It Was a Deal in 2007 and Now 3 Years Later? 3024 N. Sheffield in Lakeview
This post is for G who requested a special category be created over 2 years ago called “knife catchers” so we could track this property at 3024 N. Sheffield in Lakeview which was mentioned in an article in Smart Money Magazine about taking advantage of declining home prices in March 2008.
See our March 2008 chatter here.
The condo has returned to the market just about 3 years later.
From Smart Money Magazine:
INDIFFERENT TO THE bleak real estate headlines, 26-year-old Michael Klauer and his fiancée recently bought a two-bedroom condo in the desirable Lake View neighborhood in Chicago. They weren’t in a rush to buy, but when an opportunity presented itself only a month after they started looking, they jumped on it.
The apartment, listed at $519,000, was theirs for only $480,000 — an initial offer they didn’t back down from, even though they knew the seller had bought the place 10 months earlier for $512,000. Factoring in the broker’s fee and sales taxes, the seller lost more than $44,000 on that deal, according to the couple’s realtor, Jay Michael, owner of the Estate Property Group in Chicago.
“We leveraged the fact that they’d already moved out and were in a [financial] struggle to keep two places,” Klauer says. And even though the condo’s value may drop further, the couple wasn’t concerned since they plan to live in the place for at least three to five years. “It was a good time to buy,” he notes. “Prices are on the down low, and it’s something I could sit on for a while.”
The unit is currently listed for just $9,000 above the 2007 purchase price.
The 2-bedroom unit has all the bells and whistles of newer construction, as this building was built in 2006.
The kitchen has granite counter tops, cherry cabinets and stainless steel appliances. The bathrooms are marble.
There is also a wood burning fireplace and plantation shutters.
Parking is included in the price.
Jay Michael at Estate Properties has the listing. See the pictures here.
Unit #3N: 2 bedrooms, 2 baths, no square footage listed
- Sold in July 2006 for $509,000
- Sold in June 2007 for $480,000
- Currently listed for $489,000
- Assessments of $135 a month
- Taxes of $7333
- Central Air
- Washer/Dryer in the unit
- Parking included
- Bedroom #1: 16×15
- Bedroom #2: 12×12
Buying in a Rocky Housing Market [Smart Money Magazine, Aleksandra Todorova, Mar 3, 2008]
Well, I think it’s pretty clear how this story ends. They’re already underwater.
Albeit based on my small dataset the aveage discount to offer is 5 to 10 percent. Factor in transaction fees and that pretty much takes you to the land of negative equity. Knowing human psychology I’m guessing 489K is the minimum amount required to come out even.
Sorry when I say break even I mean not have to bring extra money to closing.
“INDIFFERENT TO THE bleak real estate headlines”
I’m not sure there were many bleak real estate headlines in June 2007. It wasn’t obvious to me the top was behind us until August 2007 when the ABCP market blew up along with Countrywide’s stock price.
“Prices are on the down low, and it’s something I could sit on for a while.”
Glad to hear that. As they will be sitting on it for awhile.
So where does this go, 440?
The layout of this unit is fair;y standard (“http://www.smartfloorplan.com/il/v300935”) but I noticed a humidifier in the inclusions – is that normal?
There’s an identical unit in the building next door listed for $449K:
http://tinyurl.com/25ca4x7
Good catch Madeline. They have been aggressively lowering that one (every two weeks or so.)
Thats what these dumbasses get for thinking they can flip a place in 3 years, sorry but the real estate market is a lot slower moving than the equity market
Where is G? I miss that guy. He just disappeared one day and never posted again.
“I’m not sure there were many bleak real estate headlines in June 2007.”
Dude, you always cite the Economist cover story from what? … June 2005? There were plenty of headlines, just not in the USA Today. Extend and pretend had already started.
I like $430,000 for this one, assuming it is the same as the next door one. They would have to bring money to the table at closing, assuming they put little money down. Interesting to watch.
I think G and westloopelo are summering in the hamptons together
I just don’t see how a 2/2 on a semi-busy street in Lakeview (not LP) with limited outdoor space sells for anywhere close to $489,000, regardless of the granite, marble, fp, and plantation shutters. I think you can do quite a bit better for half a million bucks.
“I just don’t see how a 2/2 on a semi-busy street in Lakeview (not LP) with limited outdoor space sells for anywhere close to $489,000, regardless of the granite, marble, fp, and plantation shutters. I think you can do quite a bit better for half a million bucks.”
I completely agree. I think the boring, generic $500k 2/2 that is so prevalent in green zone hoods will soon be a relic of the bubble era.
ouch. Yeah, this generic place goes from $430 tops and even then I think someone will over pay.
