Market Conditions: “No Significant Weakening in Demand” in September As Sales Jump

Millennium Park in the fall 2010

The Illinois Association of Realtors is out with the September home sales and the hot market continues to get even hotter.

From the Illinois Association of Realtors:

The city of Chicago saw sales of 2,358 homes in September 2015, up 5.2 percent from last year when 2,242 homes were sold. The median price of a home in Chicago was $250,000, up 0.4 percent over September 2014 when the median price was $249,000.

September sales for the last 9 years:

  • 2007: 2172 sales
  • 2008: 1816 sales
  • 2009: 1918 sales
  • 2010: 1403 sales
  • 2011: 1498 sales
  • 2012: 1845 sales
  • 2013: 2395 sales
  • 2014: 2242 sales
  • 2015: 2358 sales

Median prices for the last 9 years:

  • 2007: $267,750
  • 2008: $268,600
  • 2009: $225,000
  • 2010: $180,000
  • 2011: $190,000
  • 2012: $188,900
  • 2013: $230,000
  • 2014: $249,000
  • 2015: $250,000

“With increased sales and even stronger median price numbers, the Chicago market still shows a lot of life as we enter the last few months of the year,” said Dan Wagner, president of the Chicago Association of REALTORS® and senior vice president of government relations for The Inland Real Estate Group. “The continued low number of homes available for sale shows consumers are still very much interested in buying.”

While the state-wide numbers showed that this was the best September in a decade, the numbers I have in the list above indicate that 2013 was still slightly better than this year. But 2013 was a hot year too.

No one is saying the market is “slow” right now.

“The fall housing market has shown little sign that there’s any significant weakening in demand,” said Mike Drews, GRI, President of the Illinois Association of REALTORS® and broker-associate with Charles B. Doss & Co. in Aurora. “While we always see a seasonal slowdown this year, this month’s numbers were quite strong, and indeed were the best sales numbers for September in a decade.”

The time it took to sell a home in September averaged 64 days statewide, down from 69 days a year ago. Available housing inventory remained tight with 70,547 homes for sale, a 10 percent decline from September 2014 when there were 78,373 homes.

“The annual pattern of home sales continues with modest annual gains but negative month-over-month growth rates,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois.  “The dampening effect of less-than-expected job growth has not yet affected the housing market and housing prices continue to climb modestly.  At the state level, the median price index, adjusted for inflation, is 91 percent of the 2008 peak; for Chicago, the comparable figure is 86 percent.”

The data is more interesting if you drill down into the actual neighborhoods. Some are hot and some are not and median price is really completely random.

In Lakeview, sales of condos and townhouses were down 13.6% year over year.

  • 2014 closed sales: 184
  • 2015 closed sales: 159

Median price for condos/townhouses fell 5.1% to $305,000 from $321,500 last year.

Market time fell 7% to 66 days from 71 last year.

Inventory was down, declining 14.5%.

  • Inventory in 2014: 663
  • Inventory in 2015: 587

When you see the single family home data, it just doesn’t seem all that hot. Market times and inventory are both spiking. Are they simply building too many of the $1.5 million new builds? There seems to be one every block.

  • 2014 closed single family homes: 15
  • 2015 closed single family homes: 13

Market times were up 182%.

  • 2014 market time: 39 days
  • 2015 market time: 110 days

Inventory of single family homes rose 46%.

  • Inventory in 2014: 63
  • Inventory in 2015: 92

Low inventories continue to be a problem city wide. But none might be as bad as the condo/townhouse market in West Town.

Inventory fell 34% in West Town in September to 274 properties from 415 last year. Good luck West Town condo buyers.

Median price remained unchanged year over year at $390,000.

Mortgage rates continue to be lower than 2014 and near the lows of this cycle.

Is this hot market going to continue to steam on through the December holidays?

What would slow it down?

Strong Illinois home sales and prices continue into September [Illinois Association of Realtors, Press Release, October 22, 2015]

191 Responses to “Market Conditions: “No Significant Weakening in Demand” in September As Sales Jump”

  1. It seems like they may be overbuilding the new construction homes in some neighborhoods like Lakeview. How many buyers are there of these $1.5 million new builds?

    I wish they’d build something more affordable. Even the condos being built are “luxury” at the $500,000+ price range.

    When was the last time there were new condos built anywhere on the north side in the $300,000 range? I don’t even remember. Obviously pre-Great Recession.

    VN:F [1.9.22_1171]
    Rating: +6 (from 6 votes)
  2. By the way, there will only be one post today.

    VN:F [1.9.22_1171]
    Rating: 0 (from 2 votes)
  3. “I wish they’d build something more affordable. Even the condos being built are “luxury” at the $500,000+ price range. ”

    Thanks to the Chicago building code and land costs, you can’t really build ‘affordable’ stuff without subsidies from somewhere. I mean even those piece of crap smart tech homes were built on lots that cost no more than $50k and were still $400k+

    VA:F [1.9.22_1171]
    Rating: +7 (from 7 votes)
  4. “the new construction homes in some neighborhoods like Lakeview. How many buyers are there of these $1.5 million new builds?”

    The “$1.5m” (look at $1.25 to $1.75) houses are (right now) twice as common in North Center compared to Lake View. Move up a notch to $1.75 to $2.5, an it flips–twice as common in Lake View.

    In the whole range ($1.25 to $2.5) the totals are basically the same. Which really amplifies the question–who is buying (or going to buy) all these *2* million dollar homes.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  5. “Thanks to the Chicago building code”

    What aspect of the building code do you think drives the cost of construction in a meaningful way?

    Also what is “affordable”? $150,000 homes? That gets you a newer (but not new) SFH in Plainfield or something that is about 1,000 SF. It could also get you about 1,000 SF of new build in the city, on a $10,000 or less lot. But there isn’t a lot of new, small, building activity in the hoods with the $10k lots.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  6. What aspect of the building code do you think drives the cost of construction in a meaningful way?

    Its has more to do with the zoning ordinance. 10% of units need to be affordable or you need to contribute to a fund, the fees went from around $100k per affordable unit required to $175k per affordable unit required. If you build a 100 unit building you will need to donate around $1,750,000 for 10 units. Why would I build 100 cheep condo vs 100 luxury…. The cheep condo day are over people. The theirs the mla which sets the number of units you can build….. if you build to many small units you will not hit your FAR target.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  7. I live in the Southport area see a lot of $1.5-$2.5 million dollar houses sitting on the market, including several vacant brand new places. It seemed like they couldn’t build these places fast enough for a while,but now that prices have gone up it seems that demand has gone down.

    VA:F [1.9.22_1171]
    Rating: +4 (from 4 votes)
  8. “It could also get you about 1,000 SF of new build in the city, on a $10,000 or less lot. But there isn’t a lot of new, small, building activity in the hoods with the $10k lots.”

    The moment the first $150,000 1,000 SF home home on a $10k lot in the hood, the $10K lot would disappear overnight and would become a $50k lot purely due to the rapid influx of money from speculators. In fact, from what I know, many of the $10,000 lots are already owned by speculators, who pay a few hundred bucks a year for taxes and lawn maintenance on the chance that the $10,000 lot may someday become a $20,000 lot.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  9. “I live in the Southport area see a lot of $1.5-$2.5 million dollar houses sitting on the market, including several vacant brand new places. ”

    I have no idea who buys these things. In the past when I had more time on my hands I would ccrd and then google the owners, and from what I remember, it was heavily weighted towards small business owners, or professionals with small businesses, and individuals involved in ‘finance’ or ‘banking’ generally. The typical AMT paying 1%ers.

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  10. “What aspect of the building code do you think drives the cost of construction in a meaningful way?”

    It’s also more than that, Chicago is a hub of money from all over the midwest. There are lots of people with lots of money in this city and area and that money just works its away around and into the real estate market. there’s lots of highly paid professionals who are willing to throw lots of money into real estate; lots of family money, stock options, BigLaw $100k bonuses for 8+ year associates, etc, that people use to buy homes. It’s hard for the average Joe to just buy a $300,000 2/2 in a good area when there are half a dozen other people out there competing for the same property but they have large bonii/stock options/etc type events to throw around. It might take an average joe a few years to have a $100k down payment but plenty of people get that every year,in lump sums.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  11. I don’t understand how it’s legal to force developers to set aside “affordable” housing. For that matter, I don’t understand the rent controls in some cities. Why does the government get to dictate how much a private person charges for rent?

    VA:F [1.9.22_1171]
    Rating: +5 (from 13 votes)
  12. Jenny,
    So young and naïve….. you should see all the other fee’s involved with development…. if you need to close the sidewalk theirs a fee…. and god forbid you need to take our a metered parking spot…. the monthly fee for that is unbelievable.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  13. “So young and naïve….. you should see all the other fee’s involved with development…. ”

    My favorite fee was the $500 per structure campaign donation developers made to get zoning changed from single family to multi-unit, hence the disappearance of the various SFH along addison, damen, ashland, etc into large, cinderblock behemonths.

    VA:F [1.9.22_1171]
    Rating: -2 (from 2 votes)
  14. http://www.chicagobusiness.com/article/20140224/OPINION/140229967/chicagos-zoning-laws-are-just-insane

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  15. HD:

    You ‘complain’ about the disappearance of SFH on arterials, and then cite someone who thinks that SFH should disappear from (basically) everywhere in the city. Seems incongruent.

    VA:F [1.9.22_1171]
    Rating: +4 (from 4 votes)
  16. Technically, i’m complaining about the cinderblock material used to build the multi family unit, not the disappearance of single family homes on arterials.

    The point of the maps (because the article was tl;dr) was to show how north side developers took cash to change the zoning codes.

    Tearing up SFH on the NW side and replacing them with tens of thousands of condos would lower the cost for everyone, but drive the cost of SFH through the roof, just like it did on the north side where it’s difficult to find newish SFH for less than $1M.

    VA:F [1.9.22_1171]
    Rating: -1 (from 3 votes)
  17. There are still plenty of affordable single family homes on the north side. They just aren’t in trendy areas.

    VA:F [1.9.22_1171]
    Rating: +7 (from 9 votes)
  18. “affordable single family homes … aren’t in trendy areas”

    See: “North Park is an un-hip hot spot for city home sales”

    http://www.chicagobusiness.com/realestate/20151022/CRED0701/151029954/north-park-is-an-un-hip-hot-spot-for-city-home-sales

    Now, is $300k to $450k “affordable”? ???

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  19. I found a lovely SFH in a very trendy Lakeview area east of Southport and south of Belmont last year for under $1m…got if for under $800k. :)

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  20. Yes. $300-$450k is affordable for a SFH in a safe neighborhood.

    VA:F [1.9.22_1171]
    Rating: +1 (from 5 votes)
  21. “What aspect of the building code do you think drives the cost of construction in a meaningful way?”

    As applied to single family homes in Chicago…
    – Plumbing code allows very little plastic materials; no plastic supply lines, only cast iron storm water lines, etc.
    – Electrical code allows very little plastic materials; no plastic conduit, no plastic clad cables, no plastic electrical boxes (even though they are safer), very little flexible metal tubing, etc.
    – Sprinkler systems are frequently required and have to be all steel ($$$).
    – Porches/decks have to be built to withstand a crowd of 200 lb people pressed cheek-to-cheek
    – a lot of other fire safety requirements that are excessive compared to the International Building Code (which Chicago should adopt).

    Chicago’s SFH Building code was outdated in the 1970’s. Today it stands alone as an island of waste.

    VA:F [1.9.22_1171]
    Rating: +4 (from 4 votes)
  22. island of waste? it’s the union contractor employment act.

    and btw I hate romex

    VA:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  23. “As applied to single family homes in Chicago…”

    First: “Sprinkler systems are frequently required ” and “a lot of other fire safety requirements”

    Sprinklers are certainly not frequently required in SFH construction in Chicago. And what fire safety requirements apply to SFH?

    As to the plumbing and electric: how different are those from the Chicago suburbs? We aren’t comparing Chicago to Dallas, we’re comparing Chicago to Aurora or Elgin or Plainfield or whatever.

