset is at right now?

    That’s a 25.7k note due every month.
    With 32.4k in revenue you are making 6.7k monthly (before taxes, insurance, expenses)

    I’m still not seeing the potential , you can get an approx. equal return by throwing the 1.5 mil into bonds and other investments.

    As I said before, I don’t see the potential in this, anywhere near 50k a month…
    Even though these are condo style apartments they in the middle of DePaul…
    Unless the University buys them, it’s not a good buy sometime down the line. IMO
    Keep in ind DePaul is also expending to where the Children s memorial hospital used to be…
    I’m not sure how many more building they will take over there, I doubt they will be shopping around for real estate anytime soon.

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  160. “That was pulled out of the ***, ”

    Think that’s the same place the $50k/month came from, too, so no worries.

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  161. Just an OT comment to Icky: I would offer congrats on your recent news, but for fear that you will take offense bc I would see fit comment about this, while not having commented on your gate repair or some such.

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  162. “What do you think a reasonable ARM rate for investment asset is at right now?”

    Think that the 5.25 (or lower) is easily available, but with more like 30% equity. Obv an experienced operator and/or a well-seasoned property would change the loan uw, but this one is not the latter, and, given the market time, is apparently not attracting the former. So hard to see the buyer, if it’s not going to be depaul (which I agree, for now at least, it’s not).

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  163. “fear that you will take offense”

    He’ll take offense that you are commenting here, rather than there. That is item one in the Icky Wiki, ahead of the fact that there is a there in which to comment other than here.

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  164. “He’ll take offense that you are commenting here, rather than there. That is item one in the Icky Wiki, ahead of the fact that there is a there in which to comment other than here.”

    I was going to give my standard should-be-in-my-wiki response that I did it to drive traffic to his site except that, after checking, it appeared to have generated no traffic. In any event, taking offense at well wishers on facebook responding to an item that you chose to post on facebook is impressive.

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  165. Thanks, Anon; I did a search on the address, but that post didn’t come up.

    I’m sort of amazed that 20+ owners agreed to sell. Impressive! I’ve lived in 3-flats and 6-flats and couldn’t get everyone to agree on what color door mat to put in the entry or what font to use on the mailbox labels.

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  166. right on tfo, though I’m also worried about sending Jenny over the edge when she hears that she’ll be funding future Icky educations.

    PS nice touch with the Icky Wiki.

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  167. ” is impressive.”

    I do not think the word means what you think it means DZ

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  168. “I do not think the word means what you think it means DZ”

    Okay, you win, you’re not impressive, except in your ability to craft interesting blog posts out of mundane everyday activities. Am I using the word correctly now?

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  169. “your ability to craft interesting blog posts out of mundane everyday activities.”

    DZ,

    now that was very impressive!

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  170. Sabrina – what did I tell you about “everyone” saying rates would go higher?

    http://finance.yahoo.com/blogs/talking-numbers/this-is-the-big-trade-wall-street-got-wrong-122703534.html

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  171. chuk – I was beating her over the head with that… but then again whatever, I’m just here to help folks… sure looks like the ten year is SOLIDLY ABOVE 3% still right? lmao

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  172. Chuk,

    so sabrina was wrong, like most everybody else. But it would normally be expected that interest rates would rise. How they’re not. Sonies and I both agreed (the first thing we’ve ever agreed on!) that rates would stay low for a long time…look at Japan. That’s a short answer why I know but it seems to be holding true.

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  173. “so sabrina was wrong, like most everybody else.”

    But she was SOOOO sure of herself. Her “I’m so much smarter than you” attitude once again exposes her ignorance.

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  174. thats not totally true HD, we both agree that living in the desert isn’t a good idea either

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  175. gringozecarioca on May 16th, 2014 at 7:04 am

    When 100% of economists polled predicted higher rates, it could only go one way. Those rare moments one needs no opinion of their own to know what to do.

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  176. HD

    Google news
    Nyt how student debt …

    Student debt affecting housing and economy overall

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  177. I see this site is still filled with all the same priced out right-wing doom and gloomers. Sorry you all couldn’t cut it in Chicago, so just give up and move to the desert already.

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  178. “When 100% of economists polled predicted higher rates, it could only go one way.”

    http://www.businessinsider.com/gundlach-warns-of-treasury-short-covering-scramble-2014-5

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  179. found this perspective interesting

    “When there is a large global overhang of labor that is not earning enough income to cover rising expenses and to make possible a rising quality of life, that labor force does not create an upward inflation pressure. And today we do not see upward inflation pressure coming from labor. It may come in the future, but it is not there now. At the same time, that labor pool has to eat and needs fuel. Rising food and fuel prices, in the absence of increasing labor income, result in economic slowing. One household at a time has to realign its budget in order to continue to cover the costs of its necessities.”

    http://www.ritholtz.com/blog/2014/05/ten-year-treasury-note-2-5/

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  180. Rat on LaSalle today. I’m going to assume HD has something to do with it.

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  181. My office is on that particular stretch of LaSalle with the rat.

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  182. “Student debt affecting housing and economy overall.”

    Of course it is. You can see it in Chicago’s condo market. Unless you’re making six figures (which is like 2% of the population) then you can’t afford a mortgage on a $400,000 condo AND your $1000 a month student loan payment. And that’s the payment for those who just have undergraduate loans now. It’s like a noose around your neck.

    So if you have a car AND a student loan payment- that’s your mortgage right there. There’s simply no way to save for a downpayment either.

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  183. “so sabrina was wrong, like most everybody else. But it would normally be expected that interest rates would rise.”

    It is only May 22. It’s not the end of the year yet. If the Fed ends QE3 in October as scheduled and the ten year stays this depressed- it is signaling a recession (or we’re already in one.) The bond market doesn’t get it wrong. It’s NOT a mystery. The bond market, right now, is signaling very bad things are coming.

    And how will the housing market be if stocks drop 20% or more from their highs and companies start laying off again?

    I would hazard- not good.

    We already have an affordability problem. That’s why sales are down. It has nothing to do with inventory and everything to do with prices. Hell- the average homebuyer can’t even make it with rates at 4.3%. Imagine when they rise? OMG. What a disaster.

    Rates have gone from 18% to as low as 3.25%. But homeowners are at the most distressed they’ve ever been in the last 50 years (with rates near record lows.) The Fed can’t do anything more for them and yet they STILL can’t make it. They are stretched to the limit, living paycheck to paycheck, devoting every more income to debt repayment, including their housing.

    It’s not normal and it’s not good for the economy. Sadly, there’s no way out.

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  184. “Keep in ind DePaul is also expending to where the Children s memorial hospital used to be…”

    Really? Where?

    They’re putting apartments/senior living and some retail right there.

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  185. I agree, good units have become EXTREMELY hard to come by.

    I’ve been shopping for a condo for the last 3 months, I’m in the student loan bubble with everyone else.
    And can only afford a limited mortgage, approximately 100k…

    What are your opinions on this property, I’m in the process of closing.
    http://www.redfin.com/IL/Chicago/4337-N-Kedvale-Ave-60641/unit-2E/home/13481486

    Feel free to speak your mind, I’m interested in the good and the bad.
    Inspection came back OK, no major defects, but a lot of little things that need fixing probably ~3-4k of little things.
    Offer price that was accepted is 105,750 with 3.5% back for closing costs + 6 mo of Assoc. dues.

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  186. Sabrina,

    DePaul already took over the property on Belden and Halsted, I’m sure they might cut another deal with the developers of the Children s Memorial.

    Here’s a clip from the news article from Sun times:
    “The outcome was never in doubt for a project that will change the face of Lincoln Park — with a pair of 21-story, 270-unit residential towers, 60 condominiums, 156 assisted living units, a five-story health club and 100,000 sqaure feet of retail space..”

    Something doesn’t add up here 156+60= 216
    Are there going to be 2 towers @ 270 units ea? Or both together 270?

    Either way, I’m thinking it will make a prime space for a Student Housing, Either 54 units or a whole building @ 270 units of student housing.
    Student housing market has been extremely hot as of late.
    Prime example is 1237 west Fullerton, where students (Their parents) pay low of $990 a month for 1 room in a 4br apartment.

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  187. “My office is on that particular stretch of LaSalle with the rat.”

    Back today. You really have to stop using the guys from the Dunkin lot at Milwaukee/Belmont, and start checking union cards.

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  188. “Unless you’re making six figures (which is like 2% of the population)”

    Pretty sure that figure is ~10% for Chicago metro. Might be closer to 15%.

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  189. ” It will be interesting to see if the prices hold up. I see two recent sales in my neighborhood that went for way over what I would have expected.”
    Hah! 1511 S Peoria was actually my listing. The price was in line with recent comps. In fact, I believe that if we had held out we could have gotten a slightly higher price but the seller made the rational decision. We had a buyer in hand and it was not worth the risk of waiting for the next buyer. Whether or not you make that decision depends on many factors. I think the buyer got a decent deal. Went under contract in 14 days. I think 29% of all properties are going under contract in 14 days or less last time I checked. That’s city wide.

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  190. “We already have an affordability problem. That’s why sales are down. It has nothing to do with inventory and everything to do with prices. Hell- the average homebuyer can’t even make it with rates at 4.3%.”

    This whole affordability discussion makes no sense to me. Personally, I just think it’s a fashionable topic precipitated by the decline in home ownership from historically unrealistic levels. Yeah, SOME people can’t afford to buy homes but overall prices wouldn’t be rising if there was an affordability problem. And homes are way cheaper now than at the peak and rates are lower so why is it we didn’t have an affordability problem then but we do now?”

    Now, I can absolutely tell you that the sales decline has everything to do with inventory as evidenced by how easy it is to sell something that isn’t overpriced. So much of our stuff is selling in 2 weeks – whether it’s 200K or 600K like the one on Peoria. Heck we went under contract in 3 days on a listing for an 825K landmark on Alta Vista.

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  191. This comment may have just cleared Sabrina’s approval: “Been lurking since I started shopping months ago. Curious what the collective wisdom says about my pet theory on Chicago real estate, that the market has bifurcated to an extreme degree, and whether data is available to parse it. Declining sales+increasing prices+relatively stable market times seems to me to equal a completed stagnant underclass of supply, combined with an extremely competitive overclass. Essentially: Chicago data is fucked because its aggregating extremely depressed areas with extremely competitive areas. ”

    I think it’s bifurcated between properties priced too high and properties priced right. It is stunning how many sellers think they should price their property based upon what they need as opposed to where the market is. We tell these people to just wait, with the attendant risks.

    What is going to increase supply is rising prices and principal repayments. Once sellers don’t have to bring money to closing it will change their perspectives. I know a ton of would be sellers like this.

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  192. “I would observe this level of competition is specific to multi-units [along near blue line]”

    2/3/4 or larger? IN either case, in the ‘better’ blue line locations, a larger %age of the historical inventory of those properties have been converted/demolished in the last 15 years, so there is a second source of supply constraint.

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  193. …and investors don’t know what to do with their money with 0% rates so they pile into these 2 – 4 flats.

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  194. ” why is it we didn’t have an affordability problem then ”

    We did have an affordability problem then, as evidenced by the volume of foreclosures afterwards. And no, that wasn’t all bc of ninja loans and OARMs, and etc, even tho OARMs and ninja loans (for the masses) are themselves evidence of an affordability issue. Did the affordability problem affect 100% of Chicago? No. And it still doesn’t; but that doesn’t mean there is zero problem.

    “I think it’s bifurcated between properties priced too high and properties priced right”

    …in the portion of the Chicago market that you deal with, Gary.

    The Doc is talking about how the average/median stats are misleading bc there is a portion of the Chicago market than is doing well, and another portion that just sucks. Put together, you see listing times and inventory counts that look reasonably healthy, but that comes from the mean/median of an unhealthy hot/constrained market and an unhealthy cold/dead market (which is combined bt overpriced and undesirable and near-zombie).

    Yes, I realize that you will say that “overpriced” captures the entirety of the issue on the ‘bad market’, and that isn’t really ‘wrong’, but it’s more than that–for example, there is a ton of ‘condo’ inventory in buildings that never should have been converted from apartments.

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  195. Define affordability problem. The defacto definition is the media is talking about it. They didn’t talk about it back then because home ownership levels were high. That’s my point. As long as lots of people can buy homes there is no perception of a problem. People are just pissed off that some percentage of the population can’t buy a home now and they used to be able to. But that’s not really a problem is it?

    Check out this Crain’s article: http://www.chicagobusiness.com/article/20140426/ISSUE01/140429919/where-home-prices-are-rising-the-most Prices are rising throughout the city.

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  196. “The defacto definition is the media is talking about it.”

    Well, if you define “problems” by whether or not the media is saying it is a problem, I don’t know what to say. Seems facile?

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  197. The point is that people talk about these things when the media gets behind them and it makes it appear that there is a problem when there really isn’t one. I don’t know the exact numbers off hand but if home ownership declines from an all time high of 61% to 59% is that really a problem? The media seems to think so.

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  198. ” I don’t know the exact numbers off hand but if home ownership declines from an all time high of 61% to 59% is that really a problem?”

    What does that have to do with the “affordability” of new purchases? That’s mainly about the un/affordability of *past* purchases.

    Did the fact that no media was talking about a ‘problem’ with Alt-A and OARMs in 2006 mean that there was NOT a problem?

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  199. I’m talking about the perception of a problem and you are talking about an actual problem. We agree on this much: there is no connection between the two. Therefore, I’m saying that just because the media says there is an affordability problem doesn’t make it so. If you aren’t looking at the homeownership percentage (which is usually what is thrown around) as the evidence for an affordability problem what data are you looking at. I’m just hearing anecdotal stuff.

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  200. “I’m just hearing anecdotal stuff.”

    Yes, mainly anecdata. But there is a demonstrable dearth of the “mid-priced” “first-time owner” type of place (suitable for a 7+ year holding period) in the better parts of the city and the better half of the ‘burbs. Now, I don’t think that anyone is ‘entitled’ to find an affordable home *in the precise neighborhood* that that would prefer, but it is part of the perception.

    Now, is that perception a bona fide ‘affordability problem’? Probably better stated as an ‘issue’. And, for a significant segment of the market, there is an affordability “issue” in their (broadly construed) preferred locations (ie, someone wanting a house in the city isn’t cross-shopping Romeoville townhouses, and someone looking in New Trier isn’t cross shopping HD’s hood in Long Grove).

    And, also, there is a more convoluted issue with the DPs–raising the $80 for a conforming loan on a $399 house is much harder for most first-timers than affording the PITI + Maintenance post-closing. Yeah, yeah, I know that they can get 90% ltvs, and are good-risk FHA candidates, but both of those alternates are evidence of an ‘affordability issue’.

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  201. “Sabrina: That’s why sales are down. It has nothing to do with inventory and everything to do with prices.”

    In other words, it has everything to do with inventory and nothing to do with prices.

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  202. “what data are you looking at”

    what about data on housing to income rations? Wo having looked at anything, my guess is if you look at monthly costs it looks okay, relative to historic norms. But if you look at housing prices it prob looks high, dunno if it looks just a little high or very high. if at some point rates rise, if housing prices stay same, will be less affordable at new rates for now homeowners. if housing prices decline, will screw over recent buyers.

    “But there is a demonstrable dearth of the “mid-priced” “first-time owner” type of place (suitable for a 7+ year holding period) in the better parts of the city and the better half of the ‘burbs.”

    In certain areas, the gap between land/gut value and live in it for a while as a cheaper house in an expensive area value is really small.

