Finding the 4-Bedroom Townhouse: 1151 W. George in Lakeview
It’s hard enough to find a 3-bedroom townhouse let alone a 4-bedroom, but they do exist such as this one at 1151 W. George in Lakeview.
At 2800 square feet, it has 3 bedrooms up and 1 on the main level with the family room (the kitchen/living space is on level #2.)
Built in 1995, the listing says this townhouse has an all new kitchen with white cabinets, stainless steel appliances and granite counter tops.
It also has a private roof top deck and a 1-car garage.
It was recently reduced $50,000.
Is this townhouse a good single family home alternative?
Joanne Nemerovski at Prudential Rubloff has the listing. See more pictures here.
1151 W. George: 4 bedrooms, 3 baths, 2800 square feet, 1 car garage
- Sold in July 1995 for $332,000
- Sold in February 1999 for $475,000
- Sold in December 2004 for $648,000
- Originally listed in March 2011 for $749,000
- Reduced
- Currently listed for $699,000
- Assessements of $80 a month
- Taxes of $9346
- Central Air
- Washer/Dryer
- Bedroom #1: 16×12 (third floor)
- Bedroom #2: 10×10 (third floor)
- Bedroom #3: 10×9 (third floor)
- Bedroom #4: 12×12 (main floor)
Nice place, good location, appropriately priced below SFHs in the hood, looks well built…basically upper-middle class commodity TH housing in a good GZ location.
“all new granite/SS kitchen redone to perfection. Updated baths.”
It was built in 1995, so it probably did need updating and the owners did a nice job. But the kitchen rehab is sort of blah (not to mention the view from the window too), and now the new buyer is stuck with it. I wonder, what if they had ripped out the old kitchen completely and left it unfinished and given a credit? Sure, the toothbrush-ready types would be aghast, but how much vision would one need to see that then a buyer could totally customize it, since the kitchen hold a prominent position on that floor?
wonder if this is the one Chris O’Donnell bought/rented. when he became a fixture jogging around the hood is approx when the gentrification of this slice of Lake View went into overdrive.
“how much vision would one need to see that then a buyer could totally customize it, since the kitchen hold a prominent position on that floor?”
They could even have the installation contracted for, with finishes to be chosen by the buyer (I mean, who wants SS appliances? How 2005!!). “Still time to customize”!!
But, the real problem appears to be that they are still living there, and (potentially) several months without a kitchen, esp w/ kids, isn’t a good solution.
You would also have an issue with financing. No bank is going to close without a completed kitchen. Everything would have to be perfect to allow sellers to live without kitchen, buyers without a need to move immediate, and contractors that can actually complete work in a timely manner.
The kitchen works for 95% of the buying public. The vast majority of people have no imagination. Most people who can afford a place like this also are busy professionals and don’t have the time nor patience to deal with renovations. This is why DIY and fixers don’t work for most people.
Nice Deck
$513,200.00 + $70,000.00 = $583,200 / $648,000 = 90% financing 10% downpayment in December 2004.
Although the kitchen is new, it looks dated to me. The cabinet doors may appeal to the masses but I really dislike them. Looks fairly cheap to me but considering the amount of cabinetry it may have made sense. Also, the kitchen looks plenty big to not put the micro above the cooktop.
“Although the kitchen is new, it looks dated to me. ”
We get told on here repeatedly that white kitchens are “haaawwwt”, but you probably have a point on the SS appliances, as we are also told repeatedly that SS is passe and dated.
I, too, don’t much care for the detailing on the doors and *strongly* disapprove of the knob pulls for drawers–which is an actual problem b/c if you want to switch to pulls, you have to fill that hole somehow.
If you’re o.k. with the location, this place is a great value. Can’t imagine it not closing quickly for $650k, or $675k by end of summer.
This is a place we would have considered, but it is about 100K out of our price range.
I agree with the posters about the cabinet doors. I don’t like the ridges. I want flat doors in my kitchen – easier to clean, less collection of dust/grease. That said, if it was prices right, I probably still would have bought it, everything else being equal.
Is there a bath on the floor with the kitchen? Or, is the family room level missing a bath?
So if stainless steel appliances are passe and outdated, what is the appliance surface du jour?
“$513,200.00 + $70,000.00 = $583,200 / $648,000 = 90% financing 10% downpayment in December 2004.”
Looks like he was far better off buying instead of renting, no?
Oh, and the taxes are too high too. We appealed ours and got them reduced to the price at which we bought our place.
anon (tfo) – the ss appliances are the only thing i like about the kitchen.
could they have possibly kept the original cabinets and just added new granite and ss. the listing does say “all new granite/SS kitchen”
as for white kitchens, the only 2 types i can deal with, while extremes, are the traditional ones with nice molding details (think christopher peacock) or a modern european style with white lacquered flat panel doors. everything in between i dislike.
““Although the kitchen is new, it looks dated to me. ”
We get told on here repeatedly that white kitchens are “haaawwwt”,
”
It’s the black countertop that screams 1997-2000 and makes my eyes tired.
I’m a vampire, don’t wanna see my reflection and glossy, black surfaces are verboten in my abode.
That’s why I’m a big fan of butcherblock.
http://www.redfin.com/IL/Chicago/1880-N-Larrabee-St-60614/home/13347167
4 bedroom TH in Lincoln district, I think. $650k asking. Definitely looks pretty dated though.
Nice-looking place in a good location. The taxes are definitely too high.
So, 5 units in the row, two with lower-level garages, three sharing the garage at the end, with the alleyside unit having a GatorDeck. Pros and cons to each of the 3 unit types, right?
chukdotcom:
It’s at least close. Assuming it sells for 650, they’re probably out ~$30k a year in interest (maybe $20k after tax savings), ~$9k a year in taxes, ~$1k a year in assessments, and ~$50k in total transaction costs (or about $7k a year). How much for updates? If those are all new kitchens and bathrooms, maybe another $50k just in upgrades (so another $7k a year)? The kitchen is big. How much in general maintenance? Maybe $4k a year?
What could you rent for $48k a year? MLS is showing a couple 4 bedroom entries in that zip – not sure on how the location compares.
What makes the kitchen look dated in the white/black contrast which is so passe not the appliances. For instance look at:
http://www.chicagotopcondos.com/?q=07788247#
Same white cabinets but it does not look bad because the stone is not black.
“So if stainless steel appliances are passe and outdated, what is the appliance surface du jour?”
The style-meisters don’t have a clear answer, tho white, cabinet front, glass and carbon fiber have all been proposed. And, in a actual high-end application, I kind of agree.
I’m more interested in what might replace SS in a “typical” $20-$50k kitchen reno. And I think the answer is “nothing; SS for the foreseeable future”.
“It’s at least close.”