    Porches/decks: So you need to use 2×12 instead of 2×10, times 200 linear feet. How is that a material affect on the cost of a SFH?

    Now, I agree that the building code was outdated 40 years ago, but I don’t see how it’s moving the needle on the cost of building 2400 sf SFH (as opposed to a mid-rise or bigger apartment or condo building) compared to the burbs.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  24. “I live in the Southport area see a lot of $1.5-$2.5 million dollar houses sitting on the market, including several vacant brand new places. ”

    This is so true. I am shopping for a place a little bit below this price range. There are SO MANY new SFHs in Roscoe, North Center, and Lakeview. The problem is there are all so generic. It is as if every developer is using the exact same blueprint. Hardie Board exterior, same white kitchen, stairway in the back to the basement, free-standing tub, etc. Developers are lazy and uncreative these days and I think buyers are starting to tire of these cookie-cutter homes. These properties have been sitting for a VERY long time now. Examples:

    Listed since March 11: https://www.redfin.com/IL/Chicago/1929-W-Grace-St-60613/home/13388660

    Listed since Dec 1, 2014: https://www.redfin.com/IL/Chicago/1842-W-Cuyler-Ave-60613/home/13390099

    Listed since June 25: https://www.redfin.com/IL/Chicago/2149-W-Berteau-Ave-60618/unit-1/home/13391320

    Listed since July 23: https://www.redfin.com/IL/Chicago/3452-N-Oakley-Ave-60618/home/13387189

    There are literally dozens of these examples. I don’t see how all of these places sell without serious price cutting. It must be frustrating being the developer on these units, hearing constantly about the rising market, yet being unable to offload your brand new homes for months on end.

    VA:F [1.9.22_1171]
    Rating: +4 (from 4 votes)
  25. No one has commented on land prices. The reason the homes cost so much is because before a developer puts a shovel in the ground,his straying cost is in the hundreds of thousands.
    Take Roscoe Village,good area but not prime like Lincoln Park or Gold Coast,
    starting prices for land would be low $400,000’s and up.

    VA:F [1.9.22_1171]
    Rating: +2 (from 4 votes)
  26. Most exhurbs are using the International Building Code. The closer to Chicago, the more the suburban building code looks like the Chicago building code.

    Fire safety requirements are mostly about materials and egress. In Chicago the focus on materials is to disallow plastics. The Chicago egress requirements can trigger the requirement for sprinklers, especially if there is a livable third floor. The state of IL fire marshall is pushing to require sprinklers for all new SFHs. I know some Chicago suburbs are already requiring sprinklers for new SFHs.

    The rest of the world is using romex, which has been used since the 1950s and ubiquitous since the 1970s . In plumbing, PEX is the new standard. Chicago should get over its problems with plastic.

    VA:F [1.9.22_1171]
    Rating: +7 (from 7 votes)
  27. There is no doubt that the housing bubble is reinflated. There is strong demand for real estate. The question is will it now continue and will prices go even higher than the previous bubble’s peak prices? Or are we going to emulate Japan’s lost decades path? Where the bubble deflates, it reinflates and then deflates again.

    So far we are right back to where we were a decade ago in terms of prices. Let’s see what happens next.

    VA:F [1.9.22_1171]
    Rating: +1 (from 5 votes)
  28. September 2015 sales will probably surpass 2013 once the dust settles. It’s already climbed to 2390 units sold as a result of late entries.

    Median prices are random because – especially at the community area level – the mix changes dramatically from one month to the next.

    Contract activity does seem to be slowing down quite a bit so we could see a dropoff in these sales increases.

    VA:F [1.9.22_1171]
    Rating: +4 (from 14 votes)
  29. Can the person who down voted Gary’s post tell us why she/he did so? I understand down voting an opinion, but someone’s observation from data?
    It reminds me of my toddler trowing a fit when a fact stands in the way of his desire.

    VA:F [1.9.22_1171]
    Rating: -3 (from 13 votes)
  30. And speaking of market data…there’s this RealtyTrac Undwerater and Home Equity report that came out late last week: http://www.realtytrac.com/news/realtytrac-reports/q3-2015-u-s-underwater-home-equity-report/

    24% of Chicago area homes are seriously underwater, where seriously underwater is defined as a loan to value ratio of 125% or more. Sounds like plenty of homes are still way below the peak to me. Only thing is homes that are undwerwater are not going on the market unless they are short sales or the sellers want to bring money to the table.

    VA:F [1.9.22_1171]
    Rating: 0 (from 4 votes)
  31. “24% of Chicago area homes are seriously underwater”

    This doesn’t surprise me at all. The bubble extended all the way out to Joliet 10 years ago. Have the peak bubble values come back out there? No. So if you bought in some of these locations in 2005-2006-2007, yeah, you’re probably still underwater.

    Of course, that really doesn’t have much to do with us. Unless we’re talking about Pullman or other city neighborhoods (which DID see bubble prices and they haven’t come back.)

    In the GreenZone, prices are back and then some. It would take some serious financial malfeasance for someone in the GZ to still be underwater after paying off a mortgage for 10 years and living in the best neighborhoods in the Midwest during that time. I’m not saying everyone is making gobs of money on every property, but to be underwater? Nearly impossible now.

    VN:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  32. “The question is will it now continue and will prices go even higher than the previous bubble’s peak prices? Or are we going to emulate Japan’s lost decades path? Where the bubble deflates, it reinflates and then deflates again.”

    1. We are already past peak bubble prices in most parts of the GreenZone.
    2. Japan’s housing prices didn’t reinflate and then deflate again. In fact, I’m not sure they have ever reinflated. Our housing bubble has NOT been anything like Japan’s. They literally had a lost generation. We had a “lost” 5 years.

    VN:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  33. “It is as if every developer is using the exact same blueprint.”

    It isn’t multiple developers. It is a handful of developers building the same house over and over- sometimes even on the same block. That’s why they are all beginning to look the same. It’s easy for them to just replicate it every time.

    It’s a shame. And no one in the city government says anything. But if people quit buying them, then they will stop building the same product.

    VN:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  34. “Now, is $300k to $450k “affordable”? ???”

    Well- that’s not a starter home price, that’s for sure. That’s upper middle class home prices.

    VN:F [1.9.22_1171]
    Rating: 0 (from 2 votes)
  35. “In the GreenZone, prices are back and then some.”

    But the GreenZone is not the market – especially for people looking for affordable housing. And they may not be “seriously underwater” but if that many are seriously underwater than an even greater percentage of units are below peak.

    I see it all the time. 1335 S Prairie #1202 bought in 2003 for $627K. Hard to be sure how many parking spaces that came with but the original listing says 0. Today it’s listed at $600K + 25k for each of 2 parking spaces. No matter how you slice it this seller did not do well. Yeah, you can bitch and moan about the south loop but that’s part of the market. It’s not all downtown and Lake View and Lincoln Park.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  36. “I see it all the time. 1335 S Prairie #1202 bought in 2003 for $627K. Hard to be sure how many parking spaces that came with but the original listing says 0. Today it’s listed at $600K + 25k for each of 2 parking spaces. No matter how you slice it this seller did not do well.”

    We’re talking about two different things here.

    You gave stats about how many “Chicago area” homeowners are still underwater. Who can dispute that? Sure, homeowners in Joliet, Lockport, Lemont and who knows where else, bought at bubble highs and those areas have NOT come back to bubble pricing yet.

    Whereas I referred to people in Chicago in the GreenZone.

    You give an example of someone who just “did not do well” who is in the GreenZone. That’s not what being “underwater” means. We are talking about two different scenarios.

    1. There is “underwater”- i.e. your mortgage is more than what the house is worth
    2. There is “not making as much money as they would like”

    The example you gave is #2.

    If you’re nearly half way through your 30 year loan and you’re in the GZ, there’s really no way you’re underwater. It’s not possible- even in the South Loop.

    Is everyone who is scenario #2 getting as much as everyone else? No. It depends on neighborhood, building, location in the building, whether or not it is move-in ready, does it have new kitchen/baths, does it have parking and central air etc. etc.

    But I’ll repeat again- no one in the GZ should be underwater now. Prices are past peak and they’ve been paying on those loans for 10+ years. They should have equity to sell and move. They may not make as much money as they would like, but that’s life. They should have the equity to get out of the property.

    VN:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  37. My whole point in presenting that data was to challenge the notion that prices are past peak. For large areas of the metro they are not and even in nice neighborhoods like the south loop it’s easy to find examples of properties not past peak. Hell, I’ve found examples of entire buildings downtown that are not past peak.

    VA:F [1.9.22_1171]
    Rating: +2 (from 4 votes)
  38. “Hell, I’ve found examples of entire buildings downtown that are not past peak.”

    Sure- I can tell you some of those buildings too. These are the ones that had major problems during the boom years.

    1255 S State comes to mind but I haven’t looked at it lately. Perhaps it is back to the boom year prices now too.

    1601 S State is still having foreclosures and short sales as we know.

    River City is still a mess. The Columbian on Michigan Avenue isn’t doing as well as other nearby buildings.

    Too bad for those owners. It sucks to be them when everything else around them is soaring in price. Heck- even The Sterling in River North, which was a disaster just 7 years ago, is now well past peak. New all time high prices in there now.

    The bubble is alive and well Gary. I’m sorry you don’t see it.

    Party on.

    VN:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  39. I’ve previously provided data for the Heritage and the Pinnacle, that aren’t exactly in trouble but aren’t in bubble territory either.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  40. I’d call it more like a flight to safety Sabrina…

    people realize now that paying retarded prices in the exurbs or sketchy areas isn’t a smart thing to do, especially now that people have to put more than 0% down

    you could say there is a concentration of qualified buyers targeting limited properties in certain areas pushing up prices in the GZ but even still, there are plenty of properties that come on the market that were purchased in 05-08 and are now selling for less than they paid back then

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  41. Also, asking prices and what you actually sell a place for are quite different, new realtor strat seems to be ‘price 15% higher than you think it will sell for and negotiate down 5-10%’

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  42. Responsible people should not be “underwater” in the true sense (owing more on their mortgage than what the property is worth). We are 9 years past peak. That’s 9 years to pay down your mortgage. I’m sorry. I just don’t have much sympathy for people who are still underwater unless something extraordinary happened (such as a death/long term unemployment despite trying).

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  43. “Take Roscoe Village,good area but not prime like Lincoln Park or Gold Coast, starting prices for land would be low $400,000’s and up.”

    Are you suggesting that you can find a Roscoe Village teardown for $400k?

    Are you (1) trapped in 2009?, or (2) high on Dust Off?

    VA:F [1.9.22_1171]
    Rating: +3 (from 5 votes)
  44. RK:

    1929-W-Grace-St: Terrible block for that expensive of a house. Needs to go under $1.4

    1842-W-Cuyler: Nicely close to the IPR station; too close to the tracks. $1.25 ish.

    2149-W-Berteau: Contingent once; suffering from the competition at the price point. Too many ‘taste specific’ details, so has to be someone who likes all of those details.

    3452-N-Oakley: Seems narrower than it should feel. 3 houses away from Bell attendance area. Also suffering from the competition.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  45. “The state of IL fire marshall is pushing to require sprinklers for all new SFHs. I know some Chicago suburbs are already requiring sprinklers for new SFHs.”

    So, point one is not Chicago specific, and point two favors Chicago over those burbs.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  46. “This is so true. I am shopping for a place a little bit below this price range. There are SO MANY new SFHs in Roscoe, North Center, and Lakeview. The problem is there are all so generic.”

    If you’ve got a million to spend on a house and dislike the current housing stock, why don’t you just buy a fixer upper and rehab it to your liking.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  47. The profile I see of a typical underwater owner is someone who bought between 2005 – 2008 in an area that would not typically be considered greenzone (a la Rogers Park or outer burbs for example) at an inflated price. They usually bought with an 80/20 AND an interest-only feature. The kicker is they never made principal payments of any kind during the time of ownership.

    Unfortunately, many of these borrowers did not have the financial discipline or forethought to reduce the mortgage debt or use the monthly payment savings to increase their other assets.