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  203. Doh! Of course. Don’t know why I didn’t think of that. I look at that data all the time. One set from CAR:
    ” This index measures housing affordability for the region. An index of 120 means the median household income was 120% of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number means greater affordability”

    So that index has come down from the peak in 2012 and 2013 but it’s still considerably better than it was in 2007. QED. But there are problems with the data since it’s so averaged. It shows SFH more affordable than condos and I think it’s because in the lower income neighborhoods it’s more SFHs and condos in the higher income neighborhoods. The index is 177 for SFHs and 107 for condos.

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  204. “In certain areas, the gap between land/gut value and live in it for a while as a cheaper house in an expensive area value is really small.”

    Really, really small. Approaching zero, in certain areas. Effectively negative, on certain blocks.

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  205. When is sabrina going to get the lag fixed??

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  206. “So that index has come down from the peak in 2012 and 2013 but it’s still considerably better than it was in 2007. QED. But there are problems with the data since it’s so averaged. It shows SFH more affordable than condos and I think it’s because in the lower income neighborhoods it’s more SFHs and condos in the higher income neighborhoods. The index is 177 for SFHs and 107 for condos.”

    I’d think one could maybe use case shiller for prices, w an adjustment to get to monthly costs if one wanted to look at it that way. But yeah def not a straightforward analysis.

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  207. “Really, really small. Approaching zero, in certain areas. Effectively negative, on certain blocks.”

    As long as developers can clear what, a couple hundred K. I do think, w no particular basis, that that will come to a stop at some point in next year or two.

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  208. DZ, I actually did what you suggest in a blog post long ago but can’t find it right now. Will look harder later.

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  209. ” It shows SFH more affordable than condos ”

    Yes, because the median sale price of SFH is *consistently* lower than the median sale price of condos in the city and the metro. And we’re stuck, again, with that median shi…stuff which does nothing to contradict The Doc’s supposition about a bifurcated market. It is *perfectly* possible that the market for below median housing is affordable and a mess in one direction and the market for 150%+ of median is unaffordable and a mess in the opposite direction, but looking at them in the aggregate, you get something that looks totally “normal”.

    I don’t think anyone here cares much about whether Lansing and Crystal Lake or Roseland and West Englewood fall into the ‘affordable’ range, but that they do really affects the appearance of the Chicago aggregate numbers.

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  210. “As long as developers can clear what, a couple hundred K. I do think, w no particular basis, that that will come to a stop at some point in next year or two.”

    I think it is “so long as they can clear ~20-25% gross” on land cost + $125-150 psf construction cost and not have complete to close times over 90 days, it will continue. I do think we have to be approaching saturation in the hoods where it is happening, at least in the ~$1.5m range that is typical, but then I thought that 2 years ago, too, and it hasn’t stopped yet.

    Question is whether they can move to nearby unsaturated areas and repeat at lower price points. As HD always liked to say ‘Builders gotta build’–they make $0 if they aren’t building something.

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  211. “I do think we have to be approaching saturation in the hoods where it is happening, at least in the ~$1.5m range that is typical, but then I thought that 2 years ago, too, and it hasn’t stopped yet….HD”

    I almost miss HD’s rants after looking up ccrd about the so and so’s not being good enough to be in teh million plus homes (that he coveted). But he’s happy now wherever he is. I trust the smell is gone from the basement.

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  212. Gary: All you have to do is look at housing prices and incomes. That tells you the affordability problem right there. And then all you have to do is look at what housing prices have done over the last year (go up, up, up) and look at mortgage applications.

    It’s not hard to get a mortgage right now. Ask any mortgage broker. The problem is affordability. And it’s only going to get worse as mortgage rates rise. Something will have to give- and it will be prices. They’re going to drop again. They HAVE to drop again. You can’t get blood from a stone.

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  213. “Define affordability problem.”

    The April existing home sales data shows the affordability problem loud and clear. This is national data, of course.

    Percentage change in home sales by price from April of last year:

    $0- $100k: down 12%
    $100k- $250k: down 5.1%
    $250k- $500k: up 0.2%
    $500k-$700k: up 0.3%
    $750k- $1 million: up 2.4%
    $1 million+: up 5.2%

    On the low end, the lack of bank owned or distress sales means that investors are no longer buying the “cheap” properties. So they have moved out of this market and that will probably account for the dramatic drop there.

    But middle class housing would be the $100k to $250k level and that is sinking despite near record low mortgage rates.

    Heck- even the upper middle class brackets don’t look so hot right now either. I’m surprised by this because I would have thought the $500k-$700k level would still be humming along due to the stock market. But maybe those student loans are biting for the professionals (doctors, lawyers) in that bracket.

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  214. “What is going to increase supply is rising prices and principal repayments. Once sellers don’t have to bring money to closing it will change their perspectives. I know a ton of would be sellers like this.”

    How many years until this happens? Prices aren’t going to be rising this year and as mortgage rates rise- probably not much for the next several years. If you’re underwater now with rates near record lows, you’re REALLY going to be underwater in a few years when rates are more “normalized.”

    Massive numbers of people are still stuck in their properties with no way out (especially since they changed the tax rules back to normal on short sales- where you have to pay income tax on the difference again.)

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  215. Finally found that blog post where I did exactly what DZ had suggested: http://www.chicagonow.com/getting-real/2011/06/despite-falling-home-prices-housing-costs-have-gone-up/ The graph is cut off and for some reason I can’t resize it but if you click on it you will see the full graph. But instead of creating an index this just looks at the cost of homeownership and you can see how dramatically it had fallen through March 2011 and how it was in line with where it had been for years, despite inflation. Sure it has been heavily driven by low mortgage rates but hardly evidence for an affordability problem.

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  216. “Yeah, SOME people can’t afford to buy homes but overall prices wouldn’t be rising if there was an affordability problem.”

    Prices actually AREN’T rising anymore- even in the GZ. The level we’re at is a reflection of last year and then it’s just the mix. The median price is only rising because more is selling in the expensive range than in the lower range so it skews it higher.

    If everyone in Lakeview and Lincoln Park was back to breakeven or higher (and SOME are- but not that many) then wouldn’t we see a rush of selling going on everywhere? But strangely- we are not. That’s because they’re still underwater. As I’ve said over and over again- most of the listings I see in Lakeview and LP- the sellers try and get more than they paid 5 years ago (or whenever it was) and many times they end up lowering their price because they can’t get it. So then they are losing money by the time they pay their realtor. Some of these people HAVE to move and don’t want to be landlords so they take the loss.

    In some neighborhoods though- the feeding frenzy is on. I can’t believe what some people are paying for 1 and 2-bedroom condos in River North, for instance. But it’s turning out that River North is NOT Lincoln Park or Lakeview or Lincoln Square etc. etc.

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  217. “All you have to do is look at housing prices and incomes. That tells you the affordability problem right there. And then all you have to do is look at what housing prices have done over the last year (go up, up, up) and look at mortgage applications.”

    All that proves is that houses are less affordable than they were two years ago. That doesn’t mean there is an affordability “problem”. They are still more affordable than they were during the peak of the bubble but there wasn’t any wailing and gnashing of teeth about affordability back then.

    “The problem is affordability. And it’s only going to get worse as mortgage rates rise. Something will have to give- and it will be prices. They’re going to drop again. They HAVE to drop again.”

    If hey have to drop because of affordability then why did they go up in the first place? It doesn’t make sense.

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  218. “The April existing home sales data shows the affordability problem loud and clear.”
    No it doesn’t. All it shows is that sales declined for any of 100 reasons.

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  219. “How many years until this happens? Prices aren’t going to be rising this year and as mortgage rates rise- probably not much for the next several years.”

    Every year more and more reluctant landlords can sell. They are building equity to the tune of at least 2% per year, depending upon where they are in their mortgage. Many of these people only need another 10k in equity to pull the trigger.

    The current outlook is for about a 4.5% this year: http://www.chicagonow.com/getting-real/2014/05/home-price-outlook-economists-mildly-optimistic/ Check out the futures chart at the bottom. Really believe the market is going down? I dare you to short the futures.

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  220. “If everyone in Lakeview and Lincoln Park was back to breakeven or higher (and SOME are- but not that many) then wouldn’t we see a rush of selling going on everywhere? But strangely- we are not.”

    Not strange at all. Just because we are not back to break even does not mean that prices aren’t rising – just that they haven’t risen enough.

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  221. “Unless you’re making six figures (which is like 2% of the population)”

    For a singleton? Doubtful it’s 10% of the Chicago metro market. Everyone always assumes because they live in Southport where people push around $1000 strollers that that is the entire city and metro area. It’s really a super small part of it. Just a sliver.

    It’s kind of like new construction. If you live in Lakeview you might think new construction is everywhere. That’s it’s exploding. When, in reality, just 150 new homes were built in the first quarter in the entire city. Does that sound like a lot in a city with over a million people? Not to me. But if you live on a block where three McMansions are being built you go “wow- they’re building everywhere.”

    Same with wealth. It’s just not as common as you think.

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  222. “Something doesn’t add up here 156+60= 216
    Are there going to be 2 towers @ 270 units ea? Or both together 270?”

    There are going to be several towers there. And if DePaul was putting student housing there, they would have already announced that. This project has gone through major oversight by the alderman and the surrounding community. They’ve had to change the mix and the building height several times to accommodate concerns about overcrowding and traffic and the schools.

    Everyone already knows what is going in there and it’s not DePaul.

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  223. “Just because we are not back to break even does not mean that prices aren’t rising – just that they haven’t risen enough.”

    But Gary- prices have surpassed pre-bubble prices in many areas including downtown. Isn’t that what everyone has been saying? We’re PAST peak. So if they still can’t sell right now- how much more do they need prices to rise? Isn’t 20% enough? Or was it 30% year over year last year? If you can’t sell after a 20% increase- when WILL you be able to sell?

    Declining sales are a sign that something is wrong in the housing market. Declining sales are ALWAYS the first sign. And that’s what we’re seeing right now. I haven’t heard anyone, in Chicago or even nationally, say that they expect the real estate market to pick up further over the summer. Quite the contrary (especially if mortgage rates rise.)

    So is this just another dead cat bounce? And prices will decline again shortly? I would think we’d need more inventory to have prices actually decline though. Maybe we just sit at these prices for several years now but, again, the kicker is, what happens when mortgage rates rise further? Buying a 2/2 in West Town at 4.3% interest rates is a lot different than buying the same priced 2/2 at 6.3% rates.

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  224. “The April existing home sales data shows the affordability problem loud and clear.”

    So sales can plunge in the lower price brackets and there’s no affordability problem? With mortgages at record lows and mortgage applications at 19-year lows?

    Bah hah hah hah!

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  225. “The April existing home sales data shows the affordability problem loud and clear.”

    Did all the middle class people suddenly say all at once, “you know what? We don’t care about the American dream. We’re not going to buy this spring. We’ll keep renting even though our landlord keeps raising the rent. Who cares that mortgage rates are among the lowest in our lifetimes and that we’ll probably pay more next year? We’ll just wait.”

    Yeah- I’m SURE that’s what’s going on around the entire country right now.

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  226. “They are still more affordable than they were during the peak of the bubble but there wasn’t any wailing and gnashing of teeth about affordability back then.”

    There wasn’t an affordability problem at the peak of the bubble. You could be dead and get a mortgage (this happened several times.) You could make $28,000 a year as a strawberry picker in California and get a mortgage for $750,000. (Yes- this actually happened and this buyer became the poster boy for the bubble. Kind of like when you get tips from the shoeshine boy.)

    But today- you actually have to have a downpayment (at least in most cases- although FHA 3% down is still out there more than you might think.) And the banks ARE, gasp, actually checking to see if you have a job and verifying income. There is less fraud.

    So suddenly, not every guy on the street who makes $50,000 is qualifying for the $300,000 or $400,000 house. That’s the affordability problem. As prices rise, more and more get priced out because incomes haven’t risen for the middle class in 20 years (and have actually declined when factoring in inflation.)

    Why do people think that condos can average $300,000 in the city of Chicago when incomes don’t qualify to buy that? At some point- something has to give.

    And why do people think this is normal? Why would we WANT to go back to bubble pricing? We want to go back to affordability. But that’s not what the Fed has done here. It has reinflated the bubble in the upscale neighborhoods and towns. In many cases it is worse than the first time.

    It’s going to end badly. It always does. It’s completely artificial.

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  227. “prices have surpassed pre-bubble prices in many areas including downtown. Isn’t that what everyone has been saying? We’re PAST peak. ”
    I have no idea where they are getting that from. I haven’t seen it.
    “Declining sales are a sign that something is wrong in the housing market.”
    Not really. Just that there are fewer buyers and sellers coming to agreement and that could be for any number of reasons. I think rising inventories are an indication of a problem.
    “So sales can plunge in the lower price brackets and there’s no affordability problem?”
    There might be an affordability problem at the lower end but is that what we are talking about here? I think we usually discuss the green zone here.
    “There wasn’t an affordability problem at the peak of the bubble. You could be dead and get a mortgage”
    The ability to get a mortgage with ridiculous lack of due diligence should not be what we benchmark affordability off of. If you think that made the bubble affordable then that’s a really bad definition. The standard definition is income vs. cost and by that metric we are fine.
    “Why do people think that condos can average $300,000 in the city of Chicago when incomes don’t qualify to buy that?”
    If incomes didn’t qualify to buy that then prices wouldn’t be at those levels.
    “We want to go back to affordability. But that’s not what the Fed has done here. It has reinflated the bubble in the upscale neighborhoods and towns. In many cases it is worse than the first time.”
    I see no evidence of that. In most places prices are still well below peak – every time I check.

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  228. Hello….

    It’s because of rent prices… If people keep renting at ~2,000 for a 1br condo in DT.
    That equates to paying an estimated 300k mortgage ARM and 500 a month for association fees. (These are estimates)

    The whole Real Estate market has been turned upside down from around 2009 when Big banks and large private investors started hoarding Condos/Single Family Homes and pretty much any real estate possible. (I know because I work for one).
    In this day and age, you can’t compare to past peak prices, your asset is only good for what someone will pay for it or rent it out for.

    Investors are buying up Home Ownership debt (Bankrupt mortgages) now and reposing the properties after foreclosure, to only rent them out.

    -Y

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  229. “For a singleton?”

    Only singles buy real estate? Huh. Did not know that.

    So, the only part of the market that matters is the ~10% who are singles? Despite the fact that they are disproportionately *less* likely to buy property.

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  230. “prices have surpassed pre-bubble prices in many areas including downtown.”

    Maybe if you live in Lake View, you think it’s happening everywhere, but it’s not. Sure, it’s going great in 3 neighborhoods, but does that sound like a lot in a city with over a two and a half million people? Not to me.

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  231. “There wasn’t an affordability problem at the peak of the bubble. You could be dead and get a mortgage (this happened several times.) You could make $28,000 a year as a strawberry picker in California and get a mortgage for $750,000.”

    Wait–So, to you, an ‘affordability problem’ happens when one canNOT find some mortgage broker to approve you for a mortgage that you can’t even afford for a single month? And when you can get approved for a $3,000/mo PITI with a monthly income of $2,000, there’s no ‘affordability problem’?

    Did I get that right?

    [confused!!]

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  232. Sabrina what in the fuck are you smokin… you contradict yourself too much. Put down the crack pipe and pick up an economics textbook or something.

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  233. “I see no evidence of that. In most places prices are still well below peak – every time I check.”

    Gary: Sabrina is rolling in national anecdata. EsEff and NYC are both absolutely crazy, and way past peak. ‘Better’ LA, too.

    Even tho you’ve said again and again that you only really care about Chicago market, it helps the discussion to reiterate that specificity.