Yes, and that is even with buying during the bubble. Just imagine how much better buying is over renting during a bust.
“4 bedroom TH in Lincoln district, I think. $650k asking. Definitely looks pretty dated though.”
Yes, Lincoln.
I think (other than the master bath) it would look a **ton** less dated if they staged it with more modern furniture. And the bath would be helped a huge amount by swapping out the gold fixtures and getting rectangular mirrors to replace the ovals (would still look somewhat dated, but it’s a cheap-ish fix).
i have black granite and its fine. easy to see stains compared to lighter shades of granite and when clean it looks really sharp
i don’t post…. Butcherblock is real purty but i had it in both sides of an island cooktop and found out the hard way that you better always have trivets out and ready. Mineral oil too.
too bad so many people choose to rent this bust rather than buy. i guess renters really are looooosers.
yep … Granite, stainless steel…. Might not be this years ‘it’ thing, but will always come back because – just so practical.
My fav is corian… It’s a copy of granite but the same price… To me like buying a poster of a matisse from ikea for 74 million.
“It’s a copy of granite but the same price… To me like buying a poster of a matisse from ikea for 74 million.”
But can you sand down the poster (or the granite) and still have it look the same? Not really worth anything to *me*, but I at least understand it.
Also, is there any need to seal Corian, ever? Honestly dunno.
I hate my Corian, but I like my CesarStone.
Corian = plastic or pvc or something
my parents had that in one of their homes, it was quite ugly by todays standards IMO and didn’t look like granite at all, more like formica but in a plasticy pre-molded sorta way
anon… The problem is if you make a bad mark on butcherblock you HAVE to sand the entire thing or you can easily see the difference. In my opinion was the prettiest surface i had, just need caution.
I’m actually open to lot’s of surfaces. Love the industrial ss countertops in the right place, have had concrete which was cool… Just found black granite to be the easiest and most worry free. I cook a lot.
We have black granite and it is ok, but I do think it is starting to look dated. Just went on a high end kitchen walk in OP over the weekend. Lots of cool stuff. Stainless is being replaced by flat or matte colors. Still lots of granite. We did see a nice granite counter that was “rough” so it didn’t have the glossy finish. It was really nice. It looked similar to concrete.
“Stainless is being replaced by flat or matte colors.”
So if you want to change the paint color, you (almost) have to buy new appliances, too? Seems like another answer to the high-end kitchen question, but not so much the mid-range.
Yeah, you would have to replace appliances most likely but it wouldn’t surprise me if someone came out with some kind of a attachment to change the look of a stainless frig.
I think Stainless is pretty timeless though and would look good in any kitchen. We saw quite a few stainless counter tops too that looked great next to some traditional stone tops and islands.
These were recently renovated kitchens where it was obvious the owners spent some nice change on them, so they had the luxury of changing out everything, moving walls, etc.
Any chance that we’ll go “retro chic” anytime soon and sing the praises of avocado/harvest gold/bronze/red laminate appliances? I’m so tired of “neutral” kitchen colors!!!
And why do so many bathroom over-the-sink mirrors NOT have medicine chests behind them? Whither the medicine chest?
And why so “inappropriately placed” mirrors that reflect the Bathroom Bowl?
Feeling rather “inquisitive” today for some reason.
@Fashionista, that is what is happening but the colors are a little more subtle. I’ve seen grays, blues, reds, green, yellow, etc. The colors aren’t as glossy, the surface may be textured, but the appliances look a little more up to date and high tech.
You can get the Wolf and Viking ovens with colors on oven door now too as well. Some parts stainless, but other parts colored.
Butcher block has and will be a most forgiving surface (knives, etc) for those who truly cook. Stainless runs a close second in a practical kitchen. Neither works well if you have an open kitchen that you can see when you walk into your home as they do scratch/burn, etc. which i think is part of the charm in a true working kitchen. I have used restaurant reclaimed butcher block counters in 3 homes and in all the aged patina worked very well and the 4 inch counter blocks were a fraction of the cost of stone.
There’s always those handful of companies that do the vintage-style appliances like: http://bigchillfridge.com/site/
Which look more and more appealing to me as I completely HATE my french door fridge and cleaning gummy toddler handprints off stainless.
ed.. Define working kitchen to my wife. Warning though, when her minds made up, she seems to no longer understand english.
“too bad so many people choose to rent this bust rather than buy. i guess renters really are looooosers.”
HD – try not to be too hard on yourself. Instead of calling the renters “losers” you should be calling the buyers (in this bust) “winners” since they absolutely WILL almost certainly come out ahead of the buyers (financially, emotionally and psychologically).
Possible comp around the corner –
http://www.redfin.com/IL/Chicago/2806-N-Seminary-Ave-60657/home/12793768
OK – all of you renters – do yourself a favor and just take a look on the MLS to see what is actually out there for rent in your area – you are going to be SHOCKED at how the rents have skyrocketed in the GZ (oh, and don’t point to craigslist – so many listings there are a scam – typical bait and switch). I think the huge price increases are enough to make most renters buy..
“I think the huge price increases are enough to make most renters buy..”
But they’re not buying (at least not in the city.) We’re near a 20 year low in sales right now.
Most renters:
1. Don’t have a downpayment in which to buy
2. Or Don’t have good enough credit to buy
3. Or Realize they won’t live there 10 years or more – so why buy?
In case you haven’t noticed- buy now or be priced out forever has kind of gone away. There’s no hurry to buy anything. In fact, some properties are sitting on the market for years.
It’s funny- because it’s the renters who have all the power right now. They can buy (if they want)- with nothing to sell. No equity lost. No short sale on their credit report. No worries over foreclosure.
Sabrina,
what are you talking about? Renters may have the “power” for the next few months to a year – but, believe me, by next year, they will either have to move to more dangerous/less desirable areas or they will be paying WAY more to rent where they are than they have in the past. Renters should not be stupid and think that the rent they are paying right now is going to last forever and, when they are stuck with huge rent increases, guess who gets left out of the picture……
Renters are free as a bird. They can move at any time. They can buy at any time. They have NOTHING to sell. They have all the power. It’s a great position to be in.
I can’t tell you the number of people who write me and wish they were renters (instead of having to sell their property, for a loss, if they can sell it at all.) Many realize an opportunity was wasted. They feel trapped. There’s not much you can tell them. They bought at the wrong time.
