Past Peak Bubble Pricing in the West Loop: A 2/1 in 1228 W. Monroe

1228 w monroe approved

This 2-bedroom at 1228 W. Monroe in the West Loop came on the market in February 2015.

The building was built at the top of the housing boom in 2006.

The kitchen has maple cabinets, stainless steel appliances and granite counter tops.

Both bedrooms apparently measure 10×10.

The listing says it can be rented out for $1800 a month so it’s being marketed as an investment unit.

It has the features buyers look for including central air, washer/dryer in the unit and parking.

We last chattered about this building in 2011 which was close to the bottom of the market.

Back in 2011, a 1000-square foot 2/2 was bank owned and ended up selling for $192,000.

Not many of you thought it was a “deal” at that price, as it was bought with all cash.

Sonies said he’d rather put his cash in “passive investing.”

Bob said there was no longer appreciation so why not just invest it in something with a dividend?

Jenny said that 2/2s outside of the Gold Coast were heading under $200,000.

See the discussion here.

A LOT has changed since 2011, obviously.

This unit is just a 2/1 and it is listed well above its 2006 peak bubble price at $350,000. That’s over 30% appreciation since 2006.

How high will prices go in the West Loop?

Nicholas Calabrese at Re/Max Premier Properties has the listing. See the pictures here.

Unit #208: 2 bedrooms, 1 bath, 872 square feet

  • Sold in July 2006 for $266,500
  • Originally listed in February 2015 for $379,999
  • Reduced
  • Currently listed at $350,000 (includes 1-car parking)
  • Assessments of $256 a month
  • Taxes of $2892
  • Central Air
  • Washer/Dryer in the unit
  • Bedroom #1: 10×10
  • Bedroom #2: 10×10

 

 

71 Responses to “Past Peak Bubble Pricing in the West Loop: A 2/1 in 1228 W. Monroe”

  1. “Past Peak Bubble Pricing in the West Loop: A 2/1 in 1228 W. Monroe”

    Yet you continue to ask why there aren’t bidding wars.

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  2. It’s past peak bubble LISTING PRICE not necessarily past peak bubble pricing.

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  3. ALERT: PAST BUBBLE PRICING IN THE STOCK MARKET AS WELL!!!!!! WE MUST BE FUCKED!!!!

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  4. “it can be rented out for $1800 a month so it’s being marketed as an investment unit”

    At a sub-4.5 gross cap. As an investment property, I think this place is worth *maybe* $275k.

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  5. When it sells at this price we can say we’re past bubble pricing. Check out other, larger, more updated 2/1s in the area that sold near or below this price: http://lucidrealty.com/homes-for-sale/Chicago_Near_West_Side/condos_townhomes/1330-W-Monroe-ST-unit-310/

    Love the photos on this one BTW – especially the close up of the vanity bowls.

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  6. The 2006 price sounds about right for this place.

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  7. “The 2006 price sounds about right for this place.”

    Agreed. 350k sounds crazy to me.

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  8. make me move listing?

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  9. How does the realtor industry stand for a realtor that puts pictures like those on the internet. What would it take to weed out people like that? Set a higher license hurdle – knowledge or effort or cost? Shouldn’t the broker or realty company owner have to approve pictures (same goes for descriptions) like that? Make the home buying and selling industry a free market with competitive exchanges?

    I’ve transacted homes 7 times so far, and only once I was happy with the realtor.

    To work in the industry I work in, you need 2-3 years of additional post-college graduate education plus on the job experience to get a job. With all due respect to the Professional realtors, isn’t it easier to get a realtor license where customers pay $18,000 than for a plumber license where a customer pays $300?

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  10. I actually spend a ton of time thinking about this problem. It’s indeed mystifying and there are several layers of complexity.

    First, contrary to what you would expect the traditional brokerage doesn’t care what their realtors do or how they behave as long as they don’t violate license law. The reason is that running a brokerage is basically like owning a taxi medallion. It gives you the right to take a percentage of the realtor’s deals. The more realtors you have the more you make. You hire anyone who can fog a mirror.