Maybe this is what they’re comping it off of.
http://www.redfin.com/IL/Chicago/3028-N-Sheffield-Ave-60657/unit-2N/home/18925238
Next door and not on a top floor like this unit. Maybe they will find a taker.
Not just a semi-busy street, but DIRECTLY ACROSS FROM THE EL. And basically next door to the all night Chicago Pizza and a block from the rowdy (albeit highly entertaining) disaster that is Kirkwoods and Mad River. We live a few blocks from this intersection and we get plenty of loud stumbling drunks around 2-4am, particularly as the weather warms up.
Nice looking unit, but crazy price. $440ish seems much more reasonable.
These units are a dime a dozen in Lakeview. How much does one rent for?
“I’m guessing 489K is the minimum amount required to come out even.”
Two mortgages for $412k (typo? prob $417, no?) and $51,500. So, I’d agree that $489 is the exact amount to not bring $$ to closing.
I saw a unit very similar to this on the 2600 block of Sheffield about 3 months ago, that backed-up to the El. It was listed at $399K, dropped to $379K, and sold shortly thereafter. The property had a similar lay-out, age of construction, and comparable finishes – it also had a large deck off of the back, but I dont think it would get much use with the trains flying by.
Does a location across the street from the El (as opposed to backing up to it) command a $100K premium?
“I think G and westloopelo are summering in the hamptons together”
NO, that deal fell through when I refused to give him permission to bring along his BFF, MG.
Besides Hamptons summer retreats are now so….80s. You couldn’t pay me to live in _________________ compound now. I am more than happy to be staying in the city lounging with not a care in the world.
Regarding the special ‘Knife Catcher’ section of CC, according to the Debbie Downer regulars wouldn’t every property listed here qualify to be in that section?
Brilliant comment Sonies…a tip of the hat to you!!
Built in 2005 under the happy-go-lucky years of Chicago’s building inspection regime. $489K for only 2 BRs (albeit nicely sized with WICs no less) in LV and 200 ft from the roar of the Red and the Brown? I guess if you’re into that.
I am surprised by the sale of 2N. Anyone want to guess what happened there?
Our 2/2 is on the east side of Clark, a few blocks from this unit. It’s not bothersome to us, but even from here we notice the faint sounds of the rumbling trains. Don’t even want to imagine what living in 3024 N. Sheffield would be like. Gawd, the kitties would need a shrink by the end of the first day. No, no, no.
Btw, 2/2 living is challenging to say the least. However,if you’re fortunate, as we are, to have great neighbors in the three other units you’ll have hit the motherload. It took a little while for everyone to get on the same page but thanks to the condo prez (that would be me lol)there are no issues.
Remember when buying a 2/2, these condo’s timers are set to go off after 5-6 years at which time everything needs to be replaced or repaired. Trust me…
“Remember when buying a 2/2, these condo’s timers are set to go off after 5-6 years at which time everything needs to be replaced or repaired. Trust me…”
Where do I sign??
I’m signing only if I get $8,000 back on me tax refund from the RIS.
The problem with these 2/2 new construction places is that they are a dime a dozen. They all have the same basic floor plan and finishes. The only thing that separates them is the location and views.
These owners definitely caught the knife. However, even in ’07 it was obvious that you shouldn’t be buying a place that you would need to get out of in 3 years or you would take a bath. Most flippers were starting to crash and burn in late ’06.
I think this place will go for the mid 400’s.
Funny how dime a dozen and mid-$400’s can be in the same sentence. But that’s the real estate market. Low inventory, easy financing and 3.5% down.
HD:
It is funny, but again, Chicago ain’t cheap. DINKs with the incomes to afford this place are also a dime a dozen in this city.
Pricing would need to fall to $424k before you could buy it with FHA financing and 3.5% down.
Most condos at this price point require at least 10% down these days. We aren’t seeing a ton of 3.5% down on condos. Seems like the vast majority of the stuff we are financing has at least 10% down if not 20%.
In fact, at least 50% of my purchases these days seem to all have 20% down. All late 20s/30 something DINKs. Admittedly, some are getting gifts from Mom & Dad, but people seem to be coming with larger down payments.
Even if the finishes are so-called dime-a-dozen, they are quite nice, if you use this particular unit’s finishes as the control sample. So I guess that’s a compliment to many of these places and Chicago.
Russ,
That’s an interesting perspective and I appreciate your insight. Other than parental gifts, how do late 20’s early 30 somethings amass a 20% down payment on a $80k condo? It is high salaries, large bonuses, frugality or something else like a winning lottery ticket?
“how do late 20’s early 30 somethings amass a 20% down payment on a $80k condo?”