“I can’t tell you the number of people who write me and wish they were renters (instead of having to sell their property, for a loss, if they can sell it at all.) Many realize an opportunity was wasted. They feel trapped. There’s not much you can tell them. They bought at the wrong time”
They are idiots and are feeling the hurt right now – that will change in the next few years (you will be getting letters from them telling you how they are so happy that they own). Don’t be dumb – renters are not “free as birds” – they have an obligation to pay rent – and that rent is ridiculously high – again, Sabrina, look at the rents of even 1 bedrooms in 60610, 60611, 60614, 60654, etc. – it is ridiculous. Don’t be surprised if everyone’s rent skyrockets next year (sure, landlords are happy to keep rents low now – but once they realize they can get so much more for their units, they will raise the rents and the tenants will be out of luck).
Clio- I don’t know what you’re talking about. Repeat after me: my rent went up $25 in the GZ. As did everyone else’s I talked with. That’s pretty standard.
Wow. Scare me. That’s a half tank of gas.
I guess I had better rush out and buy something right now!
Oh- wait- all those “for rent” signs on my street? They don’t seem to be coming down real fast either.
And yes- I’m sure those who write me depressed that they own (and are losing thousands of dollars) will get over it in a few years (or decades.) But renters have nothing to get “over.” They aren’t losing thousands of dollars. Like I said- it’s a great time to be a renter.
It’s also a great time to be buying in the suburbs (as long as you’re buying to live there for a long, long time.) I’m seeing houses that were listed at $800,000 (dreamers!) selling in the $500,000s.
As HD would say- basically around 1998-2000 prices. And these are NOT foreclosures (just baby boomers who finally have figured out they have to lower the price to sell.)
“Clio- I don’t know what you’re talking about. Repeat after me: my rent went up $25 in the GZ. As did everyone else’s I talked with. That’s pretty standard.”
Sabrina, like I said, it takes a year for rents to start creeping up but it has already happened in the GZ – sure, landlords (like me) are cautious and are keeping our tenants for the next year, but as I see similar units being rented for 100-300/month more than mine, you can bet that I will raise those rents next year. Also, the fact that nobody is buying is further evidence I need to raise rents. Soon, renting in the GZ in Chicago will be like renting in NY – impossible. But look on the good side – you are “free as a bird” to move to Englewood – which is where you, HD, Bob, and G will probably be living in 5 years, waiting for the market to crash……
I live in the GZ. My rent isn’t “creeping up.”
Why will renting in the GZ be “impossible” when there are empty units as far as the eye can see – and they continue to build more apartment buildings downtown? Walk around LP and Lakeview sometime Clio. Plenty of inventory of apartment rentals. Of course, they are mainly for 20-somethings just out of college- but there are plenty of those.
People will now rent in their neighborhood of choice in their 20s. Then, instead of buying a condo, they will buy a single family home either in the city (if they can afford that)- but for most who cannot- they will simply move to the suburbs.
Condos will get crushed over the next decade- unless they are big enough to support a family. I’m talking about the 1- and 2-bedroom units. There’s absolutely no reason to buy a condo in River North when I can rent the same thing for the same price (with no money down).
Again- it’s all about the downpayment these days. In the big buildings, they’ll let you move in with just $300.
By the way- it has NEVER been “impossible” to rent in Chicago. Never.
clio/james/cooper…
Why raise rents next year? I’m fairly certain, somewhere in Ze’s burned out memory, he remembers you, with your panties all in a bunch, telling us you just raised all your tenants rents 200 dollars.
I rent my home in the GC and just signed a 3 year agreement with only a 1% increase the 3rd year and my lease includes heat. As long as I can do this I am very cautious about the real estate I am purchasing.
Ze, consistency is not clio’s strong suit. Considering what he writes about me, his honesty is lacking, too.
“Why raise rents next year? I’m fairly certain, somewhere in Ze’s burned out memory, he remembers you, with your panties all in a bunch, telling us you just raised all your tenants rents 200 dollars.”
I did raise rents on my units that came up for rent this year – but my comments on this thread were in reference to a few long-term tenants (I didn’t raise their rents) – however, next year, I WILL raise the rents for these long-term tenants and don’t really give a crap if they stay or move.
Apartments are for renters. Houses are for owners. Also, don’t forget that in 10 years the average 30 year mortgage amortizes 15%. Not a ton, but that represents savings doesn’t it?
“Renters are free as a bird. They can move at any time. They can buy at any time. They have NOTHING to sell. They have all the power. It’s a great position to be in.”
Except for the part about landlords not fixing their unit, raising their rent or not renewing their lease.
By the way, Sabrina most of your comments are geared toward someone who is a marginal buyer anyway. If you are renting in Chicago in your mid-30’s it seems to me that you likely aren’t buying a 4BR SFH in Lake View in your lifetime. It is not as if the choice to rent will allow you to accumulate a 300k downstroke for that trade. The few people who fit that profile yet rent do so for different reasons. For example, one of our tenants is building a $1.25M custom home in Lincoln Square but sold their other home quickly and wanted a gap solution. The others who make enough to save that usually spend more to live a higher end lifestyle.
Regardless, it never ceases to amaze me how dumb renting consumers will accept 50% depreciation losses in 3 years on a 50k Lexus SUV guaranteed but are scared of *maybe* losing the same amount of a house. There are a lot of those people out there.
Actually, here is a quick analysis:
New car every 3 years (or lease — you still finance the loss in residual value of course). 50% 3 year residual value. 50,000 SUV each 3 year cycle. $8,333 lost per year in value. 100k in 12 years. Tell me why that isn’t far worse than losing 20% (!) buying today on a 500k house?
50k unrealistic or too rich (go price any SUV btw)? Try 35k every 3 years. Still 70k is capital losses on one car alone. Most families have 2 cars.
“There’s no hurry to buy anything. In fact, some properties are sitting on the market for years.”
I want to share my personal experience with this and this belief in the market right now.
While the above statement may be very well true for properties outside green zones, needing updating, etc. Properties that are in good areas in good condition at the right price are MOVING quickly in this spring selling season, much much faster than they were moving during summer of 2010 when we were looking. As I’ve said on many prior threads, we were in the market for a 3-4br in Lakeview, LP, Lincoln Sq, or Bucktown in the range of $400-500k.
We made an offer on a place in Lincoln Park (bank-owned) two weeks ago. There were FOUR other offers – two which were cash (they obviously took the cash offer). Then, we saw a new construction place in Roscoe Village/Lakeview over weekend. We visited on Saturday and there were two units available. When we were at the open house, nearly 25 people walked through! By the time we left on Sunday, they were both under contract – one of which went to us and there was ANOTHER offer we were competing against.
I just want to put it out there to people who read CribChatter and are actively looking at real estate – if you see a place in a good location, needing minimal updating/work, and is priced within reach of conventional limits – IT WILL SELL! The market isn’t as dead as it was about a year ago where we would see a place we loved, then a month later it would still be sitting even with price reductions. I felt much more competition with (probably from buyers who were too skittish to buy last year, so are now out and about this year) since we’ve been out looking this season.
