A 1888 Queen Anne in the Heart of Andersonville: 1450 W. Summerdale
This 4-bedroom Queen Anne at 1450 W. Summerdale is just a few steps away from the restaurants and shops of Andersonville.
Built in 1888, the listing says it is a “breathtaking restoration” of the home.
Most of the original features have been preserved including the grand staircase, the wood moldings, and the jewel toned leaded glass.
The attic has been converted to an artist studio, complete with its own bath.
The listing also says the bathrooms are new and have been designed to blend in seemlessly with the vintage character.
There is nothing in the listing about the kitchen and no photographs.
The house is on a coveted double lot measuring 50×125.
It has a 2-car garage and central air.
Susan Lawrence at @Properties has the listing. See more pictures here.
- Sold in August 1988 for $275,000
- Sold in November 1992 for ??? (could be $565,000– there’s a typo in the public records)
- Sold in February 2001 for $710,000
- Originally listed in May 2010 for $939,000
- Reduced
- Currently listed for $925,000
- Taxes of $8551
- Central Air
- Bedroom #1: 14×13 (second floor)
- Bedroom #2: 12×10 (second floor)
- Bedroom #3: 11×8 (second floor)
- Bedroom #4: 29×23 (third floor)
whew. that’s a real beaut. no idea if the market will bear the price, but it seems like a much better deal than some of the other recent approaching-6 figure homes.
whew. that’s a real beaut. no idea if the market will bear the price, but it seems like a much better deal than some of the other recent approaching-7 figure homes.
argh, sorry for the typo. this site would really benefit from an edit function.
1988 price says it all. What fundamentally happened between 1988 & 2001? Bunch of alt-lifestyle people moved in and it suddenly gentrified beyond belief? I am skeptical.
I am super curious to know how it was financed back in February 2001. Not as much funny money loans going around back then so I am curious.
The kitchen is covered in the 360 degree Virtual Tour. Could use some work but looks like it would be pretty easy to update.
Agree that this looks pretty reasonably priced for what and where it is. Nice place.
“What fundamentally happened between 1988 & 2001?”
Bob – it’s called “appreciation”. It actually happened all over the country during this period.
“Bob – it’s called “appreciation”. It actually happened all over the country during this period.”
Okay but did incomes go up 158%? That’s 8%/year. That would be some crazy salary raises. Oh wait..salaries didn’t go up 8%/year?
Its called an insane asset bubble where prices got bid up not in relation to any fundamentals but rather on the expectation of future appreciation.
“Okay but did incomes go up 158%”
Mine did… Again, Bobby, I understand your point – but maybe that is when the owners did some updating, etc. At any rate, it isn’t really important in today’s pricing…. that was my underlying point.
“Okay but did incomes go up 158%? That’s 8%/year. That would be some crazy salary raises. Oh wait..salaries didn’t go up 8%/year?”
There was also a *little* shift in the type of person who would consider buying in the ‘hood.
And, the ’88 sale was from an estate, so I’d imagine it was in somewhat similar condition to the Pensacola house. 1992 at $565k was a more fmv for the place. The 92-01 appreciation brought forward to 01-10 marks it at just under $900k.
clio- Lets remove the government life support from the housing market and see what this thing sells at.
My guess is this is at most a 550k property sans FHA, Fannie, Freddie and the various other government programs to try to get people to overpay for housing.
“Mine did”
Dude, if you are who you say you are, I certainly hope that your income went up by more than 158% b/t 1988 and 2001. Mine went up by over 2000%!
“My guess is this is at most a 550k property ”
Funny stuff!
“What fundamentally happened between 1988 & 2001?”
Perhaps this could shed some light.
http://www.foodtimeline.org/foodfaq5.html#candybar
the cost of a hershey candy bar in 1986 was
[1986] 1.65 oz…..40 cents
in 2010 was
[2010] .95
1.55 oz., Acme supermarket, Randolph NJ
same candy bar even a little smaller….
“What fundamentally happened between 1988 & 2001?”
The owners did some updating, restoring and upgrading, and there was some appreciation.
Then the bubble hit and the gradual appreciation spiked so astronomically we cannot tell what would have been a reasonable price for this house.
“Then the bubble hit and the gradual appreciation spiked so astronomically we cannot tell what would have been a reasonable price for this house.”
The 92-01 appreciation rate was 2.57% per year. CPI-inflation from 92-01 would have the $565k become $713,200; bring that forward to 2010, it’s $877,950. 1992 was a trough in Chicago home values (which doesn’t mean that $565k was the “right” price) so it’s a reasonable starting point for comparison.
The two lots–assuming they could be subdivided–could sell for $250k each with no problem *right now*, which is what makes Bob’s estimate soo funny.
I think this is a $700 or $800k home – too bad the mortgage market in that price range is so difficult. Sort of a no man’s land. There’s a lot of price competition for very nice homes. Not many people got $140k or $160k as a down payment especially in this economy. Maybe a few years ago when people had equity in their homes but in today’s market that’s tough. Beautiful home though, it’s a lot of work to redo that wood molding and strip years of paint (Assuming the current owner did the work himself or hired someone to do it).
I’m normally roughly in sync with Bob as far as bubble asset skepticism, but in this case I think the rather large game-changing factor is that Andersonville really has undergone a substantial improvement in the past 15 years, whereas neighborhoods like LP and LV continued to skyrocket long after there they were “done” as far as gentrification.
By this I mean, people often forget this not-too-subtle distinction in the real estate game. Yes, if you get in a neighborhood well ahead of the curve you may see some big return on your investment – this is due to the risk. But you weren’t a pioneer taking any risk buying in LP in 1995. You were in Andersonville.
“Not many people got $140k or $160k as a down payment especially in this economy.”
oh, come on now. my wife and I are hardly big movers and shakers in a financial sense, and if we sold after 8+ years of ownership we’d easily have $150K to bring to the table to buy a new place.
now granted, we paid extra to bring down the principal until we had a kid, and we’ve done a lot of improvements – but I know loads of gen xers who have done the same.
I’ve cruised by this place a couple times and gawked, but never bothered to look at the listing.
My biggest shock is the layout isn’t nearly as bad as the average queen ann– the bedrooms are workable, no super tiny rooms.
I have to believe that master bath is killing sales though (tiny, one sink, no tub). Combined with the fact that a second bedroom, NOT the master is the one with the 14×13 office suite, I have to believe floorplan has been turning off some buyers.
But it always does with queen ann’s. . . And very few of them the usable space (and 3rd floor suite) that this one does. Not to mention the double lot.
Ok I have to stop looking at that lattice work in the arch over the entry way or I’m gonna get mean, from jealousy.
Although this place is beautiful and may be worth near the asking price, I would be skeptical, cautious, and scared about spending this type of money in this particular neighborhood at the current time. I feel bad for the owners – but hopefully someone who loves this particular neighborhood will fall in love with the house and buy it.
“spending this type of money in this particular neighborhood”
You feel basically that way about every place in Chicago not east of Halsted and north of the river. And some places within that small band.
This seems like a $750,000 house, but no more. Seems that “nice” Chicago neighborhoods’ single-family houses are priced at $750,000+ minimum, which out-prices significant majority of Chicago’s white-collar professional households. Not everyone can afford a million dollar house, and not everyone should aspire to do so. I’m struck by large number of “nice but not spectacular” high-priced houses for sale in “nice” neighborhoods. Wherever, whenever, whoever, that high-end market simply can’t absorb all this aspiring “high-end” housing product.
I read yesterday that half of Chicago’s population is on some form of public dole. The median income supports purchase of a $250,000 house, maybe.
Yes, I know there are some $625,000+ houses out there too, but they tend to be versions of conversions of small vintage worker-cottages, with two-bedrms, or tiny bedrms, or sloped roof bedrms.
Where’s the $150,000 to $200,000/annual income financially-conservative household w/school-age kids supposed to live – in a two bedrm/two bath condo? In Forest Glen? West Ridge and North Park neighborhoods are hardly attractive alternates for that kind of household. (And Beverly’s listing count suggests “white flight” has re-ignited.)
anon,
no, my point is that there are some established neighborhoods of Chicago that have maintained their prices better than others. These tried and true neighborhoods are where people should be looking to buy (if they HAVE to buy now and are flexible about neighborhoods). I am sure this neighborhood is good and will be fine – but, in these times, wouldn’t it be more reassuring to have a proven history on your side?
I think it’s a beautiful house and great space/yard. However it may be hard for a house on this side of Glenwood to compete with Lakewood/Balmoral places. There are lots (mostly?) rentals between Clark and Glenwood, and some of them are rather low-budget.