    They usually wind up in a short sale or foreclosure because they have a life event like divorce, unemployment, etc that forces the sale of the property. They can’t sell it for what is owed, nor do they have the assets to bring funds to the closing table.

    VA:F [1.9.22_1171]
    Rating: +5 (from 7 votes)
  48. Shame on the banks and shame on the owners for being so irresponsible.

    VA:F [1.9.22_1171]
    Rating: -1 (from 3 votes)
  49. Russ sees one type of underwater owner and I see those too, but I also see another. The kind buyer who bought 2008-2010/early 11 FHA style or low money down (while they were still giving mortgages) and paid too much and caught a falling knife, and not long afterwards they were underwater and prices haven’t recovered yet. (did I use the phrase correctly chuk?) usually in non-prime but acceptable suburbs. Anecdotally, one house I had originally put offer on back in 2011 resold as a short sale a few years later for a little less than the 2011 selling price. I was so ticked off because at the time the seller’s realtor had a dual agency with the other buyer and was trying to get us into a bidding war, and we weren’t having any of that. I knew the buyers paid too much and I was again proven right a few years later when they were forced to sell as a short sale after a 2011/2012 purchase!

    the other type of underwater borrower isn’t as much people who bought in 2005-11, but, instead, is the serial refinancer who liberated their equity many times over and now are underwater in an area that hasn’t fully recovered yet. northbrook, glenview, etc seems to be full of split levels with $600,000 mortgages from the boom era.

    The third underwater borrower is virtually anyone with a loan modification, HAMP, private, whatever, there’s often a deferred principal balance balloon at the end of the loan.

    VA:F [1.9.22_1171]
    Rating: -1 (from 7 votes)
  50. “(did I use the phrase correctly chuk?)”

    Yes, this time…

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  51. “If you’ve got a million to spend on a house and dislike the current housing stock, why don’t you just buy a fixer upper and rehab it to your liking.”

    Because in the neighborhoods used in the examples, the teardowns are selling for $600k+.

    Do you know someone who would be the GC on a gmax contract to gut rehab and expand a two flat into a 3600 sf SFH (and new garage) for $100 psf? Or even $125 psf (which takes you up to basically $1.2m)?

    And, btw, speaking from experience, that would be *cheaper* than doing it piecemeal, if you want to end up with all new.

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  52. I don’t have any issue with neg am and i/o loan products. Even 80/20s. The thing is that these loan products had been around long before the bubble. However, the underwriting was much more stringent and most of these loans were actually used for jumbo financing for borrowers who did have the discipline to use them as debt management tools instead of as an affordability product. I/Os were very popular with my i-banking borrowers and those who make a lot but work on commission or receive large year end bonuses.

    At some point, Wall Street and banks decided to loosen the guidelines and start offering them as a way to afford higher priced properties – qualifying borrowers on i/o payment instead of full amortized. Combined i/o with stated income or lower down payments. The risk layering got all out of whack (and absurd).

    VA:F [1.9.22_1171]
    Rating: +1 (from 3 votes)
  53. I’m sure Russ you still have some of those old rate sheets from 2006 lying around…

    80/20 with 560 credit scores
    125% LTV with proof of income and 600 credit scores
    Neg Am with 550 not including the tax escrow to meet the DTI ratios…

    Even back then I looked at those sheets in amazement and i just knew it would all blow up.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  54. One observation I have is that comparing 2006 (the peak of the bubble) to today-2015, more outer areas of Chicago way beyond the green zone are being gentrified. The demand for city living is great. Areas that back in 2006 buyers would not even consider are hot. For example, 2100 N. Natchez is right by 2000 North and 7200 West (Armitage and Harlem). It is right on the city limits and close to Elmwood Park and Oak Park. There is a huge development of town houses and luxury rentals are on the way. Also there are about six huge luxury houses being built.

    Also by 2700 North and 3800 West there are like 40 brand new houses for sale starting price 500K.

    I also noticed that the area around 4000 North and 5600 West there are huge houses being built.

    In all of the above areas I mentioned the price of land/teardowns is a lot lower and so the profit margins are a bit fatter for the developers. At this rate, Chicago can possibly be the San Francisco of the Midwest.

    VA:F [1.9.22_1171]
    Rating: +4 (from 6 votes)
  55. Semi-OT: Good video on Silicon Valley bubble.

    https://www.youtube.com/watch?v=SBjXUBMkkE8

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  56. “there are plenty of properties that come on the market that were purchased in 05-08 and are now selling for less than they paid back then”

    Again- I never said that some people weren’t selling for less. That is completely different than being underwater. Yes- there are plenty of poor souls who bought in the South Loop or the wrong building where lots of foreclosures happened and they still aren’t past peak. Or they never bothered to upgrade their kitchen/baths, paint the place and buy some curtains.

    You aren’t entitled to make money simply because you’ve owned real estate 10+ years. Even a condo. If you don’t update your property and get on the right side of trends, then you’re not helping your case. Buyers are still picky. They still want something “new” and move-inable. It’s not too hard. If you still have white or black appliances in your condo- when stainless became the standard over 10 years ago- then you may not get peak pricing.

    VN:F [1.9.22_1171]
    Rating: -2 (from 6 votes)
  57. Semi-OT: Good video on Silicon Valley bubble.

    Good video Chuk. I wonder why it was made. Seems like a big propaganda piece. But- that being said- Northern California is just nuts. The tours of homes for sale where you drive around on buses is what happened the last time there was a bubble.

    It’s also amazing how easy it is for everyone to throw out the numbers: $1.5 million, $3 million, $2.2 million. It almost sounds like these are middle class home prices now which would be $150,000 in other parts of the country.

    Basically, if you have a “normal” job at all, which is likely about 99% of the people living there, you cannot live there.

    They need to just move. It’s a large country. There’s nothing all that great about Silicon Valley. It’s the suburbs. It has strip malls. There’s a Walmart. Not much else there.

    VN:F [1.9.22_1171]
    Rating: +4 (from 4 votes)
  58. “There’s a Walmart. Not much else there.”

    not much else, other than some of the world’s most powerful technology corporations.

    VA:F [1.9.22_1171]
    Rating: +5 (from 5 votes)
  59. “Silicon Valley. … Not much else there.”

    Yep, not a hill to be found, and it’s *hours* to the beach.

    Plus, it takes forever to commute to your job in PA, MP, MV, etc. Why would anyone who works for Apple, Facebook, Google, etc live in SiliValley rather than EsEff given the much shorter commute, plus all the city amenities. Oh, and, of course, those schools all suck.

    VA:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  60. “Yep, not a hill to be found, and it’s *hours* to the beach.”

    You’ve never lived there, obviously. Have you been to Naperville? That’s what it is. Actually, that might be too generous.

    Most of Silicon Valley is actually flat until you get closer to San Francisco around San Mateo/Burlingame. There are the mountains on one side (those are pretty) and the Bay on the other side. It’s all landfill otherwise- and will NOT be fun in a big quake. Actually, when I worked there we used to look at the geological maps in our spare time in the office and wonder how badly our 2 story office building would shake in a 7.0 quake. The bets were we would be toast since there was absolutely no rock under us and we were right in the heart of Silicon Valley in Mountain View.

    Palo Alto is one big flat land mass. And a lot of it you’re not exactly looking at the mountains. There’s a lovely Walmart on the south end (might be in Mountain View actually) with a Target also across the street (double your fun.) Downtown Paly used to be kind of okay when the Borders was still there but that left years ago. Considering Stanford is there there really is nothing to it. Again, it looks like downtown Naperville (but not even as nice) and/or maybe Southport looks. Chain stores, some normal restaurants.

    Like a lot of California some of the better restaurants are in strip malls, so you get in your car and you drive there.

    The beach? Never. This is Northern California we’re talking about. Not a single person I knew EVER went to the beach. There are people who grew up in the East Bay and live there that haven’t seen the ocean in years. It takes a lot to get to the Ocean beaches. Even from Silicon Valley.

    I used to go to Half Moon Bay which was up over the mountains on the Ocean. Depending on the time of day, the road was twisting and often crowded. It would take a good 40 to 50 minutes to get over there on the weekend. And then it would be fogged in and cold. No one ever went to the “beach” there. Is there one? I don’t even remember seeing one. There must be somewhere. I mostly just enjoyed the town and the restaurants.

    Pacifica had a nice beach (that was up the coast a bit) but that was always fogged in too. And the water is cold. You’d have to wear a wet suit. Rip tides are also bad at a lot of those beaches. At the beach up near the Cliff House in San Francisco, they won’t even let you go into the water past your knees unless you’re a surfer. Someone always seemed to drown there every year. Very dangerous. And fogged in.

    Some of those coastal towns have fog festivals every year. Halloween is nice though. Usually sunny in Half Moon Bay at that time of the year. Big pumpkin patch every year.

    When you live there- it’s the same as anywhere else. There are chain stores and 2-story structures. There’s nothing sophisticated or cool about it. It’s no different than Naperville, Hinsdale, or Highland Park. Dare I say it- but Evanston is a much cooler place to live than Silicon Valley.

    At the company I worked for, we used to have a lot of people come out from our Manhattan office. Gosh, they HATED it. Can you even imagine someone who was living in Greenwich Village now living in Naperville? Lol. They usually left and went back to NYC within a year.

    Yeah- it really IS that boring.

    And San Jose is no help. I wish all this money could transform that city into a “real” city with a city center and neighborhoods. But so far, it hasn’t. San Francisco is a different animal. It IS an urban city with all that that means. This is why there are Google buses that drive everyone down. Because the peninsula really IS that awful. There’s a reason Stanford never makes lists of the cool college towns. Palo Alto is boring.

    And the schools? Who cares about the schools? They are no better than those in the Chicago suburbs or the Chicago magnet high schools.

    Would I live in Naperville versus downtown Chicago? No. So why would I ever want to return to Silicon Valley?

    Why is McDonald’s headquarters in Oak Brook? Because someone deemed it so back 40 years (or whenever they ended up there- but it was decades ago.) Why is Apple in Silicon Valley? Because Steve Jobs and the Woz lived nearby. That is all. There’s no special magic to the place.

    VN:F [1.9.22_1171]
    Rating: +9 (from 13 votes)
  61. “not much else, other than some of the world’s most powerful technology corporations.”

    Wow. Does someone who lives in Oak Brook care that they live in the town with the most “powerful restaurant corporation” in the world?

    I don’t think so. Not going to keep you interested on the weekends HD!

    Do I care that Groupon and Grubhub are in the loop near where my apartment is? Um…no. What about Boeing? Does having Boeing on my street suddenly make it SO WONDERFUL to live there?

    Come on. Don’t even make me laugh.

    Does having State Farm in Bloomington make you want to live there? Is that what makes a place a great location to live? An office building? You know that these companies have awful offices that are simply 2 story corporate farms (although Apple IS trying to build a cool, state of the art headquarters. Finally.)

    My god.

    Obviously, none of you, except Clio, has ever even been to Silicon Valley, let alone lived there.

    VN:F [1.9.22_1171]
    Rating: +4 (from 8 votes)
  62. By the way, there is the Stanford Shopping Center. It’s Oak Brook or Old Orchard, only smaller. Same stores. Same outdoor layout. It’s a nice place to go in the summer if you live in San Francisco and want to escape the fog.

    But if hanging out in a mall that has a Macy’s and a Bloomingdale’s is what floats your boat, you can do the same thing in Schaumburg at Woodfield.

    VN:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  63. I’ve been the the Silicon Valley. yes it’s boring. probably because all the computer geeks coding all day and night.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  64. “probably because all the computer geeks coding all day and night.”

    That’s not really the only people who live/work there. Apple, Google and the rest of them have plenty of people working in marketing and advertising, for instance. Also plenty of doctors/nurses with the big medical center there. Lots of aerospace because of the defense firms.

    Good luck to them all because anyone new moving there is completely priced out. There’s no point in even moving there anymore. No point at all. I can’t even imagine being a nurse, even one making $100,000 a year, and living there.

    I wonder if some of the companies have to offer, say, $500,000 a year salaries just to make it halfway affordable to woo job applicants? I knew someone in the marketing department at Apple making $400,000 and she wasn’t the top of the food chain there. But you can’t even buy a house on that salary anymore.