Sorry for long post, just wanted to chime in with my personal experience.
Sorry, meant to say *maybe* losing 20% over 12 years WORST POSSIBLE CASE SCENARIO (which not even the most bearish bears even believes).
White is right. Good layouts, move in condition are moving. Part pent up demand, part increased hiring, part higher 401(k) balances. And yes, people who buy 500k places have 401(k) balances and typically exceed 100k HH income. These are far from median income HH. Elite schools, good jobs, strong earnings prospects and some tangible wealth.
JMM: can you kindly tell us what you think is the best RE investment type for the mini-trump landlord to own and why?: SFH, condo (w/ low assessments), 2-3 flat, or 6-unit+ apt. building, etc. thanks
“The few people who fit that profile yet rent do so for different reasons.”
Agreed.
I only know a few people who “could” buy a place right now but continue to rent (i.e., they have the credit, income and downpayment). They’re either fairly young and single (like 27) and the 1/1.5 units they’re renting in RN or SL serve them just fine (and they’re rightly skeptical of buying a one bed or small 2 bed) and/or are in a relationship transition (mainly getting engaged or married, and are still figuring out in what part of the city they’d like to buy together, having shacked up in the more desirable rental). Other than these few rare cases, I don’t know anyone of any means (be it folks in their late 20’s/early 30’s earning 200k or so, or folks beyond that age group earning more) who is operating under the “I’m so smart – I’m going to rent a place and save-save-save – only knifecatchers would buy nowadays/didn’t you see the recent CS Index?” mantra repeated by many on here.
“what you think is the best RE investment type for the mini-trump landlord to own and why?”
What’s your horizon, your expectation of management burden and your anticipated leverage?
We are early 30s earning >200k, and we would love to be renting.
JMM – what relevance do 401(k) balances have?
“I don’t know anyone of any means … who is operating under the “I’m so smart – I’m going to rent a place and save-save-save – only knifecatchers would buy nowadays/didn’t you see the recent CS Index?” mantra repeated by many on here.”
Well, you “know” HD.
Because if you don’t have a any (or at least decent) retirement/401k balance – there’s no way you should are in a position to be coughing up a 20% down payment on real estate.
hahah sorry for so many typos -.
Because if you don’t have any (or at least decent) retirement/401k balance – there’s no way you are in a position to be coughing up a 20% down payment on real estate.
“Other than these few rare cases, I don’t know anyone of any means (be it folks in their late 20’s/early 30’s earning 200k or so, or folks beyond that age group earning more) who is operating under the “I’m so smart – I’m going to rent a place and save-save-save – only knifecatchers would buy nowadays/didn’t you see the recent CS Index?” mantra repeated by many on here.”
That’s because either they believe “I’m so smart – I’m buying at the bottom” and/or they can afford it today and are willing to accept the risk of loss. No problem with that from me (or from current sellers.) There just aren’t enough of those buyers to stop the decline in prices. So, they are still knife-catchers.
“There just aren’t enough of those buyers to stop the decline in prices. So, they are still knife-catchers.”
Interesting, G – you never talk about the spikes in rents that we are seeing in the green zone – isn’t that “wasted money”. Also, you never talk about the intangible positives about owning… All in all, I think the consensus is that it is better to buy if you are going to be in the place for 10 years. Period. It may also make sense to buy if you are going to rent out the place later or if you get a really good deal now. Renting is for transients and people unsure of their future in the next 5 years – sure there are some of them out there – but the majority seek stability and there is no stability in renting…..
“JMM – what relevance do 401(k) balances have?”
What is this supposed to mean?
If you think it’s irrelevant, I’d be happy for you to withdraw, take the penalty and taxes, net it and cut me a check for it. I will split it with Anon.
“Can you kindly tell us what you think is the best RE investment type for the mini-trump landlord to own and why?”
I like 2 flats in Bell. 500k-600k.
“There just aren’t enough of those buyers to stop the decline in prices”
Except every housing unit is owned, either by the occupant or by an investor.
The decline in prices in Chicago that makes up 2/3s of the CS index is clearly decoupled from the real estate discussed here. Again, the state of play in Englewood is not really relevant to the digerati blog types who whine about the cost of hosuing in East Lincoln Park.
“I like 2 flats in Bell. 500k-600k.”
There’s one *on* Bell under contract at $599,900 list. That you guys?
Same block as as a brick 2-flat teardown ($515k) and a block north of a brick two-flat gut job.
“There’s absolutely no reason to buy a condo in River North when I can rent the same thing for the same price (with no money down).”
Except when you can’t. Which is starting to happen at some of today’s prices.
“Except every housing unit is owned, either by the occupant or by an investor. ”
Together they aren’t currently buying enough in the GZ to maintain prices.
“The decline in prices in Chicago that makes up 2/3s of the CS index is clearly decoupled from the real estate discussed here. Again, the state of play in Englewood is not really relevant to the digerati blog types who whine about the cost of hosuing in East Lincoln Park.”
Same for the SFH’s making up the CS top tier that you like to claim as being the only thing worthy of consideration on CC.
“Except when you can’t. Which is starting to happen at some of today’s prices.”
And will happen even more at tomorrow’s.
JMM – I meant, why would an increasing 401(k) spur home purchases? Are you referring to borrowing from a 401(k) for a down payment? Do people actually do that?
“Same for the SFH’s making up the CS top tier that you like to claim as being the only thing worthy of consideration on CC.”
Oh the mythical GZ paired sale below 290k? Average duration of ownership is what? 7 years? So we’re talking from 2004 average? Below 290k?
Maybe an odd and end from 25 years ago, but north side SFHs haven’t much traded below 300k since the early 1990s.
“And will happen even more at tomorrow’s.”
How do you know? Doesn’t the very fact that value go below rent parity change the supply/demand equation? You are assuming demand is constant, when it is not.
Let’s say there is a place that you can buy for $2500 a month (mort, taxes, etc) And the same place would rent for $2750. Would you choose to rent it or buy it (even if you thought prices might go lower)?
At what price discrepancy do you become a buyer (even if you thought prices might go lower)?
G: Any luck finding me some Unicorn-Compliant listings? Didn’t think so.
Alas, we’re still holding out hope that you’ll share the general/within-couple-of-block-radius of your residence with us…
“I meant, why would an increasing 401(k) spur home purchases? Are you referring to borrowing from a 401(k) for a down payment? Do people actually do that?”
Sure, people can and do. In fact the ERISA rules permit a withdrawl for a qualified purchase of a home even for plans that do not allow for loans (which is a bad idea anyway, both for the employee and employer).
But it is also psychological. Downpayment comes from savings outside of 401(k) that is made possible in part because 401(k) is performing well.