“there are some established neighborhoods of Chicago that have maintained their prices better than others”
Name me one area you consider in this group that is west of Halsted or south of the river.
anon- none that I know of – what is your point?
Roma is right. This place is beautiful, but surrounded by rentals.
A similar house (vintage, quality, lot, etc.) just went under contract a few blocks over on Lakewood. Was listed in the mid 900’s. Another, that doesn’t look nearly as nice, recently closed on Lakewood at $835k. Several homes over in that area have moved north of $800k in the last few months. It’s only a few blocks but it makes a big difference. Still, I’d be surprised if this doesn’t sell in the high $800’s.
“This seems like a $750,000 house, but no more. Seems that “nice” Chicago neighborhoods’ single-family houses are priced at $750,000+ minimum, which out-prices significant majority of Chicago’s white-collar professional households.”
Extra lot is worth ~$250k. This is priced as a $700k house with an extra lot for $225k.
“I read yesterday that half of Chicago’s population is on some form of public dole. The median income supports purchase of a $250,000 house, maybe.”
And the median Chicagoan is not a homeowner. Over 50% of Chicagoans are renters. Argue that this is not sustainable and QoL in the city will decline b/c of it, but saying that SFHs in the nicest 25% of the city (ie, probably in the most expensive 5% of city owner-occupied residential units) are not affordable to the median city resident is meaningless.
nice house on a double lot I like it and the restoration looks pretty nice.
Sorry HD but people that can actually afford a million dollar house (not that I think this is a $1mm house) easily will have 140-160k in the bank for a down payment… remember, no more poseur wealth is around and “trading up your house” is a thing of the past?
Don’t count your chickens before the eggs are hatched. We are again returning to the slowest real estate market in a generation (or two or three). If this were appropriately priced it wouldn’t be languishing since May. This house is clearly intended to be the professor’s retirement nest egg and the monthly nut on a $568,000 mortgage is more akin to flushing his retirement savings down the toilet.
“#skeptic on September 8th, 2010 at 11:18 am
“Not many people got $140k or $160k as a down payment especially in this economy.”
oh, come on now. my wife and I are hardly big movers and shakers in a financial sense, and if we sold after 8+ years of ownership we’d easily have $150K to bring to the table to buy a new place.
now granted, we paid extra to bring down the principal until we had a kid, and we’ve done a lot of improvements – but I know loads of gen xers who have done the same.”
“anon- none that I know of – what is your point?”
I’m sure your reading comp isn’t that bad.
In case it is, my point: Every place west of Halsted is “scary” to clio.
“I think it’s a beautiful house and great space/yard. However it may be hard for a house on this side of Glenwood to compete with Lakewood/Balmoral places. There are lots (mostly?) rentals between Clark and Glenwood, and some of them are rather low-budget.”
That’s my thought too. I don’t know if some would prefer proximity to Clark (easy takeout from great lake!) but Magnolia and Lakewood seem much nicer for a SFH. I think there have been nice but not over the top houses in Lakewood Balmoral, with some period details, with niceish finishes, that have sold in the $800-900K range. This has a wide lot (although lots in Lakewood Balmoral are often 30-40 feet), prob more vintage details, but less nice street and issues with bathroom/kitchen.
Clio, have you ever actually been to the Lakewood Balmoral neighborhood? I’m not sure how you can say it isn’t “established.”
“This house is clearly intended to be the professor’s retirement nest egg”
Doesn’t look like he’s retiring; indeed, it looks like he got a *large* pay raise. And will probably be buying a more expensive place in his new city.
“My guess is this is at most a 550k property ”
“Funny stuff!”
More funnier than them actually thinking its going to sell for near ask +/- 10%? I don’t know competition in this neighborhood but I know its far from downtown and you can get comparable SFHs much closer to downtown for less.
You can get a SFH in a nice area on the near north side these days for 650k.
The transactions that will occur in the market won’t be wishful owners like this one. They will the much better priced competition properties.
“You can get a SFH in a nice area on the near north side these days for 650k.”
I’m from Missouri. Show me.
And make sure it’s on a double lot.
“I don’t know competition in this neighborhood but I know its far from downtown and you can get comparable SFHs much closer to downtown for less.
You can get a SFH in a nice area on the near north side these days for 650k.”
Ok, I’ll bite. Where can you get something that is close in house size, lot size on the “near north side”?
Been away for a while. Forgot the standard cribchatter comment:
I don’t know the neighborhood. I don’t know what I’m talking about at all. But here’s why this property is overpriced by 90%: _____insert comment re: how everybody must like what I like, how nobody can afford something if I can’t afford it, etc., etc. _______.
Is this in Peirce elementary? Anyone with familiarity with the school? I think I’ve heard semi ok things about it. (I’ve probably asked this question before.)
Forgot: allude to phantom comps.
Yes Bob. I too eagerly await you finding a nice house on a double lot on the near north side for $650k. And it can’t to be on the near north side of Toledo.
Slightly off topic but same general subject of renovated homes (and to an earlier point is east of halsted / north of the river), do people have opinions on 706 W. Roscoe @ $1.575mm?
http://www.coldwellbankeronline.com/Property/PropertyDetails.aspx?PropertyID=1518296&WT.MC_ID=021810000000000
Seems like a quality renovation but not sure about the price in this location.
Sorry – don’t mean to offend anyone. I am sure these neighborhoods are beautiful and probably just as nice (if not nicer) than the G.C., L.P, etc. – my comments were from a financial standpoint. I still think it is a safer financial decision to buy in the Gold Coast/ L.P. area – but as I have said before, money isn’t everything.
“Been away for a while. Forgot the standard cribchatter comment: ”
Which is exactly why the housing market is at a standstill. Multi-decade lows with regard to volume. Whoyagonna believe? CCers lyin’ mouths or what level of activity you think the market SHOULD be showing?
No more welfare handouts to over-leveraged newer owners minted in 2000-2009 in the form of tax credits. But the Fed is sure gonna try to goose more demand by buying up MBS to the tune of another trillion.
The best analogy I can use for what is going to happen to the US housing market once we have congressional gridlock (no more welfare, crackies) is a 21yr old Mike Tyson is entering the ring.
“but, in these times, wouldn’t it be more reassuring to have a proven history on your side?”
Ask Englewood residents from the 1940’s about “proven history”.
“I still think it is a safer financial decision to buy in the Gold Coast/ L.P. area ”
Yes but clio remember they feel entitled to GC/LP valuations because to someone from the burbs or out of town its still _in_ Chicago.
I find it funny whenever anon(tfo) pulls his land valuation comps out of his arse using logic such as: well if a lot in neighborhood X is worth Y then a lot in neighborhood Z should be worth Y-10% or other such nonsense. NOPE.
If i wanted/need to live in this area and had the money i would pay 875k for this without a sliver of remorse (ok maybe 850k 25k reduction for having to redo the landscaping to my liking and changing that green and poop exterior color).
vintage details, shyte details in general, like this are hard to come by and to own such artistry would bring levels of pride to ones self. and better paint color could accent these details even more.
the place is even more sweet azz because it has C/A in a queen, plus the double lot for even more light and fresh air makes it even more of a “want” home.
“land valuation comps out of his arse”
Better than just saying “there’s no way *I* would pay that, so it can’t be worth that much”.
re 706 Melrose:
I’d like to see a floorplan, because (and this comes from someone living w/ a weird layout) the layout seems weird. Nice 1.5 lot, tho. Don’t know if I’d go with a driveway while I also have alley access. Don’t love this stretch of Roscoe–lotsa rentals/condos.
“changing that green and poop exterior color”
It’s “classic”. Lots of folks like only using paint colors available when the house was first built. This looks like one of them.
I don’t like it much, either, but don’t hate it like you do.
re:706 Roscoe
I never understood why anyone would want to pay so much to live in this neighborhood. It is a very very young aged neighborhood (with many 20 year olds renting) and on the weekends, the bars/restarants in the area seem to cater to a very specific low brow crowd. I can’t imagine it would be fun to pay 1.5 million for a place and wake up everyday to find vomit/feces/uring all over your yard/porch/walkway (or worse, people having sex/making out, etc.).
“or worse, people having sex/making out”
This is worse? Nothing much to clean up. Doesn’t leave a foul odor on concrete. Can videotape and post on the web. Seems much better than vomit/feces/urine.
“I never understood why anyone would want to pay so much to live in this neighborhood. It is a very very young aged neighborhood (with many 20 year olds renting) and on the weekends, the bars/restarants in the area seem to cater to a very specific low brow crowd. I can’t imagine it would be fun to pay 1.5 million for a place and wake up everyday to find vomit/feces/uring all over your yard/porch/walkway (or worse, people having sex/making out, etc.).”
