Crib Chatter is On Vacation This Week
Record low inventory?
It is WORSE than 2013 when I had to go to like 2 posts a month because there was nothing to chatter about. But, there’s a lot that appears to be coming on the market in the upper bracket. We may have to concentrate on the upper bracket market for the rest of the summer if things continue like this.
If you aren’t under contract in a week or two, then you’re priced wrong because nearly everything is selling instantly.
Do you have stories of getting involved in bidding wars?
Have you heard of buyers waiving inspections?
Tell us your war stories this week.
Thanks-
Sabrina
Welllll….it depends. It’s hard to generalize. Inventory is extremely low for the most part in the Green Zone but there are pockets where that is not true. Lake View SFH inventory is higher and rising as I’ve mentioned before. And Uptown (yeah, I know…not green zone) SFH inventory is skyrocketing: http://lucidrealty.com/uptown.php so what is that all about?
For the city as a whole market times are really not that much lower than last year and SFH market times were around 100 days in April and that’s for homes that actually sold. There are plenty of homes not selling.
There are the hot neighborhoods like the West Loop and East Village/ Ukrainian Village where stuff is flying and that’s what people talk about but if it’s not a hot neighborhood there are still buyers out there looking for the unicorns and throwing in low offers.
It’s not just one market.
No, I’ve been on the market for over a month with strong comp support that I’m not over-priced and still haven’t sold. There’s your war story for your phony hottest market ever.
That’s exactly my point! I see it all the time. Buyers are still extremely picky and it’s way too easy to just declare anything that hasn’t sold as overpriced.
I don’t agree that all properties are moving quickly. Just looking at University Village, I’m not seeing properties going under contract within days. Perhaps in certain neighborhoods, properties are going quickly, but not everywhere.
Instead of high end properties being featured on this site in the next few weeks, I’d love to see some properties in neighborhoods like Bridgeport, Pilsen, The Gap, Hyde Park, Rogers Park, Peterson Park, Douglas, Belmont-Cragin, Mayfair,or Pullman. I’m guessing these neighborhoods aren’t seeing inventory flying off the market in days.
Any consensus on what area will have the greatest appreciation over next 5 years? 10 years? Is the far south loop (16th-i55, east of clark) going to grow exponentially with the new developments there?
“Any consensus on what area will have the greatest appreciation over next 5 years? 10 years? ”
Everything on the Blue Line with Avondale experiencing the greatest appreciation; although it’s still got a ways to go. I was just there over the weekend and the shopping along Milwaukee Ave was depressing to say the least.
“the shopping along Milwaukee Ave was depressing to say the least”
Still pretty bad anywhere north of Diversey.
If we’re going to predict appreciation based on the CTA, I would agree that the Blue line seems like a good bet. Certainly the last ten years have been good for the Blue line stops between Chicago and Logan Square.
Most of the Brown line is already “Green Zone” now.
The Red line is hit-or-miss where it isn’t the same as the Brown Line.
Maybe the Green line will improve some more. Certainly the Morgan stop has had a lot of growth.
“Any consensus on what area will have the greatest appreciation over next 5 years? 10 years? ”
Humboldt Park
Avondale
With East Garfield Park as my dark horse bet.
“No, I’ve been on the market for over a month with strong comp support that I’m not over-priced and still haven’t sold.”
That was my experience selling my house in Norwood Park as well and my house was darn cute. I did not get well-qualified serious buyers.
” I did not get well-qualified serious buyers.”
One of my personal anecdotal evidence of a bubble is when super unqualified people suddenly all start to get the real estate bug all at the same time. That’s where we are now. Under or unqualified people with funny money is what drives up the market. And there’s quite a bit of FHA shenanigans going on out there; it’s like marginally qualified people are showing at the mortgage broker’s office with a downpayment that consists of little more than a large tax refund and they’re getting qualified.
Twenty-five percent of my 50 unit LSD building has been for sale for more than six months. Many price adjustments but nothing has moved.