    It’s 120 hours of classes to get a broker’s license – a fraction of what it takes to get a license to cut hair. Then again there are all sorts of health codes to worry about with cutting hair. The realtor courses focus primarily on the laws and the way real estate works. Really no focus on doing the job. Then when you go to work with a brokerage their focus is on how to make money, which in theory requires you to do a good job. By the time you are done with all your training you know about half of what you really need to know to be good.

    Then there is the way the consumer buys real estate services. They don’t understand what they are buying and there is no real information on what they are going to get. The really successful agents know how to parlay this into an advantage. They focus on who they are instead of what they are going to do for someone. And then there are the host of emotional factors in the decision of what realtor to use – relative, friend, someone you feel sorry for, someone you owe a favor to, someone whose signs are all over the neighborhood, a top producer, someone who “knows the building”. The bottom line is that many, many sellers choose a realtor based upon a vague warm and fuzzy feeling they get instead of really knowing what they are getting. Sellers want desperately to believe that the right realtor is going to get them a higher price for their place so whoever instills that feeling will get the business. It’s really no different than any other sales situation. It’s not the best product that wins but the best salesman – unless the buyer of the service is highly intelligent and unemotional. There are of course different types of buyers.

    It’s really a fascinating industry and not unlike the stock brokerage business. Do you know that there are still stock brokers out there charging $800 to trade $50,000 of stock? I could go on and on.

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  11. “When it sells at this price we can say we’re past bubble pricing.”

    I have dozens of properties in the GZ (and in this neighborhood) that are thousands of dollars over the bubble peak prices (in some cases $100k to $200k higher.)

    I’ll start posting on all of those next week.

    Prices are at their highest ever. Yet incomes haven’t gone up at all. And now mortgage rates are set to move higher.

    It’s going to be a nasty combination for the housing market. The Fed kept rates low for too long. And now the housing market is going to get hit. None of us has lived through a rising rate environment. There is a whole generation of buyers who have never even seen rates over 7%.

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  12. “ALERT: PAST BUBBLE PRICING IN THE STOCK MARKET AS WELL!!!!!! WE MUST BE FUCKED!!!!”

    Corporate earnings are at record highs and the stock market valuation is well below the bubble peak and, in fact, isn’t very expensive, on a historical basis, at all. What’s the S&P 500 at- 17 times earnings?

    So we’re not anywhere near bubble levels in the stock market. The S&P 500 traded over 20 times earnings in 1999.

    But what are the fundamentals in the housing market?

    Lowest number of mortgage applicants in 20 years. Record high prices in most metropolitan cities, including Chicago. Lowest mortgage rates in history (which may- or may not- go higher.)

    The housing fundamentals are messed up. So, yes, being past peak bubble prices without any increase in incomes is not normal. It’s a distorted market (and yes, the stock market is being distorted by free Central Bank money too but at least there are solid fundamentals in the earnings behind it.)

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  13. “Prices are at their highest ever.”

    I thought everyone that didn’t sell in 2014 missed their chance?

    “And now the housing market is going to get hit.”

    Keep saying it. One of these times you will be right.

    “There is a whole generation of buyers who have never even seen rates over 7%.”

    And may never.

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  14. “So, yes, being past peak bubble prices without any increase in incomes is not normal.”

    That’s the problem with averages. They hide the real story. Is there a single person reading this message that is NOT making more than they did in 2007?

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  15. “Prices are at their highest ever. Yet incomes haven’t gone up at all.”

    Totally irrelevant since a) prices and incomes were at these levels before and b) prices got to these levels with incomes where they are.

    “None of us has lived through a rising rate environment. There is a whole generation of buyers who have never even seen rates over 7%.”

    Actually I have but now I’m giving away my age. But we’ve discussed this before (not my age but rising and high rates). The housing market has lived through rising and high rates before without a problem.

    I’ve been waiting for rising rates for so long now I can’t remember how long it’s been.

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  16. Actually, those photos are not bad. At least there are no dishes in the sink or clothes on the floor. Bed is at least partially “made.” And someone actually thought to put the seat down in the bathroom!