$80k on a $400k, or $16k to live in the south suburbs?
Think of all the people you went to college/law school with whose parents paid that tab. Now tell me how much savings you’d have if you and your roommate had the same good fortune. It’s be a hell of a lot more than $80k, wouldn’t it?
lets see, lets say 29 years old
big ten business school Grad, parents paid tuition, no credit card debt, no car note, starting salary at age 22 of around 50k, now 7 years later making 80k, assuming you make zero money from investing you’d have to sock away $952 a month to save up 80k.
That isn’t totally out of this world if you live in a standard straight out of college cheapo rental place and don’t splurge on too much useless crap. Now if you add another income, those people would only have to save half of that which is even easier.
I’d go with either nice wedding gift, or financial prudence, or Dinks… of which most are required to live in a nice place like the city
Sonies, your description describes you perfectly.
Why don’t you have $80k saved?
It sounds so easy, right?
“assuming you make zero money from investing”
Gotta include the 75 bips for your laddered CDs!
“Other than parental gifts, how do late 20’s early 30 somethings amass a 20% down payment on a $80k condo? It is high salaries, large bonuses, frugality or something else like a winning lottery ticket?”
Living with your parents and spending like a pauper is how I’m doing it, although on a smaller scale.
who says I don’t have 80k saved?
3.5% down?
haha dumbass
From what I have seen, most just get the money from living relatively frugal. However, many don’t quite have the full 20% down payment, so it isn’t uncommon to get loans or gifts from parents. I have seen people making around $200-300k getting gifts from parents for some portion of their down payment so they can make the full 20% or more to buy places north of $600k. They may have saved up 10 or 15% in cash on their own (relatively large 401ks though) and the parents get them over the threshold so they don’t have to dip into retirement funds.
Honestly, a lot of people just don’t know what down payment is required for some places. They may have the income, but short on the liquidity, so Mom & Dad step in to help after they find out they need say 25% down instead of 20%, etc.
All of us aren’t that lucky to have wealthy parents or inheritances. I have actually been pretty surprised at how much assistance many people get from their parents and the number of people with relatively sizable trust funds (couple hundred grand).
These will rent for $2,100.
Sonies nailed it. That’s me and my fiance, and plenty of our friends. Each make $50-65K, rent places with roommates for $800 plus utilities, and save $3000-$3500/mo combined. You’ll have a 20% DP on a $300-$350k place by the time you’re 25ish. We even paid for most of our college and will pay for most of our wedding.
I’m glad to hear other people out there spend $800 on rent and save $3,000 – $3,500 a month. I know of very few people doing that. most are spending every penny they earn between car payments, credit cards, student loans and vacations and sometimes a hefty mortgage.
“DC on May 18th, 2010 at 2:55 pm
Sonies nailed it. That’s me and my fiance, and plenty of our friends. Each make $50-65K, rent places with roommates for $800 plus utilities, and save $3000-$3500/mo combined. You’ll have a 20% DP on a $300-$350k place by the time you’re 25ish. We even paid for most of our college and will pay for most of our wedding.”
dude you work in a BK firm and nearly every client you see is a financial idiot, your sample size is obviously skewed a bit
Sonies pegged me too with the “financially prudent” description. Basically start life at 22 with $0, but the ability to earn a livable income. Spend your money judiciously and over the years it isn’t too difficult to save up. My first apartment out of college was a 3 bedroom shared with 4 guys that I paid $300 a month for rent+utilities. You don’t have to make a ton of money to cover that quickly and begin stashing money away. (This wasn’t in Chicago, BTW.)
What I don’t understand is I think I’m in the extreme minority though. Nearly all of the friends/acquantances my age seem to spend money like it’s burning a hole in their pocket. Maybe that’s why I like this place so much, looks like there’s a lot of other cheap bastards here.
You are in the minority, at least financial decision wise.
It also helps to start life at 22 at 0. I started life at 25 nearly six figures in the hole. Yes I had a higher salary upon graduation but the extra salary goes towards principal and interest.
$3,500 a month in savings is a little tough for 2 people to do, unless you are also including 401k and Roth IRA. Do you have car(s)? I think $2,000 a month is a more reasonable savings figure for 2 people with that income range and rent payment, but either way you’ve saved up $75,000 in 3 years, assuming you earned some interest along the way as well.
Don’t get me wrong. I know it was a huge luxury to start at 22 and $0.
Me and a good friend who also was lucky enough to get the 22/0 deal were talking about it once. Both of our significant others have significant amounts of student loan debt. That means when you combine us as couples we’re just doing ok. It would obviously be very difficult for a couple to get by if they both came out of college with significant debt. You have to make a choice to either stash some money away or “feed the beast” that is student loan debt. You wouldn’t have the funds to do both.