G:
Do you have handy the total sale counts for SFHs in CC-popular hoods in the city vs. total SFHs in the city over some time period? ANd maybe total-metro SFH sales for the same periods (or point me to a source, and I’ll carry over). Because, in the absence of data, it seems that the SFHs we discuss here do have a quite small effect on the CS, regardless of tier.
“At what price discrepancy do you become a buyer (even if you thought prices might go lower)?”
Buy the house and skip the Lexus 350. At least with the former you might break even. With the car, you know you lose. I see the cars that come out of crappy two flat rentals in Chicago. I hope anyone worried about losing money in RE drives a 10+ yo car or none at all. Otherwise they are hypocritical.
The vast majority of buyers in the GZ are condo buyers, which aren’t in the tiered index. Suburban homes are, though. The condo index is the most applicable to CC.
I have no problem with your disagreement on this point. Just like with your CS 125 and 120 bottom calls.
“Because, in the absence of data, it seems that the SFHs we discuss here do have a quite small effect on the CS, regardless of tier.”
And those that do fall into top tier, which has had no decline in a long time.
“Alas, we’re still holding out hope that you’ll share the general/within-couple-of-block-radius of your residence with us…”
“We”?
“Because, in the absence of data, it seems that the SFHs we discuss here do have a quite small effect on the CS, regardless of tier.”
Of course they do. My argument is that the condo index is more relevant to the GZ than the SFH top tier.
If you want to define the CC hoods for me by community area, I’ll get you the data.
“I hope anyone worried about losing money in RE drives a 10+ yo car or none at all. Otherwise they are hypocritical.”
What if they have a HH income of $300k and drive only late model used Hyundais while worrying if it’s the right time to buy an $750k house?
“What if they have a HH income of $300k and drive only late model used Hyundais while worrying if it’s the right time to buy an $750k house?”
funny. I know a couple who fits this description very well. and another that is pretty close.
chuk. Theoretically, at these interest rates, at rent/own parity you should be a buyer.
“If you want to define the CC hoods for me by community area, I’ll get you the data.”
Thanks. To me, in the relevant-to-SFH discussion, it’s LP, LV, NC, maybe Uptown and sort of West Town/Logan/Avondale, with a *huge* asterisk, as over half of each of those ‘hoods is not relevant.
And the relevant ‘burbs are mainly those feeding NT, Glenbrook S/N, Hinsdale C, and Evanston and OP/RF.
“Of course they do. My argument is that the condo index is more relevant to the GZ than the SFH top tier.”
Also, I agree with you on that.
THe problem here is that there are so few homes listed at the CS index prices in the city. There’s an argument to be made that you could jump in now and not lose that much, even if prices take another nose dive; but good luck trying to find a decent property listed today at a reasonable price that isn’t snapped up in a second. As G’s stats the other day showed, volume is down, sales are down and listing times are up. The market is the same overpriced homes listed over and over again. No wonder why it’s so slow.
“chuk. Theoretically, at these interest rates, at rent/own parity you should be a buyer.”
But what if you are like HD or G and think prices will go lower? Should they be buyers at rent/own parity?
i’d like to recommend irving park, portage, des plains, and park ridge for the data set, if possible. [a good gz suburb would be highland park] I know many aren’t cc-gz but not everybody can live there. they have more sfh’s there too.
oh and g i’d still like to know how somebody generating cash flow could be a knife catcher?; Although I have to commend you on putting that positive spin on your bearish sentiments makes the crash not so bad.
Whats your outlook on rental rates going forward? as depressing as housing prices or would they be buoyed by the people have to live somewhere deal.
thanks for the data!
“[a good gz suburb would be highland park]”
vassal: I agree, but Lake County isn’t in CS, which is the basis for my interest in comparative volume.
And Portage and IP would be good just to show how small the CC-hood SFH volume really is, even compared to neighboring areas.
“oh and g i’d still like to know how somebody generating cash flow could be a knife catcher?”
If it’s producing 3% now, versus 10% sometime later, how is that 3% buyer *not* a knife-catcher (hate the term, btw).
chuk….I’m fairly certain that G is an owner and his negative sentiments are more along the lines of mine, his – that it looks like shit. Mine – no rush.
Opinion should change nothing, renting over owning -at parity- current interest rates-will be a bad bet if you make it again and again.
I prefer ‘fb’ as in ‘f****d buyer’ or ‘f****d borrower’.
“a knife-catcher (hate the term, btw).
“I prefer ‘fb’ as in ‘f****d buyer’ or ‘f****d borrower’. ”
And I prefer “bitter renter”.
[I don’t really, but couldn’t resist]
lol; but I think people are moving on properties that are good value (i.e. 10% now; obamahope that is more later w/ appreciation to boot); I can’t measure the emotional but rent basis cash-flow is the closest to the income metric bears reference. [i know you know]
i just find this all-cash situation interesting, hopeful, frightening, and a bit frustrating but barring anything catastrophic its just going to be a long bumpy ride. Not much fun imo. esp. for those out looking in.
”
And I prefer “bitter renter”.
[I don’t really, but couldn’t resist]
“
i know for a fact that my rental basis would be higher to rent than own and I can assume that would be for the other landlords on cc plus a few individual owners with expensive unicorns.
dog owners too
data point: I spoke yesterday with a friend who is a residential mortgage banker with a Chicago-based bank (name we’ve all heard of). He’s been a mortgage broker for 15 years, and he was with Wamu and Chicagobancorp before that. His clientele is/was middle-class GZ buyers of everything from studios, 1 bds. up to SFHs. His quote yesterday: “my entire database (of customers) going back to 2000, the majority are underwater”.
His conclusion: that most of his database clients will not be seeking his services any time in the near future, and he’s left to deal with the few walk-ins to the branch, and it’s not leading to enough volume for this father of three.
Oh Dan that poor father of three. Afterall that was purely altruistic, non-profit work he did throwing money at people while being employed by WaMu. He had nothing to do with this bubble and subsequent economic downturn, I’m sure.
Bob: this same person was a Chicago mini-trump who amassed a tidy portfolio of 2-3 flats & condos, that probably didn’t cash flow well (or at all) at acquisition, that were leveraged, then leveraged more to acquire the next property, etc. Long story short, he no longer owns these investments, he bailed over the last 2-4 years on them, probably a good idea, and I gather that there’s not much $$ around to show for all of this past effort!
Dan I knew these dominoes had to fall at some point. When valuations got to such a point that landlording, which is a full time job in itself, not only doesn’t make any money but it actually costs for the “privilege”, something had to give.
I look forward to seeing all of the landlords who bought during the boom put tons of sweat into landlording in the decade ahead. They’re going to learn that people who sell those infomercials with hawaiian shirts on next to the beach actually make their money off of selling infomercials and not real estate.