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  234. “There wasn’t an affordability problem at the peak of the bubble. You could be dead and get a mortgage (this happened several times.) ”

    Now I see the problem. You have no idea what “affordability problem” means. Shocking…

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  235. http://www.trulia.com/trends/2014/02/rent-vs-buy-winter-2014/

    buying a home much much cheaper than renting in chicago so whats the more affordable alternative sabrina?

    derrrrrrrp

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  236. Interesting comments here. Hopefully my response doesn’t appear two weeks from now.

    Gary: “What is going to increase supply is rising prices and principal repayments. Once sellers don’t have to bring money to closing it will change their perspectives. I know a ton of would be sellers like this.”

    From Trib/Zillow: “Almost 45 percent of Chicago-area homeowners with homes valued at less than $103,800 were underwater on their mortgages at the end of March, owing more on the loans than the current value of the property. Meanwhile, among homes valued at more than $330,800, only 13 percent of those with mortgages were underwater. Another 28 percent of mortgaged homes with values between $103,800 and $330,800 were underwater.”

    Following my bifurcated market argument, I would suggest the desirable north side of the city (which I personally consider to be much larger that this site’s definition of the green zone) is somewhere around ~18% underwater. That doesn’t strike me as a number big enough to explain inventory issues. Additionally, the proportion of underwater homes in Chicago has been rapidly decreasing, yet inventory continues to fall. I suppose the decreasing shadow inventory can explain some of this, but I would have to see the numbers to believe that it’s enough to explain the entirety of limited inventory.

    One theory piggy-backing off Gary/Anon(tfo)’s observations of the blue line area: increased investor holdings at the lower end of pricing have decreased turn over more substantially than has yet been noted, and could be a long term drag until rent-buy ratios make liquidity more appetizing. The result of that would be a mass of inventory once prices hit a certain point, assuming rational investors.

    Still, I look at Logan Square and struggle to explain inventory. I would guess that increasing prices have made underwater homes almost non-existent in the neighborhood, yet inventory is at an all time low. I would suspect some of the lowest in the city. If we accept underwater mortgages as the main constraint of supply, shouldn’t Logan Square be the city’s neighborhood with highest inventory?

    To answer Anon’s question: I’m looking at anything between 2-4 units in a 3-550 range in the not completely realized pockets off the blue line. Seems like a no brainer for a young person without kids and access to credit. Would love to hear the contrary opinion.

    Sabrina – It’s remarkable how vehemently I disagree with your reasoning. Even when I think you’re right, I think it’s an accident.

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  237. “looking at anything between 2-4 units in a 3-550 range in the not completely realized pockets off the blue line. Seems like a no brainer for a young person without kids and access to credit. ”

    Been a smart route in Chicago for 100 years, obv at different price points. My one point of emphasis would be getting the foundation fully vetted–everything else is relatively easy to maintain/repair/replace.

    “I look at Logan Square and struggle to explain inventory. I would guess that increasing prices have made underwater homes almost non-existent in the neighborhood”

    If you dig thru the 05-07 prices, there are a *ton* of total crap properties in Logan that sold for $500k+. Now, many/most of those were somehow fraudulent, and many/most have washed thru the f/c and reo process by now, but not all of them, and anyone buying honest based on the comps from that time was liable to get burned.

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  238. “buying a home much much cheaper than renting in chicago so whats the more affordable alternative sabrina?”

    But, this, from the link: “Calculate the average rent and for-sale price for an identical set of properties. ”

    Who rents a place *identical* (on average) to the property one would buy? A small percentage, right? There is *no way* I would have bought any place I ever rented, and I would not rent (barring v. unusual circumstances, for me) a place as large as what we bought, *especially* at the life stage when we bought it. It’s a venn diagram with about 6 inches bt the two circles on letter size paper. NO overlap.

    Shorter: Spurious comparison!

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  239. “Shorter: Spurious comparison!”

    Yes, but what else can you do? If you are making a “life” comparison, then it may very well be cheaper to rent a dump than buy a nice place no matter what prices are. But the purpose of the rent vs buy calc is more to determine where the equilibrium point is, when comparing apples to apples. Not for deciding how one should lead their life.

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  240. “Yes, but what else can you do?”

    Fair enough, but easy comparison also tells us the least about actual decision making in Chicago. You could just as easily use that data to say “young people unwilling to commit to Chicago; paying huge premium for flexibility of renting–is this a sign of future decline?”

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  241. more…

    And the problem with it is that, whether or not anybody (cof nonny cof) things it’s midwestern-y middlebrow to want a SFH, the fact is the majority of people in metro Chicago who buy, buy SFHs. And there is too little of a rental market for SFHs (and too much variability in maintenance/replacement costs) to build a full, truly useful, comparison for SFHs.

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  242. how else are you supposed to compare it though… A slightly less shitty rental vs. purchase? To hard to quantify rental quality v purchase quality no?

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  243. “I look at Logan Square and struggle to explain inventory. I would guess that increasing prices have made underwater homes almost non-existent in the neighborhood, yet inventory is at an all time low. I would suspect some of the lowest in the city. If we accept underwater mortgages as the main constraint of supply, shouldn’t Logan Square be the city’s neighborhood with highest inventory? ”

    I don’t believe that underwater homes in Logan Square are non-existant. I just did a quick check of 60647 (not quite the same thing) and found 420 properties in foreclosure. That data might not be quite comprehensive.

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  244. “To hard to quantify rental quality v purchase quality no?”

    Yes, it is.

    But the baseline comparison that Trulia uses for Chicago (click thru to their calculator) is rent of $1750 and a purchase of $170k, with *zero* HOA fees. Which is 100% crap–who goes from paying above average (even limiting the average to just northside hoods) rent for a 1-bed to buying a 600 sf place in Sandberg to live in for 7+ years (also the Trulia default)? Certainly not “nobody”–I suspect we all know at least one person who did something like that–but it is hardly typical. The person buying the $170k condo more likely had a roommate, or lived in a crappy place or in a ‘worse’ location, and was spending under $1200/mo–which is “about the same” monthly cost as the $175k condo (per trulia).

    Doing another, I compared Trump rental v for sale–a 1/1.5 can be rented for ~$3500, and bought for $800k. Using Trulia’s default numbers (I think a lot of their costs are too high) but zeroing out the utility increase for an owner and using a real HOA, with a 7 year hold, renting it would be 13% cheaper. Yes, we all agree that Trump has … issues as far as being representative, but that’s a straight up apples to apples comparison, and it favors renting by a meaningful amount, as opposed to their fictional comparison that favors buying hugely.

    How many people *actually* pay $1750/month in rent, and then look to buy a sub-$200k home? Much more typical, I think, is the HD-like situation of moving from paying $900/mo in rent to spending ~$325k on a home–you know what Trulia sez about that, with a 30-year hold? Renting is over 20% cheaper.

    Shorter: *Still* a spurious comparison.

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  245. “I don’t believe that underwater homes in Logan Square are non-existant. I just did a quick check of 60647 (not quite the same thing) and found 420 properties in foreclosure. That data might not be quite comprehensive.”

    I certainly could be making faulty assumptions, as I’m making anecdotal observations. Still, I think we can agree that tLogan Square has seen some of the city’s more aggressive price appreciation, which should mitigate underwater owners. Yet, my observation is that the neighborhoods with the greatest price increases and shortest market times (Just guessing: West Town, Logan Square, Avondale, Lincoln Square) do not have greater inventory than the rest of the city. I would guess they in fact have some of the lowest inventory. That suggests to me some kind of inflexibility in Chicago’s supply curve, either as you seem to suggest because prices have not yet overcome debt, or that a cocktail of other factors are at work.

    Of course, my observations on inventory and price increases by neighborhood could just be wrong.

    “Shorter: Spurious comparison!”

    Buying is still far better than renting, you’re just electing to pay yourself your savings in house instead of money. You might be right that expenses rarely go down, because nearly everyone chooses to prioritize property over cash, but their dollars are still returning greater wealth. You’re also over valuing your own experiences to create a false dichotomy. I will, without question, be living in a worse apartment than I currently do (at least in the short term) after buying.

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  246. Ugh. Can we just bring back the forums, so that we 7 or 8 who still come by and comment can just stay ‘logged in’ and not have to DZ to read the latest?

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  247. “You’re also over valuing your own experiences to create a false dichotomy. I will, without question, be living in a worse apartment than I currently do (at least in the short term) after buying.”

    You’re buying an investment property and electing to live in part of it. That’s another atypical circumstance that is not intended to be captured in Trulia’s rent v buy calculator. You’re using your own planned experience to validate a market view that is not measuring your particular circumstance.

    While you may well (aka probably) intend to hold it for 7+ years, do you really intend to live in it–as-is–for 7+ years?

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  248. “While you may well (aka probably) intend to hold it for 7+ years, do you really intend to live in it–as-is–for 7+ years?”

    7 years: possibly, but probably not. As-is: no. You’re correct, I am more of an outlier case, and it isn’t particularly applicable.

    Still, equating the opportunity to use savings to pay for additional house as a de facto obligation to do so makes little sense.

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  249. “my observation is that the neighborhoods with the greatest price increases and shortest market times (Just guessing: West Town, Logan Square, Avondale, Lincoln Square) do not have greater inventory than the rest of the city.”

    That’s because the low inventory CAUSED the higher prices and short market times.

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  250. Anonemoosity on May 23rd, 2014 at 4:42 pm

    I’m surprised I never see anyone bringing up the fact that people are holding onto their mortgages with low interest rates as an incentive to not sell.

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  251. “Can we just bring back the forums”

    Sabrina *was* right. People do want the forums.

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  252. I always thought the forums were where it was at but then they didn’t seem to get much use.

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  253. “because the low inventory CAUSED the higher prices and short market times.”

    Yes, you are of course correct.

    I guess I’m not so much perplexed, as I am frustrated that the supply is so unresponsive to price in these areas. Do you think there is comparable demand in more expensive neighborhoods, but there is a healthier supply curve that is keeping inventory and price at (slightly) more normal levels? Or, do you think supply is similarly inelastic in, say, Lincoln Park, but there isn’t the increased demand to expose that inelasticity?

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  254. “Do you think there is comparable demand in more expensive neighborhoods, but there is a healthier supply curve that is keeping inventory and price at (slightly) more normal levels? Or, do you think supply is similarly inelastic in, say, Lincoln Park, but there isn’t the increased demand to expose that inelasticity?”

    Inventory is pretty much low in all the desirable neighborhoods. Lincoln Park has shown some increase in the months of supply of SFHs recently but it’s still not much above 5 months.

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  255. “Prices actually AREN’T rising anymore- even in the GZ. ”

    Yes, they are. Record high year over year gains for both SFHs and condos: http://www.chicagonow.com/getting-real/2014/05/case-shiller-chicago-home-prices-highest-growth-25-years-7632/

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  256. exciting stuff going on here

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  257. “exciting stuff going on here”

    Haven’t you heard? Housing market crashing! Interest rates soaring!

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  258. Steve Heitman on May 28th, 2014 at 11:04 pm

    I’ve been telling Sabrina for 5 years that she had no idea what she was talking about. It’s nice to see that many others have joined my fight. Let’s all chip in and pay for some economics courses for Sabrina. I think she needs them!

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  259. Chicago has a ton of affordable homes. No one wants to live in the neighborhoods with the affordable homes. There are plenty of homes in Chicago for almost any income.

    Some of the houses themselves are really beautiful: http://www.estately.com/listings/info/3932-south-martin-luther-king-jr-drive

    Given the pretty housing stock in some of these areas, I wonder what it would take to get middle class people to move there.

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  260. “Given the pretty housing stock in some of these areas, I wonder what it would take to get middle class people to move there.”

    There are thousands of empty lots in Englewood. They’re building the Whole Foods there this year. Why aren’t we building new middle class housing there? You know- houses that are $150,000? Get people IN to that neighborhood. It’s close to downtown and jobs. I can’t believe developers couldn’t get those lots for dirt cheap and still make a profit- even charging $150k. The city would probably give them tax incentives to do so as well.

    Why are they buying land west of Aurora?

    I don’t get it.

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  261. ” I wonder what it would take to get middle class people to move there.”

    What would it take? Nicole Curtis of Rehab Addict needs to buy the entire block for $1, and then the gentrification shall begin.

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  262. Market seems hot to me. Our in-town. 1260 sq. feet, 2+2) at Grand and Orleans was sold in six days. Twenty-five to thirty showings. Price was $401,200 (including parking) furnished. In 2009 was $370,00 0(including parking) with $3,000 back plus $4,800 for the furniture.

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  263. “I’ve been telling Sabrina for 5 years that she had no idea what she was talking about. It’s nice to see that many others have joined my fight. Let’s all chip in and pay for some economics courses for Sabrina. I think she needs them!”

    Steve, you work for the top 1% in one of the richest zip codes in the city. You have no idea- out of that little slice of heaven- what is going on with the middle class buyer. And no, the country doesn’t survive if just the top 1% are thriving. Unfortunately, the middle class is dependent on their incomes. Few are in stocks (and those that are- are in it for retirement plans) so they aren’t benefitting from the Central Banks’ juicing of the economy.

    That’s why we’re seeing data like this- compiled by Redfin.

    http://www.redfin.com/research/wp-content/uploads/sites/4/2014/05/growth_in_number_of_homes_sold_metro.png

    Chicago is not the worst city for rich v. middle class disparities- but through April, sales rose 9.3% for the top 1% of homes and fell 8.6% for the bottom 99%.

    ONLY the rich are doing well- which is why the vast majority of Americans still believe we’re in a recession (which we haven’t been in for 5 years now.)

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  264. “But the baseline comparison that Trulia uses for Chicago (click thru to their calculator) is rent of $1750 and a purchase of $170k, with *zero* HOA fees.”

    You really have to use the NYT rent v buy calculator. They just put out a new one that has even more features than the old and accounts for costs of your downpayment, HOAs and everything.

    http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0

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  265. “My one point of emphasis would be getting the foundation fully vetted–everything else is relatively easy to maintain/repair/replace.”

    At what cost?

    My landlord has to tuck-point the whole building he bought 3 years ago (it’s 100 years old.) Piping is going in nearly every unit. Electric is bad. Floors have to be refinished every few years. The chimneys haven’t been cleaned in 20 years so who knows what is going on there (the prior owner had the building for 15 years. He maintained it pretty well- but the building is just OLD. Stuff has to be done.) It’s a mess.

    And this is in a prime area with prime rents and it’s a struggle for him to make anything off of it because prices have skyrocketed on the multi-families but his expenses have not. I almost feel sorry for him. Almost. What a money pit.

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  266. “There are thousands of empty lots in Englewood. They’re building the Whole Foods there this year. Why aren’t we building new middle class housing there? You know- houses that are $150,000? Get people IN to that neighborhood. It’s close to downtown and jobs. I can’t believe developers couldn’t get those lots for dirt cheap and still make a profit- even charging $150k. The city would probably give them tax incentives to do so as well.”

    I’ve always wondered about Bronzeville. Very close to the central business district and they started to develop that area. In my mind that is the next logical place to focus on. But it needs a University Village type effort because one or two buildings here and there are not going to help.

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  267. “Following my bifurcated market argument, I would suggest the desirable north side of the city (which I personally consider to be much larger that this site’s definition of the green zone) is somewhere around ~18% underwater. That doesn’t strike me as a number big enough to explain inventory issues.”

    Being underwater and actually making money are two different things. And now we have the opposite problem of a few years ago.

    Remember when Steve Heitman and other realtors on this site were arguing it was okay to lose $50,000 or $100,000 on your property because you “made it up” when you bought a “cheap” property on the flip side? Now- that property isn’t so “cheap.”

    Let’s take that $400,000 2/2 in Lakeview that you bought in 2006. You sell it for $450,000 (in a good case scenario.) You have to pay your agent, transfer taxes etc. Maybe you come out $10,000- $20,000 ahead. You’ve been paying down the mortgage and you had a downpayment originally- so you come out with, let’s say, $80,000.