Apparently there’s a dearth of interest in vintage doorman buildings in the Gold Coast.
Any consensus on what area will have the greatest appreciation over next 5 years? 10 years?
Agree with Humboldt Park and Avondale; would add Pilsen and Bridgeport.
Can’t edit – would throw in the SE part of Logan Square.
Question for the crowd. Where would you buy given the following:
-early 30s, married, no kids, but likely to have them in the next few years
-looking to hold for 10+ years, meaning schools will be a factor. want to send kids to public school.
-budget under $1m, ideally under $800k.
-looking for some balance of maximizing expected return while also not moving into a completely “up and coming” area.
-walkable activities important to us.
My partner and I are debating city vs. suburbs, and which specific areas within the city. It is really quite overwhelming to balance all of the factors that go into deciding where to purchase a home given you don’t have a specific reason to be in any one area.
I dislike to hate all those neighborhoods, guess I’ll have to be happy with merely not losing money instead of reaping the benefits of gentrification.
Yeah, buyers routinely want to be close to el stops and as you go out the blue line it gets more affordable. Clearly the development is moving west and north to find more affordable options. When I do my annual new construction update I suspect it will confirm this. Of course, the less developed it is the less certain the future appreciation is.
The neighborhoods I mentioned above are pretty safe bets at this point. I also agree on Pilsen because it’s reasonably well located except that public transportation options are not great on the eastern end. I don’t know how much of an obstacle the anti-gentrification movement in Pilsen will be but it seems that that ultimately the laws of economics always win.
The South Loop scares me though because of all the planned development. That’s an awful lot of supply coming on but then again the development itself will make that area more appealing.
Vince Vaugn just put his Palmolive building up again. I’d like to have a chat about that.
I disagree with Humboldt Park. Most of Humboldt Park is too far from the Blue line and has too high of concentration of public, subsidized, and income restricted housing. Note Uptown for an example of a neighborhood held back by a high of concentration of public, subsidized, and income restricted housing.
Neighborhoods with high gentrification won’t have those anchors weighing them down.
“Just looking at University Village, I’m not seeing properties going under contract within days.”
University Village may not be a hot neighborhood but it’s doing OK. There are only a handful of townhomes there that have been on the market a long time and those have generally been priced on the high side – some really high and some just moderately so. It really comes down to your selling strategy. Do you want to price to sell in a week or price to sell in 2 months? Price to sell in a week and you may leave money on the table. Realtors like to brag about stuff selling over list price but what does that really tell you?
I’m thinkin Bronzeville for 5-10 years appreciation, the hipster loser Bernie voters won’t have enough money to live in Pilsen anymore but will still want to be close to downtown
I hope you’re right about Pilsen. I’m not so sure.
I’d love to see the Gap gentrify as well as Bronzeville and the entire area near the McCormick Center.
Our friends listed their Avondale three-bedroom SFH three weeks ago, and it immediately received multiple offers, ultimately going to the folks who offered an immediate $30K over the original ask of $375K to counter/beat any competing offers. Under contract within two days of the open house; they’re about a block away from the Belmont Blue Line stop.
Pilsen now is like Wicker Park was in the late 90s: Get ready, because it’s all going to change.
Even nearby Bridgeport is starting to see things happen, especially along the developing Morgan Street corridor and all the arts and make-ey small manufacturing along 35th Street and immediately south. (Antique Taco’s opening this summer at 35th and Morgan, I believe.)
Here in sleepy McKinley Park, we continue to see many new professional and Chinese residents move in and fix up property. There’s also new SFH home construction (~$500K+) right north of Pershing, and it looks like one of the big former warehouses on the south edge of the park is going to pop with a mixed-use retail and residential development.
I think Hyde Park will do well. They are finally getting amenities befitting of a major college town. I was surprised at all the new restaurants and development going on down there during a recent visit.