    VN:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  65. If you work in tech it’s a very exciting place to be. So much happening – very dynamic environment – electric almost. And if you are young and in tech it’s mind blowing. Those kids lead a charmed existence – for now. So what if they share a place with 1 – 4 other kids? 2 can share a place for $2500 each per month or less and if you split a larger place 5 ways it’s a lot cheaper. Almost doesn’t matter where you live because you’re never home – they go out every night and they go away many weekends or they’re working.

    VA:F [1.9.22_1171]
    Rating: -2 (from 6 votes)
  66. do people besides bored teenage thugs actually still go to malls often? I think I maybe hit one once or twice a year? Usually the Lego store in 900N and thats pretty much it, malls, BLECH!

    VA:F [1.9.22_1171]
    Rating: +1 (from 3 votes)
  67. That million dollar shack video is a bit shocking. People have to commute to Silicon Valley from Sacramento? That’s like coming in from Rockford or Beloit to downtown Chicago every day. That Deleon realtor is a bit arrogant, he just loves driving that rolls Royce and making absurd comments, why did he have to talk down about the sellers like that? Some of the sellers are just cashing out, it seems smart to do so if you have such huge appreciation. It looks unsustainable to have that level of price growth. Is there any land within 40 miles of Silicon Valley that can be redeveloped? It seems that money could be made developing it into housing. The vacant houses owned by the Chinese investors is a bit scary too. Are they paying property taxes and just not maintaining the properties?

    VA:F [1.9.22_1171]
    Rating: +4 (from 4 votes)
  68. I have never been to Silicon Valley, however, I like the idea of living in a geek enclave.

    VA:F [1.9.22_1171]
    Rating: -3 (from 3 votes)
  69. I have to agree with Sabrina about Silicon Valley. Back when I was in consulting, I worked on an engagement there at a well known tech company for a few months. It was suburban hell. At least some of the suburbs here have nice leafy streets and villages. A lot of the areas I saw looked like Skokie / Golf Road with similar vomit inducing residential architecture. I recall looking at the employee bulletin board in the cafeteria and there was a FSBO flyer for some craptastic 2/1 house for like $750k or so and this was 15 years ago.

    Nothing sucks worse than working long hours in a 2 story corporate plantation at some office park. At least when you put in hours in a major city, there is still some life around when you leave.

    About the only thing I fondly remember was the mild weather.

    I didn’t even care for San Fran, but I could tolerate living there way before I’d even consider Silicon Valley.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  70. what’s wrong with golf road?

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  71. That $750K 2/1 house is now for sale for $1.8M I’m sure. That’s a different world.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  72. “Palo Alto is one big flat land mass.”

    Yeah, this looks totally flat:

    https://www.redfin.com/CA/Palo-Alto/2991-Alexis-Dr-94304/home/1467156

    “Not a single person I knew EVER went to the beach.”

    Huh, I knew a lot of people who went to the beach. Not every weekend or anything, of course.

    “There’s a lovely Walmart on the south end (might be in Mountain View actually) with a Target also across the street (double your fun.)”

    Both in MV.

    “It’s all landfill otherwise”

    There is *very* little landfill west of the 101. And essentially none west of El Camino. The Googleplex and Shoreline are, of course, basically on a converted garbage dump, tho.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  73. Going for that Palo-Alto type pricing…. LOL

    http://www.nbcchicago.com/news/local/Home-in-Wrigleyville-Listed-at-98-Million-337314041.html?dsfsdfgdfg

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  74. https://www.redfin.com/CA/Los-Altos-Hills/14195-Wild-Plum-Ln-94022/home/637130

    LOL! $5Million for that? Looks like a home in Hoffman Estates that you could get for $250,000.

    VA:F [1.9.22_1171]
    Rating: 0 (from 2 votes)
  75. A $6M house with $5,500 in annual property taxes…. that’s what happens when property values go from $270,000 to $6M over the past 37 years and you have proposition 13 in place. That’s a nice gain you can retire on.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  76. “LOL! $5Million for that?”

    It’a a better value than this tiny lot place for $3m:

    https://www.redfin.com/CA/Los-Altos-Hills/25520-Deerfield-Dr-94022/home/1722871

    “Walk to town (w/ all of its events)”

    A little over a mile and (truly!) uphill both ways. Pleasant enough, but c’mon.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  77. Oh, but you get the plans for the new house INCLUDED with the sale. That makes it a steal.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  78. “The Googleplex and Shoreline are, of course, basically on a converted garbage dump, tho.”

    Indeed. Spring GD tour ’91, had just fired up the Coleman stove to start making grilled cheese to sell, and a security guard informs me that open flames are prohibited (because of landfill, etc.).

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  79. While I am not moving to the Bay Area any time soon either, all these machinations about how the real estate there is too expensive in our Chicago heads seem silly to me. There are people there who are willing to pay those amounts and who are willing to live the lifestyle to make it work. There are many people around that part of the country with stupid amounts of money. And it’s a destination for the future US upper middle class from all over the world in a way that Chicago will never be. I am not really interested in what you guys think that a crappy ranch in LAH on 1 acre “should” be “worth.” Your normative views (even if I share them) are irrelevant.

    VA:F [1.9.22_1171]
    Rating: -3 (from 9 votes)
  80. If i’m gonna drop 5 million bucks on a stupid house in california I wanna be on the beach somewhere

    VA:F [1.9.22_1171]
    Rating: +2 (from 4 votes)
  81. “all these machinations about how the real estate there is too expensive in our Chicago heads seem silly to me”

    are these really “machinations”? is it permissible to complain about stuff like this?

    waht did J3 really mean? ruminations?

    VA:F [1.9.22_1171]
    Rating: +5 (from 5 votes)
  82. “be on the beach somewhere”

    Not in NorCal. No one goes to the beach in NorCal.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  83. Isn’t part of the problem that they the zoning rules don’t allow for more homes to be built? Do they have condos and apartments out there?

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  84. JJJ, it’s kind of like no one cares what you think. It’s a real estate blog you douche.

    VA:F [1.9.22_1171]
    Rating: +3 (from 5 votes)
  85. Tone:

    Your normative views about JJJ (even if others share them) are irrelevant.

    VA:F [1.9.22_1171]
    Rating: +5 (from 5 votes)
  86. the only relevant opinions are sabina’s, because it’s her blog, so I say shut the comments section down!

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  87. I was using it to mean “contrived efforts erroneously calculated to achieve a particular end.” You’re right, a bit of a stretch but I assume some dervishesque handwaving to accompany the words. It just sounds so silly to me, like “when I was young a gallon of gas cost 13 cents!” All the speculation and theories about Chicago real estate are at least somewhat well-informed. But now there are fools suggesting that an acre of prime residential LAH land is not pretty valuable, comparing it to Hoffman Estates, etc. All you need to do to see that these prices are in line with the market is to check the recent sales.

    VA:F [1.9.22_1171]
    Rating: -5 (from 5 votes)
  88. http://www.zillow.com/research/silicon-valley-home-values-tech-11070/

    Supply and demand. By definition housing is always affordable – just not to everyone who wants to live anywhere.

    VA:F [1.9.22_1171]
    Rating: +1 (from 5 votes)
  89. I have enough trouble with the math on the captcha, don’t make me break out a dictionary to understand the comments.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  90. Gary Lucido so it is all about simple supply and demand right? Nothing about how the insider real estate developers and their political friends use zoning laws to dish out favors to one party but not another. In Chicago and most other major cities this is classic corruption 101. Nope, that is never in the calculation.

    Or how about the central banks of the world using leverage to make asset prices go higher and higher. Tsk, tsk, let’s not discuss the elephant in the room. Lest it make some uncomfortable.

    VA:F [1.9.22_1171]
    Rating: +5 (from 5 votes)
  91. “Or how about the central banks of the world using leverage to make asset prices go higher and higher. Tsk, tsk, let’s not discuss the elephant in the room. Lest it make some uncomfortable.”

    In Gary’s defense, that IS supply and demand. They are artificially inflating demand.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  92. One of the problems in the bay area is that the zoning laws restrict supply. And the high salaries of the tech workers and the convenient transportation to the offices way south of the city increase demand. The result is totally predictable.

    VA:F [1.9.22_1171]
    Rating: +4 (from 6 votes)
  93. “One of the problems in the bay area is that the zoning laws restrict supply.”

    In San Francisco proper, I think they are building 10,000+ units right now. Mostly high rises all over the downtown, SOMA and Mission Bay. It’s still not enough. And rents in all of those new buildings are $4,000+ for the 1-bedrooms.

    There’s also really not much they can do about the peninsula. It’s restricted by geography and the landfill. These are normal suburban areas. You’re not going to build a bunch of 30 story high rises all over the place. When I lived there, I lived in a 10 story high rise though. They were building those wherever they could find some new land. Which is why I lived across the street from the Walmart (joy.) They’ll build along El Camino Real. That’s like building on Roosevelt Road (which we’re doing here in Chicago) or along Ogden Avenue out in the suburbs.

    Otherwise, yes, they’re not going to build high rises next to people’s suburban homes.

    VN:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  94. “By definition housing is always affordable”

    Wow Gary. Yes- you ARE a realtor.

    So- it doesn’t matter if nurses, school teachers and everyone else making middle class salary can’t live in a certain city because they don’t belong there. They should then move somewhere else (and presumably, “the market” would somehow respond because someone has to run the cash register at the grocery store and be someone’s nanny, right?)

    This is what they call, in Texas, “drive until you can buy.” It’s where the home buyer simply gets in their car and drives out of Houston, Dallas, Austin etc. until they can FINALLY afford to buy something on their salary. And there’s plenty of land out there! They can keep building for hundreds of miles outside those cities.

    But historically, our cities have never been this unequal. San Francisco has been at 4x average incomes for the prior 20 years before the 1995-2015 era. You had the dot-com bubble and now the unicorn tech bubble going on during that period. But there’s no tech in Napa or Contra Costa Counties and those have been in a bubble too.

    So what has changed in the last 20 years? What has changed in Chicago, New York, San Francisco, Los Angeles?

    Gasp.

    Could it be the Fed’s monetary policy? Could it be record low mortgage rates and a record high in the stock market backed by the longest bull market in bonds in our history? Could it be the riches made from the art world, also with prices at record highs? Could it be the trillions the central banks have allowed to slosh through the global economy?

    Nah. Never.

    And heaven help us all when it ends.

    VN:F [1.9.22_1171]
    Rating: +3 (from 7 votes)
  95. By the way- we’re back at it again.

    10% appreciation a year in housing.

    20% in some cases.

    This is considered “normal” again even with what the nation went through just 7 years ago.

    It’s almost hard to believe that people’s memories are that short. But with asset prices soaring in everything- why shouldn’t they buy in? They are getting rich.

    The flips right now in California are even more outrageous than those I remember during the bubble. People who have bought houses in, say, Ojai, in 2013 for $450,000 and are listed at $650,000 2 years later after having done nothing to it.

    Yep- it’s going to be a bad crash again. Don’t know how long it will take to really pick up steam. It all depends on mortgage rates and the stock market.

    That’s why I’m so glad I’m still running this blog. This bubble will be documented in real time.

    VN:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  96. “No one goes to the beach in NorCal.”

    Nope. If you want beaches you live in SoCal. Obviously anon(tfo) has never lived out there. Ask Gary to ask his daughter how many times she’s been to the “beach” and gone into the water? Ha! Don’t make me laugh.

    It’s just not the beach culture there and they love it for that reason. They have restaurants and museums and nice hiking trails. Beaches? Nah. On a nice fall day, if it’s 80 degrees for some strange reason, I would go to the beach near Lands End. Not much to do though. But you’re not swimming. Hell no. The beaches in Chicago are used 1000x more than those in the Bay Area.

    The surfers love it though. They wear wet suits and can deal with the cold temps, the fog and the rip tides. My gosh, the winds are so bad on the ocean side that often the Great Highway is shut down because big sand dunes have blown across the highway there.