    Now you go to Oak Park, Evanston or Park Ridge to buy your house. But inventory is low in those three cities for “starter homes” and you find out you’ll have to pay at least $500,000 for anything with granite counter tops and stainless steel appliances in a decent area not near the Howard El stop. Suddenly your $80,000 doesn’t look so good. Prices are too high.

    You’re screwed.

    So you decide to stay in your 2/2 with the baby to “wait it out” and see if prices rise further. You still aren’t really financially in that great of a position.

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  268. “Some of the houses themselves are really beautiful”

    A total deferred maintenance nightmare.

    There’s a ton of potential to Bronzeville/North Kenwood, but just about nothing there right now. If/when the lakefron access gets improved, that will be a big plus. The south lakefront down to Hyde Park should be a lot better than it is, but the legacy of the departed projects hangs heavy.

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  269. read this today…

    “Despite the rally, some big investors have yet to change their outlook for Treasuries. “Coming into this week, hedge funds were still net short the 10-year note in the futures markets on an aggregate basis, so they haven’t yet quite capitulated and so to me, that’s the story.””

    what happens when they capitulate, 1% on the ten year? Worldwide investors are pouring money into US treasuries since they are the best yielding of the major developed economies. I can’t believe hedgies are too stupid to not see this coming…

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  270. “Now I see the problem. You have no idea what “affordability problem” means. Shocking…”

    Please- enlighten me oh Genius chuk. You know all, of course.

    Why are mortgage applications still falling week over week even as mortgage rates are dropping again? Why oh why?

    Gary would say “there’s no inventory and nothing to buy.”

    Really? Plenty to buy in Flossmoor. Plenty of condos just north of Irving Park Road in Lakeview on Cullom, Belle Plaine and other streets. They’re dropping their prices every few weeks.

    Why am I getting as many “price cuts” properties on my real estate trackers as new listings? Heck- on some days- I’m actually getting MORE price cuts? Oh- because people are listed too high? How could that be? Prices are only going up, up, up! We’re ALL rich. Mortgage rates are going down. Stock market is at record highs. Housing prices in the GZ could go up another 10% or 20% and it’s all great.

    Right?

    Oh- wait- people don’t have the downpayment (unless they do FHA or another government program that allows the 3% to 5% down- which there are still some of those.)

    Take the “investors” out of Chicago- and the housing market is dead as a doornail. You can really see the difference in the numbers from downtown- where Chinese investors are buying (yes- it’s true- they have found their way to Chicago) versus, say, some parts of Lincoln Park and some parts of Lakeview where Chinese investors won’t buy because it’s not considered “the best.”

    So the 2/2 in a River North high rise might sell fast, but the 2/2 that someone is actually going to live in near the Addison brown line stop isn’t selling so fast.

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  271. “Why are they buying land west of Aurora?
    I don’t get it.”

    MARGINS! Thats why

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  272. “Please- enlighten me oh Genius chuk. You know all, of course.”

    I’ve tried. It’s hopeless.

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  273. ” The chimneys haven’t been cleaned in 20 years so who knows what is going on there”

    Wood-burning fireplaces? Otherwise, what’s the big deal?

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  274. “Even tho you’ve said again and again that you only really care about Chicago market, it helps the discussion to reiterate that specificity.”

    Crain’s data is showing that SFHs in some neighborhoods are now above peak (Lincoln Park, Lakeview.) In River North/Streeterville, condos are selling above peak prices and have been for a few months now. Again, investors are pushing up the market there.

    People are still losing their shirts on condos in most parts of Lincoln Park and Lakeview. Logan Square is still pretty hot. I haven’t looked there recently. Prices are outrageous in West Town (Ukrainian Village and that area). Bucktown still seems pretty soft for condos. If you break even you’re doing well there.

    It’s really neighborhood by neighborhood and it all depends on the type of property. Lots of sellers have been sold a false bill of goods that prices are SO high and they can list for $100,000 more than they paid in 2006. It’s really not happening very often. Then they’re left to reduce, reduce, reduce and their listing becomes stale. They would sell for more if they didn’t start out so high. Duh!

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  275. “Maybe if you live in Lake View, you think it’s happening everywhere, but it’s not. Sure, it’s going great in 3 neighborhoods, but does that sound like a lot in a city with over a two and a half million people? Not to me.”

    This is correct. Only where the rich live are you actually making any money- and even that is spotty. (Lots of townhouse sellers in LP and Lakeview are finding out it’s not so great out there right now.) SFHs are hot though. In other parts of the city- yeah- you’re not back at peak. Not even close.

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  276. “what happens when they capitulate, 1% on the ten year? Worldwide investors are pouring money into US treasuries since they are the best yielding of the major developed economies. I can’t believe hedgies are too stupid to not see this coming…”

    Central Bank distortions again. Italy has gone 11 quarters with NO GDP growth yet its bonds are at multi-year lows. Why???? Too much money sloshing around the globe? Perhaps.

    It’s not going to end well.

    The bond market NEVER gets it wrong. If yields plunge here, there’s a reason. And it won’t be pleasant.

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  277. “There’s a ton of potential to Bronzeville/North Kenwood, but just about nothing there right now.”

    Sure. I’ve been saying this for as long as I’ve run this blog. During the boom, they were building all over the place down there. Drive down the Gap neighborhood. There are empty lots and then a new townhouse subdivision without much inbetween. And then the Gap will have 2 or 3 blocks of preserved vintage rowhouses and condos that are nice- but, again, nothing else nearby.

    You could live there for 20 or 30 more years before it gentrifies. Who has the time? If I’m 30 and childless, I want to live in the hot neighborhoods where all my friends live, my bar is, the coffee shop is, movies/entertainment are.

    Marianos, however, announced that they are opening in Bronzeville so that might help.

    I lived in Hyde Park a long time ago- in the 1990s. It’s the same now as it was then. Same restaurants, really. Same boredom. Whole Foods is finally going in there. But otherwise, not much has changed.

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  278. “I’ve always wondered about Bronzeville. Very close to the central business district and they started to develop that area. In my mind that is the next logical place to focus on. But it needs a University Village type effort because one or two buildings here and there are not going to help.”

    They had that whole “jazz townhouse” development during the boom years (or maybe that was technically in Kenwood.) It didn’t really rejuvenate the neighborhood, unfortunately.

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  279. I enjoy the ‘required incomes’ in this list:

    http://www.redfin.com/research/reports/special-reports/2014/2014-luxury-report.html#.U4dhOPldWPY

    Do people with HHI of $220k really feel comfortable buying $1.3m homes? At $150k, do you really feel ok spending $875k? Seems crazy to me.

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  280. ” Let’s all chip in and pay for some economics courses for Sabrina. I think she needs them!”

    I was going to suggest therapy or Cabana Boy!

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  281. “Do people with HHI of $220k really feel comfortable buying $1.3m homes? At $150k, do you really feel ok spending $875k? Seems crazy to me.”

    2.5x gross IMO.

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  282. That IS crazy, I mean thats pretty crazy even if you don’t have to pay property taxes or insurance or assessments/fees

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  283. “That IS crazy, I mean thats pretty crazy even if you don’t have to pay property taxes or insurance or assessments/fees”

    It’s what they ALL do on the coasts. They never take real vacations. They don’t save into their 401ks. They can’t pay for their kids college. They have no cushion. It’s SUPER stressful. But they justify it because “the house will go up in value” and then they tell you some story about a secretary who bought a house in Mill Valley for $150,000 in 1987 and now it’s worth $2 million- so it’ll be okay.

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  284. 4x income would be stretching it for us thats for sure, wouldn’t be able to have very much fun (or children lol), can’t even imagine 5-6 times!

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  285. Here’s an example similar to what I described in my other post about the owner in a 2/2 in LP or Lakeview which, on the surface, appears okay since prices have gone up- but in reality, they haven’t risen enough yet and many are still losing money.

    http://www.redfin.com/IL/Chicago/929-W-Montana-St-60614/unit-3W/home/21619998

    If this seller actually gets their asking price- then they end up making a little bit of money (but not much after realtor fees/closing costs/transfer tax.) If they have to do a price cut at all- then they are technically selling for a loss.

    So while all the headlines talk about this amazing 11% year over year price increase, the reality is- many sellers just aren’t seeing that kind of appreciation even in Lincoln Park. It all depends on the type of property and location though.

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  286. “Seems crazy to me.”
    I”m logging in to see if we’re all agreed it’s crazy. [When is Sabrina going to fix the post lag?]

    Is the calculation that is footnoted based on “standard” DTI ratios?

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  287. dz’ing.

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  288. Here’s yet another example in West Lincoln Park.

    http://www.redfin.com/IL/Chicago/1400-W-Webster-Ave-60614/unit-2W/home/12699057

    Bought in 2006 for $600,000.
    Just came on the market listed at $615,000.

    Chinese investors aren’t buying in West Lincoln Park so they’re out of luck. They’re also not in a “hot” neighborhood like Logan or parts of West Town.

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  289. “dz’ing”

    You’re supposed to comment on the post lag each time you do it. Eventually, Sabrina will respond for by saying for the nth time, “what, you guys are getting a lag? huh, don’t remember this being an issues. seems to work fine for me.”

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  290. Lack of inventory or lack of buyers at certain price points? (i.e. affordability issues?)

    This 2/2 in Lakeview has been on and off the market since August 2013. It has been reduced by $60,000 in that time and is now listed $20,000 under the 2006 sales price.

    http://www.redfin.com/IL/Chicago/1043-W-School-St-60657/unit-202/home/13380859

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  291. “they tell you some story about a secretary who bought a house in Mill Valley for $150,000 in 1987 and now it’s worth $2 million”

    Funny how everyone, everywhere, knows that secretary.

    “Is the calculation that is footnoted based on “standard” DTI ratios?”

    Seems to be–*BUT* doesn’t the 28% usually bake in taxes, insurance, assessments (all of which are *very* absent–the taxes on that $5.85m SF place would be ~$5k/month)? Where’s Russ?

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  292. ““dz’ing”

    You’re supposed to comment on the post lag each time you do it.”

    OK, so can I use: DZv2.0’ing and have that imply the comment about the post lag, too? Or do I have to actually type it all, and possibly attempt to be creative?

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  293. I am tempted by the Gap neighborhood, but I’m not sure if I can give up easy access to organic groceries or restaurant deliveries or the luxury of having UPS leave a package at my doorstep and having it not get stolen. On the other hand, I could get a yard for my dogs in that area, which would be incredibly nice. I feel like it would help if I could get a group of 4-5 friends also buy in that area.

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  294. “OK, so can I use: DZv2.0?ing and have that imply the comment about the post lag, too? Or do I have to actually type it all, and possibly attempt to be creative?”
    Well, I think SAbrina’s installed some kind of filter for lag complaints, so it prob doesn’t matter.

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  295. Also, anecdatally, it feels like bunch of listings have been coming on in the last week or two. List prices also feel a touch high.

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  296. “[1043 School, #202]”

    They are listed at ~5% off a *2006* price. The other (currently pending) unit for sale in the building:

    http://www.redfin.com/IL/Chicago/1043-W-School-St-60657/unit-306/home/13380996

    is listed for *30%* off the *2003* price. 306 previously sold for 35% off the ’03 price in ’11.

    So, yes, #202 is ridiculous pie in the sky pricing. Should be more like $350k.

    The 1998 price was $270k; the ’94 price (when it was new) $179k–which, inflated by 3.5%/year (ie, about Chicago’s historic RE inflation rate) would be …wait for it. … $360k. The owe ~$330k on a ’11 re-fi, so that would be barest minimum, and leave them w/o a rental deposit, nevermind a DP.

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  297. Here’s another listing that isn’t really indicating that the market is all that “hot”- at least for 2/2 condos in Lakeview.

    http://www.redfin.com/IL/Chicago/1520-W-Henderson-St-60657/unit-2/home/13382622

    Prime Southport corridor. Can walk to the EL and all restaurants within minutes.

    Listed at $399,000. Sold at the peak in June 2007 for $382,500.

    Listing says agent owned so if they sell for ask, maybe it’s not so bad.

    But I wouldn’t call this a screaming hot real estate market either. At least in this neighborhood. Like I said- it’s SO neighborhood specific right now. Even specific to type of property.

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  298. “Also, anecdatally, it feels like bunch of listings have been coming on in the last week or two.”

    Looking at Redfin for the broadest reasonable concept of what I think you are looking at, looks like 1/3 of the currently ‘active’ listings came on in the past 14 days. To many to look at individually to hazard about the ‘touch high’ supposition, but his is the time of year to be a touch high.

    Anecdatally, a nearby recent lister is on the market ~4% over ’06 (brand new) purchase price–ie, pricing for a slight cash loss, if sold at ask. Competing with nearby brand new listing ~10% over their ask, for facially similar homes.

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  299. Another ancedote, in my neighbood (University Village), the prices are still below the 2006 figures from what I’m seeing. The townhouses are getting close to their 2006 peak. The condos are still off peak by quite a bit. My parents purchased their townhouse in 2003 and they can probably get back what they paid finally. I purchased my condo in the downturn and could make a rather nice profit if I sold now, but the prices are still below the $300k+ that the original owners paid in 2003.

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  300. “If this seller actually gets their asking price- then they end up making a little bit of money (but not much after realtor fees/closing costs/transfer tax.) If they have to do a price cut at all- then they are technically selling for a loss.”

    Never mind they didn’t have to pay rent for 5 years…

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  301. “Never mind they didn’t have to pay rent for 5 years…”

    Yeah- never mind that the downpayment they put down 5 years ago could have been in the stock market making them 140%.

    Blah, blah, blah.

    Yeah- you HAVE to live somewhere. But your great buying scenario isn’t making these people rich. And they’re stuck in that condo. A renter can just say “see ya.”

    This discussion today- actually isn’t even about rent v. buy. I don’t know why you keep bringing that up chuk. You’re like a broken record. We’re talking about inventory and why people aren’t listing their properties if prices have skyrocketed and they are no longer underwater.

    I’ll tell you why (and can give you hundreds of these same examples all in the GZ.) Because while, on paper, it appears they are above water- when you drill down into selling costs and the price increases on the property they’d buy to replace their current one- they can’t make the numbers work.

    The reality is- price increases of 10% or even 20% or even 30% in some neighborhoods hasn’t been enough to make it profitable for them to sell. Sadly. All homeowners want to make money. Unless they HAVE to move for job transfer reasons, divorce etc. they are LOATH to sell for a loss (even if they have equity where there isn’t a check to bring to the table at closing.)

    And they need all the money they can get to buy the next property.

    They’re priced out of their chosen neighborhoods. Unless they start looking in Portage Park, Jefferson Park, Galewood, Forest Park etc. You know- not the “prime” neighborhoods or suburbs. But those living with their luxury appliances in a Lakeview 2/2 won’t take a loss on their condo to move to one of THOSE neighborhoods. No way.

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  302. “Looking at Redfin for the broadest reasonable concept of what I think you are looking at, looks like 1/3 of the currently ‘active’ listings came on in the past 14 days. To many to look at individually to hazard about the ‘touch high’ supposition, but his is the time of year to be a touch high.”

    Does that include “back on the market” listings? I would say, on any given day, in my listing trackers, about 40% to 50% of the “new” listings are old listings that they have removed from the market and re-listed to try and get some more eyes to look at them. It’s really annoying actually. So it seems as if there is more coming on, but it’s an illusion.

    I don’t know how many people have listings sent to them from their realtor via the MLS but, you know, most days you may get 5 new listings. And then last week you were getting 10 to 12 new listings a day. You think, “wow- finally- things are picking up.” But you look at them and they are the same listings from a month ago. They’re just not selling.