This from the guy who owns a place like three blocks away in a much more party-centric immediate neighborhood?
East Lakeview off Broadway doesn’t really attract the college student atmosphere you’re talking about.
anon(tfo): ooops. the next google entry shows a large pay raise. you’re probably right.
Regardless, this is not a $900k house or even an $800k house. It’s probably a $700k house, maybe even a $600k house given the large down payment needed to purchase it.
The market is crashing, it’s game over, architect is right. The nice houses in nice neighborhoods are priced too high for a majority of the professional class.
“It’s “classic”. ”
good call on that one! didnt see it that way, but i still would change it if i owned it and would ask a discount to cover my preference for changing it.
“Regardless, this is not a $900k house or even an $800k house. It’s probably a $700k house, maybe even a $600k house given the large down payment needed to purchase it. ”
So, it was overpriced in ’92? If this, with a double lot, isn’t “worth” more than $700k, many, many, many condos (in *prime* locations) are overvalued by 3x or more.
HD,
really? i dont see a similar condition rehab queen with a decent floor plan and oh wait a double lot in the close area.
you dont think those attributes/uniqueness qualify it for a higher price (premium) than the other housing stock in the area?
“Regardless, this is not a $900k house or even an $800k house. It’s probably a $700k house, maybe even a $600k house given the large down payment needed to purchase it.”
HD, I think what you mean is this won’t be a $900K or $800K house when things shake out (a position that I don’t think is ridiculous). Or are you really saying that in the market as it exists today, it would not find sellers at $800K? There are certainly a sales of not particularly exciting houses in Bucktown in the $800s.
“This from the guy who owns a place like three blocks away in a much more party-centric immediate neighborhood?”
True… but my place is in a secure building (away from the street), is not my personal residence, AND, MOST IMPORTANTLY, cost a LOT less than 1.5 million.
anon- probably not the people you would like to see….
“probably not the people you would like to see….”
certainly true, but still less of a mess.
Bob, you are the one talking out your arse. You call it the “CCers lyin’ mouths or what level of activity you think the market SHOULD be showing?” But if you take 5 minutes to look at the comps . . . rather than 5 minutes typing your nonsense . . . you would see what the activity has actually been.
I can find five houses that have closed in this neighborhood for between $785k and $900k. Some had 37.5ft lots, but none of them had a double lot:
5253 N. Lakewood, 5/28/2010, $785k
5400 N. Lakewood, 3/19/2010, $817k
5407 N. Lakewood, 7/15/2010, $835k
5439 N. Lakewood, 7/27/2010, $835k
5312 N. Magnolia, 6/30/2010, $900k
I also know of at least one house on the 5300 block of Lakewood, similar to the house in question, that was listed in the mid-$900’s and went under contract in the last few weeks.
Is that enough comps to get your head out of your arse?
How many of these do you think were bought with the funny money you like froth about?
“How many of these do you think were bought with the funny money you like froth about?”
That’d be all of them (unless someone paid cash). The jumbo market is funny money, too.
wow – alanon, that is surprising. who are the people buying these expensive homes?
“That’d be all of them (unless someone paid cash). The jumbo market is funny money, too.”
Only if you mean that everyone who bought in the last 10 years paid with funny money. Are we now lumping the responsible, 20% down, good credit, non-fha, real job, financially stable home buyer into that group?
http://www.redfin.com/IL/Chicago/5302-N-Lakewood-Ave-60640/home/13402546
Double lot.
On Lakewood.
Sold for $925…
…
…In 2007.
“wow – alanon, that is surprising. who are the people buying these expensive homes?”
Don’t know. What I do know — only because I’ve personally dreamed about buying here for a long time and watched it closely — is that you used to have to spend $1m to get a renovated home in this hood. So, while prices have not dropped here like they have in other places in the city, they have come down a little. So I assume there are others that have been watching like me. Maybe the hood is finally in their reach and handful of families decided to jump?
‘Only if you mean that everyone who bought in the last 10 years paid with funny money. Are we now lumping the responsible, 20% down, good credit, non-fha, real job, financially stable home buyer into that group?”
In Bob’s land of funny money, yes. Because it’s about the artificially low (ie, not risk-related) interest rates that we’ve have for (almost) 9 years.
alanon,
I’m not defending nonsense, but on the other hand, I’m not sure these are comps. There is a big difference between Lakewood, Magnolia (or Wayne), and Summerdale west of Glenwood.
Evidence supporting my assertion: this beautiful house, sitting on the market (and my guess is will continue to sit, until it can undercut the many 800-950k places on those streets).
good catch roma!!!
the only thing i can argue is that is not for sale now,
and a comparable for sale in the area is not seen so the market would suggest you can charge a premium for this uniqueness.
also the 925 was the SALE price and we all know its a 15% off listing type of thing in 2010.
Roma, agree that’s a hard one to answer. My guess: it doesn’t have a master bath. I’ve toured a lot of houses in the hood over the years, and you’d be surprised how many of them are fully renovated but never had a master bath added. If it has a master bath, then that’s a pretty tough comp.
The numbers speak for themselves people:
Languishing since may with only one price cut of a whopping $14,000.
How do you possibly get around this? It’s been listed 112 days!!!
Oh but wait, CC’s think that sellers determine market price: HERE’S WHAT IT SHOULD BE WORTH EVEN THOUGH NO ONE IN THE REAL WORLD WILL EVER POSSIBLY PAY THAT MUCH MONEY FOR IT!!!
“There is a big difference between Lakewood, Magnolia (or Wayne), and Summerdale west of Glenwood.”
Completely agree. Said in my first post. That’s why I’m thinking this is priced fairly. It’s nicer than all the other houses I listed and it’s on a double lot.
Market time shouldn’t be that big of a factor. Not unusual in this market. The house that went under contract on Lakewood a week or two ago was on for about the same time. And it tracked this house on price changes. Maybe I’m underestimating the premium for living east of Glenwood. But I figured it would be compensated for by the double lot, nicer woodwork, etc.
This is the one I’m talking about. http://www.urbanrealestate.com/property/5340-N-Lakewood-CHICAGO-IL-60640-5ZXOTKYXIMCYU.html
Was listed one before the house in question. So, again, market time doesn’t seem to be that big of data point.
one “month” before
“Languishing since may with only one price cut of a whopping $14,000.”
“Market time shouldn’t be that big of a factor. Not unusual in this market. The house that went under contract on Lakewood a week or two ago was on for about the same time. And it tracked this house on price changes.”
I don’t think market time is a big deal when there are significant price drops (were there on the Lakewood one, don’t see it on redfin). But I can’t really remember seeing properties that were e.g. listed without more than token drops from list for 6 months and then selling within 5 percent of list.
“also the 925 was the SALE price and we all know its a 15% off listing type of thing in 2010.”
I think 15 percent off happens, I think it’s still more the exception than the rule.
Are you talking about 5340? Is that under K?
I agree 112 days isn’t outrageous in this price range/market, but my guess (an educated one, but still a guess) is that it will continue to sit at this price.
What I’m trying to get at is we just don’t know what the market is for this place, given its location – just how much will someone pay for a house/double lot not on the premiere streets? There really are no recent comps that I know of.
Alonon:
I hate you. With a passion. With links like that, I know that I could never (well almost never) afford something like that in Old Town Triangle. So its either leave Old Town or be content with what I can afford in Old Town.
*drool* what a nice looking place.
Ok, you were talking about 5340 (didn’t see when I posted). The listing says “cancelled,” not under contract. Do you know otherwise? I thought it was rented. Certainly at $3700 (the advertised monthly rent), it made the asking sale price look horribly inflated.
“Where’s the $150,000 to $200,000/annual income financially-conservative household w/school-age kids supposed to live – in a two bedrm/two bath condo? In Forest Glen? West Ridge and North Park neighborhoods are hardly attractive alternates for that kind of household.”
Well they’re supposed to rent these days.
The past 30 years the American middle class’ standard of living has declined. This has only been masked from the public via increased access to credit. One of the byproducts of all of this excess and cheap credit was we had a housing bubble. This pushed valuations of properties beyond limits that the debt could be serviced and we had a financial crisis.
Everyone that bought prior to or early in the bubble is sitting pretty because they have phantom net worth and they don’t want to see the ponzi economy musical chairs game end. Our government has shown it will do almost anything and pull out all stops to prevent this select group of people from taking a financial hit. Ironically enough, the HUD is now promoting policies contrary to it’s mission: keeping housing unaffordable.
I guarantee you most of these 900k places on Cribchatter aren’t supported by a household making 150-200k. Instead its either long-time owners sitting on appreciation or those overextended with an IO loan just barely scraping by.