    Plus, everyone there works too many hours. Sad, but true. If you can afford to live in Silicon Valley it’s because Google is paying you $400,000 a year and you’re working late into the evening and on the weekends.

    VN:F [1.9.22_1171]
    Rating: +2 (from 6 votes)
  97. “So- it doesn’t matter if nurses, school teachers and everyone else making middle class salary can’t live in a certain city because they don’t belong there. They should then move somewhere else (and presumably, “the market” would somehow respond because someone has to run the cash register at the grocery store and be someone’s nanny, right?)”

    Uh…yeah. I can’t afford to live on Park Avenue or in San Francisco so I don’t. And Lincoln Park is too expensive for what I want so I don’t live there. If it becomes too expensive for nurses and teachers to live close enough to their jobs then they will move to a different city and a shortage in those professions in Chicago will drive up salaries.

    But in reality what happens is that people compromise on what they want. Maybe they move further away or they move into a marginal neighborhood that is improving. Frankly, we’ve never encountered a buyer that just melted down in agony over housing not being affordable. I am aware of one nurse that is not happy with her commute though.

    You can buy new construction SFHs in Bridgeport for $400K. And there is plenty of opportunity to build cheaper housing in Pilsen or even Bronzeville.

    You can’t have anything you want in this life.

    VA:F [1.9.22_1171]
    Rating: +3 (from 9 votes)
  98. Here’s more on what is happening with the California “dream.”

    Sure- it’s gone. It’s not ever coming back. Too many people crammed in too small of space. The traffic alone is now horrendous.

    But California has been written off a lot of times. I still tell people to move out there- just don’t expect to stay unless you hit it big with stock options. In your 20s, it’s a fun place. Much like New York. You don’t care if you live in a group house with 6 other people in 3 bedrooms.

    But by the time you’re 40? Then it gets old.

    It makes you appreciate what makes Chicago a great city to live in though.

    http://www.nytimes.com/2015/10/25/opinion/sunday/my-dark-california-dream.html?_r=0

    VN:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  99. Oh…and there’s a corollary to my statement about no client melting down about their choices: very few buyers don’t have to compromise on something – even when they are fabulously wealthy. It’s just a fact of life.

    “If only the yard were a little bigger”
    “If only the school was better”
    “If only the school wasn’t across the street”
    “If only the master bedroom had a better layout”
    “If only it was closer to work”

    It’s the hedonic setpoint problem.

    VA:F [1.9.22_1171]
    Rating: -1 (from 7 votes)
  100. “Oh…and there’s a corollary to my statement about no client melting down about their choices: very few buyers don’t have to compromise on something – even when they are fabulously wealthy. It’s just a fact of life.”

    Sure. No one ever gets everything. Even the mega-rich.

    During the dot-com years, people would faint in realtors offices when they came out to “look” at what their options were when they were considering a move there. I doubt many are fainting now because the skyhigh prices are pretty much well known. I don’t know how they can lure anyone from outside the bay area now unless they literally are paying $500k for a job that pays $150k in Chicago. And even that might not be enough to live a similar lifestyle.

    But there’s not getting everything and there’s not being able to afford ANY property within a 40 mile radius of where you live. These people are deciding “do I want to commute 2 hours one way, or 4 hours, round trip?”

    And in some cases, they say yes. If they say no, they either have to continue to rent or they have to move out of that area. There are plenty of places to live in this country- many where you don’t have to shovel snow.

    VN:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  101. “Frankly, we’ve never encountered a buyer that just melted down in agony over housing not being affordable.”

    You can’t compare Chicago with the Bay Area, thank god. You have no idea what it’s like out there. There were people fainting in realtor’s offices. That was common back in the day. But, as I said, if someone now doesn’t know how bad it is out there- then they are morons.

    You really can’t work for Groupon in Chicago making $125,000 and expect to move to San Francisco, get a “pay raise”- even to $200,000 and think you’re even going to be able to live anywhere close to the same lifestyle. You’re not. But everyone makes their own choices. Like I said, if you’re in your 20s, you’re single, you don’t mind living in a group house or can afford the $4,000 a month apartment rents, then it’s great. Otherwise, Chicago is FAR superior.

    But the real difference between Chicago and NY or SF or LA is that you actually CAN live in Lincoln Park even if you make a middle class salary. I can live in the Gold Coast if I make $50,000 a year. I can live in River North. I can live in ANY neighborhood I want even if I make what is considered paltry income.

    How is that possible?

    Yeah- I may be in a studio in some of those neighborhoods. Or maybe I’m in a small 1-bedroom. I may not have a deeded parking space. Or in-unit laundry. But I CAN live there.

    That’s what makes Chicago so fantastic and such a bargain and a deal compared to any of the other major big cities in this country. We are SO lucky.

    There’s no way someone who is making a middle class income could afford a studio or a 1-bedroom in most of San Francisco. You’re not living in Venice or Santa Monica anymore. Even 1-bedrooms there are $700,000. Even the crappy parts. That’s why San Francisco has the “affordable” housing program which puts the units at a much lower price point. But there are a limited number of those.

    No one who is renting in the GreenZone is going to be priced out of the entire city. But in NY, LA, SF and other places, you actually ARE.

    Viva Chicago and it’s snow.

    VN:F [1.9.22_1171]
    Rating: +7 (from 9 votes)
  102. “lived across the street from the Walmart”

    Avalon Towers?

    779 sf 1 bedroom for $3,280 a month, with a year lease!

    http://www.avaloncommunities.com/california/mountain-view-apartments/avalon-towers-on-the-peninsula/floor-plans

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  103. “how many times she’s been to the “beach” and gone into the water?”

    I never said anything about getting in the water. Nonny went to the lakefront almost every day–did he get in the water every time?

    You have such a narrow viewpoint.

    VA:F [1.9.22_1171]
    Rating: +1 (from 3 votes)
  104. “Oh…and there’s a corollary to my statement about no client melting down about their choices: very few buyers don’t have to compromise on something – even when they are fabulously wealthy. It’s just a fact of life.”

    a fact of life, to be sure, but is it really a “corollary”? is it permissible to complain about this?

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  105. Complain, yes. But curse the universe and wring your hands in despair? I don’t think so. But of course people can do whatever they want.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  106. It would be interesting to see a major player move out of Silicon Valley. At a certain point, don’t workers become frustrated at the lack of housing options or do they just leave by the time they are 30?

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  107. That’s what I’m waiting for. It doesn’t make sense to stay there. You can pay people a lot less somewhere else. I think once these companies mature and cost pressure develops you see this happening. I wonder how many programmers Google has outside the Bay area, though anyone starting there pretty much works in the Bay area.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  108. “It would be interesting to see a major player move out of Silicon Valley.”

    Intel and HP moved significant operations out 30+ years ago. It’d be really big if one of the players moved their HQ or their principal tech offices, but that’s less likely.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  109. Silicon Valley is not the only game in town when it comes to the technology sector. However, that is what comes into most people’s minds when they think of technology jobs. Kind of like the association between deep dish pizza and Chicago or political corruption and Chicago.

    Other places in our country where there are huge technology jobs and businesses are: Boston MA, Raleigh-Durham NC, Austin, TX, Huntsiville, AL and Orlando, FL. I have had family members take jobs in Raleigh-Durham and Orlando over Silicon Valley simply because it is too damn expensive in Southern California. Just think about it; three out of the five technology hubs in our country are in the South.

    Southern California is shooting themselves in the foot by making the cost of business too expensive. So is Chicago.

    VA:F [1.9.22_1171]
    Rating: -7 (from 9 votes)
  110. “Silicon Valley is not the only game in town when it comes to the technology sector.”

    “Southern California is shooting themselves in the foot by making the cost of business too expensive. So is Chicago.”

    Don’t worry….. China and India are even cheaper..
    College Grads in Computer Science per year per country
    USA 70,000 (many are foreigners)
    Europe 100,000
    China +600,000
    India +400,000

    VA:F [1.9.22_1171]
    Rating: +8 (from 8 votes)
  111. Relevant to the discussion:
    http://www.cnbc.com/2015/05/21/soaring-housing-costs-forces-talent-to-flee-silicon-valley.html

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  112. First time poster here, need to correct some info out there:

    “Don’t worry….. China and India are even cheaper..”
    Yes, they are, because a significant % of chinese and indian degrees are the equivalent of the degrees from for-profit colleges in the US. In the US people complain of grade inflation; but in asia, it’s like degree inflation.

    SF: Everyone knows it’s tech money in SF/SV that inflated housing values. Some of it real money like Google/Apple (like my long employed cousin who bought his shack in cash presumably after selling a small % of his stock option shares); some of it fake money like twitter, millions from a company that can’t turn a profit…or any of the other crazy start ups.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  113. “SF: Everyone knows it’s tech money in SF/SV that inflated housing values.”

    No it’s not. Or else Sacramento and everything that is in Contra Costa County wouldn’t be outrageous. Except for a few poor souls doing the commute from Sacto, a Google engineer is not living in Sacto or Point Richmond and pushing up housing prices.

    And, by the way, the housing bubble isn’t limited to the Bay Area. Go to San Diego. How many tech companies there? Why are prices $500,000 and up 120 miles from Los Angeles? Why are Riverside prices back to $450,000? The wages can’t support any of those prices. But the Fed’s low mortgage rates combined with 3% down can.

    VN:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  114. “You have such a narrow viewpoint.”

    No. I was working my ASS off in Silicon Valley. Driving in heavy traffic up over the fog invested mountains so I could go stare at the water was not my preferred use of downtime when I actually did get some time off.

    That’s pretty much how it is out in old San Francisco. Everyone works their butt off. How else do you afford it otherwise? It’s non-stop. Your foot is always on the accelerator.

    Like I said- nothing special about the Bay Area. There’s such a myth that it’s magical and somehow, if you live there, you become one with nature. No, you become one with the traffic on 280 and El Camino Real as you drive to and from your office. But you can look at the mountains and the bay from your car. The commute on 280, I do have to say, was stunning.

    For anyone curious about the view, they used it in The Wedding Planner with JLo. It’s the scene where they are supposed to be driving to Napa. That is really the 280 to Silicon Valley. Gorgeous. And no trucks allowed.

    VN:F [1.9.22_1171]
    Rating: +1 (from 3 votes)
  115. “Avalon Towers?”

    Yep- that’s it. I won’t click on the link. It’s too stressful to be reminded of the awful Walmart with its 24-7 security guards because stuff was always going down in the parking lot.

    I mean- really? The Walmart parking lot? Come on.

    Yes- move to Avalon Towers and live the tech dream. Right across from the Walmart AND the Target.

    VN:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  116. Something came up yesterday so there won’t be any new posts today. Sorry.

    It’s getting really tight now. There’s really nothing much coming on the market and inventory is super low. Only the stuff that hasn’t sold in the last 6 months is still on the market.

    I’ve seen a couple of relos though, where the relocation company owns the property. That’s unusual. I haven’t seen much of that since 2007. It tells you the job market is strong.

    VN:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  117. ““You have such a narrow viewpoint.”
    No. ”

    Um, yes. Because you asserted that you knew/know no one who went/goes to the beach. I knew/know people who did/do, yet I haven’t ridiculously asserted that *everyone* loves going to the NorCal beaches. Sure, most of them live in the city, rather than on the Peninsula, but if they did live on the Peninsula, their recreational activities would still include the ocean front (and *not* getting in the water).

    Which is not at all to say that I’m pining for a job in SV, and wanting to move into that craziness, but it is rejecting the notion that Palo Alto is just Naperville with more expensive (and smaller) houses.

    VA:F [1.9.22_1171]
    Rating: 0 (from 4 votes)
  118. I used to play paddleball buck-naked at Muir Beach. Lots of balls flopping around. Just kidding, but once I went to that beach and you see that the people who should not be nude, are the ones who are. The vision of 2 gay SF middle-aged men playing nude paddleball was emblazoned on my brain. IT wasn’t until this thread that it was brought back to memory. Lol.