Even today the majority of Chicago MLS listings in the GZ are not cash-flow positive: this means a ways to fall.
“Even today the majority of Chicago MLS listings in the GZ are not cash-flow positive”
What’s your assumed cost of funds and LTV to come to that conclusion, Bob? Serious question.
chuk, I see ze’s answer about rental parity. I would just add that many people often ‘buy up,’ even on their first purchase. In other words, staying put usually means paying less because they are currently renting a lesser property than they are looking to purchase.
“What’s your assumed cost of funds and LTV to come to that conclusion, Bob? Serious question.”
LTV ~75%, cost of funds ~3%.
“I would just add that many people often ‘buy up,’ even on their first purchase. In other words, staying put usually means paying less because they are currently renting a lesser property than they are looking to purchase.”
Bingo. If I buy, I’m looking for something that should be good for 10 years or so (beyond that is problem for future DZ). Renting, as I do, I just need something good for the near term.
What cities/towns/villages am I missing?
Hinsdale Central – Hinsdale, Oak Brook, Clarendon Hills? Burr Ridge?
New Trier – Wilmette, Winnetka, Kenilworth
Glenbrook N/S – Glenview, Northbrook, Northfield?
“LTV ~75%, cost of funds ~3%.”
Thx. One more related q–how you determining rental value?
“What cities/towns/villages am I missing?”
HC–I think you got it.
NT–Add Glencoe, Northfield is NT, not GB
Glenbrook–I think you got it.
“chuk, I see ze’s answer about rental parity. I would just add that many people often ‘buy up,’ even on their first purchase. In other words, staying put usually means paying less because they are currently renting a lesser property than they are looking to purchase.”
Well, in that case renting will always be cheaper than buying. Of course its cheaper to rent a 2br condo than it is to buy a 3br SFH. You need to do an apples to apples comparison.
a lot of my answer comes from a renter – who intends to one day buy – has both price and interest rate risk. They are very short i rate whether they realize it or not. I bet if you quantify that risk as a NPV on 30 yr of i rate pmts it would surprise you.
“a lot of my answer comes from a renter – who intends to one day buy – has both price and interest rate risk. They are very short i rate whether they realize it or not. I bet if you quantify that risk as a NPV on 30 yr of i rate pmts it would surprise you.”
You just went over the head of a lot of people. Maybe not many regulars, but most people in general.
“Thx. One more related q–how you determining rental value?”
Take average of craigslist ask prices and lop off 12% (vacancies, concessions, etc).
ok… But a renter should understand that they have more risk than they see, and it’s no small amount either. Of course you can just remove it and never buy.
“ok… But a renter should understand that they have more risk than they see, and it’s no small amount either. ”
Try explaining that to people who don’t *actually* understand how ARMs work, even if someone skillfully explains it to them at a 4th grade level.
“a renter – who intends to one day buy – has both price and interest rate risk”
Doesn’t two offset each other? Just (mostly) kidding.
ah… 4th grader… Try CEO.. Make everything cartoonish and informative and hope then maybe they will get it.
Ok but for fun… Go to a 10yr tnx chart and just look at a 5yr chart -if that made sense-and seperate each year. Look at each yr price movement and tell me what movement you think the 10yr can do a yr. Interesting that it moves a good amount but always returns home for x-mas… One year it wont. To me, 2 full pts feels totally possible. I would be interested in your answer. Or anyone elses.
btw.. On cell phone so i’m kinda on memory here with the 2 percent – if it’s way off- and hey.. I made it thru college like tommy boy! U all got your advanced degrees.
“Ok but for fun… Go to a 10yr tnx chart and just look at a 5yr chart -if that made sense-and seperate each year. ”
You don’t have any nieces/nephews you’re close to, either, do you?
Like I said, you give folks, in general, WAY too much credit on their numeracy. But that, of course, is one big reason Wall Street is able to collect the rents it does.
“To me, 2 full pts feels totally possible.”
2009 saw 140+, so I don’t see 200 as particularly unlikely. Repeat of the 400+ (downward) of ’82 does seem improbable, but obviously not impossible.
my apologies, was pointing this analysis in a specific direction for someone, who tends to be rather risk adverse, to look at. Knowing your risk and taking it and not being aware of your risk, and taking it are very different things.
Here are 2010 detached SFH closings for 2010 with % of Total CS 8-county sales and % of City or % Non City Sales (for suburbs)
Lincoln Park 151 0.4% 1.8%
Lake View 109 0.3% 1.3%
North Center 144 0.4% 1.7%
Uptown 21 0.1% 0.3%
Lincoln Square 65 0.2% 0.8%
West Town 127 0.3% 1.5%
Logan 157 0.4% 1.9%
Avondale 66 0.2% 0.8%
Irving Park 173 0.4% 2.1%
Portage Park 278 0.7% 3.4%
Selected Chicago Community Areas Total 1,291 3.2% 15.6%
Evanston 375 0.9% 1.2%
Hinsdale 240 0.6% 0.7%
Oak Brook 55 0.1% 0.2%
Clarendon Hills 86 0.2% 0.3%
Burr Ridge 96 0.2% 0.3%
Wilmette 267 0.7% 0.8%
Winnetka 194 0.5% 0.6%
Kenilworth 33 0.1% 0.1%
Glencoe 101 0.2% 0.3%
Northfield 50 0.1% 0.2%
Glenview 376 0.9% 1.2%
Northbrook 309 0.8% 1.0%
Oak Park 293 0.7% 0.9%
River Forest 77 0.2% 0.2%
Des Plaines 348 0.9% 1.1%
Park Ridge 297 0.7% 0.9%
Selected Suburbs Total 3,197 7.9% 9.9%
Here are the CS 8-county totals for 2010:
Cook County 22,961
DeKalb County 549
DuPage County 5,242
Grundy County 346
Kane County 3,814
Kendall County 1,024
McHenry County 2,194
Will County 4,469
Total CS Counties 40,599
Chicago was 8,272 of the Cook County sales. FTR Lake County was 4,927 sales.
“my apologies, was pointing this analysis in a specific direction for someone, who tends to be rather risk adverse, to look at. Knowing your risk and taking it and not being aware of your risk, and taking it are very different things.”
No, I’m being unclear. I only added the (downward) to avoid someone saying “but that was a reduction!!” Any amount an index can go down in some time period, it also *could* go up, imo. I think you’re “it could go up 200 bips in 12 months” is a perfectly reasonable expectation, and NOT even a worst case scenario, even w/o US economic calamity.
Thanks, G!
That’s *tiny*. Even if every one of those was “high tier” (highly doubtful) and counted for C-S (impossible), they’d only be 1/3 of the top tier number. Tho, strangely enough, they total exactly 11.1%–1/3 of 1/3.