    In other words…trust me, I’ve seen A LOT WORSE!!!

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  17. “The reason is that running a brokerage is basically like owning a taxi medallion.”

    Except that the govt doesn’t (significantly) restrict entry into brokerages they it does taxis (or did until uber etc. found a way around).

    “It’s really a fascinating industry and not unlike the stock brokerage business. Do you know that there are still stock brokers out there charging $800 to trade $50,000 of stock? I could go on and on.”

    But the average trading fee paid has declined enormously. (What kind of places charge the $800?)

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  18. Yeah, I was talking about the economics of it. Owning a brokerage is basically having a license to take a cut.

    You can still have a private stock broker. My mother has one with RBC and that commission is an actual commission I was quoted. It may even include some kind of discretionary discount.

    The reason that the average stock trading fee has declined so much is that the newer model has been around for a long time so more people have adapted to it. Also, I think it’s a lot harder for people to believe that a stock broker adds value than it is for people to believe that a realtor adds value.

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  19. “The housing market has lived through rising and high rates before without a problem.”

    At record high prices?

    Huh.

    Yeah- because that’s what was happening in the 1970s. All of those American families were sooooo stretched back then.

    NO ONE on here has any idea what will happen when rates rise. It hasn’t happened since the 1970s. That being said, no one has any idea what will happen when the Fed starts raising after leaving rates at zero for 6 years. We are in an unprecedented time. The Fed has been at crisis level funding for 6 years. We are in an economic emergency (with 5.5% unemployment rate.)

    So what happens when it “normalizes”?

    No one knows.

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  20. “That’s the problem with averages. They hide the real story. Is there a single person reading this message that is NOT making more than they did in 2007?”

    That’s so arrogant Chuk. There are plenty who haven’t had a pay raise and some who have gotten raises that are under the inflation rate, so it doesn’t help them much either.

    The data for this doesn’t lie. Incomes are not increasing and haven’t for a long while. This is why the Fed has been keeping rates low. It wants to see pressure on wages. We are only now just starting to see it but it’s not enough to push up incomes much. It would be a good sign for the economy if it did, however.

    It is also why mortgage applications are at 19-year lows. Incomes haven’t kept up with housing price increases. You can’t have home prices up 20% or 30% in one year and think that the housing market will be healthy. This is why we’re seeing sales down in the major cities now. The buyers just can’t keep up with the price increases.

    Even with rates at record lows, you just can’t keep finding buyers if prices go from $400,000 to $500,000 in one year. And if rates rise, good luck. It gets even worse.

    We have an affordability problem. It’s so obvious.

    You can’t get blood from a stone yet everyone is acting like that’s what’s going to happen the next few years.

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  21. “There is a whole generation of buyers who have never even seen rates over 7%.”

    “And may never.”

    Right. We don’t know. The Fed may never again raise rates. We may be Japan. No one knows.

    But one thing I DO know and know it right now- this housing market is really distorted and unhealthy. When does housing normalize?

    The Fed did their job though. They wanted to reinflate asset classes and they certainly did that. Housing in the major cities are well above the bubble prices. I never would have thought the Fed could do it. But they did.

    But when do we pay the price?

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  22. You’re worried about families being stretched. You’re worried about affordability. But they’re not problems. People can’t get mortgages now for more than they afford. So there is no affordability problem. You are confusing the inability of a few people to live in the most desirable neighborhoods with people being stretched. The people who drove the prices up are different people than the ones who can’t afford to live in those houses.

    And I still don’t see evidence of Chicago home prices being past the bubble. Tons of people are still underwater. There are still thousands of reluctant landlords out there.

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  23. “That’s so arrogant Chuk. There are plenty who haven’t had a pay raise and some who have gotten raises that are under the inflation rate, so it doesn’t help them much either.”

    Really? How many people have stepped forward to say they make less? Are YOU making more than 2007? Sure, there are plenty of fast food workers living as you describe. But there is not a SINGLE Crib Chatter reader that hasn’t had a raise in 8 years.