    Stinson Beach really isn’t that bad of a beach, it’s somewhat inviting. The beach out by the Richmond district is thoroughly uninviting, agreed. It’s amazing to see some CA folks who see the ocean and bay in NoCa as a place for recreation. It sure looks like this “fun” takes work, looks dismal. These nuts who go diving for abalone? Who F’n cares? I seriously think they’d all choose to tie up by Ohio Street beach with the babes and the partying, if they would actually admit it. But they won’t because everything in the Midwest has to be deemed inferior. I’m with Sabrina, NoCal and SF Bay Area is totally overrated. It’t not that “beautiful” either. Sailing in the SF Bay, you have to wear jeans and a jacket, even in the summer. They have this one place to go, Tiburon, that is an ersatz version of Southern California, it’s never truly warm there either. Washington State is the most beautiful state in the nation, and the Puget Sound puts the Bay Area to shame for beauty.

    VA:F [1.9.22_1171]
    Rating: -5 (from 9 votes)
  119. PS One time waiting in a ferry line in the Puget Sound, I got to talking with this man, turns out he’s a United pilot, experienced guy, who flies the Seattle-Tokyo route, once a week, 3 days work. Great pay, and he lives on Bainbridge Island in the Puget Sound, a ferry ride across from Seattle.

    I recall thinking, man, does this guy have the life or what? Seattle, Puget Sound, great pay, gets to fly to a First World place like Tokyo, half the week off…what they hell am I doing in Chicago. Why would anyone be in Chicago compared to that guy’s gig?

    VA:F [1.9.22_1171]
    Rating: -5 (from 9 votes)
  120. Agree with much of what you wrote, Sabrina. I lived in Manhattan for 2 years out of school, then in SF for 6. My husband and I moved out because we could actually afford to buy a place in the city, and raise a family here.

    In SF, it was a choice between affording a tiny little place and not having kids, or moving someplace else (another city) and being able to afford children.

    The peninsula is awful. It’s suburban, but lacks many of the benefits that one would find in suburbia, like say, relatively easy parking at shops/malls. The city, Marin, and even the East Bay are all much nicer than the peninsula, but the peninsula has so many jobs.

    One thing the Bay Area has over Chicago is access to great weekend trips – Monterey or even LA to the south, Tahoe to the east, and Wine Country to the north. But that isn’t worth paying $5 million for the generic, albeit large, shitbox that was linked to in one of the comments above.

    The people I know that have stayed in the area have either family money, are investment bankers, or are living up in Novato stretched to the hilt with a 40-year no money down mortgage.

    I remember when friends were buying shoeboxes for big bucks 15 or so years ago. My husband said, “well, we make out better than they do, so we should be able to buy a place, too” Only problem was that I’m financially literate and sane, and knew how much we could afford, regardless of what a bank was willing to lend us.

    Chicago rocks.

    VA:F [1.9.22_1171]
    Rating: +3 (from 5 votes)
  121. oilc on October 29th, 2015 at 3:22 pm
    “Silicon Valley is not the only game in town when it comes to the technology sector.”
    “Southern California is shooting themselves in the foot by making the cost of business too expensive. So is Chicago.”
    Don’t worry….. China and India are even cheaper..
    College Grads in Computer Science per year per country
    USA 70,000 (many are foreigners)
    Europe 100,000
    China +600,000
    India +400,000

    The quality of Indian and Chinese engineers is super low. The education system in both countries is suspect. In India all learning is based on rote memorization. You memorize a set of standard facts and then spit them out in exact verbatim in a test. I kid you not. No thinking, no creativity, no essay exams. Indian engineers can not think on their own two feet and the quality of their work is garbage.

    Even the whole idea of a STEM shortage in America is a myth espoused by the mainstream media. They just keep repeating the same lie/story again and again and the public now believes in it.

    VA:F [1.9.22_1171]
    Rating: -2 (from 8 votes)
  122. “I recall thinking, man, does this guy have the life or what? Seattle, Puget Sound, great pay, gets to fly to a First World place like Tokyo, half the week off…what they hell am I doing in Chicago. Why would anyone be in Chicago compared to that guy’s gig?”

    Plenty of pilots live in Chicago and do the Chicago/Tokyo route too. In fact, plenty of international flights. So some pilots must like Chicago enough to make it their home base.

    Flying the long haul international flights is a whole different gig from the domestic routes. If you want some good insight into what it’s like I really recommend Mark Vanhoenacker’s new book by a 747 pilot: Skyfaring.

    It’s really a weird life. Leaving London one day and 15 hours later arriving in Tokyo. You fly with different crews every time so you don’t really get to know your work colleagues. It’s a great book.

    http://www.nytimes.com/2015/06/03/books/review-mark-vanhoenackers-skyfaring-a-journey-with-a-pilot-on-joy-of-flight.html?_r=0

    VN:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  123. “but it is rejecting the notion that Palo Alto is just Naperville with more expensive (and smaller) houses.”

    It IS Naperville but worse. Ironically, Naperville is MUCH nicer. It has a beach. ha! And at least you have some decent restaurants there.

    The Stanford Shopping mall is the best thing about being down there. And the weather is better. The mountains block that dreaded fog. Oh- and Burlingame is actually pretty nice. That’s a LOT like Naperville (or any of the other “older” downtown areas) with shops, restaurants, movie theaters.

    The architecture of the peninsula is also awful. Simply atrocious. It’s mostly all 1950s homes, even in “old” Palo Alto.

    There’s no “soul” there. That’s what it is. It’s all been built up in the last 30 years. And it shows.

    But people have to move there for themselves and find out. Everyone is different. But a dynamic urban area, it’s not.

    VN:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  124. Yet another article from out east about people fleeing the big cities- but only going to the suburbs.

    This time- leaving Brooklyn (instead of Manhattan). But they already owned a pre-war apartment that ended up selling for seven figures!

    http://www.nytimes.com/2015/11/01/realestate/escape-from-brooklyn.html?contentCollection=weekendreads&action=click&pgtype=Homepage&module=c-column-middle-span-region&region=c-column-middle-span-region&WT.nav=c-column-middle-span-region

    VN:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  125. Looks like we’re finally starting to see evidence of the market slowing down. IAR will most likely report October sales down by 0.8% from last year. Inventories just keep dropping, which might be the problem.

    http://www.chicagonow.com/getting-real/2015/11/chicago-real-estate-market-update-october-home-sales-disappoint/

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  126. “Looks like we’re finally starting to see evidence of the market slowing down. IAR will most likely report October sales down by 0.8% from last year. Inventories just keep dropping, which might be the problem.”

    Or- we are heading into the headwinds of last year’s hot market? When you’re already at 10-year highs in sales, you have to do even better to see further gains. Are we going to? With rates apparently starting to rise?

    And yes- record low inventories aren’t helping either. But people still have to live somewhere, right?

    Or is it the record high prices finally starting to hit?

    I’ll be interested to see what happens in the next few months- going up against those powerhouse early 2015 sales numbers.

    VN:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  127. “10-year highs in sales”

    Hmmm. Was Oct-14 a “ten year high”? Let’s see:

    2005 2,846
    2006 2,630
    2007 2,007
    2008 1,564
    2009 2,068
    2010 1,225
    2011 1,324
    2012 2,009
    2013 2,231
    2014 2,082

    Looks to me like 2014 was one of 4 about average years–yes, the strongest of those 4, but well behind 2013, and nowhere close to the highest in the last 10.

    http://cribchatter.com/?p=21917

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  128. This study just came out and it shows home price appreciation by area within the metro area. It uses a statistical model rather than paired sales to determine price changes. Again, the conclusion is that no area is “above peak”. We are not in a bubble and housing is generally more affordable than it was at the peak in most areas: http://price-index.housingstudies.org/

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  129. “Again, the conclusion is that no area is “above peak”.”

    If the “Lincoln Square/North Center” “submarket” were limited to just Lincoln Square and North Center, instead of going all the way north to f’ing *Howard* (which is *not* that same market, at all), I suspect that it would be clearly *over* peak, rather than statistically *at* peak.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  130. I wonder if that’s just a map problem.

    BTW, I should have pointed out that they do not provide data for the Near North Side, The Loop, or The South Loop

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  131. “BTW, I should have pointed out that they do not provide data for the Near North Side, The Loop, or The South Loop”

    Gary – any thoughts on why?

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  132. “I wonder if that’s just a map problem.”

    I don’t think so, as I think I’ve seen that ‘submarket’ map before.

    Really should separate RP/WRP/WR into a submarket, and have the other two (NC/LS & Up/Edge) reflect (mostly) the actual named areas. Would be truer ‘submarkets’.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  133. “Gary – any thoughts on why?”

    Normally you would exclude an area for lack of data but that certainly couldn’t be the case here so I’m at a loss. The only other possibility I could think of is that they felt their statistical model did not have a good fit in this area.

    VA:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  134. http://www.bloomberg.com/news/articles/2015-11-16/here-s-how-today-s-home-price-rebound-differs-from-bubble-years

    BBG doesn’t think we are in a bubble despite the cc broken record

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  135. “BBG doesn’t think we are in a bubble despite the cc broken record”

    And what was the media (and practically everyone else) thinking in 2006, 2007 and 2008? No bubble then either.

    Lol.

    Don’t even make me laugh.

    Heck- 80% of the people on this blog as late as 2009 were saying that there wasn’t a bubble in Chicago and that was AFTER it was already starting to pop.

    How about this dandy quote from the Ozarks region of Missouri. It’s in Christian County, one of the fastest growing counties in Missouri. But I doubt there are a bunch of tech jobs there.

    Good times.

    This is going to be nasty when it pops. Again.

    http://www.news-leader.com/story/news/local/christian-county/2015/11/11/building-permits-christian-county-nixa-ozark/75163264/

    Jason Massengale, a Nixa real estate agent with the Heartland team of Keller Williams, likened today’s sales to the rate during the bubble.

    “This real estate market — it’s kind of like it was in ’06,” he said, adding that he this year he has been able to list houses one day and sell some the very next day. “We haven’t moved stuff this fast since 2006.”

    VN:F [1.9.22_1171]
    Rating: -1 (from 3 votes)
  136. “Again, the conclusion is that no area is “above peak”.”

    Gary- I guess Crain’s and all the local data is “wrong.” And if that study you provided doesn’t include 3 of the key GZ neighborhoods- then what’s the point of it? It’s THOSE neighborhoods that are above peak.

    I’m literally laughing out loud.

    Why are you so desperate to show that we aren’t at peak prices when we clearly are in so many different neighborhoods? People are making money hand over fist. They are routinely selling 2/2 (not even 3/2) new construction condos in Lakeview for $600,000. That is $100,000 above the last peak price for the same product.

    Here’s what Crain’s just said when touting the announcement of a new 24-story condo tower proposal for River North:

    “After years of slowly recovering from a crash, downtown condo prices nearly reached 2008 peak levels during the first half of this year, according to a survey of downtown high-rises by Chicago-based Appraisal Research Counselors. In the River North submarket, the average $420 per square foot was 1.2 percent above peak levels, according to the survey.”

    http://www.chicagobusiness.com/realestate/20151116/CRED03/151119887/river-north-condo-tower-planned-by-chicago-based-jfj-development

    VN:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  137. I think that maybe the top 10% of the market may be at peak, not far past peak. That’s hardly “the market” and it’s not much of a bubble that’s going to come crashing down and take the whole housing market with it.

    I talk to sellers all the time (just tonight in fact) that will be selling at a loss.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  138. factual differences from before vs now

    robo signings was before vs now
    income proof verification now
    LTV much less than before
    Interest only much less than before
    etc

    VA:F [1.9.22_1171]
    Rating: 0 (from 4 votes)
  139. Article in the local news paper yesterday quoting a rolling meadows building department employee claiming that 2015 has more commercial development going on than in 2008. Granted that’s just commercial development but that makes for a hot market regardless.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  140. “what was the media (and practically everyone else) thinking in 2006, 2007 and 2008”

    I guess calling it a bubble in 2005 was too early???

    “The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops”

    http://www.economist.com/node/4079027

    VA:F [1.9.22_1171]
    Rating: +2 (from 4 votes)
  141. The prior bubble was rife with fraud, investors, and stretched borrowers. While the market can certainly seem heated I don’t think it is driven by availability of easy financing necessarily like the previous bubble.