    Actually, that’s also a sign that this market isn’t “hot.” In a truly hot market, you don’t have to play the “delist and relist” game to make it appear “new” and get people to come look at it.

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  303. “Anecdatally, a nearby recent lister is on the market ~4% over ’06 (brand new) purchase price–ie, pricing for a slight cash loss, if sold at ask.”

    Interesting. You’ll have to tell us what happens. People still want “new” and are willing to pay a premium. That’s why they’re tearing down 20 year old houses in LP and building new ones because no one wants the 20 year old house anymore.

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  304. “This discussion today- actually isn’t even about rent v. buy. I don’t know why you keep bringing that up chuk.”

    Because you have no idea what you are talking about. Hint: you can’t just take ONE part of the equation and determine something is a “loss”.

    A house is a depreciating asset like a car. If I buy a car for 20k and drive it to work every day for 5 years and then sell it for 19k, am I really “taking a loss” or did I just incur an expense for using that car for 5 years?

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  305. “To many to look at individually to hazard about the ‘touch high’ supposition, but his is the time of year to be a touch high.”
    Well, as another anecdatum, I thought a place near me in Logan was priced insanely and is under contract relatively quickly, so who knows.

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  306. “could have been in the stock market making them 140%”
    or sonies could have put them in aapl options. or was that writing aapl options? I forget which is the sure money thing.

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  307. ” That’s why they’re tearing down 20 year old houses in LP and building new ones because no one wants the 20 year old house anymore.”
    Please provide an address of a house that is 20 years old or less in LP is being torn down so that a new one can be built. From the connotation of your sentence there are so many it shouldn’t be hard to provide one.

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  308. “That’s why they’re tearing down 20 year old houses in LP and building new ones because no one wants the 20 year old house anymore.”

    Wait, WHAT? Where in LP are they tearing down circa 1994 houses to build new ones? Inquiring minds want to know

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  309. “or sonies could have put them in aapl options. or was that writing aapl options? I forget which is the sure money thing.”

    well AAPL will be getting sold probably this upcoming expiration (bought @ 500, selling at 600), might be a good time to sell some more calls for some free money :) They even have mini options now so you only need 10 share lots to do the strat

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  310. …—…

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  311. Dennis Rodkin at Crain’s had an article 2 weeks ago about how there are a record number of McMansions being built in LP right now (you know- double, triple lot type houses.) It is the most since 2007. These are $6 million+ houses.

    If you click on the “gallery” you will see two houses listed that were built just 20 years ago (early 1990s) and they are already tearing them down.

    “We don’t know what a teardown is anymore. It used to be the little rundown houses. Now it’s even bigger houses that aren’t that old,” said Lissa Weinstein at Re/Max Premier Properties.

    http://www.chicagobusiness.com/realestate/20140520/CRED0701/140519783/whos-building-those-lincoln-park-mega-mansions

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  312. “Because you have no idea what you are talking about. Hint: you can’t just take ONE part of the equation and determine something is a “loss”.”

    I’m talking real life here. That couple is looking at their own finances right now. They bought 5 years ago. They’re not sitting there saying, “gee- what if we had rented instead?”

    DUH!

    So, to them, they look at what they’re going to be able to sell for and things aren’t so good. They’re looking at their options and they suck. They’re not going to make much, if any, money off of the condo to put into the house they want to buy that has gone up 20%. Right now, it’s not so bad because mortgage rates are still really low. They really SHOULD suck it up and just sell with whatever they can get and move because when those mortgage rates go up it’s going to be even worse. Not only will their own condo be more expensive, but any house they want to buy will also be way more expensive.

    But at that point, affordability will REALLY bite and housing prices will have to come down again- to be in line with incomes.

    2013 was really the key year to sell and buy again. This year is not too bad because rates have stayed low and prices are now flat. But for those who are waiting- I fear for them over the next few years. They’re going to be stuck in that condo for a long, long time.

    In real life- most people don’t make a spreadsheet and second guess their decision from 5 years ago. These people already bought the condo. How do they get out of it with the best possible scenario?

    The scenarios still suck. And that’s why inventory isn’t rising. They’re still in a tough place financially. We’d need prices to go up another 10% or more for many of these Lakeview and LP sellers to come of it looking good. But- again- the price on the house they want to buy would also probably be going up the same amount. The bidding wars for SFHs in some neighborhoods with low inventory doesn’t help either. Who wants to engage in that when they can barely afford it as it is?

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  313. [When is Sabrina going to fix the post lag?]

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  314. Well, I gotta say, Sabrina did produce the 20 y.o. lp teardowns, although, even as ugly as some of them are, the teardowns are less bc no one wants to live in the 20 y.o. house, as it is that the land they were built on has appreciated ridiculously in value, and the structures themselves have become externally obsolesced.

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  315. “bought @ 500, selling at 600″
    Can you let us know each time you trade, so we can replicate?

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  316. “So, to them, they look at what they’re going to be able to sell for and things aren’t so good. They’re looking at their options and they suck. They’re not going to make much, if any, money”

    I believe you don’t even know what “suck” means.

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  317. “[When is Sabrina going to fix the post lag?]”

    Not soon enough!!

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  318. “I believe you don’t even know what “suck” means.”

    I have plenty of friends in this situation. Some have decided to just sit there and live in the condo for a few more years. A few tried listing at super high “greed” prices- but didn’t sell. They took them off the market. (They figured “if there was someone dumb enough out there to pay it- why not try?” Apparently- there was no one dumb enough.)

    A couple have just decided to sell even though they won’t make anything. They want to move on. It’s still better than a few years ago when they would REALLY have lost a lot of money. So they feel better about that.

    But this is why inventory is low. The options aren’t good. There’s no incentive for the masses to list their properties. We’re stuck with low inventory this year.

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  319. “I believe you don’t even know what “suck” means.”

    You’re not pulling a ‘do they know it’s Christmas-time at all’ thing are you?

    Their options do ‘suck’ compared to (1) their 2006-era irrational exuberance, (2) their friends who bought in Brooklyn at about the same time, (3) having just sucked it up and moved to the ‘burnd in ’06 instead of now, and (4) if they had rented in ’06 and bought first in ’10 or even last year.

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  320. Clio used to say that $2m+ houses were a tough sell, because at that price you can pretty much buy your dream home. No one wants someone else’s dream home, so they buy houses, tear them down, and build their own dream home. Is that what is going on in LP?

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  321. “Clio used to say that $2m+ houses were a tough sell, because at that price you can pretty much buy your dream home. No one wants someone else’s dream home, so they buy houses, tear them down, and build their own dream home. Is that what is going on in LP?”

    Not really. Because if you’re buying a $1.5 million home to tear down- it will cost you a lot more than that to actually buy it (for land purposes) and then build your “dream house” there.

    Dream house prices probably start closer to $4 million. But in this case- since they’re built on multiple LP lots- they’re starting at $6 million and going up from there.

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  322. “Not really. Because if you’re buying a $1.5 million home to tear down- it will cost you a lot more than that to actually buy it (for land purposes) and then build your “dream house” there.”

    Sure, but Clio’s point was that *reselling* that dream house was going to be hard, bc someone dropping that amount (whatever it is) would rather find the teardown and build new than try to fix the 2/4/6 million dollar ‘used’ house.

    And, $2m is something different in Oak Brook and is something different than it was 4 years ago when Clio said it.

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  323. “Plenty of condos just north of Irving Park Road in Lakeview on Cullom, Belle Plaine and other streets. They’re dropping their prices every few weeks.

    Why am I getting as many “price cuts” properties on my real estate trackers as new listings? Heck- on some days- I’m actually getting MORE price cuts? Oh- because people are listed too high? How could that be?”

    Inventory in Lakeview and Uptown has bottomed and is inching up a bit but is still below a 5 month supply. Market times are way down – 60 days in Uptown, down from over 100 at this time in the recent past. And just because prices are rising doesn’t mean that you can’t price a property too high. Hence the cuts.

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  324. “Crain’s data is showing that SFHs in some neighborhoods are now above peak (Lincoln Park, Lakeview.) In River North/Streeterville, condos are selling above peak prices and have been for a few months now.”

    Can you please point me to that article? I vaguely recall something like this but ignored it for some reason. Now I can’t find it.

    “Lots of sellers have been sold a false bill of goods that prices are SO high and they can list for $100,000 more than they paid in 2006. It’s really not happening very often. Then they’re left to reduce, reduce, reduce and their listing becomes stale. They would sell for more if they didn’t start out so high.”

    I don’t know about that. You can never prove it and it would require a property to carry a stigma discount just because it hasn’t sold, which would be dumb of buyers. Yes, that’s true if you’re holding the price for months and months but once you drop the price that should reset the confidence of buyers – i.e. “It didn’t sell at THAT price but maybe it will sell at THIS price”

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  325. “So while all the headlines talk about this amazing 11% year over year price increase, the reality is- many sellers just aren’t seeing that kind of appreciation even in Lincoln Park. It all depends on the type of property and location though.”

    Condos were up 18.4% in the past year in Chicago. The example you showed was for a home bought before prices bottomed. There is now way to know how much that home appreciated in the past year from the data. Do I believe it was 18%? Probably not but you can’t definitively say they are not seeing that appreciation.

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  326. So, let me get this straight. Prices are nowhere near back to their peak level and homeowners are losing their asses but no one can afford to buy anything because the prices are too high?!?!?!?!?!

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  327. ” in my neighbood (University Village), the prices are still below the 2006 figures from what I’m seeing. The townhouses are getting close to their 2006 peak. The condos are still off peak by quite a bit. My parents purchased their townhouse in 2003 and they can probably get back what they paid finally. I purchased my condo in the downturn and could make a rather nice profit if I sold now, but the prices are still below the $300k+ that the original owners paid in 2003.”

    That’s basically correct. Here’s the data: http://www.chicagonow.com/getting-real/2014/01/rising-home-prices-university-village-home-sellers-losses/ But you will see there’s quite a bit of dispersion and it’s linked to the condition of the unit obviously. The original units there are looking pretty tired and outdated and trade at the lower end of the range. And the “hardwood” floors can’t be refinished. If your “hardwood”/ carpet is shot I’m telling people to put in real hardwood since many buyers might tear out new carpet anyway.

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  328. “So, let me get this straight. Prices are nowhere near back to their peak level and homeowners are losing their asses but no one can afford to buy anything because the prices are too high?!?!?!?!?!”

    I found that stance interesting too.

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  329. Thanks Gary! I’ll forward your article to my parents since they are thinking of selling in the next couple of years. Luckily, they chose the real hardwood floors, so at least they are covered there.

    Is it kosher to put real hardwood floors in a condo? I’d like to re-do my floors. I had the engineered hardwood floors, but I have heard the real hardwood floors can cause issues with sound transference.

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  330. ” I have heard the real hardwood floors can cause issues with sound transference.”

    1. Most likely BS sales pitch from the “engineered” hardwood talking points.
    2. There are all sorts of underlayments that will deaden sound, so if you are really concerned about your downstairs neighbors, you can have something installed that will substantially reduce noise transmission. Secondary benefit is that it will also reduce noise coming up from below.

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  331. “Not really. Because if you’re buying a $1.5 million home to tear down- it will cost you a lot more than that to actually buy it (for land purposes) and then build your “dream house” there.”

    So it is exactly what is happening, just a price class up. 20 years ago people bought $500k teardowns to build million dollar homes. Now people are buying $1.5m teardowns to build $6m homes. Maybe in 20 years people will teardown these $8m homes to build $15m homes.

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  332. “Is it kosher to put real hardwood floors in a condo? I’d like to re-do my floors. I had the engineered hardwood floors, but I have heard the real hardwood floors can cause issues with sound transference.”
    Absolutely, and I wouldn’t do it any other way. With engineered floors you can easily find yourself unable to refinish them and then you have to replace them again. If you are really concerned about noise you can find out about sound insulation available but UV has concrete floors anyway so I doubt there would be much noise transference.

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  333. “You’re not pulling a ‘do they know it’s Christmas-time at all’ thing are you?”

    there won’t be snow in Africa this Christmas

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  334. “there won’t be snow in Africa this Christmas”

    I always thought the following was really about Oak Brook:

    the Christmas bells that ring there
    Are the clanging chimes of doom

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  335. Sabrina – you are all over the place. A) In one instance you are saying there are all these underwater / forced landlords out there waiting to sell but can’t because they are underwater. B) In another instance you are saying nobody is listing because prices are TOO HIGH and they can’t afford the next place they would buy. C) In another instance you say there are all these price cuts in the burbs / peripheral areas. None of that makes sense! If A then how can prices be too high (B)? If B then why aren’t people moving to the under priced burbs (C)?
    Also – can we have a moratorium on predicting interest / mortgage rates? Literally none of you know the answer so lets just use current rates. Some of the smartest people in the world with access to more info than you (including talking directly to central bankers themselves) disagree on where rates are headed. They get paid billions to predict this stuff and can’t agree. And finally – even if you DID know what interest / mortgage rates were going to do that doesn’t even tell you what housing prices will do because it depends on WHY rates are higher.
    And for the record I agree with Sabrina’s B opinion. Low inventory because housing prices are high so people would rather just stay put unless they have a good reason to move.

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  336. And here is a link that to me represents the frenzy going on in LP / LV / Old Town:
    http://chicago.curbed.com/archives/2014/05/20/super-pricey-condos-replacing-lincoln-park-strip-mall.php
    These are condos priced at $1.8mm for 3BR and $3.2mm for 4BR. There are already 2 of 7 under contract! A $3.2mm condo in Old Town! WTF???
    And another minor quibble with terminology – those places on Orchard / Howe / Burling that are $6mm+ and 2+ lots are not McMansions. They are legit mansions. A McMansion is a cheaply built home that prioritizes space / size over scale / details and has a mass produced feel (hence the “Mc” referencing the mass production / homogeneous nature of McDonalds franchises / food).

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  337. ” A McMansion is a cheaply built home that prioritizes space / size over scale / details and has a mass produced feel”

    …typified (possibly incorrectly) by Toll Brothers. eg: http://www.tollbrothers.com/IL/The_Woods_of_South_Barrington_-_Signature_Collection#homedesigns

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  338. @anon (tfo) – There should be a link to those on the wikipedia definition!

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  339. “typified (possibly incorrectly) by Toll Brothers”
    “There should be a link to those on the wikipedia definition!”

    That’s my sister’s house! They are v happy.

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  340. “That’s my sister’s house! They are v happy.”

    Lemme guess: the Chamberlain, bc of her love of Shakespeare.

    Close?

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  341. [lag, blah blah blah, lag, lag]

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  342. “Lemme guess: the Chamberlain, bc of her love of Shakespeare.”

    Prob more the cumberland. or maybe the cary. ahh, who can tell the difference.
    Was actually more of early generation mcmansion, 20 years old now. 4 bd, only 2.5 ba, vaulted everything, 3 car attached garage, w a white kitchen that will never come back into style.

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  343. Perhaps the Toll Bros could introduce a new model:

    The Laggy Laggington.

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  344. “a white kitchen that will never come back into style.”

    White kitchens were hot for a while in the notsodistant past. But I think they got killed by the posting lag.

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  345. “White kitchens were hot for a while in the notsodistant past.”
    Ones w mdf cabinet doors, white (not fancy new ice white) fridges, gold hardware, and laminate countertops?

    “But I think they got killed by the posting lag.”
    Tis true. Not much can survive the posting lag, not even the collective efforts of the chatterati**.

    ** After gthooi, can’t decide if chatterati was coined by (a) sabrina, (b) nonny, or (c) icarus.

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  346. white kitchen time warp…?