To think that a financially conservative couple earning 150-200k can’t and shouldn’t afford decent housing in Chicago is laughable.
The boomers need to learn that their “retirement nest egg” of owning a property they think is worth 900k because a house down the street similar to it sold for 900k four years ago using a 0% down no doc mortgage isn’t quite the nest egg they thought it was. Because valuations during the boom went haywire and were disconnected from underlying wages.
Chichow – Old Town is a pretty great place to be content.
Roma – I was told that it was under contract. Told by a realtor, so maybe I shouldn’t have believed it?
“I guarantee you most of these 900k places on Cribchatter aren’t supported by a household making 150-200k.”
Where do you get this crap from? I know $150-200k is a lot. But it’s not that unusual. Certainly not so unusual to justify all of your blanket statements. I know couples where both are mid-level government employees . . . and they make this much money! Get over it.
“To think that a financially conservative couple earning 150-200k can’t and shouldn’t afford decent housing in Chicago is laughable.”
You’re right, it is laughable. And nobody thinks it but you. This $900k house isn’t “decent housing.” It’s a huge house on a double lot in one of the nicer neighborhoods.
@Alanon:
My dream place that was out of reach (didn’t want to involve the great tribe)
http://www.zillow.com/homedetails/229-W-Eugenie-St-Chicago-IL-60614/65562093_zpid/
Yard. Alley access. 2 car garage….
And the owner is going to pave the yard to throw events. Sigh.
I’m happy with even a single lot in OTT.
Hmm, interesting.
Housing in Chicago continues to be a strange, strange market (the Bobs and HDs of the world would use different adjectives). Why even bother putting in an offer to buy @ $875,000 if you could offer to rent @ $3500?
I guess I shoulda learned the new math…
Gotta say, I think clio makes a VERY important point here simply because people aren’t conditioned to think about neighborhood stability. They’ve gotten so used to neighborhoods improving over the last 20 years that they don’t know what true, long-term decline looks like. Look what happened to city neighborhoods from 1955-1975. Since we’re in a buyers market why wouldn’t you hedge yourself? Why wouldn’t you only look at areas that have been established longer and as a result will be less likely to suffer generalized neighborhood decline?
“clio on September 8th, 2010 at 11:34 am
anon,
no, my point is that there are some established neighborhoods of Chicago that have maintained their prices better than others. These tried and true neighborhoods are where people should be looking to buy (if they HAVE to buy now and are flexible about neighborhoods). I am sure this neighborhood is good and will be fine – but, in these times, wouldn’t it be more reassuring to have a proven history on your side?”
“I know couples where both are mid-level government employees . . . and they make this much money!”
Wot?!!??! You mean CPS/Chicago/Cook County pays people over $75k and they have a spouse who also works in a similar job? That’s UNpossible.
“You’re right, it is laughable. And nobody thinks it but you. This $900k house isn’t “decent housing.” It’s a huge house on a double lot in one of the nicer neighborhoods.”
We’ll see who is right. I’m calling you out as an out of touch ownership class. Case-Shiller in Chicago is going to get pummeled, absolutely devastated, in the coming months and years because on aggregate people in Chicagoland don’t have the incomes to support the valuations that resulted.
Most houses in nice or even decent neighborhoods do indeed cost between 500-1MM and I seriously doubt all or even most of those owners earn 150-200k. They may have been abled to SPEND like they did via the house-as-ATM strategy during the boom though. And 200k after taxes, living expenses and daycare doesn’t leave a lot for the 900k mortgage.
“Wot?!!??! You mean CPS/Chicago/Cook County pays people over $75k and they have a spouse who also works in a similar job? That’s UNpossible.”
It’s not just the City. I also know Fed. Gov. families that make combined $200k. And they don’t have to take furlough days.
Roma — did you confirm that house is rented, not sold? And for only $3,500? That sucks for those people. I think I’d rather eat the mortgage than turn that place over to renters for only $3,500.
Chichow – I love that place too. But I really love the one two doors down that’s two houses connected by a glass hallway.
“Wot?!!??! You mean CPS/Chicago/Cook County pays people over $75k and they have a spouse who also works in a similar job? That’s UNpossible.”
The government can’t provide a 75k job for every homeowner in a “nice” neighborhood. It wasn’t for lack of trying–they certainly did and now we have a $600MM deficit.
The ponzi economy will only continue so long as the wasteful spigots of government support & unsustainable spending keep up. What, pray tell, will happen to a lot of these 75k government jobs if spending is brought in line with actual tax receipts?
“I’m calling you out as an out of touch ownership class.”
Or in touch. In touch with my friends and neighbors and I’m telling you that, by and large, they make more than you think they do. Not less.
One thing we actually seem to agree on: people making $200k probably shouldn’t be buying a $900k house.
“Case-Shiller in Chicago is going to get pummeled, absolutely devastated, in the coming months and years because on aggregate people in Chicagoland don’t have the incomes to support the valuations that resulted.”
Group predictions on case shiller in 6 mo, 1 year, 2 years, 5 years?
“Most houses in nice or even decent neighborhoods do indeed cost between 500-1MM and I seriously doubt all or even most of those owners earn 150-200k”
Why 2x for house price and only 1.33 for income? Apples/oranges, no?
@Alonon:
The house I am referring to is the one that is two houses connected by the glass hallway. FWIW their initial ask on renting the place before selling it was 14,000 a month.
—
Alonon is correct. The GSA (insert pick your scale here) has a decent 20+ bump for locality for Chicago. 200k I think is the higher end but easily 160k+ and cushy hours.
No, no, apparently government working couples makes hundreds of thousands a year and they deserve places like this. Us, the working class professional stiffs, we should be living in jefferson park or hedgewish with all the rest of the working class folk.
p.s. those government salaries are getting some backlash because it’s unsustainable.
“To think that a financially conservative couple earning 150-200k can’t and shouldn’t afford decent housing in Chicago is laughable.”
“It’s not just the City. I also know Fed. Gov. families that make combined $200k. And they don’t have to take furlough days.”
If this were DC this would be an entirely different conversation. The DC metro area has benefited ginormously from the government largess from 2008-today in terms of six figure government and related jobs. But this ain’t DC.
Once government spending is brought in line these temporary trends (temporary keynesian stimulus) is removed and we overshoot lower than we even would’ve before. Its going to be a worse bloodbath over the next decade than it would’ve been had we just let the banks fail and rebuild from there. Instead of bleeding out it will be death by a thousand cuts.
The real danger is that more and more potential buyers realize this and instead decide to defer their purchasing until after the cuts have subsided.
How is our government going to come to the rescue when potential buyers are conditioned with 5% year/year declines in real estate going out several years? They can’t and housing is totally F’d for the foreseeable future.
“people making $200k probably shouldn’t be buying a $900k house.”
What if, for whatever reason, they have $300k+ for a dp?
Alonon:
This is the agent for that place in OTT. I have no connection to her. Just met her once while looking at the house.
http://www.rubloff.com/agents/chicago_-_2663_n_halsted/sara_superfine.cfm
Look at the properties she has listed for rent. Everything from Astor to Laura’s LSD queens to LP grand dames on Fullerton overlooking the park.
I’d hate to have to agree with Bob and HD. For those rental prices…maybe I should just rent.
No, I don’t know that it rented. I do remember that it was listed for rent, asking $3700. Anon, what was Stevo’s back-of-the-envelope calculation? I gotta figure even on his equation, $925,000 vs. $3700 doesn’t make sense except in the *very* long term.
“Group predictions on case shiller in 6 mo, 1 year, 2 years, 5 years?”
Dec-10: 113 (winter)
Jun-11: 115 (summer)
Jun-12: 108
Jun-15: 89
Five years out very difficult to predict given our government interventionist policies aimed at supporting unsustainable housing prices.
Those rentals don’t seem that nice for the price…
Also probably none of them allow dogs
“What if, for whatever reason, they have $300k+ for a dp?”
Different story, I guess. Would make the mortgage affordable. Different questions arise about becoming house poor. But that’s a personal decision that I’m not in a position to evaluate.
“doesn’t make sense except in the *very* long term.”
Were you planning on using that place as a cryo-preservation storage facility?
Bob, try to make one post that isn’t loaded with rhetoric. Just try and see what happens. Maybe it will make you relax a little.
Sara Superfine. Really her last name?
Again, the numbers speak for themselves. THere are more homes for $900k than buyers willing to pay for them.
didn’t realtytrac just recently say that less than 1/3rd of homes listed in the Chicago area ever result in a sale?
This is one of them.
112 days on it’s way to 224 to 336 to delisting and a relisting in 2012.