Pilsen will do ok. Anything along the blue and brown lines. I also think Oak Park will do well with the major companies moving downtown. Pretty much any inner burb with good schools is probably a safe bet.
Huh? What about Pullman Historical District? I remember reading not too long ago that, thanks to state and federal grants, this neighborhood was going to “pop” with restored vintage homes, commercial/retail space, and the tourist trade thanks to its proximity to the Metra. I know a couple of my investor clients lost out because they waited too long to bid on “workers cottages” that went under contract the week after listing.
Gary,
I have the same concern about the south loop. It could easily become the next river north with all of the new hotels and apartments, but it might be too much housing stock. I preferred the area when I purchased due to Grant Park, RN will never have more parks.
“any inner burb with good schools”
So, OPRF, Park Ridge and Evanston.
Anyone want to argue in favor of other Chicago adjacent school districts? Niles/Skokie = ok side of good, but not fully ‘good’.
lol at all the bernouts on this blog…
Lincolnwood. don’t forget Lincolnwood
or stone park.
The market is driven by extremely low rates, great employment, and once again fear that rates/prices will go up and I will be priced out of luck. Too many people I know bought in a hot neighborhood and paid at or above peak prices. No one is thinking about the pension/CPS crises that will have a significant effect on property taxes. No one is thinking how the rising (and they will rise) will create a downward pressure on the prices. I do not think any should be buying unless their timeline is 7+ years, you will simply not break even if you’ll need to sell quicker.
I sold a condo in the loop last year, and my price was supported mainly by two things: high rent and low interest rates. The buyer got a 15yr mortgage and ended up paying $200 less (incld. Tax and Association Fee) than she would have if she rented. However if her interest rate was 5.5 vs. 3.5 that she got, my condo would have sold for $25,000 in order to keep her monthly payment the same.
All the great deals were sold by 2013, and good deals by last fall. If you are selling your wonderful condo/house/etc. and think you are supported by whatever it may be, guess what? You have not sold because you overpricing your property and a good agent should tell you that. May and June are the hottest month…so make sure the price is right.
“don’t forget Lincolnwood”
Right–together with Niles-Skokie on the not-quite-“good” train.
“or stone park.”
Or Ford Heights!
Great starter home:
https://www.redfin.com/IL/Ford-Heights/1429-E-15th-St-60411/home/40384960
Taxes are under 28.5%!
“If you are selling your wonderful condo/house/etc. and think you are supported by whatever it may be, guess what? You have not sold because you overpricing your property”
We can only have that discussion in the context of how long something has been on the market. The statement that is often made here is that if you haven’t sold it in a week it’s overpriced (or something like that). Well, that’s simply not true. On the other hand, if you haven’t sold it in 2 months at the current price it’s very probably overpriced but even then you see properties that do sell without huge discounts after being on the market that long. And it depends on the price point too. $2 MM homes take longer to sell than $250K condos. And it depends on how many showings you’ve had also. If you’ve been on the market for one week with 40 showings and no offers (yeah, it happens) then you are definitely overpriced but your marketing is outstanding.
Simple rules like you’ve been on X long and you haven’t sold so you’re overpriced are for simpletons. There are many variables at work and for many properties you really do need to get that one buyer for whom the property is a perfect fit or that buyer who needs to buy NOW.
Yeah, maybe you are Vince Vaughn or Michael Jordan waiting for that perfect buyer to come along but at some point even they have to rethink their strategy. If your home is too unique when do you decide that it’s not going to work at the current price? If you have a black bathtub in the middle of your living room it is indeed possible that there is someone else out there who would appreciate your style but it’s a statistical estimation problem. If you draw a white ball from a bowl 40 times in a row what is the probability that you will draw a black one the next time or at least once in the next 20 draws? I’ve actually been meaning to look this up.
“would throw in the SE part of Logan Square.”
Yeah, that’s where we bought about 18 mo. ago… have seen a surge in prices this spring. Paid $450k for townhouse, and a few sales after us in development all in similar range… then one closed at $499k and one at $516k in past couple weeks. Have seen single families in the area jump about $100k in past year.