Winnetka alone had more SFH sales than any of the prime CC-sfh-hoods (LP, LV, NC, WT/Logan[splitting BT]).
For the condo index distribution, I added the Near North & South Sides and the Loop to the city areas above. Here are 2010 condo/TH closings for 2010 with % of Total CS 8-county sales and % of City Sales:
Selected Chicago Areas Total 7,463 31.7% 65.6%
Chicago Total 11,383
CS 8-county Total 23,573
“Selected Chicago Areas … 65.6% [of City of Chicago condo/TH sales]”
and
“Selected Chicago Areas Total 7,463 [condo/TH sales]”
v
“Selected Chicago Community Areas Total 1,291 [SFH; and only 490 east of the river]”
Proving your point about the CC-Hood market being mainly about condos/THs. About 85% of 2010 sales.
yes, anon.. Just because you are certain of something that you can’t really be certain of, doesn’t mean the risk doesn’t exist. U just give it a low weighting. I bet the NPV of 1 percent is somewhere near 10k on 100k. Maybe 21 k on 2 percent….That’s serious risk at these levels.
and if you own the loan already and it goes 400 pts in your face don’t u just re-fi? You don’ have that option the other way. Thanks for pointing that out. MUCH worse.
“I bet the NPV of 1 percent is somewhere near 10k on 100k. Maybe 21 k on 2 percent….That’s serious risk at these levels.”
Sure, but if you say that the risk of 100 bips is 20% and 200 bips is 10%, then you’re talking about an EV of ~$2k/$100k for both.
I agree that the odds may well be higher than that, but do you think that–right now–100bps is more likely than not w/in 12 months?
And, yes, I realize that if you use a 5 year horizon, it’s more than 5x higher probability, but it’s still going to top out at something less than 90%, no?
“and if you own the loan already and it goes 400 pts in your face don’t u just re-fi? You don’ have that option the other way. Thanks for pointing that out. MUCH worse.”
Of course you do. I was just looking at the most extreme calendar year moves to get a sense of the range. Bigger 12 month moves, but not tied to 1/1, so too much work, eye-balling it.
And, of course, it’s not a percentage move kind of thing (ie, not bracketed by X% of current nominal value), like so much else. It’s pretty much as likely to move 100 bps whether the index value is 300 or 700.
no.. The point of the 5 yrs was so you could have a reasonable data sample so i didnt just pick the year with a 400 point move.
Expected value or value for that matter is not the point. The point is simply figuring w/in a years time what your maximum exposure could be. To understand the size of the risk. Hey a few months ago someone was sure they were going to work tomorrow morning only to find a tsunami qnd their teeth glowing,… You really never know what’s coming.
i guess i am just pointing out that you can easily be correct on price and lose big time anyway. Just needs to be quantified to dollars so you see all your bets as apples to apples.
“The point of the 5 yrs was so you could have a reasonable data sample”
We were just talking past each other on that one. Got that, and I wasn’t trying to equate, just extend my point of expectations, in the context of a Bob/HD sort with possibly a longer holding pattern.
Also, this:
“The point is simply figuring w/in a years time what your maximum exposure could be.”
doesn’t quite jibe with:
“find a tsunami qnd their teeth glowing”
as (1) “maximum” interest rate risk doesn’t really work in correlation to “maximum risk” and (2) if you really look at even the remotest risk as your max, w/o any expectation adjustment, then you build too much fear into it, and the typical (won’t use average, cuz it’s not right) person will make worse decisions than if they add the expectations adjustment in a rational, logical manner–that is, while +400 bps is *possible*, it’s very, very unlikely (barring problems that would make the interest rate risk seem minor), so it shouldn’t go into the max risk, even tho it’s *absolutely* a non-negligible risk.
“i guess i am just pointing out that you can easily be correct on price and lose big time anyway. Just needs to be quantified to dollars so you see all your bets as apples to apples.”
Yep, but again, try to get your typical prospective buyer to understand that.
“Winnetka alone had more SFH sales than any of the prime CC-sfh-hoods (LP, LV, NC, WT/Logan[splitting BT]).”
Which might explain why they are so expensive relatively speaking for what you get. Supply / demand.
So a SFH is a rare bird in a major urban area. Non existant in NYC. Rare and minimum multi-million in Boston and San Francisco. Within mortals reach in Chicago. Doesn’t exactly paint a doom and gloom scenario for that market.
ok anon. 1-i didn’t understand your first point.
2- my point being you never assume anything can’t happen. In actuality it is damn fine practice to start out seeing what you look like at the most outrageous scenario you can think of. Eventually it will happen to you. You can’t recover easily from catastrophic risk. You should never have any that can be avoided. THEN you assess probable risk. That’s the 1- 1.5 percent… Then you ask if you can afford to lose it and is the potential gain worth it. I always start at my potential losses.
here’s a perect example…
You roll a die and pay a dollar to do so. If you get it correct i pay you 7 dollars. Great bet … You make it as many times as i let you.
Now i tell you same game but you have to bet a million to get 7 million. Same exact odds but you ain’t playin that game!
“Ok but for fun… Go to a 10yr tnx chart and just look at a 5yr chart -if that made sense-and seperate each year.”
It is called bootstrapping rates if I understand what you are trying to say.
Are you saying people should buy now to hedge inflation?
Funny that every ahole has been buying silver as a hedge (now getting f’d, good to see) but everyone seems to forget a 30 year fixed loan RE hedge is all you need to offset inflation risk.
“1-i didn’t understand your first point. ”
If you’re referring to my (1), I was getting at (poorly) the point that if you’re considering catastrophic-type risks*, your interest-rate risk in holding off buying for a year ain’t a top fifty sort of risk. If you limit yourself to 1%+ probability risks, it’s certainly top 5.
*New Madrid 9.0? Earthquakes are excluded in your HO policy, so total structure loss is a maximum sort of risk, and if the 9.0 happens in the next twelve months, you’d be better off as a renter. 20% PV risk is small compared to that.
“Funny that every ahole has been buying silver as a hedge (now getting f’d, good to see) but everyone seems to forget a 30 year fixed loan RE hedge is all you need to offset inflation risk.”
That’s (almost) *exactly* Ze’s point. Anyone who doesn’t have the fixed rate mortgage *now* is betting that rates won’t go up (ie, they’re basically shorting mortgage rates).
JMM… Depends where they bought it?
No nothing about inflation. Simply talking volatilty and possible outcomes. Complete no opinion generated outcomes.
Yes.. You can strip out the risk and hedge it easily but that will never be done so i never brought it up. Just presenting risk surfaces. Feel free to add your thoughts.
yes it is exactly my point. And JMM is going to tell us you can replicate it for cheaper buying options on the underlying bond, he is correct, but chance of that happening in scope of why we are discussing this is 0. Secondly it still doesnt change defining your RISK, just defines a cheaper alternative to alleviate it.