    Let’s take 10 different women. One has had 100 sexual partners. The other 9 had 0. So, the “average” woman has had 10 partners. Sounds reasonable right? The reality is, one was a real slut, and the rest were practically nuns. The “average” tells you NOTHING.

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  24. “You can’t get blood from a stone yet everyone is acting like that’s what’s going to happen the next few years.”

    You’ve been saying that for the LAST few years.

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  25. Robert Shiller’s not worried about a bond market crash taking down the housing market: http://www.project-syndicate.org/commentary/bond-market-crash-contagion-by-robert-j–shiller-2015-03

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  26. I agree with Chuk, the professional class that is the typical buyer in the Greenzone is not suffering from stagnant incomes. The greenzone is a relatively small slice of the overall market and demand is high for properties. Pricing is not out of whack.

    I do a decent amount of mortgages in other major cities. Prices in other comparable greenzones are not much different from what we see here in Chicago, even in smaller cities. In many cases, it is more expensive.

    I’ve looked at relocating on many occasions and in almost every case, our cost of living does not decrease if we were to move to a comparable area in any other major city. My theory is that the professional class’s incomes are fairly consistent city to city so prices reflect that fact.

    Yes, blue collar and lower skilled incomes have stagnated, but that is not the Greenzone buyer.

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  27. “I agree with Chuk, the professional class that is the typical buyer in the Greenzone is not suffering from stagnant incomes.”

    Prepare for rebuttal by Sabrina that cites only lawyers incomes…

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  28. “Incomes haven’t kept up with housing price increases.”

    They also didn’t keep up with housing price decreases. While housing fell 30%+, incomes barely fell. Now with housing up 30%, you expect incomes to go up 30%?!?!?

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  29. if anything Chicago might be under priced compared to other major cities. We are definitely the cheapest of the major Tier 1 cities – LA, Boston, NYC, DC, SF.

    With more and more higher paid industries moving to Chicago, it doesn’t surprise me that Greenzone prices are still pretty resilient. Chicago is a steal compared to those other cities. So yeah, the $500k 2/2 in Lincoln Park seems absurd until you see that same unit would probably be $2 million in NYC or $750k in Boston, or $1 million in SF.

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  30. “the $500k 2/2 in Lincoln Park seems absurd until you see that same unit would probably be $2 million in NYC or $750k in Boston, or $1 million in SF”

    And the property tax on each of them would be surprisingly close…

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  31. My sister in law bought a place in SF the same time we bought ours in Chicago. Same price, comparable neighborhoods. Hers is a 2/1 house no yard and needing lots of work. Mine is 4/3 on a double lot needing little work.

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  32. Perhaps the average salary for a particular job at a particular level hasn’t increased much in the past 8 years. Most people don’t stagnate in the same job for 8 years though. They move up and get more responsibilities. I am not sure if the position I am currently in had a significant increase over the last 8 years, but I am making significantly more than I was 8 years ago.

    I still think Chicago is very affordable in terms of housing. The property taxes are relatively low (compared to the suburbs). There are properties at a vast array of prices. A quick search shows homes as low as about $1,500. This house for under $90,000 needs a lot of paint, but it would be perfect for a lower middle class family: http://www.estately.com/listings/info/9132-south-chappel-avenue–1

    Are places in this price range available in NYC or San Francisco?

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  33. sabrina doesn’t understand that people won’t be priced out, they will just have to buy a cheaper property since option arm zero interest ninja loans aren’t available anymore to people who “want it all” but can’t really afford it

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  34. It’s all relative. Of course, when compared to big urban areas like NYC, Boston, and SF this city is much more affordable. However, when compared to more average cities the cost of housing is ridiculous here. $300K doesn’t buy much here but in a city like Dallas – not downtown but a nice neighborhood – $300K buys you a really nice house. In my sister’s neighborhood the median household income is $82,000 and houses cost $200 – 300K. My sister’s house is a 3 bed, 2 1/2 bath house with attached garage and a built in pool on what has to be 3 – 4 Chicago sized lots.