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  347. “After gthooi, can’t decide if chatterati was coined by”

    Seems it was ‘coined by Peter Simmons in 1998 and used in The Globe’.

    First appearance here, per the CC search box, was in a post title:

    http://cribchatter.com/?p=14530

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  348. “First appearance here, per the CC search box, was in a post title:”

    Citing use of the CC search box might be relevant if one could have *any* faith in site functionality [laglaglaglaglaglaglaglaglaglaglaglag]. Otherwise, it is impossible to rule out that someone (check out who!) might have used it earlier:
    http://cribchatter.com/?p=11025

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  349. http://www.salon.com/2014/04/13/let_them_eat_mcmansions_the_1_percent_income_inequality_and_new_fashioned_american_exess/

    Absolutely amazing article about mcmansions. suggested read for anyone who loves them as much as I do.

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  350. Wow, the lag is so HUGE that it swallowed my mcmansion article!

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  351. Prices are insane. Yesterday I used the Redfin home pricing tool. I picked five comps 1) within a stone throw of my house 2) of comparable size, location and upgrades 3) which have sold in the last 6 months.

    My house post-renovation was appraised at $310,000 in 2012. The comp tool values my home at $380,000. I know that’s not ‘a lot’ of money for ANYTHING in the green zone but I bought the one of the smallest crappiest least visually homes in the neighborhood with external obsolescence (necessitating a -10% price valuation according to mr. appraiser compared to other homes in the neighborhood) but now its as if nothing matters because moderately small 1,400 sq feet 1960’s ranches are selling at prices darn near the top of the last bubble. Insane.

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  352. “check out who!”

    He even spelled it correctly!

    Earlier use here: http://cribchatter.com/?p=8626

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  353. gringozecarioca on May 31st, 2014 at 9:36 am

    White kitchens will always be in style…

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  354. “These are condos priced at $1.8mm for 3BR and $3.2mm for 4BR. There are already 2 of 7 under contract! A $3.2mm condo in Old Town! WTF???”

    Only the upper bracket is selling “quickly” or “well.” It is back to 2007 levels because, surprise, surprise, the stock market is even higher than 2007 and that’s where rich people get their wealth. One of their largest assets is up over 150% since the Great Recession. They are feeling REALLY good.

    But, alas, on the lower end, where people are trying to buy entry level condos and worried about having a downpayment for a mortgage- it’s not so hot. Lots of “affordable” condos just sitting on the market for weeks in LP, Lakeview, Bucktown and other popular north side neighborhoods.

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  355. “Sabrina – you are all over the place. A) In one instance you are saying there are all these underwater / forced landlords out there waiting to sell but can’t because they are underwater. B) In another instance you are saying nobody is listing because prices are TOO HIGH and they can’t afford the next place they would buy. C) In another instance you say there are all these price cuts in the burbs / peripheral areas. None of that makes sense! If A then how can prices be too high (B)? If B then why aren’t people moving to the under priced burbs (C)?”

    I’m actually NOT all over the place. The state of the market depends on:

    1. What neighborhood are you in? Right now- not even all of the GZ can be lumped in together. The Chinese investors, for instance, are NOT buying in “hot” Logan Square. They ONLY want the downtown- i.e. Gold Coast, River North and Streeterville because “that’s the best”. Perhaps 6 or 12 months from now, that will change. I don’t know. But right now- the foreign investors are only buying downtown. So it’s pushing prices of 2/2s and even 1-bedrooms well past the peak. But in the neighborhoods to the north, that same 1-bedroom is just sitting there on the market, lagging.

    2. What’s the size? Many move-up buyers are looking for 3-bedroom units so they can stay in the city with their kids. The 2/2 is still a hard sell. The 3-bedroom duplex down or townhouse isn’t as tough a sell.

    3. What’s the price? The rich have gotten richer. They are buying. But anyone who needs a mortgage or is scraping to put together a downpayment is having a more difficult time. The $700,000 townhouses are selling fairly quickly. Ditto with the $1.5 million homes. But the $400,000 and under crowd isn’t doing so great. If you list your property over the FHA limit of $417,000- you are probably having a more difficult time selling as well.

    4. It had better be pristine. Buyers are still picky. If it has an old kitchen, it won’t sell for top dollar. In a truly “hot” market – EVERYTHING sells almost immediately. This isn’t a “hot” market. It’s a low inventory one. If you’re currently renting, are you going to buy a place that has a worse kitchen or bathroom than you already have? Um…no. So properties selling quickly are those that are renovated and move-in ready.

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  356. “Condos were up 18.4% in the past year in Chicago. The example you showed was for a home bought before prices bottomed. There is now way to know how much that home appreciated in the past year from the data. Do I believe it was 18%? Probably not but you can’t definitively say they are not seeing that appreciation.”

    You had to have bought in 2010 or maybe 2011 to be making money in some neighborhoods. Most didn’t. Even the 2009 buyers are losing money. The price increases haven’t been enough to put people in the green on the north side yet. And not every neighborhood got the 18.4%. If that is condos in all of the city- it includes those in areas that got crushed down and now have jumped rapidly. In the “stable” north side neighborhoods- it just didn’t happen like that. So they haven’t seen the appreciation.

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  357. “Lots of “affordable” condos just sitting on the market for weeks in LP, Lakeview, Bucktown and other popular north side neighborhoods.”

    Lincoln Park condos under $330K (that’s the only choice the system gives me) median market time only 19 days.

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  358. “I don’t know about that. You can never prove it and it would require a property to carry a stigma discount just because it hasn’t sold, which would be dumb of buyers. Yes, that’s true if you’re holding the price for months and months but once you drop the price that should reset the confidence of buyers – i.e. “It didn’t sell at THAT price but maybe it will sell at THIS price””

    There are foreclosures where the bank is actually listing WAY too high and they’re sitting there and sitting there. And then the bank reduces, reduces, reduces. It becomes a stale listing. And then finally sells when someone gets a really good deal.

    It’s amazing that they’re sitting there as long as they are. I’ve been watching several of these in LP and Lakeview.

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  359. “Can you please point me to that article? I vaguely recall something like this but ignored it for some reason. Now I can’t find it.”

    http://www.chicagobusiness.com/realestate/20140429/CRED0701/140429761/lincoln-park-lakeview-bucktown-home-prices-almost-back-to-peak

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  360. “Lincoln Park condos under $330K (that’s the only choice the system gives me) median market time only 19 days.”

    What’s “affordable”? Why’d you choose $330k? Why not $300k? Why not choose $417,000 which is the FHA limit?

    I’ll do some posts this week on properties just sitting and sitting on the north side. Obviously, there are these properties in every kind of market. Sometimes it’s location. Sometimes it’s how updated the unit is (or is not.) Sometimes they started out too high.

    But despite the realtor rah-rahing, not everything is selling all that fast.

    Like I said last week- anyone with a property tracker (either on the MLS or Redfin etc.) can see the “price changes” daily and there are almost as many price changes as new listings.

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  361. “But despite the realtor rah-rahing, not everything is selling all that fast.”

    I wouldn’t expect it to. Never does.

    “Like I said last week- anyone with a property tracker (either on the MLS or Redfin etc.) can see the “price changes” daily and there are almost as many price changes as new listings.”

    They must have been overpriced to begin with. That says nothing about the market.

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  362. “They must have been overpriced to begin with. That says nothing about the market.”

    Then almost NO data says ANYTHING about the market. Market times are meaningless too then. Median selling price is meaningless as well because it’s about the mix.

    Basically- no one knows anything that is going on in this housing market except:

    1. Inventory is low
    2. Sales are down

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  363. You forgot that prices are up.

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  364. “You forgot that prices are up.”

    Not this year. They rose in 2013 and they are flat to down so far this year. Medians are being skewed by luxury sales.

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  365. Here’s how hot the luxury market still is in NYC (but sales on the “low” end – i.e. under $1 million are slumping. And some properties are having to cut prices on the low end to find buyers.)

    But on the high end- they’re buying sight unseen.

    http://www.nytimes.com/2014/06/01/realestate/new-yorks-multimillion-dollar-condo-market-booms.html

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  366. CS is up significantly.

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  367. sabrina is right, although like Chicago itself, this shows that the housing market is a tale of two cities
    http://chicagoagentmagazine.com/inconvenient-truth-housing-two-charts/#sthash.fyXNK7wT.dpuf

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  368. “They rose in 2013 and they are flat to down so far this year. ”

    This is, of course, not true.

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  369. ” this shows that the housing market is a tale of two cities”

    1. Is that 2d chart the current breakdown (ie, after the changes shown in the first chart) or some other period?
    2. That is *national* data. As we’ve established, most of us wouldn’t live in most of the country if given a free house + $100k. So that’s not too material.
    3. The nationwide median price went up from $185k to $215k, so, yeah.
    4. That’s existing homes, only, New Home median is $275k.

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  370. Anonemoosity on June 2nd, 2014 at 3:29 pm

    Didn’t the developer for the Lincoln Park condos pull out due to the Alderman telling them no way, Jose’?

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  371. steve heitman on June 2nd, 2014 at 3:37 pm

    I think Sabrina may be going crazy. She talk in circles and never can correct herself when she is wrong.
    Remember what I told you years ago Sabrina… “Buy a property with true utility in a good location (i.e. Lincoln Park) and you will be just fine.” I bet you wish you would have listened. There were some great deals in LP back in 2009 & 2010. Not so much anymore.

    What are you thoughts about developers buying whole townhouse complexes, tearing them down, and putting up $16 million SFH? This is happening on Howe, Orchard, and Fremont. Someone must really want to lice in LP!

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  372. gringozecarioca on June 2nd, 2014 at 4:26 pm

    Why inconvenient? Rich people unfortunately being forced to pay up for housing while housing remains affordable priced for the proletariat.
    Seems like that should make the 99% happy.

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  373. “Why inconvenient?”

    Hoping for a quasi-documentary to be made and then win a not really deserved the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.

    That, or the author is a love child inspired by watching Love Story, or listening to PMRC-opposed ‘explicit lyrics’, or something.

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  374. “Why inconvenient? Rich people unfortunately being forced to pay up for housing while housing remains affordable priced for the proletariat.”

    Yeah but it’s just swapping one asset class for another. During the days of the roman empire there two economies: the rich used gold for large transactions but the poor used silver and coinage to buy bread and olive oil. There’s really not that much difference today except that instead of showing up at the closing table with satchels of gold, they wire ghastly sums with lots of zeros on the end.

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  375. gringozecarioca on June 3rd, 2014 at 7:40 am

    … It would be a bit inconvenient to bring 800 pounds of gold to heitmans 16 million dollar closing… Tulips for currency seems to make much more sense. Besides, transferring large sums of money just gets you flagged at NSA these days… Better to be poor and not have such complications in ones life… Add to that easier entry into the kingdom of heaven……..

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  376. ” It would be a bit inconvenient to bring 800 pounds of gold to heitmans 16 million dollar closing”

    ‘specially bc that’s about 10% short.

    Unless you meant Troy pounds.

    And then you’d be much more short.

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  377. gringozecarioca on June 3rd, 2014 at 11:53 am

    Ze avoids looking at gold, impressed I came within 10 percent.

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  378. May closings are going to come in well below last year. I’m going to publish my update on Monday. Need to dig deeper because market times are down, months of inventory are down, yet listings are up. Go figure. Maybe lots of cancelled listings? I know pending sales are up too.

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  379. steve heitman on June 3rd, 2014 at 11:57 am

    Sabrina, I always said buy a property with utility in a good neighborhood. 2 bed, 2 bath condos are not what I consider good utility. Good utility is a property you can grow into and will not be forced to leave when you get married and the 1st kiddie arrives. Anyone who followed my advice is doing quite well.

    Also, at least you are finally realizing that just because attorneys are not seeing wage increases, does not mean the rest of the LP crowd is not killing it. The top 1% is getting richer and the middle class and the poor are losing out. Anyone is favor of higher taxes and some asset redistribution yet? I am and I am doing just fine. Why so many republicans are against it is beyond my understanding. They all seem to think that they are the 1%, when in reality, they are the ones suffering near the bottom. Asset redistribution does not mean “us” give money to the non-working lower class. It means taking some of the froth off the top of the 1%’s and giving the middle class a well deserved break. Support it. Know it. Love it!

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  380. Another lagging indicator…

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  381. gringozecarioca on June 3rd, 2014 at 12:02 pm

    Hey..just checked price 16 oz times 1245 times 800 seems pretty close to 16m … U including closing fees… Otherwise it’s my best guess I’ve made since my 1989 guess of 10 million bricks in the empire state building. That’s the one that got me my first real job. They realized I wasn’t too bright but I had luck on my side.

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  382. “Hey..just checked price 16 oz times 1245 times 800 seems pretty close to 16m”

    Heh, you took the bait.

    14.5833 troy ounces to a ‘common’ pound. Or 12 troy ounces to a troy pound. So, 11,666 (or 9600) troy ounces in your 800 pounds.

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  383. “my best guess I’ve made since my 1989 guess of 10 million bricks in the empire state building”

    Straight guess, bc wtf–figuring it was right to one significant digit, or calculated approximation? If height and ballpark footprint dimension is known (and single course assumed, bc only a mo-ron doesn’t know its a steel-frame building), than readily calculable to ~10m.

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  384. I wonder what would happen to the world’s economies if gold suddenly became a lot more plentiful than it is now. What if there was a meteor shower that distributed billions of pounds of gold to the Earth? (Note: I do not think this will ever happen, but it would be interesting to see what would happen to the economies of the world if gold was much more common.)

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  385. “What if there was a meteor shower that distributed billions of pounds of gold to the Earth?”

    There’d be so many fewer people that I don’t think many would be concerned about the effect of the gold on international economics.

    Or we could change the hypo to: aliens land, carefully unload billions of pounds of ‘waste’ gold in various deserts, and leave peacefully, never to return. While we’re at it, let’s have them leave all sorts of other useful things.

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  386. gringozecarioca on June 3rd, 2014 at 7:45 pm

    Her premise is good. I asked a similar question to a gold bug a couple of decades back. What if some small little piss ass country discovered a massive quantity of gold, does it suddenly become the worlds richest country despite no productive effort to get there and for a product that has no real conversion value, unlike oil. And what if they find an amount 100 times all the gold currently available.

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  387. “May closings are going to come in well below last year. I’m going to publish my update on Monday. Need to dig deeper because market times are down, months of inventory are down, yet listings are up. Go figure. Maybe lots of cancelled listings? I know pending sales are up too.”

    May is when mortgage rates began rising last year. So sales slowed sharply in May and June. So if we’re coming in BELOW even those numbers- it is not good out there.

    Non-seasonally adjusted mortgage purchase apps declined 14.5% last week even though mortgage rates were at 11 month lows. So lower rates are having NO impact on people’s decision to buy a house. Year over year purchase apps were down 20%. Wow.

    If people aren’t getting a mortgage right now- that means sales will be slower in July and August.

    We’re already seeing it here in Chicago. I don’t know how everyone is saying the market is hot. I see plenty of condos just sitting there on the market now. It seems like a dead market to me. Inventory remains very low though. It’s almost shocking how few properties are coming on the market right now.

    I’ve been busy- but I have some new properties I’ll put up tonight.

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  388. Here’s what’s happening with prices and why everyone thinks they’re rising (but they’re not).

    Average price:

    March 2013: $100,000
    April 2013: $106,000
    May 2013: $110,000
    June 2013: $113,000
    July 2013: $114,000
    August 2013: $114,000
    September 2013: $114,000
    October 2013: $114,000
    November 2013: $114,000
    December 2013: $114,000
    January 2014: $114,000
    February 2014: $114,000
    March 2014: $114,000

    Headline: Average house price up 14% year over year.