“The market is driven by extremely low rates, great employment, and once again fear that rates/prices will go up and I will be priced out of luck.”
I have a differing opinion, after talking to numerous buyers actually in the market (some of whom are only marginally qualified as I discussed in an earlier post). Rates have been low for a long time (and will likely remain low for years to come) so that’s not driving the market. Yes, employment is great and people feel secure in their jobs, so that certainly helps. I’m not sure that people are worried that prices/rates will go up as much as first time buyers believe that RENTS are going up. I talked to a suburban buyer yesterday who is paying $2,000 for a small 2 bedroom apartment, whereas a decent single family home (50/60’s ranch) just a short drive away can be purchased for only $1,900 a month. Rents keep going up and up as demand increases. i had another guy tell me a few days ago that after two years of renting (since his last foreclosure) he’s sick of paying high rents and his broker claims he can squeeze him into a loan using his tax refund as a down payment.
“If you draw a white ball from a bowl 40 times in a row what is the probability that you will draw a black one the next time”
I would speculate that it is zero, because there are only white balls in the bowl.
Or did you leave out that there are the same number of black and white? And are you putting the ball back in the bowl every time?
If both of those, then the odds for the next one are the same as the odds for all previous (and all future) draws: 1 in 2. And that you’d have 20 more consecutive whites is the same probability as the last 20 consecutive whites before your question–so vanishingly small that one would assume that teh bowl was somehow rigged.
HD, mortgage guidelines are no where near as loose as they were previously. Granted, FHA is pretty forgiving about past credit issues, but all borrowers still have to document income.
The issue during the prior bubble was the NINA, NINJA, stated loans and the fraud / speculation they invited allowing borrowers to purchase homes they couldn’t afford under any circumstance along with the ease of being able to purchase multiple investment properties for speculation.
“same probability as the last 20 consecutive whites before your question–so vanishingly small that one would assume that teh bowl was somehow rigged.”
Except that it *has* to happen sometime, so as long as you keep watching…
“Or did you leave out that there are the same number of black and white? And are you putting the ball back in the bowl every time?”
The thing is that you don’t know how many white and black are in the bowl. That’s what you are trying to estimate based upon your draws.
You aren’t putting the ball you drew back in the bowl but in fact the bowl is constantly being replenished from a similar population (new buyers coming into the market) so that the content of the bowl essentially remains constant.
This is exactly what a seller is up against. They are trying to estimate the odds that the next showing will result in a contract – draw a black ball. But they are like gamblers who assume that because the roulette wheel hasn’t hit a number in a while it is “due”.
“The thing is that you don’t know how many white and black are in the bowl.”
Then you can’t determine the chance. If you don’t know that there is even a black ball in the universe–much less the bowl–you’re simply guessing.
I’m pretty sure I encountered a formula for estimating this in my stats classes. Surely someone here remembers it. I don’t have the time to look it up right now but it’s like: the probability of the percentage being greater than x% is less than y%. For instance…if there were 5% black balls then the odds of you drawing 40 white in a row would be only 12.8%. So that kind of logic allows you to make a statement like above.
Remember: if your agent cannot sell your place, it’s because the market is bad. If your agent does sell your place, it’s OBVIOUSLY becuase your agent did something special to bring in buyers.
Ick: how is that proslat wall?
“if there were 5% black balls then the odds of you drawing 40 white in a row would be only 12.8%.”
Sure, if you have a knowable percentage of black balls. Indeed, even if you know that there is a non-zero percentage of black balls. But you don’t.
You’re trying to guess how long it will take to draw a black ball (an offer) based on drawing only white balls (non-offers) from the current bowl (asking price)–yet you have not yet determined that there are *any* black balls.
“i had another guy tell me a few days ago that after two years of renting (since his last foreclosure) he’s sick of paying high rents and his broker claims he can squeeze him into a loan using his tax refund as a down payment.”