    In East Village where I live the median household income is $67K and a teardown costs $400K.

    Now I’m not supporting Sabrina’s theory here. I just think people in Chicago spend more of their disposable income on housing than in normal cities and perhaps draw more on savings or inherited wealth to put down large down payments.

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  35. I wonder what the statistics are on people who receive money for down payments from their parents. Of my close friends, only one bought a house without any financial help from parents and he is a very high earner. I wonder how much impact the gifting of money to buy a house is going to impact the retirements of the older generation. I suppose this has been happening for generations, so it might just be part of the normal economy.

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  36. With inflation year over year below 0 and core personal consumption expenditures at 1.3%, the idea the fed is going to rapidly raise rates is simply untrue. And that is coming from someone who is a fiscal hawk who wants higher rates. Rates will only go higher with steady job growth and higher inflation / expenses.

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  37. Jenny, I’ve never seen industry stats on gifts, but when I look at my own purchase originations, I’d venture 25% or more have gifts from parents on purchases. Gifts are very common.

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  38. “the idea the fed is going to rapidly raise rates is simply untrue”

    I believe QE4 is more likely than a raise in rates at this point in time.

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  39. I’m also skeptical about how much influence the fed actually has on interest rates. Not sure we know because as our interest rates have been coming down so has the rest of the world’s. How much of a spread can there realistically be between our bonds and the rest of the world?

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  40. Shiller, via Gary’s link, reflecting upon the current predictive power of an interest-rate model he devised 40 years ago, writes:

    “But the explanation that we developed so long ago still fits [present circumstances] well enough to encourage the belief that we will not see a crash in the bond market unless central banks tighten monetary policy very sharply (by hiking short-term interest rates) or there is a major spike in inflation. Bond-market crashes have actually been relatively rare and mild.”

    Note how he nicely hedges his assertions with qualifiers “well enough,” “encourage the belief,” “unless (X, Y or Z occur),” “relatively rare and mild.”

    What’s the takeaway? Everything will be fine as long as future crashes are like the prior ones, “relatively rare and mild”? Hmm. Ok. I agree.

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  41. I liked Shiller more when he was ripping on home ownership:

    If you think investing in housing is such a great idea, why not invest in cars? Buy a car, mothball it, and sell it in 20 years. Obviously not a good idea because people won’t want our cars. It’s the same with our houses. So, they’re not really an investment vehicle.”

    http://www.businessinsider.com/robert-shiller-home-investment-a-fad-2013-2

    Shiller comes off sounding like the drunken Mr. Rogers in The Simpsons: “What do you mean, I can’t take off my sweater? I’m HOT!”

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  42. Homer & Sylla write in “A History of Interest Rates” (4th edition, revised, 2005):

    “When [WW2] ended, some people thought that the Treasury would not always be offering [bonds yielding] as much as 2½%. Perhaps rates as high as 2½% would vanish forever.”

    [Long bonds yielded ~ 2% in 1946.]

    “This was the great crest of a twenty-six bull bond market.” (p. 355.)

    But time passed, and:

    “by 1981, peak yields were more than six times greater than 1946 low yields. The great bear market lasted some thirty-five years, by far the longest duration for a bear bond market in U.S. history. If a constant maturity thirty-year 2½% bond had been available throughout this second bear market of the century, its price would have declined from 101 in 1946 to 17 in 1981, or 83%” (p. 367).

    So, getting back to Shiller, as long as the future doesn’t resemble the past (of livable memory), and rates don’t rise—and you don’t own a long duration bond fund—then those “relatively rare and mild” bond market declines won’t erase 83% of your capital over 35 years.

    “What do you mean, I can’t take off my sweater? I’m HOT!”

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  43. “the idea the fed is going to rapidly raise rates is simply untrue”

    When the Fed raised after the dotcom bust, once they started they did so fairly quickly. At every meeting. The rates went from 1% to 5% in under 2 years.