    But in reality, prices haven’t risen in months. The price increases were early in 2013 and they haven’t done much since.

    There’s an affordability problem. They can only rise so high unless people start earning higher incomes. Even lower mortgage rates aren’t doing anything to help affordability right now and they are only going to go HIGHER in the near future. This $114,000 house will become even more affordable by next year.

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  389. That’s averages and as we’ve discussed many times it’s meaningless. Also, that must be national data. Who cares about national data? Chicago is seeing price increases and I can tell you that our listings are getting LOTS of interest.

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  390. The Duke of Laggington is quite the bulimic fellow, swallowing up posts just to barf them back up a little while later.

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  391. “a product that has no real conversion value”

    Well, that’s an exaggeration, as gold is far better than a lot of alternatives as a conductor. If gold were suddenly as plentiful as, say, copper, it would substitute for much of the copper in electrical wiring, at a price somewhat higher than (then current, soon after to trend down) copper.

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  392. I have found that over the years that gold bugs are typically moron conspiracy theory types. Now I love a good conspiracy as much as the next guy, maybe more than most, but these are like paranoid wacko types who literally need to seek psyciatric help immediately.

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  393. Sabrina, why do you keep repeating that prices aren’t increasing when they are?
    http://www.housingviews.com/wp-content/uploads/2014/05/CSHomePrice_Release_March2014-results.pdf

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  394. Sabrina is apparently smarter than Core logic as well… pulling numbers out of her ass

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  395. ” I don’t know how everyone is saying the market is hot. I see plenty of condos just sitting there on the market now. It seems like a dead market to me.”

    See what you want to see.

    “Inventory remains very low though. It’s almost shocking how few properties are coming on the market right now.”

    Wow, you didn’t even wait 1 full sentence to completely contradict yourself!

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  396. What do people think will happen to prices over the next year?

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  397. “What do people think will happen to prices over the next year?”

    Will they laglaglaglaglaglaglaglaglaglaglaglaglaglaglaglaglaglaglaglaglaglaglaglag, or not? I know chuk is good for an answer. Anyone else?

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  398. “a product that has no real conversion value”
    “Well, that’s an exaggeration, as gold is far better than a lot of alternatives as a conductor”

    Surely that has to be assess relative to current value of gold. If [value of gold as conductor]/[current value of gold] << 1%, that seems close enough to say no real value (I'm afraid to do the actual calc w all those troy ounces and such).

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  399. “The Duke of Laggington”

    Aiming to be elevated to Prince, I think…

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  400. “Surely that has to be assess relative to current value of gold.”

    Ze cited Oil. What’s crude oil worth, per pound? About 90% less than copper is.

    And gold would remain more valuable than copper, provided that it did not become orders of magnitude *more* abundant than copper, which is way way more abundant than suggested by Ze’s hypo. Which is “real conversion value”, much like oil, which is the aspect I objected to.

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  401. U.S. soon to recover all jobs lost in crisis

    http://money.cnn.com/2014/06/04/news/economy/jobs-report-recovery/index.html?hpt=hp_t2

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  402. “What do people think will happen to prices over the next year?”

    Nothing too thrilling.

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  403. {Lag it!]

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  404. “What’s crude oil worth, per pound? About 90% less than copper is.”

    What does that have to do w anything? Issue is surely [Value of X solely based on productive use (which may be difficult to measure)]/[Value of X inclusive of speculative/store of value/etc. function]

    “And gold would remain more valuable than copper”

    How much more? Order of magnitude?

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  405. “What do people think will happen to prices over the next year?”

    Up 5% YOY in May.

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  406. “What do people think will happen to prices over the next year?”

    not sure, my magic 8 ball is LAGGING

    but maybe 1-3% increase?

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  407. ” Issue is surely [Value of X solely based on productive use (which may be difficult to measure)]/[Value of X inclusive of speculative/store of value/etc. function]”

    Statement was, regarding gold, “a product that has no real conversion value”. Comparison was to oil “a product that has real conversion value”. Thus, at best, an exaggeration. Which was my issue–typical pedantic nitpicking.

    Your issue relates to the rest of Jenny/Ze’s hypo, the broader economic effects. A bigger issue, certainly, but not what I was raising.

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  408. gringozecarioca on June 4th, 2014 at 1:16 pm

    Ze thinks prices higher, but ze always a fan of anything getting higher.

    …and DZ.. Don’t feed anon on gold arguments, he is still trying to defend his early 80’s purchase of several large, gold chain run DMC necklaces with the diamond dollar sign pendants. Ask him to send you his photo before his company made him remove his diamond grill braces… Priceless!!!

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  409. gringozecarioca on June 4th, 2014 at 1:23 pm

    …and copper is more conductive than gold anyway…

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  410. “ze always a fan of anything getting higher”

    So, you’re in favor of higher lag times?

    Ready for the World Cup riots? Or leaving town again?

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  411. “Ask him to send you his photo before his company made him remove his diamond grill braces”

    With *exactly* the same pose as the old Jenny Ames pic.

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  412. “…and copper is more conductive than gold anyway…”

    Yes, sloppy. “better than copper in many electrical (and other) applications” would have been … better (ie, not inaccurate).

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  413. gringozecarioca on June 4th, 2014 at 1:43 pm

    . returning tonight to Rio FOR the riots. Currently in Buenos Aires. Not that I care one shit about soccer but it will be fun watching Germans and Italians fighting it out for the hookers.

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  414. Looks like sales will be way off for May – like down 17% or so. However, almost all of that is due to a decrease in distressed sales, which are down like 50% from last year. The market is fine.

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  415. “What do people think will happen to prices over the next year?”

    Up 4.5% y-o-y in June 2015. Flat m-o-m from August-December. 2 more months of price increases reflecting the past 2 months of shitty supply.

    Anecdotal observation: new listings in green zone up aggressively since labor day. I predict this pattern continues, and we see it reflected in months of inventory data in next 2-3 months. I see closed sales increasing substantially in September, while price moderates and possibly retreats.

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  416. “Looks like sales will be way off for May – like down 17% or so. However, almost all of that is due to a decrease in distressed sales, which are down like 50% from last year. The market is fine.”

    Thanks for the info Gary.

    I just looked at what the sales were like for last May and it was the best May since the boom. But rates didn’t start rising until the Fed let it slip that they were probably going to start the taper soon and everyone panicked. That was about mid-May. Then rates started going up sharply as the ten year climbed.

    But those who closed in May had already locked in mortgage rates weeks/months before. So they weren’t impacted by the rate increases. We only saw sales really start to slow by the end of the summer when buyers had to get the new, higher rates. So it will really be interesting to see the year over year sales numbers in a few months.

    Sales are slow though. This is nowhere near a recovery. Prices rose too quickly and now we’re stuck with this mess of a housing market.

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  417. “Up 5% YOY in May.”

    The median price was up?

    Median prices mean NOTHING right now. It tells you absolutely nothing about the market- except that the rich are doing really, really well.

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  418. “What do people think will happen to prices over the next year?”

    Flat if mortgage rates stay under 5%.

    Fall if mortgage rates go above 5%.

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  419. “That’s averages and as we’ve discussed many times it’s meaningless. Also, that must be national data. Who cares about national data? Chicago is seeing price increases and I can tell you that our listings are getting LOTS of interest.”

    So if you bought last year in September, you’re selling for more right now?

    I don’t see many properties doing that.

    This isn’t any “data.” This is made up numbers. This is what the market has done in Chicago over the last year. Get it? Prices aren’t going up anymore. Wake up people. That’s so last year’s story. Prices haven’t gone up for 8 to 9 months. They are flat.

    Case Shiller is YOY as in the example I just gave. All that Case Shiller is telling you is that prices went up in the early part of last year- until they didn’t. In the next 5 months you’ll see that yoy prices aren’t going up.

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  420. “Chicago is seeing price increases and I can tell you that our listings are getting LOTS of interest.”

    Really? Where?

    Maybe your sliver of the Chicago market is a small luxury market Gary. The rest of the city isn’t really seeing that. Heck, Lincoln Park isn’t even seeing that right now. But maybe West Town or Logan or other neighborhoods are hotter.

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  421. Apparently not even Sabrina’s posts are immune from LAGLAGLAGLAGLAG.

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  422. “Chicago is seeing price increases and I can tell you that our listings are getting LOTS of interest.”
    “Really? Where?”
    “Maybe your sliver of the Chicago market is a small luxury market Gary. The rest of the city isn’t really seeing that. Heck, Lincoln Park isn’t even seeing that right now. But maybe West Town or Logan or other neighborhoods are hotter.”

    I don’t have data but prices def seem up a bit from 12 months ago in nortcenter, lincoln sq. Might well be the luxury market but does seem to be up. And logan too.

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  423. “Chicago is seeing price increases and I can tell you that our listings are getting LOTS of interest.”
    “Really? Where?”
    “Maybe your sliver of the Chicago market is a small luxury market Gary. The rest of the city isn’t really seeing that. Heck, Lincoln Park isn’t even seeing that right now. But maybe West Town or Logan or other neighborhoods are hotter.”

    I don’t have data but prices def seem up a bit from 12 months ago in nortcenter, lincoln sq. Might well be the luxury market but does seem to be up. And logan too.

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  424. “I don’t have data but prices def seem up a bit from 12 months ago in nortcenter, lincoln sq. Might well be the luxury market but does seem to be up. And logan too.”

    I guess we should differentiate the market.

    SFH or condos?

    SFHs have even less inventory than condos so the competition is more intense there. For condos, however, not so much. Plenty sitting on the market on the north side- but- again, depends on the neighborhood.

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  425. “This is what the market has done in Chicago over the last year. Get it? Prices aren’t going up anymore. ”

    Here are the last 13 Case Shiller seasonally adjusted index values for Chicago. Every single month is up. Your statement simply is not true.
    116.66
    118.65
    120.17
    120.40
    121.61
    121.82
    122.76
    123.81
    124.81
    125.77
    126.30
    127.74
    130.04

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  426. “Maybe your sliver of the Chicago market is a small luxury market Gary. The rest of the city isn’t really seeing that. Heck, Lincoln Park isn’t even seeing that right now. But maybe West Town or Logan or other neighborhoods are hotter.”

    We work a pretty broad swath of the market. The high end is definitely looking good – even better than just 6 months ago – but we’re also seeing the one bedrooms in Lake View under 250K going under contract in 2 weeks. Huge interest in University Village listings also.

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  427. “Here are the last 13 Case Shiller seasonally adjusted index values for Chicago. Every single month is up. Your statement simply is not true.”

    Case Shiller measures only SFHs. So this is just a sliver of the market. Also it measures the “average change in the value of residential real estate.” When you have $5 million houses selling in Lincoln Park and record high luxury prices- it’s going to look different than if you have 2/2 condos selling in Logan Square.

    I don’t cover Case-Shiller on CribChatter because I have never considered it to be a reliable indicator. Not only does it only cover single family homes but it also is a composite of several months of data and is delayed by several months. It basically is irrelevant to the conversation. It was during the bust and it is now.

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  428. By the way- anyone actually bother to look at the Chicago Case-Shiller chart lately?

    Look at all those dead cat bounces during the bust years.

    Looks like it’s going to head lower yet again.

    http://us.spindices.com/indices/real-estate/sp-case-shiller-il-chicago-home-price-index

    It also is a reminder of just how messed up our housing market has been in the last 10 years because the graph is smooth until the housing bubble and the Fed distortions.

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  429. “Case Shiller measures only SFHs.”

    C-S has a Condo Index, too (Mar-13 to Mar-14):

    104.07546
    108.63411
    114.90707
    120.07737
    124.81904
    127.04371
    127.8197
    127.89321
    126.5733
    125.96818
    123.00251
    121.03737
    123.2261141

    I assume that Sabrina knew that and was sandbagging Gary.

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  430. He provided the SFH data so I answered with SFH response.

    Maybe he didn’t give the condo index because it doesn’t look as hot as the SFH index.

    But- like I said- I don’t consider any of it to be reliable anyway. It’s all a lagging indicator which is why I’ve never covered it on CribChatter.

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  431. In addition, the Index measures the metro area and includes 8 counties. So it is like using the IARs monthly data on Chicago metro house sales and prices and NOT Chicago only data.

    Again, this is why I don’t use it on the site. I think it can give you the direction of trends in major metro areas, but that’s about it.

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  432. “the graph is smooth until the housing bubble”

    It *appears* smooth bc of the scale. Many of the early 90s seasonal bumps were as big–percentage wise–as the 09/10/11 seasonal bumps, but you can’t see them bc the Index is a nominal index.

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  433. “why I’ve never covered [Case Shiller] on CribChatter”

    So, you really are Sabrina 2.0?

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  434. “So, you really are Sabrina 2.0?”

    What do you mean?

    I’ve never covered the Case Shiller numbers here.

    This is one of the few posts where I even mentioned it.

    http://cribchatter.com/?p=15207

    Others have talked about it in comments to other posts but I have never covered it on a monthly basis- even from the start of this blog in 2007.

    Nothing has changed.

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  435. “the Index measures the metro area and includes 8 counties.”

    Yes and no. Lake County is certainly part of the “Metro” but is not included. I believe solely bc the data was harder to access when they started the index.

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  436. “It *appears* smooth bc of the scale.”

    Really?

    I just looked at a few of the months quickly and when it goes from 69.43 in April 1990 to 69.97 in May 1990- that seems pretty darn “smooth” to me. You’re lucky if you’re getting a point increase month to month in those years. And real estate prices didn’t go down- right? They didn’t go down in “Chicago” for 30 years until the housing bust.

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  437. http://cribchatter.com/?p=3275 CHICAGO’S CASE-SHILLER INDEX NUMBERS

    http://cribchatter.com/?p=10050 MARKET CONDITIONS: CHICAGO CASE SHILLER HITS NEW LOWS

    http://cribchatter.com/?p=10634 MARKET CONDITIONS: CASE SHILLER CONFIRMS DOUBLE DIP

    http://cribchatter.com/?p=1192 CASE SHILLER INDEX: CHICAGO METRO AREA DROPS 3.2% YOY

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  438. You have to look at the seasonally adjusted condo index values and they are also up very single month. It’s not even debatable.
    111.125123
    114.0818851
    116.4673107
    117.4810986
    119.683721
    120.9829276
    121.8067144
    123.1477701
    124.1247196
    126.8176317
    127.8570535
    127.9703811
    131.7477325

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  439. “average change in the value of residential real estate.” When you have $5 million houses selling in Lincoln Park and record high luxury prices- it’s going to look different than if you have 2/2 condos selling in Logan Square.”

    They separate condos from SFHs and if you look at their tier data you can see that their idea of high end is like $350K – i.e. it’s mostly lower priced properties.

    There is no other measure that comes even close to measuring price changes accurately. Forget all those averages and median prices. It’s all mix related changes.

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  440. “Look at all those dead cat bounces during the bust years.”

    A lot of that is seasonality. Look at the seasonally adjusted numbers.

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  441. Lol @ sabrina

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  442. “Lol @ Sabrina”

    Lag O’Laggington?

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  443. Oh, tied up in moderation is this (de-linkied):

    cribchatter. com/?p=3275 CHICAGO’S CASE-SHILLER INDEX NUMBERS

    cribchatter. com/?p=10050 MARKET CONDITIONS: CHICAGO CASE SHILLER HITS NEW LOWS

    cribchatter. com/?p=10634 MARKET CONDITIONS: CASE SHILLER CONFIRMS DOUBLE DIP

    cribchatter. com/?p=1192 CASE SHILLER INDEX: CHICAGO METRO AREA DROPS 3.2% YOY

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  444. “By the way- anyone actually bother to look at the Chicago Case-Shiller chart lately?
    Look at all those dead cat bounces during the bust years.
    Looks like it’s going to head lower yet again.”