    Mortgage quality is the highest it has been in a very long time. So other than low rates, there appears to be a legit demand for properties in many areas.

    VA:F [1.9.22_1171]
    Rating: +1 (from 5 votes)
  142. “I don’t think it is driven by availability of easy financing”

    No, but it is driven by the availability of extremely *cheap* financing.

    At 4%, every $100k amortizes are $477/mo; at 7%, it’s $665–40% more. Add in something like $300/mo per $100k of purchase price (rather than loan) for taxes/ass/util/ins/etc.

    For a (nationally) “typical” family with $75k HHI, spending 30% of gross on their housing, that’s $1,875.

    At 7% rates, that’s a $200k loan, and a $250k house.
    At 4% rates, that’s a $250k loan, and a $315k house.

    Basically same cost–but what happens if rates go up, but income growth doesn’t follow? That’s the issue.

    It is not like last time, so long as most ‘typical’ buyers are using fixed rate mortgages–they aren’t going to lose their house bc of an ARM adjustment, or the OARM amortizing or other stuff–they’d just be stuck, not fc’d.

    VA:F [1.9.22_1171]
    Rating: +3 (from 5 votes)
  143. “It’s different this time”. So say the talking heads on CNBC, Wall Street Journal, etc.

    VA:F [1.9.22_1171]
    Rating: -3 (from 5 votes)
  144. “It is not like last time, so long as most ‘typical’ buyers are using fixed rate mortgages–they aren’t going to lose their house bc of an ARM adjustment, or the OARM amortizing or other stuff–they’d just be stuck, not fc’d.”

    The studies show that the biggest predictor of foreclosure is being underwater on the mortgage combined with a ‘life event’, such as job loss, reduction in income,job loss, family discord or health problems. It’s not arms, or option arms, or IO loans that cause foreclosures.

    VA:F [1.9.22_1171]
    Rating: +1 (from 3 votes)
  145. “he biggest predictor of foreclosure is being underwater on the mortgage combined with a ‘life event’, such as job loss, reduction in income,job loss, family discord or health problems”

    Right, and so long as that doesn’t happen to 20% of mortgage borrowers all at once, there isn’t a major problem.

    Last time, you had a ton of borrowers who relied on ninjas and oarms to put off fc from life events in 03-07 (when fc rates were dropping), and then the music stopped.

    VA:F [1.9.22_1171]
    Rating: 0 (from 4 votes)
  146. “It is not like last time, so long as most ‘typical’ buyers are using fixed rate mortgages–they aren’t going to lose their house bc of an ARM adjustment, or the OARM amortizing or other stuff–they’d just be stuck, not fc’d.”

    It doesn’t have to be like last time, obviously.

    No two bubbles are alike.

    The distortions are there this time, just like last time. We’re not seeing the excesses, yet, in financing. But you can, once again, buy with just 3% down. Getting a mortgage is as easy as ever. Ask any mortgage broker. It’s a myth that it’s “hard” now. You DO have to supply more documentation, though.

    If people can’t come up with 3% to buy, then they have problems. But plenty of millenials can’t. Maybe because they are spending $3000 a month to rent an apartment. I don’t know.

    VN:F [1.9.22_1171]
    Rating: 0 (from 4 votes)
  147. “The prior bubble was rife with fraud, investors, and stretched borrowers. While the market can certainly seem heated I don’t think it is driven by availability of easy financing necessarily like the previous bubble.”

    As I’ve said- no two bubbles are the same. Why would they be?

    But nothing about housing costs makes sense when you look at incomes. The head of the Swedish Central Bank just warned that their housing market is a danger to the financial health of the country because if it blows up, look out. People have too much debt. Of course, he keeps rates near record lows anyway and says it’s up to the politicians to figure a way out of the housing dilemma.

    That’s what’s weird this time around. Nearly every country is in the same position because central bankers have lowered rates worldwide and pushed up asset prices worldwide. So there is a housing bubble in Vancouver, Toronto, London, Berlin, Sydney, New York etc. all at the same time.

    But it’s starting to show its cracks. In California, sales are falling again. Prices can only go to absurd levels for so long. In Australia, prices are dropping rapidly in the mining cities like Perth. But thanks to fewer Chinese investors, they are starting to fall in Sydney and Melbourne too.

    Where’s the demand in Chicago? If it was truly there the developers would stop putting up apartment buildings and would be building 7,000 condos. But they’re not. They’re not even building townhomes, single family homes or any of it in the Chicago area. It’s among the lowest number for new construction builds in the Chicago area in the last decade.

    In the last month, there have actually been a few new condo building announcements. They’re all at the luxury price points though. And it will add like 250 units to the pipeline.

    Where are the apartment conversions? We haven’t seen those yet. That would normally be the next step. That’s what happened in 2000-2002.

    VN:F [1.9.22_1171]
    Rating: -1 (from 3 votes)
  148. “I guess calling it a bubble in 2005 was too early???”

    I can go around and find articles from 2004 too. It was all bubble denial even though it was staring everyone in the face. As I said- even on this blog which was started in late 2007, there was denial from dozens of posters that prices could EVER go down in Chicago. Remember Steve Heitman’s complete denial for all of 2009 that prices were dropping in “special” Lincoln Park?

    If you called it a bubble in 2005, 2006, 2007, or even 2008, you were basically mocked.

    Go see the Big Short movie when it comes out this winter. Better yet, read the book. Out of all the brilliant minds out there were only a handful who actually made a bet and won. And they were mocked by everyone else for betting that there was a bubble and it would burst.

    I get it that it’s human nature to think the conditions will continue forever. Every landlord thinks rents won’t drop because they’ve been going up so dramatically for the last 4 years. And every homebuyer believes that housing prices will continue to go up 10% a year, once again, for the next decade.

    My favorite article from the first bubble era was this one about South Florida.

    anon(tfo)- if you think everyone wasn’t drinking the Kool-Aid, please go remind yourself. It’s easy to forget what was really happening. After all, it was 10 years ago now.

    “Premonitions of a bubble on the verge of popping do not ruffle those who are bullish on real estate. In Miami, Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, predicted that a limited supply of land coupled with demand from baby boomers and foreigners would prolong the boom indefinitely.

    “South Florida,” he said, “is working off of a totally new economic model than any of us have ever experienced in the past.””

    Lol.

    Nothing has changed. People are still in denial.

    And the Fed has allowed it all to happen.

    http://www.nytimes.com/2005/03/25/business/trading-places-real-estate-instead-of-dotcoms.html?_r=0

    VN:F [1.9.22_1171]
    Rating: -1 (from 3 votes)
  149. “factual differences from before vs now”

    No two bubbles are the same.

    I will say it again and again.

    No two bubbles are the same. No two bubbles are the same. No two bubbles are the same.

    Do you get it yet?

    No two bubbles are the same.

    VN:F [1.9.22_1171]
    Rating: -2 (from 4 votes)
  150. Thanks to the Fed, there is excess money in the system. Does everyone forget? The Fed has TRILLIONS on its balance sheet.

    Surprise!

    It’s distorting the economy. Add to that everything the other central banks are doing- and the result is that all asset classes are at record highs.

    Art? Check.
    Housing? Check.
    Collectibles- including baseball cards and classic autos? Check.
    Stocks? Check.
    Bonds? Check.

    The only thing that isn’t at record highs is commodities. And that’s because the Chinese economy is in a freefall.

    Tell me how this is normal? It’s not.

    Tell me how it will all end?

    Badly.

    VN:F [1.9.22_1171]
    Rating: -1 (from 5 votes)
  151. By the way- you don’t need foreclosures to have the housing market collapse again. All you need is falling prices. People are putting just 3% down. They’re guaranteed to be underwater immediately. And then what happens when they want to sell that loft just 3 years later?

    Whoops! They can’t.

    VN:F [1.9.22_1171]
    Rating: -1 (from 5 votes)
  152. I’d like to know what percent of the volume is 3% down. I rarely see them but then again by clientele skews higher net worth.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  153. From August: “Despite being introduced to the market with great fanfare, Fannie Mae’s 3% down payment mortgage offering has yet to gain much traction with lenders and consumers.

    Fannie Mae acquired 9,000 mortgages with loan-to-value ratios between 95.01% to 97% from 600 lenders during the first half of 2015, representing less than 1% of all loans Fannie purchased during that period, according to regulatory filings.”

    http://www.nationalmortgagenews.com/news/secondary/why-fannies-3-percent-down-payment-mortgages-have-been-slow-to-take-off-1058126-1.html

    VA:F [1.9.22_1171]
    Rating: +2 (from 4 votes)
  154. “People are putting just 3% down.” “Whoops!”

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  155. “That’s what’s weird this time around. Nearly every country is in the same position because central bankers have lowered rates worldwide and pushed up asset prices worldwide”

    How is that “weird”? It’s basically exactly what happened last time, too:

    “The global boom in house prices has been driven by two common factors: historically low interest rates have encouraged home buyers to borrow more money; and households have lost faith in equities after stockmarkets plunged, making property look attractive.”

    http://www.economist.com/node/4079027

    Again, that was in **JUNE 2005**.

    VA:F [1.9.22_1171]
    Rating: +2 (from 4 votes)
  156. “And then what happens when they want to sell that loft just 3 years later?”

    Even at just 3% down, after 3 years, unless it’s an interest-only, don’t you think they will have paid down enough to (almost) cover closing costs, and thus sell and get back their (whopping 3%) down? After enjoying 3 years of handy tax deductions?

    VA:F [1.9.22_1171]
    Rating: +1 (from 3 votes)
  157. Looks like no one has ever heard of the natural rate of interest, inflation, rent to buy ratios, or mortgage-debt to income ratios.

    For those of you who aren’t frenzied and irrational:
    http://www.frbsf.org/economic-research/publications/economic-letter/2015/november/what-is-different-about-latest-housing-boom-mortgage-debt-ratio/

    “No two bubbles are the same.”

    One is, like, all inflated and translucent, and the other is, like, hard and opaque, but it’s weird because they’re, like, both bubbles, you know?

    People are taking on less debt to buy fundamentally stronger assets, but since the debt is also less expensive, it must be weird and crazy, right?

    VA:F [1.9.22_1171]
    Rating: -1 (from 3 votes)
  158. By what metric do we measure house affordability? In the end it all comes down to income to expense ratio does it not? We all pay our grocery, gas and housing expense based on that metric alone.

    By that measure home prices have gone back to peak levels and housing costs are eating up a greater chunk of our paychecks. It seems that we are all house horny again and have not learned from the last bust. How many of you are actually spending 25% to 30% of your net income on housing?

    VA:F [1.9.22_1171]
    Rating: 0 (from 4 votes)
  159. I spend less than 20% of income on my home.

    VA:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  160. If you have two equal groups of people: one making $100K/ year and another making $50K and the $50K group rents and the $100K group purchases at 20% of their income it will look like housing is 30% of people’s income.

    VA:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  161. There is literally a link right there, next to your comment nimesh, that says mortgage debt to income ratios are much much healthier than in 2006. Which is the exact opposite of what you’re saying as if it’s factual.

    And if anyone trires to argue that there is a rent “bubble” and it is the same as a housing “bubble,” I swear to god, I’ll have a heart attack.

    VA:F [1.9.22_1171]
    Rating: 0 (from 6 votes)
  162. I’ve read all the comments here and I’ve weighed the issues. I’ve looked at all the facts and analyzed all evidence in a rational and calculated manner.

    I have determined that there is no real estate bubble. Everything is OK, there’s nothing to see here, just move along folks. we should just stop talking about this because everything is Just Fine, there is no Bubble, hard or soft, and everyone who buys a home today can afford it.

    http://www.ritholtz.com/blog/2006/11/1927-1933-chart-of-pompous-prognosticators/

    VA:F [1.9.22_1171]
    Rating: 0 (from 2 votes)
  163. “And if anyone trires to argue that there is a rent “bubble” and it is the same as a housing “bubble,” I swear to god, I’ll have a heart attack.”

    I’ve got one for you.

    The BLS uses ‘homeowners imputed rent’ to determine inflation; and according to that figure, there’s no bubble because inflation has been flat!