    You can see it in this Fed chart if you expand it to the last 15 years.

    http://research.stlouisfed.org/fred2/graph/?g=H2E

    Yellen has indicated that the Fed would be doing the same thing again this time. There’s no reason not to “normalize” monetary policy. The economy is humming. Tons of restaurants/bars/stores hiring all over the north side. The job market is back and it’s tightening.

    You get nothing by stretching it out. It just creates more volatility. The Fed will raise quickly.

    It’s similar to what the Fed did when it tapered the QE. It said it was cutting back by $10 billion and it did so every single month until it was not buying bonds.

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  44. “Rates will only go higher with steady job growth and higher inflation / expenses.”

    This is the best job market in 20 years. The only thing missing is significant wage increase- which is starting to happen but isn’t anywhere near 1998-1999.

    What more do you want?

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  45. “Yellen has indicated that the Fed would be doing the same thing again this time. ”

    She did?

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  46. “Yellen has indicated that the Fed would be doing the same thing again this time. ”

    I trade interest rates for a living. Unless I’m ill-prepared going into today’s interest rate decision, the Fed has stated that it believes it’s peak interest rate will be lower than in past cycles. So instead of topping out at say 5-7%, it will be more likely in the 3-5%. Additionally, the hikes in rates have hinted that they will be at a slower pace. So instead of 8 hikes per year, it may only be 4.
    The fed also has a dual mandate on inflation, not just employment. As I stated earlier, inflation in non existent to negative right now. Core CPE is at 1.3%. That aspect of the mandate has not been filled according to the doves on the fed. Since the fed has a majority of doves, I do not think rates will be raised until September.
    Personally, I think rates should have started being raised in Q4 of last year. We are not in an emergency with regards to the economy. There is already a building car loan bubble. I’d prefer to avoid any other lending bubbles. If I could have it my way, rates would be between 1 and 1.25% by year end.

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  47. ^TNX 1.95

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  48. maybe I should take up trading interest rates for a living too i’ve been spot on the last few years

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  49. “It’s similar to what the Fed did when it tapered the QE. It said it was cutting back by $10 billion and it did so every single month until it was not buying bonds.”

    btw, what effect did that have on interest rates? Did the taper cause them to “skyrocket” as you predicted?

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  50. If the fed raises rates won’t that bring in a bunch of foreign money to take advantage of those rates and the dollar will raise? With the rest of the world pushing rates down won’t a vastly stronger dollar hurt the US economy? It seems the Fed is stuck in a tough position due to the global nature the world is in now. It will be interesting to see what the first quarter point raise will do.

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  51. The fed raising short term rates will not have much of an effect at all on the longer term yields due to what you mentioned above, B

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  52. “btw, what effect did that have on interest rates? Did the taper cause them to “skyrocket” as you predicted?”

    Yes it did. As soon as the Fed signaled it would begin the taper in the next several months interest rates rose over 1%. See the chart starting in May 2013.

    The bond market will anticipate the rate rises and will start rising ahead of time which is what happened in 2013. It was the unintended consequence of the Fed signaling it. Whoops! And it stalled out the housing market for 6 months until rates started to fall again in 2014.

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  53. “TNX 1.95”

    Ya’all get why the 10 year went down and stocks rallied, right? Do you GET IT???

    I don’t think you do.

    The Fed all but said it wasn’t going to raise until late this year- and maybe not even then.

    Party on everyone! The punch bowl isn’t going away any time soon. The free money party continues.

    Oh- and then contrary to what they did with QE3, they apparently WON’T be raising quickly so as not to spook anyone. So we apparently could see one rate increase and then not see one for meeting after meeting. At least that’s what Yellen said. So this whole process has to be dragged out for years. Or at least until the next recession (which should be hitting sooner rather than later according to business cycles) and then the Fed won’t have ANY firepower to help because rates will still be too low.

    Good times.

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  54. Also interesting developments happening around the country in the housing market.

    San Francisco saw the lowest number of sales in February since 2008 even though inventories are above last year. I’m sure it has something to do with affordability out there. But that is true of basically every major city now.