    LOOK! Sabrina has no fucking clue how to read a chart…

    Another anecdotata, my neighbor just sold their place in my crappy building for 2% over list price (which I thought was high in the first place) in 1 week, and closed in a month. Wow is all I can say about that.

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  445. “Lag O’Laggington?”

    Lol @ Vlajos!

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  446. “Another anecdotata”

    Is that more like vagina dentata or more like hakuna matata?

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  447. anecdotal tatas?

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  448. “”Another anecdotata” Is that more like vagina dentata or more like …”

    In this case I think the LAGLAGLAGLAG is saving me from seeing something, but I can’t help myself.

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  449. It was worse than the dentata. (Is it really acceptable to use lol?)

    Rising prices or not, has not helped this place:
    http://www.redfin.com/IL/Chicago/3945-N-Tripp-Ave-60641/home/13457835

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  450. “Is it really acceptable to use lol?”

    Only if at least one of the els is for LAG!

    Enjoy the HD bait.

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  451. interesting listing history on that one, yeah it didn’t sell in 2007 for 1.4 million so jack it up to nearly 2 milliion in 2009! Yes I realize there could have been a ton of work done, but ouch on today’s price!

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  452. oh i see the realtard had a typo on the price and changed it 2 days later… durp

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  453. “oh i see the realtard had a typo on the price and changed it 2 days later”

    Only *after* changing it the same day by raising it $9k.

    If the place were one full block south, it would have been an easy sale. But that’s a tough spot for a SFH.

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  454. “Only *after* changing it the same day by raising it $9k.”

    like a poor man’s zaskowski. v v poor.

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  455. Here’s the ultimate gator deck:

    http://www.redfin.com/IL/Chicago/2241-W-Irving-Park-Rd-60618/unit-3E/home/13389294

    A full 1500 sf of garage top, rat-spotting, bliss.

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  456. Ambitious:
    http://www.redfin.com/IL/Chicago/2127-W-Giddings-St-60625/home/13392116

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  457. “Ambitious”

    Indeed. I like what they did with the back of the house–especially the light well. Would’ve rather seen a loft/bonus room/storage on the 3d floor over the volume ceilings.

    Lawrence streetscape area is hot hot hot!

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  458. I do miss you guys ripping on overpriced homes that aren’t selling. I also miss Groove.

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  459. how about almost 500k for a convertable studio? http://www.redfin.com/IL/Chicago/225-N-Columbus-Dr-60601/unit-5909/home/45507940

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  460. “how about almost 500k for a convertable studio?”

    speaking of groove-ish, maybe i should rent one of these for the summer. pool access, downtonw activities etc.

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  461. “So if you bought last year in September, you’re selling for more right now?”

    Here’s a place that was listed above what it sold for last fall: http://www.redfin.com/IL/Chicago/743-W-Buckingham-Pl-60657/unit-2/home/12773668. It went under contract in two weeks.
    Granted, it was only a $20K increase over last fall, and we don’t know the final sale price…

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  462. “Here’s a place that was listed above what it sold for last fall: http://www.redfin.com/IL/Chicago/743-W-Buckingham-Pl-60657/unit-2/home/12773668. It went under contract in two weeks.”

    Thanks for the link Madeline. No- we don’t know yet. Have to wait until it closes.

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  463. “Another anecdotata, my neighbor just sold their place in my crappy building for 2% over list price (which I thought was high in the first place) in 1 week, and closed in a month. Wow is all I can say about that.”

    You’re in River North Sonies. You’re not in the North Side neighborhoods. Or Bucktown. Or Wicker Park. Or any of the places where investors aren’t buying. The Chinese are buying downtown. If you read what I’ve been saying- I’ve said that River North, Gold Coast and Streeterville are ABOVE peak. Some people in The Silver, for instance, are actually making $100,000 profit on 800-square foot non-luxury 1-bedrooms.

    Too bad that market hasn’t extended elsewhere in the city.

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  464. “Oh, tied up in moderation is this (de-linkied):”

    Thank you anon (tfo). You PROVED my point exactly. After searching thousands of blog posts on this site written over the last 7 years you’ve found exactly 4 where I mentioned Case Shiller.

    One was the one I pointed out from just a year ago or so- which I posted because everyone was posting the numbers so I thought I’d be nice and just put it in a post. If you clicked on the link you might discover I said, “I don’t normally post on Case Shiller but…”

    Because I don’t.

    Two of the other links were from when I first started the blog in 2007 and early 2008 and I wasn’t sure what I wanted to blog about yet.

    You obviously didn’t find a post from every month over the last 7 years or else you would have posted it.

    I don’t cover the Case Shiller index and never have. There’s nothing new about this. If you want to read all about it- Gary does a post every month as soon as it comes out.

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  465. “They separate condos from SFHs and if you look at their tier data you can see that their idea of high end is like $350K – i.e. it’s mostly lower priced properties.”

    Really? My god. Then it tells you even LESS about the market. How do they even cover San Francisco if they use only lower priced properties? That makes no sense.

    But this is why I don’t care about Case Shiller. It doesn’t tell you anything about the market. I’d rather rely on the numbers from the IAR. At least I can get city-specific monthly numbers from them.

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  466. “You have to look at the seasonally adjusted condo index values and they are also up very single month. It’s not even debatable.”

    Yes- condos in Joliet, Naperville, Downers Grove, Evanston, Winnetka are going up in price.

    Wow- that tells me so much.

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  467. “the Index measures the metro area and includes 8 counties.”

    “Yes and no. Lake County is certainly part of the “Metro” but is not included. I believe solely bc the data was harder to access when they started the index.”

    Wait a minute. You’re actually bitching because it doesn’t include ONE of the counties? ha! ha!

    Then use the IAR data!!! For goodness sakes. They measure 9 counties in the Chicagoland area.

    This just confirms my point. Case Shiller has almost nothing to do with Chicago proper. Anyone using it to gauge what is going on in Chicago is clueless. Heck, while we’re at it- why don’t we consider average selling prices and market times with the south side and the north and then say that THAT is what is going on throughout the city.

    I like the IAR data because at least it is Chicago specific. And it’s not delayed by 3 months. And, oh yeah, it’s not a combination of the prior three months either.

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  468. “I like the IAR data because at least it is Chicago specific.”

    The IAR does not produce price data. They produce median prices, which I have shown countless times is total garbage for understanding the price trends. And if you looked at that data you would see massive “price” increases just about anywhere you looked.

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  469. “Really? My god. Then it tells you even LESS about the market. How do they even cover San Francisco if they use only lower priced properties? That makes no sense.”

    It doesn’t include ONLY lower priced properties but it averages out to a fairly low number. I was just allaying your major concern that the index is overly influenced by high price properties. Or is your major concern now that it is overly influenced by low price properties? And the high tier for Chicago is anything over $300K. It doesn’t average to 300K. For San Francisco that tier starts at $837K.

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  470. “The IAR does not produce price data. They produce median prices, which I have shown countless times is total garbage for understanding the price trends. And if you looked at that data you would see massive “price” increases just about anywhere you looked.”

    Right! The median tells you nothing. But Case Shiller tells you nothing either. If you look at the methodology- it is VERY specific. It doesn’t include distress properties. It includes the ENTIRE metro area. It doesn’t include properties that sell within 6 months of each other (to try and exclude flips). What about rehabs? Does it take those out of the equation too?

    What a mess. No wonder it is several months delayed and a “composite” of 3 months data.

    But I dispute the price increases. They already happened. They happened last year.

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  471. …except you have no data to prove that.

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  472. I’ll tell you guys what has been rising…..listing prices.

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  473. “Well, as another anecdatum, I thought a place near me in Logan was priced insanely and is under contract relatively quickly, so who knows.”

    Anecdatum retracted. Sale fell through. Many of hte neighbors were excited bc that house was shittier than their houses and was listing for 20 percent more than they thought their places were worth.

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  474. “I’ll tell you guys what has been rising…..listing prices.”

    Did you see the $1.5 MM new construction places in OIP, one of which is under contract?

    Also, what’s irving park northeast of the kennedy like?

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  475. “…except you have no data to prove that.”

    Only in an extremely abnormal marketplace do you have sales of something FALLING and the price RISING.

    Now- maybe that’s what this is. It’s a Fed induced extremely warped market.

    But eventually fundamentals will win out. And the fundamentals are:

    1. Incomes are NOT rising
    2. Prices are past peak in some areas

    Who can afford it?

    Who can afford to pay 20% more for a house?

    The sales data tells us.

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  476. “Only in an extremely abnormal marketplace do you have sales of something FALLING and the price RISING.”
    You mean like when supply is constrained? BTW, most of the decline in sales is attributable to lower sales of distressed properties.

    “1. Incomes are NOT rising
    2. Prices are past peak in some areas”

    Overall prices are still substantially below the peak in Chicago and incomes have not declined from the peak.

    “Who can afford to pay 20% more for a house? ”

    I think you mean 27% less than 8 years ago.

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  477. “Who can afford to pay 20% more for a house?”

    People other than you? What do I win?

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  478. “Only in an extremely abnormal marketplace do you have sales of something FALLING and the price RISING.”

    Doesn’t demand normally decline when price rises? Okay, now maybe real estate is different. Supply creates its own demand or demand creates its own supply, or something like that? Or do giffen goods have something to do w this. Much appreciated if someone could clear this up.

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  479. “Who can afford it?
    Who can afford to pay 20% more for a house? ”

    Apparently lots of people…. and if they bought a while ago their housing payment is fixed… I actually feel bad for people trying to find rentals in this town, it has to be a brutal market out there finding something decent for a reasonable amount of money

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  480. “Fall if mortgage rates go above 5%.”

    What do you mean IF? I was assured they were skyrocketing.

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  481. Sabrina, thank god you’re here to make everyone else look insightful.

    I’m beginning to think you might be on Gary’s payroll as a clever use of “the ugly friend effect.” Gary should be paying you for how rational you make him look.

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  482. “you’ve found exactly 4 where I mentioned Case Shiller”

    1, You said you had NEVER, which is untrue.
    2. That isn’t even a comprehensive list of those with “Case Shiller” in the post title. I got bored after 4.

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  483. “Doesn’t demand normally decline when price rises?”

    Only in an extremely abnormal marketplace.

    A proof of that might be worthy of a Sveriges Riksbank Prize.

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  484. gringozecarioca on June 6th, 2014 at 11:33 am

    “Only in an extremely abnormal marketplace do you have sales of something FALLING and the price RISING”

    Would have to disagree. It is imbalance and the aggressiveness of the side attempting to close that imbalance that moves prices, not volume of transactions.

    “Doesn’t demand normally decline when price rises”

    Theoretically – mind numbing text book 101 version, “normally” Yes.
    In practice, often not so.

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  485. [lunchtime lag...mmmmm delicious lag with some lag on the side]

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  486. ahhhh never mind, back to my tasty lag.

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  487. We should take up a collection for the “Nobel” Prize in Lag.

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  488. @anon

    That one broke my sarcasm detector!

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  489. You may need to be equipped with more sophisticated concepts than a simple supply/demand curve to explain or understand housing markets.

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  490. “Also, what’s irving park northeast of the kennedy like?”
    Not as nice as southwest of the kennedy…

    “who can put down 20%”?
    http://www.foxbusiness.com/personal-finance/2014/06/04/paying-pmi-what-it-means-for-buyers/

    “According to the survey, 37% of people who purchased a home in the past 10 years and 43% of those who bought within the last two years required some form of mortgage insurance. ”
    ……………..
    “so who is feeling the most pain from the extra mortgage insurance? According to the survey’s results, 43% of millennials (those 18 to 34) couldn’t afford the 20% down payment, while 37% of Gen X-ers (35 to 54) didn’t have the cash on hand, and 23% of baby boomers (55 an older) couldn’t come up with the requirement.”

    So apparently, quite a few people aren’t putting down 20%

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  491. “Only in an extremely abnormal marketplace do you have sales of something FALLING and the price RISING.”

    This is precisely what happens when supply decreases. Econ 101 here. Come on guys.

    http://www.hypothetical-bias.net/.shared/image.html?/photos/uncategorized/2007/11/15/supply_and_demand_basics.jpg

    That photo is labeled supply and demand basics. Seems like it might be helpful.

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  492. “So apparently, quite a few people aren’t putting down 20%.”

    Nope. And as the prices rise- even fewer and fewer can afford 20%.

    There’s an affordability problem and it’s biting even with near record low mortgage rates.

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  493. “That isn’t even a comprehensive list of those with “Case Shiller” in the post title. I got bored after 4.”

    Wow- I can use the “search” function too.

    I’ve NEVER covered the Case Shiller numbers on a monthly to month basis. Yes- you can see that from looking up “case shiller” in the search. I would think after 4,000 posts I know what I’m actually writing about. And it’s not the stupid Case Shiller index.

    But dream on.

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  494. “Apparently lots of people…. and if they bought a while ago their housing payment is fixed… I actually feel bad for people trying to find rentals in this town, it has to be a brutal market out there finding something decent for a reasonable amount of money.”

    Actually no- they can’t. Which is why sales are FALLING. You know that they are still under the historic norm right? We’ve not even got back to what is “normal” and now prices are back above the peak at the height of the craziest housing boom ever in the United States of America? Why does this make ANY sense?

    It doesn’t. It is Central Bank induced distortion. That is why the global stock markets are at record highs. The bond bubble continues to run. Art prices are at record highs. And people are buying $100 million condos in NYC and London.

    Central Bank distortions. And it’s not going to end well.

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  495. steve heitman on June 7th, 2014 at 10:02 pm

    You sound like Rick Santelli! That soap box star has been telling the same story for the past 5 years. Guess what… both you and he were, are, and will continue to be… wrong!

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  496. Previous Post:
    “So if you bought last year in September, you’re selling for more right now?”

    Here’s a place that was listed above what it sold for last fall: http://www.redfin.com/IL/Chicago/743-W-Buckingham-Pl-60657/unit-2/home/12773668. It went under contract in two weeks.
    Granted, it was only a $20K increase over last fall, and we don’t know the final sale price…

    Closed $1K under ask. $19K over last fall’s sale price. $55K over 2007 sale price.

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  497. “Closed $1K under ask. $19K over last fall’s sale price. $55K over 2007 sale price.”

    They did redo some (relatively small) tihngs in the bath and kitchen.

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  498. “Here’s a place that was listed above what it sold for last fall: http://www.redfin.com/IL/Chicago/743-W-Buckingham-Pl-60657/unit-2/home/12773668. It went under contract in two weeks.
    Granted, it was only a $20K increase over last fall, and we don’t know the final sale price…

    Closed $1K under ask. $19K over last fall’s sale price. $55K over 2007 sale price.”

    Thanks for the example Madeline. This seller was lucky. Most aren’t this lucky. Heck, plenty of people who bought in 2008, 2009, 2010 are still losing money by selling right now. It’s hit or miss though. There are a ton of variables.

    This seller also actually LOST money on this transaction. But that’s to be expected if you only live in a property for a year. The transaction costs are higher than any year over year gains we’ve seen.

    You know what’s hot right now? The Silver tower in River North on Ohio. Those sellers are making serious bank. It’s strange which high rises are hot (and which are not.) Hopefully some of you are owners in the “hot” ones.

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  499. I think this one is going to see a big gain when it sells. I unsuccessfully tried to snap this up in 2012 but now it’s back listed way higher. Sold for 280 in 2012, now listed at 339. I’m guessing it sells for 325. I’m curious what others think.

    https://www.redfin.com/IL/Chicago/905-N-Racine-Ave-60642/unit-1/home/12790909

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