    Quick, go take an aspirin!

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  164. I love it that everyone here is in denial that we are in another housing bubble, just different.

    Because that means we’re actually IN one.

    It’s going to be real interesting to see what the Fed does as it keeps raising rates (if it does.) How will this housing market support even 5% rates? We saw in 2014 what happened and we didn’t even get rates over 5%.

    OMG- those $600,000 2/2s they’re building all over lakeview right now. Who is buying one of those with higher rates?

    VN:F [1.9.22_1171]
    Rating: -1 (from 3 votes)
  165. Even at just 3% down, after 3 years, unless it’s an interest-only, don’t you think they will have paid down enough to (almost) cover closing costs, and thus sell and get back their (whopping 3%) down? After enjoying 3 years of handy tax deductions?

    You’re paying down $15,000 on a $300,000 in 3 years? On what planet????

    And that mortgage deduction might not even be taken if it’s a married couple filing jointly. They wouldn’t be over the married exemption limit.

    anonny: not everyone buys $700,000 properties like you do. The mortgage deduction is actually very limited. According to the most recent data, only half of homeowners bother to itemize to get it because they don’t qualify.

    And when you do get it, it’s just 30 cents on the dollar.

    Gosh. It was SO much better for them to have bought that $300,000 condo over the last 3 years. Yep. So much better.

    Get a clue.

    VN:F [1.9.22_1171]
    Rating: -1 (from 3 votes)
  166. “How is that “weird”? It’s basically exactly what happened last time, too:”

    Were Central Banks at their lowest rates ever 10 years ago? Were they doing QE? Were they pumping trillions into the system with bond buying?

    No. No. No.

    BUT- in the US, I do agree that it was the Fed’s policy of loosened money that pumped trillions in the economy and allowed the housing bubble to expand. Go check out mortgage and auto debt growth from 1992 to 2008. It was insane how much money was pumped into the economy through debt.

    That has not changed. Just how they’re going about it has changed. It’s actually more dangerous this time around.

    We’re all floating on air. And it is fake and false.

    VN:F [1.9.22_1171]
    Rating: 0 (from 2 votes)
  167. “From August: “Despite being introduced to the market with great fanfare, Fannie Mae’s 3% down payment mortgage offering has yet to gain much traction with lenders and consumers.”

    We don’t need this. They’ve been doing 3% down for the last 3 years through FHA, Veteran’s and just about every other form of lending.

    In fact, the government has, just in the last 6 months, again loosened restrictions on lending. Because, you know, that’s what’s holding back this housing market from really taking off. It’s just too hard to get a loan.

    Lol.

    Don’t even make me laugh.

    Remember how after the bust everyone said we’d go back to 20% downpayments to make the system safe?

    There are NO safeguards if there is another decline in prices. None.

    And, again, I say- what will that person who just bought that loft, has lived there for 3 years, do when prices reverse?

    Whoops. Not thinking it could happen AGAIN, right? Even though it just happened 8 years ago.

    We couldn’t see price declines twice in a decade in the United States, could we???

    We will see.

    VN:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  168. This is a good article explaining who gets to actually take the mortgage deduction.

    If you’re a single filer making $80,000 and you’ve bought that $270,000 or $300,000 loft, odds are you might not even be taking the deduction.

    According to recent data only 24.7% of homeowners making under $100k in Chicago took the deduction. If you made over $100,000, 78% did. That still leaves 22% of those making over $100,000 who didn’t bother with the deduction.

    http://www.nationalaffairs.com/publications/detail/rethinking-tax-benefits-for-home-owners

    VN:F [1.9.22_1171]
    Rating: 0 (from 2 votes)
  169. “Whoops. Not thinking it could happen AGAIN, right? Even though it just happened 8 years ago.”

    I’m confused. Are you bullish or bearish on housing now? A month ago you were a raging bull.

    VA:F [1.9.22_1171]
    Rating: -2 (from 2 votes)
  170. “I’m confused. Are you bullish or bearish on housing now? A month ago you were a raging bull.”

    I’m a huge bull. The market is soaring. There are bidding wars everywhere. There is not enough inventory and too much demand.

    We are Bubble 2.0 and I get to document it.

    When will it end? Most likely with the next recession, but who knows?

    This time we also have the added bonus of a rental bubble. Rents up over 30% in just the last 3 years. Yeah- that’s completely normal for Chicago.

    We already know that the current absorption rates won’t absorb all of the new construction downtown. So then what? Supply will exceed demand which should mean prices will fall in the rental market. Will we get a rental crash? That bubble will be interesting to watch as well.

    If you like bubbles, it doesn’t get any better than right now. Housing, bond, art, and even collectibles are bubblicious.

    VN:F [1.9.22_1171]
    Rating: 0 (from 2 votes)
  171. Now here is data that looks totally different from the story I linked to above. It says that a ton of people are putting very little down.

    http://www.dsnews.com/news/11-20-2015/why-are-agency-purchase-loans-becoming-even-riskier

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  172. “You’re paying down $15,000 on a $300,000 in 3 years? On what planet????”

    The planet where people aren’t innumerate???

    Here’s the first 5 years of an Am schedule on a 4% 30-year mortgage:

    1 $300,000.00 $11,903.83 $5,283.17 $294,716.89
    2 $294,716.89 $11,688.61 $5,498.39 $289,218.54
    3 $289,218.54 $11,464.60 $5,722.40 $283,496.18
    4 $283,496.18 $11,231.44 $5,955.56 $277,540.68
    5 $277,540.68 $10,988.83 $6,198.17 $271,342.54

    The columns are beginning principal, annual interest, annual principal and end of year principal.

    So, *shocker!!!*, in three years on $300k, you actually pay down not $15,000, but $16,000.

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  173. Monday, November 16, 2015 03:29PM
    Americans owe more on their cars than ever.

    U.S. car buyers are $1 trillion dollars in debt on car purchases.

    VA:F [1.9.22_1171]
    Rating: 0 (from 4 votes)
  174. People, as a whole, are taking on far less debt compared to their income. People, as a whole, are not anywhere a close to their maximum leverage capacity.

    Home-values are much, much lower in relation to rent-prices.

    Less toxic-asset bundles are being created. There are far fewer buyers for toxic-asset bundles. Hence, intra-market contamination is unlikely to contribute to a similar death-spiral.

    What else is there to talk about?

    Re. absorption rate and apartment construction: Decelerating price increases due to additional supply is not a bubble, it’s the healthy operation of a market.

    All I see here are personal reactions to sales numbers.

    VA:F [1.9.22_1171]
    Rating: +2 (from 4 votes)
  175. “When will it end? Most likely with the next recession, but who knows?”

    When do you think that will be?

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  176. Recession is something I can feel intuitively, like a 3rd sense I have. I monitor this stuff daily and I think we’re still at least a year or two away at least from a recession. It won’t be a like a crash, but more of a slow/long recession. We’ve learned too many lessons from the GFC of 2008 to repeat that debacle, but the world economy is having new problems instead; specifically:

    The debt in the world is still out there, it never really went away during the GGC, and in fact, it’s been growing, and while DTI levels might be ‘manageable’ for households, that’s like saying “I’m only in debt up to my neck and not my eyeballs”. All it takes is a reduction in income, a round of lay offs, for the defaults to occur; and then other households tighten their belt for a few years and the effects are felt from everything from new home purchases, to retail, to consumer staples, to new debt borrowings…..

    Even corporations are having problems. We hear about all the cash companies are sitting on, but it’s only a handful of companies that hold all that cash, and it’s held overseas anyways.

    VA:F [1.9.22_1171]
    Rating: +1 (from 5 votes)
  177. Furthermore, the world economy is having problems too, and the world economy is more connected today than ever before. I think everyone in the know assumes that China is finally slowing down despite what official stats are released; and the housing/investment/building spree is ending quite rapidly, and a lot of that wealth is fleeing into housing and investments overseas, obscuring the slowdown in other economies.

    There’s an article today that says the European recessions is more or less ‘permanent’, google it to find it. They have a 10% unemployment rate in the eurozone, which is ridiculously high.

    There’s no reason to expect that america will stand alone, with it’s trillion dollars in student loan debt, 44% of all borrowers being in default, IBR, forbearance, or deferment, and it’s trillion dollars in vehicle loans spread of 7 year plans now.

    I see tons of people up to their necks in debt, households earning above median incomes too, paying the minimum amount, incomes flat but debt is accruing interest. There’s nothing these people can do except for, as Modest Mouse sings so eloquently, ‘Float On’.

    VA:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  178. “Recession is something I can feel intuitively, like a 3rd sense I have.”

    That deaf, dumb and blind kid sure plays a mean economic-forecast-ball??

    VA:F [1.9.22_1171]
    Rating: +3 (from 3 votes)
  179. “That deaf, dumb and blind kid sure plays a mean economic-forecast-ball??

    I’m more an like an old school oracle, actually. I inhale a few poppers of amyl nitrate and just get right into it. These visions of economic forecasting come to me in a state of altered but vivid lucidity.

    VA:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  180. “I inhale a few poppers of amyl nitrate and just get right into it.”

    Ummm…..

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)
  181. OT: I read on Crain’s that now it’s Fulton Market that is attracting the “on trend” retailers, maybe not so much Bucktown. I love when Chicago tries to act like NY, but sorry, there isn’t enough foot traffic on Damen or Fulton for this stuff and to cover the $60 psf rents or whatever.

    VA:F [1.9.22_1171]
    Rating: -2 (from 6 votes)
  182. “I love when Chicago tries to act like NY, but sorry, there isn’t enough foot traffic on Damen or Fulton for this stuff and to cover the $60 psf rents or whatever.”

    On Damen? You’re kidding me, right? Thousands of people take the Blue line from that stop and walk right up the street every day.

    There’s a reason Marc Jacobs had a store on Damen in Bucktown for years. I see it just closed 2 weeks ago after 7 years on the street. Quite a run. Many of the big name retailers are there now.

    VN:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  183. “Recession is something I can feel intuitively, like a 3rd sense I have. I monitor this stuff daily and I think we’re still at least a year or two away at least from a recession. It won’t be a like a crash, but more of a slow/long recession.”

    Does anyone here actually know what a recession actually is? It’s not a “slow/long” thing. It’s negative GDP. The US economy, even during the darkest times of the Great Recession, didn’t have a “slow/long” recession. It was the longest since 1940 and it was 1 year and 6 months. That is it. The two longest recessions before that one were in 1981-1982 and 1973-75. Both were 16 months. The average is 10 months.

    VN:F [1.9.22_1171]
    Rating: -1 (from 1 vote)
  184. “When do you think that will be?”

    Average expansion is just 57 months but we are well past that. So who knows?

    VN:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  185. Europe has had 10% unemployment for like 30 years. It’s a an economic structural issue. It’s a choice they have made.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  186. recessions are defined by two quarters of negative growth, but even in some circles that definition is outdated. after the negative growth there’s often years of no or slow growth. and this particular last recession all of the growth and income gains were concentrated in a small minority of companies and people.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  187. Has to be a bubble bc this place, which has the shittiest front of any house I remem looking at, sold. I was sure it had to go sub $1mm.

    https://www.redfin.com/IL/Chicago/4448-N-California-Ave-60625/home/13489087

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  188. To be clear, that photo is about the best it can look. At one point they were listing it with a nighttime front photo to hide it.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  189. “shittiest front of any house I remem looking at”

    you haven’t seen many shitty fronts but, yes, this is not great.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  190. “you haven’t seen many shitty fronts but, yes, this is not great.”

    on any house I’ve looked at == any livable $800k+ sfh.

    so yeah, not really low priced and not tear downs.

    you really have to look at it in person to appreciate how bad it is. and, compounding matters, am pretty sure this was a reno w “reclaimed” brick of a prior red brick facade taht I’m sure was not great but could not have been this bad.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)
  191. “in some circles that definition is outdated”

    In some circles, the world is flat. In some circles, women are chattel. In some circles, you are an infidel.

    VA:F [1.9.22_1171]
    Rating: 0 (from 0 votes)

Leave a Reply