A few years back I had a prospective tenant who had just been foreclosed on looking to rent a unit. Told him I needed 2.5 months security due to background (normally charge 1.5). Said he didn’t have it. Assumed he hadn’t made a mortgage payment in a least 3 years…Perplexed at how he did not have the funds.
“if there were 5% black balls then the odds of you drawing 40 white in a row would be only 12.8%.”
You would need either a raw number or ratio of white:black balls. You can find one number using the other, but you cannot find probability without having one or the other to start.
“Ick: how is that proslat wall?”
it’s fine. not the cheapest option out there but it looks pretty cool and has held up well.
Luis in my experience about 10% saves the money from
the years of unpaid mortgage payments but upwards of 90% either frivolously spend it on dinner at Applebee’s etc or just never had the money to make the mortgage payment during the foreclosure anyways.
“Sure, if you have a knowable percentage of black balls. Indeed, even if you know that there is a non-zero percentage of black balls. But you don’t.”
Maybe gary is a bayesian, which I knew you would not be.
“it’s fine. not the cheapest option out there but it looks pretty cool and has held up well.”
will have to update my views, I thought you’d be more excited about it.
“upwards of 90% either frivolously spend it on dinner at Applebee’s etc”
Or buying Leapfrog stock!
“will have to update my views, I thought you’d be more excited about it.”
what is the reaction you were hoping for?
https://www.redfin.com/IL/Stone-Park/1743-36th-Ave-60165/home/13337540
The most expensive house in Stone Park. Great location, near highways, airport and a stone’s throw from great restaurants OPRF (hence, the town’s name). What a steal, this one will go quick!
“The issue during the prior bubble was the NINA, NINJA, stated loans and the fraud / speculation they invited allowing borrowers to purchase homes they couldn’t afford under any circumstance along with the ease of being able to purchase multiple investment properties for speculation.”
All bubbles do not repeat in the same manner.
Bubbles are caused by speculation. THAT we have- in spades.
I’m also hearing stories about messy appraisals suddenly being cleaned up to push through the sales. Could we be seeing appraisal fraud again? That would be the first place to look for overheating.
“Paid $450k for townhouse, and a few sales after us in development all in similar range… then one closed at $499k and one at $516k in past couple weeks. Have seen single families in the area jump about $100k in past year.”
But…this is totally normal.
How do they get a loan for those townhouses? It couldn’t appraise out. Oh wait- we’ve seen this before. Of COURSE they can appraise out. No problem.
“Pilsen now is like Wicker Park was in the late 90s: Get ready, because it’s all going to change.”
How?
The Podmajerskys own most of Pilsen along Halsted.
All anyone has been talking about is Pilsen for the last nearly 20 years. It HAS improved. But even when an award winning restaurant opens in the neighborhood, it still couldn’t get the buzz. And it’s been a while since I’ve heard buzz about the galleries or whatnot (most owned by the Podmajerskys.) It’s close to downtown, but it’s just a block or two from the Kennedy Expressway.
I had friends who lived there in the 1990s. There would be a grim over all their belongings just from opening up the windows due to the expressway. It was gross.
“Vince Vaugn just put his Palmolive building up again. I’d like to have a chat about that.”
Okay- I’ll post on it on Tuesday. He split it into two units because he STILL can’t sell.
I’d just like to point out to all those Chinese investors buying million dollar units in Chicago at the peak- Vince Vaughn did the same in the last peak and where did it get him?
“Question for the crowd. Where would you buy given the following:”
Your criteria just begins to scratch the surface. I’m assuming you’re considering a single family home. So many other factors to consider such as commute time, size of home, desired level of finishes, frame vs. brick, and what you consider a good school. You’d get more for your money in Coonley but you’re not going to get a brick home with contemporary finishes and what’s your commute time from there? At the end of the day it always comes down to what parameters you are willing to compromise on and only you can answer that.