Rates increase as wages increase in a highly correlated fashion though so in real terms people are somewhat hedged through their employment. Retirees, well that is a different story.
I know all the Gen Y’s who post here think wages cannot go higher because they are getting used to the real world where they cannot actually instantly live mommy an daddy’s lifestyles with big houses and big SUVs. But wage inflation is real and it is starting to show. Particularly because economists got caught flat footed on shifts in long term full employment (i.e., 5 to 7 % UE).
btw.. That was my wonk humor.. JMM..
“And JMM is going to tell us you can replicate it for cheaper buying options on the underlying bond”
I wouldn’t expect that; JMM is an ownership booster, if not really a bull.
honestly, i think real wages continue to fall for the median. The well off rise. Basically i am still convinced of the global wage arbitrage continuing.
well anon… Just find it interesting if someone was worried about a 20 percent loss on price and not seeing a 20 percnt loss possibility somewhere else.
One of those quit your job and know you are poorer than the day before, when you were working, even though all your accounts look the same… Ahhh b-hit time!
SFH in a major urban area are a rare bird; but the SFH in the GZ have all been luxurified (not a real word); meaning that if the land value is $300k, the final product needs to be 3x to 4x times that, and in order to justify that price, it needs to be high end. But there aren’t enough buyers who can afford those prices. Nobody has ever argued that SFH shouldn’t be expensive, but, the argument I think has been that absent a few properties, nothing should be over the 2005 price.
“Rare and minimum multi-million in Boston and San Francisco. Within mortals reach in Chicago. Doesn’t exactly paint a doom and gloom scenario for that market.”
That’s not true about SF. Most of the city is SFH or multi-flats. Whole neighborhoods were built as middle class housing after WWII. Drive around the Sunset (mile after mile of SFHs) or Visitation Valley or the Bayview. But like Chicago, SFHs in the “prime” neighborhoods are now out of reach of the middle class homeowner. $700k is NOT middle class. Neither is $500k. Heck, the $400k house isn’t either.
What should be alarming to the housing bulls is the 1980s housing correction was caused by an intentional spike in rates. This time around housing imploded under it’s own bubble heights…and rates are still low. If/when the Fed decides to start increasing rates that’s just another factor which will push housing prices lower.
All factors (& monied interests) came together to form this RE perfect storm: low downpayment loans, liars loans, subprime, Alt-A, prime, Option-ARMs, falling rates, and probably more I can’t think of right now.
Now all that crap has to be removed and the piper must be paid. I don’t see any positive catalysts for Chicagoland RE values in the near or medium term.
Whenever I think of this perfect RE storm I think of that POS McCrapBox condo featured here near Wellington & Sheffield (I walk by it all the time).
Geniuses paid a cool half a mill for it likely using this financial chicanery to “own”, because they were young & dumb & wanted to be near 20-something hookup nightspots and never considered that RE prices could fall. Now they’re trying to sell near peak pricing competing with a neighbor’s unit that went into foreclosure with a bid of 250k.
People are stupid however in times past they would have never been able to make such an idiotic financial decision because banks actually required a sizable down payment. On a 500k property by the time those 20-somethings could’ve actually saved the 100k it would be a few years later and most would have different priorities/be in a different stage in life. Or for the few well off people half million dollar condos represented a small sliver of the market.
Make no mistake: most of the people who bought half million dollar properties in Chicago during the boom were not this well off set. And they were not just putting 5% down as some sort of advanced “liquidity strategy”.
“That’s not true about SF. Most of the city is SFH or multi-flats. Whole neighborhoods were built as middle class housing after WWII. Drive around the Sunset (mile after mile of SFHs) or Visitation Valley or the Bayview. But like Chicago, SFHs in the “prime” neighborhoods are now out of reach of the middle class homeowner. $700k is NOT middle class. Neither is $500k. Heck, the $400k house isn’t either.”
And yet, those Outer Sunset 2/1 shacks still sell for $500k+. Even in the non-prime hoods, EsEff is out of reach for the “middle class” homeowner.
“And yet, those Outer Sunset 2/1 shacks still sell for $500k+. Even in the non-prime hoods, EsEff is out of reach for the “middle class” homeowner.”
Sure. But that is a recent phenomena. In 1998, you could get a house in the Outer Sunset in the $300,000s. Then the housing bubble happened and everything went ballistic. I’m not saying $300k is cheap either, by the way. That’s why most of the middle class has fled the city of San Francisco over the last 20 years. The suburbs, while still expensive, are cheaper.
“Sure. But that is a recent phenomena. In 1998, you could get a house in the Outer Sunset in the $300,000s. Then the housing bubble happened and everything went ballistic. I’m not saying $300k is cheap either, by the way. That’s why most of the middle class has fled the city of San Francisco over the last 20 years. The suburbs, while still expensive, are cheaper”
Sure, but the “nice” suburbs in short-ish commute distances to job centers have been close to the same prices for a long time, *BUT* you get an actual livable house. Kinda similar to the current Chicago difference b/t a northside cottage and a [pick your suburb] 5/3 for about the same price. But the Chicago cottage is a lot nicer than the $500k 2/1 shack you get in EsEff.
if normal rate of unemployment is 7% just means the capital class got lazy; because workers have held their end of the bargain the last 12 years. Real wages have to go up and soon.
—
“Particularly because economists got caught flat footed on shifts in long term full employment (i.e., 5 to 7 % UE).”
This is what concerns me about reported job gains “After the Great Recession”, per the National Employment Law Project:
“Lower-wage industries (those paying $9.03 -$12.91 per hour) accounted for just 23 percent of job losses, but fully 49 percent of recent growth.
Midwage industries ($12.92 -$19.04 per hour) accounted for 36 percent of job losses, and 37 percent of recent growth.
Higher-wage industries ($19.05 -$31.40 per hour) accounted for 40 percent of job loss, but only 14 percent of recent growth.”
http://www.nelp.org/page/-/Justice/2011/UnbalancedGrowthFeb2011.pdf?nocdn=1
G – stick to providing data and stop worrying, we’ll take care of the rest.
25% of all new jobs created last month were from ONE fast food chain (mcdonalds)
“G – stick to providing data and stop worrying, we’ll take care of the rest.”
Is this anything like how you took care of your declining income, broken marriage and absentee parenting?
“Is this anything like how you took care of your declining income, broken marriage and absentee parenting?”
Exactly …. last time I checked, I still have 7 figures worth of real estate, am free as a bird to date around, and have a kid who got in to Yale and a daughter who is gorgeous…. so, yeah, exactly how I took care of all of that!!