    In New Orleans, the local newspapers are writing articles about gentrification and about how all the “locals” are being priced out. I haven’t seen those articles in awhile. Similar distress in Nashville. Prices have jumped so much there that many are concerned that the “musicians” who make up the city culture won’t be able to live there anymore.

    And here in Chicago? Even the bank owned listings in the GreenZone are above the peak prices.

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  55. Illinois’ February sales report is out on Monday from the IAR.

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  56. “In New Orleans, the local newspapers are writing articles about gentrification and about how all the “locals” are being priced out. I haven’t seen those articles in awhile. Similar distress in Nashville. Prices have jumped so much there that many are concerned that the “musicians” who make up the city culture won’t be able to live there anymore.”

    That has zero implications for the housing market. Obviously these people are not setting the prices.

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  57. “Illinois’ February sales report is out on Monday from the IAR.”

    I’ve already told you what happened. Sales up 6% but IAR will report 3.6% increase.

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  58. “That has zero implications for the housing market. Obviously these people are not setting the prices.”

    What are you talking about? Middle class people paying $400,000 for a bungalow in Portage Park has no implications for the housing market? Chicago professionals paying 20% more than PEAK prices in Chicago’s Greenzone for a 2-bedroom condo?

    In NOLA and Nashville, prices have jumped like 60% in some neighborhoods in just the last 7 years. Well above peak and then some. The creative are being priced out changing the flavor of the neighborhoods (and, eventually, the city.) This has already happened in San Francisco. Unfortunately, writers, painters, musicians can’t afford to live there anymore so they don’t. But NOLA and Nashville would both die without their arts. People are pissed about the gentrification.

    There’s no reason for a bungalow in the Bywater to be selling for $400,000 (oh- wait- except for cheap money. Thanks Mrs. Yellen.)

    Chicago still has some pockets where lower income people can live and not be shot at. But look at the prices in East Humboldt Park. In some cases, those are now approaching what you’d pay to live in Lakeview. It used to be a lot cheaper to live in an “up and coming” neighborhood. But not anymore. Even in Humboldt Park, some new construction houses going for $650,000 or higher. Incredible.

    I knew a lot of musicians who lived in that area. They could rent apartments for $700 a month. For that price they were willing to put up with the heroin drug dealers and overdoses. I haven’t talked to them in the last 2 years. I don’t know if rents have soared there too (even though the drug dealers are still living there.)

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  59. You’re worried about a class of people being priced out of neighborhoods. Call them the creatives if you will. If they are priced out then they are, by definition, not buying there. Therefore, they are not setting the prices there. Therefore, the fact that they are priced out of those neighborhoods has zero implications for the housing market in those neighborhoods. A different, higher income individual is buying there and they can afford it otherwise they would not have been able to buy there.

    Much ado about nothing.

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  60. “Ya’all get why the 10 year went down and stocks rallied, right? Do you GET IT???”

    You were the only one that was confused. Congrats on finally understanding what you’ve been told for the last year or so?

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  61. What’s all this about past peak pricing? We still have a 16.9% negative equity rate: http://zillow.mediaroom.com/index.php?s=28775&item=137151

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  62. My anecdata: My 1/1 in River North is worth at least $25k less than I paid for it in July 2009 (past peak, but nowhere near the bottom). If I could sell it for what exactly I paid for it (forfeiting my downpayment after fees) I’d move out tomorrow and rent.

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  63. “San Francisco saw the lowest number of sales in February since 2008 even though inventories are above last year. I’m sure it has something to do with affordability out there. But that is true of basically every major city now.”

    There’s also the shrinking buyer pool. Those under 35 aren’t clamoring to buy like they historically have been. They just plain do not want to be locked into their housing for 5+ years. Short of 50% price chops with no corresponding drop in rent, housing prices and interest rates don’t affect that position.

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  64. people bitching about gentrification are fucking morons. Oh boo hoo I can’t afford to live in a place where heroin overdoses and stabbings are comminplace because the neighborhood is improving and horrible things are happening less frequently and more economic opportunity is available.

    shut the fuck up dumbasses!