Sonies:
Given some of the clientele of the buildings, I’m betting little dogs are totally allowed. Let me check…
http://www.rubloff.com/property/chicago/07588284.cfm
http://www.rubloff.com/property/chicago/07597834.cfm
pets allowed….and as for rents
I think the rental ask reflect location premium
My additional point is that although I might want to rent in this building and this location…I wouldn’t want to buy with the dropping housing prices and the higher assessments of these older and maint. intensive buildings.
If I have a choice of living it up by renting in these building vs. buy for the 5340 for 900k, its a pretty tough call as much as I hate to admit it.
“Anon, what was Stevo’s back-of-the-envelope calculation?”
12*(Rent-Assess)-Taxes/.055/.8 = Price
So, 12*3700 – 11636/.055/.8 = $744k.
And I always thought–at least for condos where there are *much* better rental comps–the .8-dp-factor took it from reasonable to overvalued. For this one, w/o the .8, it’s $595k, which seems a little low, but that’s b/c the market for ~$4k family-sized rentals in the city is pretty thin.
“112 days on it’s way to 224 to 336 to delisting and a relisting in 2012.”
I don’t see what’s wrong with that. In fact, I’d take it as a good sign for the neighborhood. Especially if Roma’s hunch is right and the similarly priced place just went to rental. Sales prices are still high. Sellers that can’t move their property in this market are financially stable enough to hold until market recovers. Evidence of an “established” neighborhood where the neighbors aren’t engaging in a race to the bottom.
“Group predictions on case shiller in 6 mo, 1 year, 2 years, 5 years?” (I’m guessing you’re doing not seasonally adjusted, so I will too.)
Dec-10: 117
Jun-11: 119
Jun-12: 120
Jun-15: 125
I know on CC we like to discuss the 1 million dollar home and affordability, below is a quick breakdown of SFH for sale in Chicago.
0-300k 17,700
300-500k 1,693
600-900k 775
950-8 mil 724
The vast majority of home inventory falls below the 300k pricetag, just a little perspective on things. Are there too many +1million homes probably….. And if you we too include some of the surrounding suburbs the numbers would probably increase substanially on the lower priced properties.
I don’t think Bob’s near-term projections are crazy – we were at 119 before the recent bump. Long-term, given that C-S is not inflation-adjusted, that’s a whole nother ball of wax.
“Evidence of an “established” neighborhood where the neighbors aren’t engaging in a race to the bottom.”
The salt-of-the-earth neighborhood person like this one (well 22yrs might not be SOTE but close) can afford that strategy yes.
The thing is most “green zone” neighborhoods aren’t “established” in this sense. They’re filled with college educated 20-somethings and there is flock turnover of ~10% each year. The person who bought the overpriced condo likely can’t afford this strategy.
Not talking about Old Town or GC Mr. Moneybags but other areas like Lakeview, and parts of LP.
“I guarantee you most of these 900k places on Cribchatter aren’t supported by a household making 150-200k”
I agree – I don’t know why people don’t understand that, for a family of 4, to live well in the city of chicago AND live in a 1 million dollar house, you absolutely should have an income of at LEAST 450-500k. I know it may sound like a lot of money to a lot of people – but it really isn’t (especially when you take into account taxes and educational costs).
Seriously, walk in some neighborhoods and you’ll get mugged and or killed for the $20.00 in your wallet. People in some neighborhoods kill each other over dice games involving less money. You sound like an idiot when you say that $450k a year isn’t a lot of money. That household income is in the top 1% of all earners in the country and probably top 3% in all of Chicagoland.
But I do agree that you need that kind of money to live in a $1,000,000 home w/family kids dogs and a attendant lifestyle. Which should be for the top 3% anyway.
“you absolutely should have an income of at LEAST 450-500k. I know it may sound like a lot of money to a lot of people – but it really isn’t (especially when you take into account taxes and educational costs).”
Clio:
Way to go pulling numbers out from no where.
At LEAST 450-500k to afford a 1mil house???
I’d like to see your breakdown please…
homodelete,
no no no, don’t get me wrong – I am not saying earning 450-500k/year is not a lot of money – I am saying that earning this amount is NOT enough for a family of 4 to live comfortably in a 1 MILLION dollar house in the city (assuming no outside income source or inheritance, etc.)
“The salt-of-the-earth neighborhood person like this one (well 22yrs might not be SOTE but close) can afford that strategy yes. ”
Um, 9 years. And I don’t see ChemE profs as SOTE unless–maybe–they teach at BigSquareStateU.
“Dec-10: 117
Jun-11: 119
Jun-12: 120
Jun-15: 125”
For reference, the current number (Jun-10) is 124.90. If (yeah, bad assumption, but whatever, it’s easy) inflation for the next five is the same as the last five, that’s a real $$ decline of ~10%.
“no no no, don’t get me wrong – I am not saying earning 450-500k/year is not a lot of money – I am saying that earning this amount is NOT enough for a family of 4 to live comfortably in a 1 MILLION dollar house in the city (assuming no outside income source or inheritance, etc.)”
Everybody remember he’s factoring in both kids at latin/parker/lab and extra parking for the extra cars.
“For reference, the current number (Jun-10) is 124.90. If (yeah, bad assumption, but whatever, it’s easy) inflation for the next five is the same as the last five, that’s a real $$ decline of ~10%.”
FWIW, that’s more or less the inflation assumption I had in mind. Yeah, it’s fairly bearish, and I’m still looking to buy. Of course, I haven’t actually bought yet.
Any predictions you, or anyone else, would care to share, for the record?
“At LEAST 450-500k to afford a 1mil house???
I’d like to see your breakdown please”
Remember, that income taxes will account for 170k of this income. Children’s private school education (2 @12k/year) = 24k. Also, I am assuming that you are saving for retirement and children’s college (which should account at LEAST for another 50-75k/year). There are mortgage/real estate taxes (which will be 60-70k/year). Already, we are up to 340k – now you have 110-140k left to spend on cars, house maint., vacations, food, clothes, insurance, entertainment, elder care, etc. You can see there isn’t much money left over.
It obviously CAN be done at this income level, but below this, it becomes a little more difficult. My point was that people assume that someone making 250-300k can easily afford a 1 million dollar house – this is not the case.
“you absolutely should have an income of at LEAST 450-500k.”
and yet again we forget about the move up buyer who had/has equity built and sold then bought said 750k+ homes.
not many people go straight from college to said 1mil+ home. so an average buyer of said 750k+ home would have lived in the previous home 10-15 years….. ok i am tired i take nap now
“Children’s private school education (2 @12k/year) = 24k.”
Is there someplace in Chicago that is $12k? Isn’t it mostly the ~$6k for Catholic and the $20k+ for others?
“Is there someplace in Chicago that is $12k? Isn’t it mostly the ~$6k for Catholic and the $20k+ for others?”
Not counting all the “fundraising” you have to do on the side.
OK – the basic point I was trying to make is that if a family of 4 wants to live a comfortable lifestyle (w/o worrying about money, or penny-pinching) in Chicago and wants to live in a 1 million dollar house, they should make about 450-500k/year.
I base this not only on the hard numbers but also on observation. Most of my colleagues, fellow partners and friends are in the 450-750k income range. All of them have between 1-4 kids. None of them lives in a house over 1.5 million dollars and NONE of them feel comfortable enough to call themselves rich or retire (they are mostly in their 40s and 50s). – oh, and most of their kids went to public schools in the suburbs.
I think clio makes some good observations, people I know in the 200K+ bracket do seem to spend money like it’s going out of style – high income jobs often come with high income lifestyles (not that there seems to be a lot of resistance to this).
but I do think there are more “trade up” people out there than folks like Bob understand. and many that I know don’t have kids & won’t ever – for these kinds of folks, they’ll splurge on the perfect place.
And this, for someone, is a perfect place, as it’s unique. Now, $900K cookie cutter mcmansions, bleah.
I know couples with $250k incomes that put charged up new furniture for the new house on zero % credit cards and carry the balances. They spend money like it’s going out of style, no doubt. And because these people are totally willing to leverage themselves into the perfect house in Roscoe Village, houses in Roscoe village and elsewhere cost what they do.
“skeptic on September 8th, 2010 at 3:13 pm
I think clio makes some good observations, people I know in the 200K+ bracket do seem to spend money like it’s going out of style – high income jobs often come with high income lifestyles (not that there seems to be a lot of resistance to this).
but I do think there are more “trade up” people out there than folks like Bob understand. and many that I know don’t have kids & won’t ever – for these kinds of folks, they’ll splurge on the perfect place.
And this, for someone, is a perfect place, as it’s unique. Now, $900K cookie cutter mcmansions, bleah.”
“I know couples with $250k incomes”
I don’t believe you. No one makes that much money.
“the basic point I was trying to make is that if a family of 4 wants to live a comfortable lifestyle (w/o worrying about money, or penny-pinching) in Chicago and wants to live in a 1 million dollar house, they should make about 450-500k/year”
In all seriousness, I basically agree with this. Assume a $1mm mortgage and $15-20k in property taxes and a private school tuition bill, anything under ~$400k will involve compromises in lifestyle that someone with a $300k+ HH income would probably find unpalatable. Unless, of course, that $300k+ is all passive.
We once lived in Lakewood-Balmoral area. “LBers” limit their definition of “LB” to Lakewood and Magnolia Streets and their single-family houses; nearby houses and multi-family buildings are really just wanna-bees. This house is not LB; it’s Andersonville, with the multi-family and varying housing quality factor in play. A homebuyer spending $750,000 here will want to factor private school tuition too for all the kiddies; public school isn’t a strong choice here. And you’ll need two cars, because immediate retail choices are limited, private schools don’t have bus service, and downtown commute by el is a miserable 45-minute experience.
Yes this is an interesting house. My view was that “nice” (meaning interesting house in reasonably good condition with architectural appeal) in “nice” neighborhood (meaning neighborhood which has quality food choice restaurants and retail, safe streets, attractive landscaping and well-maintained homes) seem to priced from $750,000+ (for couple w/two junior-high kids plus dog). This is a $750,000 house, regardless of side lot, if seller gets lucky.
I’m concerned about relative enormous inventory of “high-end” houses; this house has significant competition.
Regarding government jobs, many City of Chicago middle-management employees earn high salaries despite weak educational credentials and few performance requirements. Clout, political sponsorship, and “affirmative action” hiring 1/1/1 quotas affect hiring and promotions. Clouted individuals can be hired with a CPD HS diploma and quickly earn six figures. But these folks don’t live in Green Zones, nor buy up $750,000+ houses despite their $200,000+ household income. Given $655 million budget deficit, I’d expect significant job reductions in all city departments soon, including many of those clout-protected semi-competent desk-job middle-managers. (WBEZ already announced department consolidations) 2nd installment tax bills will reflect large tax increases too, while actual collection revenue will be down. I suspect Daley declined to run for re-election because the future situation is ugly. He’s off to China junket, so I expect tax bills soon, outrage, lay-offs, crisis, and Daley near invisible until his successor is sworn in.
“so I expect tax bills soon”
They won’t come out until November 3 unless there is court intervention.
I recall $200,000 annual income puts the household in the top 3%; anyone confirm? Yet Chicago housing market is so convoluted that such a household must either financially stretch to “live nicely” in an upwardly-mobile Chicago neighborhood, or live in an outer-ring neighborhood like Forest Glen, Beverly, or where else? Nope. They move to “nice” suburbs, get a “nice” house on a “nice” block, get higher-quality schools, and leave Chicago.
But Chicago is also a Potemkin’s village, nice upscale veneer along lakefront from Lake Shore Drive downtown to Edgewater curve, some nice Green Zone residential neighborhoods and prominent architectural landmarks, but all the while many neighborhoods contain prominent examples of neglected property, high retail and industrial vacancy, foreclosures and abandonment, residents’ unemployment or public dole prevalence, poor-performing schools, frequent crime occurences, real personal risk, etc. There is no middle-class paradise in Chicago, not anymore.
“definition of “LB” to Lakewood and Magnolia Streets”
-Wayne is actually nicer than Lakewood toward Bryn Mawr (not toward Foster)
“A homebuyer spending $750,000 here will want to factor private school tuition too for all the kiddies; ”
This is probably still true for *most* LB buyers, I agree, but I bet Pierce is much different than when you lived there.
“I recall $200,000 annual income puts the household in the top 3%; anyone confirm? Yet Chicago housing market is so convoluted that such a household must either financially stretch to “live nicely” in an upwardly-mobile Chicago neighborhood”
Not a Chicago problem. A fact of urban living. In fact, a $200k family in Chicago can afford to live better than a $200k family in San Fran, NY, Boston. Imagine what this house would cost in a comparable neighborhood in any of those cities. (Those are cities I know about. Don’t know about DC, LA, others where you may make comparable money.)
“I recall $200,000 annual income puts the household in the top 3%; anyone confirm? Yet Chicago housing market is so convoluted that such a household must either financially stretch to “live nicely”
Funny how all threads on here end up the same….
“I recall $200,000 annual income puts the household in the top 3%; anyone confirm?”
Top 5%, nationally, in real dollars from 200-2008 was ~$180k. Chicago is undoubtedly a little higher, so $200k is at 5% of households, metro-wide.
I lived in Andersonville in the mid 90’s and people were already doing fairly lavish rehabs of Lakewood Balmoral houses. Since then, the yuppie retail ( which tends to lag by at least 5 years) has jumped Bryn Mawr on the north end of A’ville.
So the notion that this is an upstart neighborhood is fairly laughable.
I think this house should be able to fetch a bit more than $825k.
“Top 5%, nationally, in real dollars from 200-2008 was ~$180k. Chicago is undoubtedly a little higher, so $200k is at 5% of households, metro-wide.”
So to put all the doom, gloom, naysing in perspective . . . Compare this to Vlasko’s chart of price distribution for Chicago homes:
0-300k 17,700
300-500k 1,693
600-900k 775
950-8 mil 724
$200k is top 5%. Homes that people in this range can afford ($600k-900k) represent the top 4-7% of the market. Makes income / pricing seem a little more in line than all the doomsayers / naysayers want to think.
I understand this may be a skewed comparison because it compares all incomes to only the buy/sell market. But which way does that cut? Lots of missing data, but I’m guessing it goes largely in favor of my comparison, since more low income earners rent. I.e., there are more than enough Chicago wage earners to afford the “over-priced” housing stock in this city.
DZ-
Peirce school has been getting a lot of good reviews lately-but really you need to go and visit schools in person.
If you have are not already a member, I suggest joining npnparents.org for real discussions about schools, by actual parents of kids who attend the Chicago schools.
On cribchatter you’ll get school commentary from ‘experts’ who live in suburbs 20 miles away or people who spend all of 30 seconds googling test scores…
“Is this in Peirce elementary? Anyone with familiarity with the school? I think I’ve heard semi ok things about it. (I’ve probably asked this question before.)”
I don’t know… I think we are all in agreement that there are just not that many people w/high incomes (300k+) to buy all of these 800k+ houses in Chicago – period. What is going to happen to all of these houses and the people that own them? Obviously, the consensus is that prices are going to spiral downward to affordable levels (decreasing the most in lesser established areas and less in areas such as the gold coast/lp that are considered “more desireable” by people w/ money – not my opinion)). Therefore, I don’t think anyone in their right mind would be thinking about spending this kind of money in this particular neighborhood.
my comments are only directed at the financial aspect of buying a house. obviously there are many other factors that are involved when buying a house – but the most obvious factor for most is financial.
“I don’t know… I think we are all in agreement that there are just not that many people w/high incomes (300k+) to buy all of these 800k+ houses in Chicago – period.”
Oh my god, it’s like talking to a bunch of five year olds.
Fact: there are 775 homes listed in Chicago between $600-900k.
I can find 775 people in Chicago that can afford to buy these in less than ten minutes. How? Go to the website of the major Chicago law firms and cut and paste their list of attorneys.
Want to double the number? Do the same thing with the list of specialists at the major hospitals.
Want to triple it? Look up who trades at the CBOE and the Merc.
Want to quadruple it? Look up all the consultants for McKinsey, BCG, Bain, etc.
Want to quintuple it? Look up middle management at the Fortune 500 companies with offices here.
This is the easy, low hanging fruit. And it doesn’t even consider the two income families where each is making a more modest $100-150k.
You folks are clearly right that these people aren’t *spending* their money on expensive houses now. But that’s completely different than saying there aren’t a bunch of people in this city that can afford to if they so desired.
“On cribchatter you’ll get school commentary from ‘experts’ who live in suburbs 20 miles away or people who spend all of 30 seconds googling test scores…”
Hey now. Not all of us.
And besides, it’s mostly from people who live in the city but don’t have a kid (yet or ever) or don’t even have an SO to have a kid with.
“Peirce school has been getting a lot of good reviews lately-but really you need to go and visit schools in person.
If you have are not already a member, I suggest joining npnparents.org for real discussions about schools, by actual parents of kids who attend the Chicago schools.
On cribchatter you’ll get school commentary from ‘experts’ who live in suburbs 20 miles away or people who spend all of 30 seconds googling test scores…”
Thanks. I have joined npnparents in the past. The quality of the info varies a lot by school. There were some with limited info even when I posted questions. But others it’s very useful for.