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  65. What’s all this about past peak pricing?

    We are WELL past peak pricing in the GZ. Even the banks are listing for well above the peak (by like $50k to $100kk in some instances.)

    This is IN the GZ. I’m not talking about Orland Park or wherever else you’ll point to and say “see- everyone is underwater.”

    A lot of the agents I talk to tell me that the accidental landlords are all listing now. They’ve been stuck with the property for 5 to 10 years and now think it’s a good time to get out. That could bode well for the condo inventory- but won’t do much for the single family home inventory.

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  66. “You were the only one that was confused. Congrats on finally understanding what you’ve been told for the last year or so?”

    You mean like every time the Fed has stimulated with QE????

    I’ve said this for 7 years. Buy stocks. Get rich. That’s all you’ve needed to do.

    I didn’t think they’d be able to reinflate housing though. I thought the bubble was too big. I was wrong on housing. But there was never any doubt about stocks. That message has been clear for a long, long time.

    But what happens now? They’ve reinflated every major asset class well past peak. But it’s distorted and fake. What happens when they aren’t stimulating? Can they ever stop? (maybe not. maybe we WILL be Japan.) But Japan has had low interest rates for 20 years but NO stock market reinflation (until right now.) It’s been 20 years for the Nikkei. The Fed took us back to all time highs, even in the NASDAQ in just a few years in stocks.

    The Fed should really be applauded. It has been able to reinflate housing prices (but not the housing industry, which is still mired at lows in construction equivalent to a recession) in just 7 years.

    Amazing. Really, really a feat. Unprecedented.

    But everyone better watch out. Because there will be a price to be paid, right?

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  67. “We are WELL past peak pricing in the GZ. Even the banks are listing for well above the peak (by like $50k to $100kk in some instances.)”

    I’m sure there are cases of this but even the Crain’s article said “A survey of 65 large downtown buildings found that average condo resale prices on a square-foot basis were within 4.3 percent of their 2008 peak in the first half of the year.” That doesn’t sound like WELL past peak pricing to me.

    It’s really hard to settle this with real data. However, I did decide to take one premium building and analyze the trend. This is what I found for The Pinnacle: http://www.chicagonow.com/getting-real/2015/03/downtown-chicago-condo-prices-pinnacle-sales-history-shows-the-rebound/

    Again, not exactly what I would characterize as WELL past the peak. Eventually I’ll look at a more run of the mill building. Wanna pick one for me to look at?

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  68. Yeah- you can’t really look at the Pinnacle and determine anything. That’s the upper bracket. That would be like looking in The Palmolive or The Belvedere.

    Look at the prices in The Silver on Ohio. Those are WAY above peak. Same with SONO in Lincoln Park, but again, those are particular buildings that were “new” during the bust so prices have surged in there.

    But $400,000 for a 1-bedroom in the Silver? That is WAY above peak. That building was built as an “affordable” building. Those 1-bedrooms are 800 square feet.

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  69. Also- just about every building in the West Loop is past peak. Take your pick.

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  70. The Silver tower wasn’t completed until late 2009 IIRC
    which would explain why peak pricing there is much lower than some of the other crazy 2006/7 condo prices (like 33W Ontario or 345 N lasalle)

    I remember near the bottom you could get a 2/2 for like 275k talk about a missed opportunity, oh well

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  71. “The Silver tower wasn’t completed until late 2009 IIRC
    which would explain why peak pricing there is much lower than some of the other crazy 2006/7 condo prices (like 33W Ontario or 345 N lasalle)”

    They were selling these during the boom. If you bought pre-construction you bought boom era prices. Even those boom era prices were $275,000 for a 1-bedroom NOT the $400,000 they’re selling for again today. Sure, after the building was completed and some dropped out of their original contracts, they came out on the market even lower. But many people in The Silver and SONO both bought at peak prices. They’re ALL selling for more now.

    Those basic 2/2s are now selling for $550,000 or more. They’re only 1100 square feet. Some are even smaller. They were never meant to be “luxury” even in the original marketing. But they are now.

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