We have visited some schools in areas we have thought seriously about buying. I do use scores as a bit of a screening mechanism. I can believe that good scores does not mean a good school. Bad scores, especially across all grade levels with no signs of improvement, suggest to me I don’t want to take the risk. I don’t know if that’s dismissing schools that really might be ok or good.
alanon,
I understand your point – but remember that most of those high earners already live in nice houses and are not looking for a new place. You should be looking at up and coming people and their income. In addition, you are not considering the number of condos/townhouses over 1 million for sale in chicago. A quick review of the numbers is as follows:
detached homes for sale 950+ = 724
condos/townhouses for sale 950+ = 722
This is not counting any new construction or the fact that most high earners w/ kids live in the suburbs. No question or doubt about that.
“This is not counting any new construction or the fact that most high earners w/ kids live in the suburbs. No question or doubt about that.”
Agree, but I think this is the point that people are confusing. They say people choose to move to the suburbs because the city is not affordable. My point is that the numbers show the opposite.
Roughly speaking, it looks like the percentage of high priced properties tracks the percentage of high wage earners. I.e., pricing is in line with wages. (At the high end at least. It may be true that the low end of wage earners can’t afford to buy the low end of the for sale market. But that’s a non sequitur. Of course not everybody can afford to buy a house.)
So, looking at the numbers, the idea that prices “have to come down” to some level of “affordability” seems clearly wrong.
Maybe Chicago needs to do a better job of making itself an attractive place to live vis a vis the suburms. What do NY / San Fran / Boston have that we don’t? I’m not sure what it is, but it’s not good public schools. More density? More street food? More garbage on the streets? Less corruption?
I don’t know what it is, but I’m convinced it’s not “affordability.”
“This is not counting any new construction or the fact that most high earners w/ kids live in the suburbs.”
Per Trulia, in the 7 county metro:
4,472 homes listed for $950k+. (1,979 over $1.5mm; 1,145 over $2mm)
6,679 listed for $600k-$950k (overlaps at $950k=65)
31,661 listed for $300k-$600k (overlap at $600k=105)
123,561 listed for under $300k (overlap at $300k=363)
total = 165,840.
0.7% over $2mm
1.2% over $1.5mm
2.7% over $950
4.0% b/t $600-$950
19% b/t $300-$600
7,319 b/t 535k (max conforming w/ 20%) and $750k; 7,257 over $750k.
So, yeah, a few too many high $$ homes, but not completely out of whack with the income of the metro, unless you have a basis for believing that typical buyers (including 1st-time and move-up) are *not* reflective of the overall income distribution (and that the skew is downward rather than upward).
“What do NY / San Fran / Boston have that we don’t?”
3 words – “high paying jobs”
“Maybe Chicago needs to do a better job of making itself an attractive place to live vis a vis the suburms. What do NY / San Fran / Boston have that we don’t?”
How many people–with kids and without enough money to comfortable afford private school–do you know who live in SF and Boston? NYC is different, sort of, but it’s different in *lots* of ways.
SF has *by far* the lowest percentage of kids of any (non-retirement) city in the country. Portland is 2d lowest and no other place comes close.
This is a false argument because there are so many expensive properties have that not been listed or have been delisted. Nobody in their right mind would try to sell an expensive upper-class property in this market unless they had to. Lord only knows how many of those homes are lurking in the shadows….but it’s a lot.
There’s also some speculation that the banks are actively holding back on expensive properties precisely because they are so difficult to sell in this environment…they too are waiting for the market to rebound…
In my rough estimate, contrary to alanon’s opinion, I think there are probably 3 to 4 times as many expensive upper-class priced properties than there are buyers who are interested in purchasing them.
“3 words – “high paying jobs””
There are a lot of those in Chicago.
Again, the numbers bear it out. Anon(tfo) just showed that even when you extrapolate out to the suburbs you have prices roughly in line with wages. $200k at top 5% v. 4% of homes between $600-900k. It looks like maybe the top end is over built (4% over a million), but things aren’t that out of line.
“3 words – “high paying jobs””
Dunno if you feel asleep the past few years but in most major metros these high paying jobs are disappearing. DC is the only one with any significant growth and that’s all government and government contracting growth (hopefully unsustainable). The entire midwest is hemmoraging high paying jobs (even Chicago). I’d imagine SF is shedding jobs too.
Dunno about NYC that is a different beast given all the rich foreigners who get fed up with their home country and move to Manhattan.
“Maybe Chicago needs to do a better job of making itself an attractive place to live vis a vis the suburms. ”
When you have a critical mass of leechers here in Chicago they gain control of the political system. You honestly don’t think anyone (in quantity) on the south side is going to vote R anytime soon do you? And they tend to reproduce more than the north side yuppies who use the greenzone as a weigh station to a suburb.
Dumb brainwashed whities with their liberal arts degrees often vote Democrat too because they’ve been brainwashed by years of political indoctrination in some dumb liberal arts school. They are truly the dumbest one’s beyond belief because they never make the causality connection that the reason they can’t raise a family on a middle class wage in the city is the schools teeming with idiot’s kids and the Democratic party continuously rewarding said idiot’s with handouts.
The numbers speak for themselves. Sales volume at generational lows after a recent collapse. The low end of the market is all that’s selling. Soon the CS index will begin falling precipitously (we’ll know for sure by next spring!). Sure you can point out that there rich big law partners that could afford this house – guess what, bill gates could afford 60,000 of these houses – which is every house listed over $300k in Chicago and the suburbs and still have billions left over! But in the real world, bill gates isn’t buying up all these houses, nor are big law partners snapping them up like hot cakes. ‘enuf said. Sit back and watch the ensuing train wreck and protect yourself accordingly.
alanon,
again, your point is well taken – but I have to disagree. almost all of the people making 300k+ are already settled and not looking to move. You really have to look at the income demographics of people looking to move – those numbers are the valid ones.
Believe me, I wish you were right – but I just don’t think there are enough people w/ high paying jobs looking to move compared w/ the inventory.
“In my rough estimate, contrary to alanon’s opinion, I think there are probably 3 to 4 times as many expensive upper-class priced properties than there are buyers who are interested in purchasing them.”
This may be true, but it’s not the question. Interested and capable are two separate things. You are taking the effect of the market (people afraid to buy) and bootstrapping it into a false cause (people aren’t able to buy). Ability has been there and still is. But people are spooked.
Fact is this economy has not been that hard on the upper end. I.e., the top 5%. Interesting series this week on Slate.com about trends in American wealth distribution talks about this.
“Sit back and watch the ensuing train wreck and protect yourself accordingly”
I couldn’t agree more – hence my advice about choosing your neighborhood wisely. In chicago, the G.C. and L.P. have held their prices nicely. Andersonville is not truly tested and would be a risk (with this kind of money).
Bob, please see comment at 2:02pm.
“Dumb brainwashed whities with their liberal arts degrees often vote Democrat too because they’ve been brainwashed by years of political indoctrination in some dumb liberal arts school. They are truly the dumbest one’s beyond belief because they never make the causality connection that the reason they can’t raise a family on a middle class wage in the city is the schools teeming with idiot’s kids and the Democratic party continuously rewarding said idiot’s with handouts.”
Some people actually value things other than money, Bob. I know it’s hard to believe.
“Bob, please see comment at 2:02pm.”
hilarious!! actually, i think he may be drunk….
DZ-
I just checked NPN and there is a fair amount of positive, recent info/opinions about Peirce. If you don’t feel like rejoining, I could copy the threads for you.
“Thanks. I have joined npnparents in the past. The quality of the info varies a lot by school. There were some with limited info even when I posted questions. But others it’s very useful for.”
Anon ( tfo- present company excepted.
” They are truly the dumbest one’s beyond belief because they never make the causality connection that the reason they can’t raise a family on a middle class wage in the city is the schools teeming with idiot’s kids and the Democratic party continuously rewarding said idiot’s with handouts.”
I find that the dumbest “one’s” are those who have no idea when to use a simple punctuation mark like the apostrophe.
“I just checked NPN and there is a fair amount of positive, recent info/opinions about Peirce. If you don’t feel like rejoining, I could copy the threads for you.”
I would greatly appreciate the threads if you’re able. You can also email them to dz_account at hotmail if that works for you.
I will rejoin npn at some point but I think we are probably off serious househunting till the spring unless something good pops up. We had looked at Lakewood Balmoral a few years ago but has been off our radar recently. At the peak of the bubble, the nice houses on the nice streets were going for north of $1MM, which seemed a little nuts. Like the neighborhood, the red line commute is not bad for me. It’s not great for getting out to the SW burbs where my inlaws live or the airport.
“I can find 775 people in Chicago that can afford to buy these in less than ten minutes. How? Go to the website of the major Chicago law firms and cut and paste their list of attorneys.
Want to double the number? Do the same thing with the list of specialists at the major hospitals.
Want to triple it? Look up who trades at the CBOE and the Merc.
Want to quadruple it? Look up all the consultants for McKinsey, BCG, Bain, etc.”
Haven’t we figured out by now that the doctors and lawyers don’t really have that much money (not the young ones, anyway)? They are all graduating with $100k- $250k (maybe more) in debt. With that much debt, do you think they’re rushing out to buy $900k houses within just a few years of graduating?
They’re buying $400k-$500k condos and that’s about it (if they even have a job- in the case of many lawyers who are out of work. Last year Harvard Law School only placed 55% of its graduating attorneys in jobs by the time of graduation.)
The older docs and lawyers, as clio said, already own something so they aren’t exactly going to be looking for property.
Oh- and then there’s that little thing called a “downpayment.” Even on the good salary- how long does it take you to save $150k to $250k? Several years- even for the most disciplined. So we’ll have to wait 3 or 4 years for all these consultants, lawyers, doctors to buy these million dollar houses.
“Some people actually value things other than money, Bob. I know it’s hard to believe.”
Anon one question–where in my post did I mention money? Just because YOU like the city amenities doesn’t give you moral highground to claim I’m some sort of moneygrubber. Why do YOU live in the city with kids? Is that crickets I hear?
Chicago city proper is F’d so long as you have yuppies like you turning against other yuppies and voting D cuz it soothes your white guilt laden soul. Take the red pill dude and wake the F up. No you can’t eliminate the leechers overnight its gonna take about 20 years but the sooner you get started the better.
[Editor deletion]
“In chicago, the G.C. and L.P. have held their prices nicely. Andersonville is not truly tested and would be a risk (with this kind of money)”
Clio you do know there are other hoods in chicago that held their prices fairly well also?
So, is the general cc consensus that a family can afford to spend double their combined, pretax, income on a property and still live comfortably?
“Haven’t we figured out by now that the doctors and lawyers don’t really have that much money (not the young ones, anyway)? They are all graduating with $100k- $250k (maybe more) in debt.”
This is true for a lot of lawyers. Always has been. But I said look at the big firms. That’s the upper crust, but in a city like Chicago it’s still a lot. I can think of a dozen off the top of my head that have over 100 in Chicago, and several of those have more than 300.
These lawyers still make a lot of money. Economy has not been too rough on them. They had their salaries frozen for a year, and they whined about it mightily. But most of them got those raises back this year. If you pull up the website for one of these firms, 90% of the faces you see will be making $200k a year or more. Even the “young ones.” 50% will be making $300k. Many will be making a lot more than this.
Yes, they graduate with lots of loans. And, again, they whine about it mightily. But those payments are a drop in the bucket on these kinds of salaries.
These things I know for a fact because I was once in this world. Doctors, I only know what I hear from my doctor friends. It’s anecdotal, but my impression is the same. They like to whine about insurance, tort reform, and school loans. But they too are doing better than they want anyone to know.
On the down payment barrier, I submit that anyone making this kind of coin should be able to save $150-200k easily within three years after they get out of school. Also, keep in mind that a lot of these will be two income families. Kids meet in law school and get married. I know more than a few two lawyer households. 25 years old with with a household income of $500k. Even after you buy two BMW’s you still have a lot of money to spend on a house. Also, keep in mind that most of these people come from money. And, even though they make more than 95% of America, their parents are still giving them money for down payments. Sad but true.
“Also, keep in mind that a lot of these will be two income families. Kids meet in law school and get married. I know more than a few two lawyer households. 25 years old with with a household income of $500k. Even after you buy two BMW’s you still have a lot of money to spend on a house.”
….you would be surprised how fast it goes. Just look at the price of nannies, upkeep on the two BMWs and a few nights out at NoMi, ridiculous taxes and, before you know it, you are left with a LOT less than you think. People who don’t make this type of money always fanatasize about all of the things they could buy and all of the money they would save – but believe me, once you get to that point, there are a LOT of other factors that come into play (namely taxes, upkeep on your “toys”, expensive dinners out – yeah, you start getting used to it, expensive clothes, etc.) Everyone thinks that they will live the same life as they did when they didn’t make as much – but that very very rarely happens.
So according to alanon BigLaw and doctors (surely specialists not pediatricians) are going to be the saviors of the upper end of Chicago RE.
Yeah I’m not buying it–no significant increase in the quantity of either segment whereas the quantity of other high-earner segments (ibankers, consultants, RE-related professions) is decreasing. Resulting in lower aggregate demand and consequently lower equilibrium price of housing.
Bob, this was a good post. No rhetoric. You stated your disagreement in a productive way, then offered a thoughtful analysis to back it up. Much more effective than the rants.
“voting D cuz it soothes your white guilt laden soul.”
Nope. Just hate the God Squad and the attendant nuts. Held my nose and voted Pereica (who would have won had he kept his fool mouth shut about social issues irrelevant to County Board Prez), would vote for Pete Fitz in a second. Won’t vote for anyone beholden to wingnuts, which is basically every other Repub nominated for an office I can vote for.
Also, if you live in the City and don’t vote in the Dem primary, mostly your vote doesn’t count AT ALL.
“where in my post did I mention money?”
That was the most charitable interpretation, my friend.
prof: “So, is the general cc consensus that a family can afford to spend double their combined, pretax, income on a property and still live comfortably?”
That’s (1) probably right about the CC’rs most likely to have a strong opinion about it, (2) pretty conservative, (3) dependent on what one means by “comfortable”, (4) dependent on source of income, total assets, age, number of kids, etc, etc, etc. If you keep yourself to 2x current income, you should be in a good position to weather lots of bad things that might happen in the future.
Under contract.
I drove by the other day, and I have to say-this house looks pristine from the outside-and that’s saying a lot about a wooden 100+ year old house.
I’m surprised it took so long for this house to go under contract. I assume there was a little resistance because this seems to be a multi-family street and this is one of the few single-family houses on this block.
A (less attractive, imho) stucco house at 5255 N. Lakewood (SEC of Berwyn) was just listed at $995,000 and is supposedly under contract above asking price, after a bidding war. The Lakewood house is in Lakewood Balmoral, so even though it’s only two blocks away from this Summerdale house it’s a much more desirable single-family location.
Yes, this property is under contract now. I am the lucky buyer. There is a good history behind this house starting with the original owners. There were some very wealthy folks prior to the most recent owners who had a lot of money to burn. They spent ungodly amounts of money to restore the interior, and believe me (excepting for the kitchen) they did a very nice job. The most recent owners have maintained the property in overall very good condition. The landscaping is well-kept. The exterior colors (while not everyones’ taste) are reported to be the original ones on the home when it was built in 1888. The kitchen is the only room that does not fit seamlessly with the rest of the house. The bathrooms are all excellent, although the master bath is smaller than I would prefer and has no tub. Also, there are no bathrooms on the first floor and little closet space. But overall I could not be happier with this house! I very much appreciate all the comments above… they gave me helpful pause while I negotiated the offer.
doczie-Congrats! I have a feeling that a previous owner also spent maegabucks on the exterior. It looks great!
meagabucks are bigger than megabucks
( trying to cover my typo)
Sold for 837k on 12/21/2010.
Steep discount off of list price.
1 – dahlia, good call on final sale price (i think you said above it would be around 825)
2 – just checked back on 5340 lakewood. don~t know for sure that it rented, as i suspected at the time, but it did NOT close as a sale. not currently listed. dont know what the real-tore referenced above was talking about.
3 – doczie, thanks for reporting back and congrats on the new home! i always thought it was a truly beautiful place. also very cool to see that a buyer got some useful info here (which, despite the haters’ claims, i suspect is not an uncommon occurrence). let us know when we can come over for the housewarming!!
p.s. i actually really like the original-color exterior paint. to each his own…
5340 Lakewood is back on the market, with a new, much lower price: $800,000.
“Sale Price Does Not Include Parking” No idea what this could possibly mean for a SFH.
5344 is also down to $975 and may be still dropping (sold for 1.2 mil in ’08).
When you see what is happening in LB you can see that the sellers are in BIG trouble, despite the extra interior sq footage.
(1224 W Bryn Mawr) no link to avoid moderation…
While this is in the worst possible spot in LB (close to Foster, backs up to low-end retail on B’Way), it was priced aggressively and went under K immediately.
http://www.redfin.com/IL/Chicago/5219-N-Magnolia-Ave-60640/home/13402813
House sold in 1992 for $400,000.