I am convinced that generally no one ever thinks they make enough. But I am also convinced there are 2 types of people, those that generally don’t worry about money and those that worry about it no matter how much they make. Those that are part of the latter school of thought are the ones that tend to be savers and set goals to reach when it comes to retirement, bank acct balances, etc. Those in the former are the ones that live paycheck to paycheck. I am lucky enough to be the latter who married a former. We sold 1 condo, paid off his debts, share my remaining car, BOTH max 401Ks now and now manage to save a good amount a month. It wasn’t easy to convert him until he saw how much he liked money in bank accounts and how it really isnt that hard to live with out some of the luxuries in life. Makes those luxuries even more special when you decide to splurge on them.
“Dude, you always cite the Economist cover story from what? … June 2005? There were plenty of headlines, just not in the USA Today. Extend and pretend had already started.”
Sorry Nortcenter but this Smart Money magazine article is almost certainly revisionist history, even if purchasing this place in 2007 for 480k was colossally stupid non-withstanding. There weren’t headlines everywhere about the RE market being in the crapper in 2007. Journalists and the public hadn’t yet caught on, by and large, at this point.
I love reading some of the comments from back then.
“If you’re going to make a mistake in the market, doing it at 26 is the right time to do it.”
No Pete, thats not a good justification. This purchaser is on the hook for this place, as are his parents apparently. Making colossally stupid financial mistakes at 26 can be just as devastating as it can at 50.
“40% of all billionairres (or the patriarchs of billionairre families) in the US have gone bankrupt at some point in their careers.”
They go bankrupt from being overleveraged on business decisions and investments. In economics class this is called Investment, represented with an (I). This purchaser is no billionaire–he bought a 500k consumption decision (C), consumption is a net negative to wealth. Consumers do not created investment as businesses do.
“Obviously, it will be easier for all of us to comment after dust has settled…which I agree will be years from now. Whether the fallout is worse than the tech bubble (a fallout that has not yet been resolved) will be impossible to determine for at least another 10 years. But it certainly is interesting to talk about:)”
Pete you’re wrong and a fool. The fallout is worse, far worse. This can be seen from economic metrics today. And for those of us not long real estate it was just as easy to talk about the fallout years ago as it is today.
“This probably one of the wrost comments I have read. If this guy would have purchased a home in the burbs with his parents down payment how would he have done? The burbs (single families) is where the market is struggling because no one wants to live in the burbs anymore. If this guy purchased a condo in the gold coast or streeterville he would be doing just fine. Chicago’s condo prices have held up quite well. Can you say the same for Highland Park, ect?”
Stevo, Stevo, where art thou Stevo? Yes you seemed to have disappeared as well. The Chicago condo index is now (predictably) lower than the Chicagoland SFH index. Guess you don’t have an internet connection in that older model Bimmer you’re crashing in these days?
Here’s another one of a stuck owner trying to move on:
MLS: 07457281
Listed on 3/2/2010 for $279k. Price cut to $269k on 4/5/2010. Last sold for 276k on 8/17/2004.
Three sales in the building in 2004, three sales in 2005, four sales in 2007, one sale in 2008, zero sales in 2009. Zero sales in 2010. Stuck.
Nice economics lesson, but it’s fairly well acknowledged that purchases of real property are capital investments. Alternatively, rent is expensed as it is paid.
To the chap that co-saves 3k a month on a 65k salary — you should write a book. Your share of that means you have close to a 40% after tax savings rate assuming a 25% total effective tax rate (payroll FICA, state, federal). That level of savings, at that income threshold, is unheard for most people.
“I have seen people making around $200-300k getting gifts from parents for some portion of their down payment so they can make the full 20% or more to buy places north of $600k.”
That is pretty lame if you make 300k and need to borrow from your parents to buy a place for 600k-ish.
“I have actually been pretty surprised at how much assistance many people get from their parents and the number of people with relatively sizable trust funds (couple hundred grand).”
While I’d rather have it than not, I’d be embarassed to call a few hundred thousand a “trust fund”… That’s a nice 401k balance, not a trust. I’ve found that description is vastly over used and seems to apply to just about anything. From kids who have 50k left from their college savings account to those whose last names are shared with major endowments and companies in the greater Chicago area.
Homedelete may fill his days with people declaring BK so maybe his view is skewed- but when you see the stats about the average amounts in 401ks (under $60k was the last number I saw) and that a huge percentage of people have nothing saved for retirement- it’s not that far fetched to figure out that most people aren’t saving $100k in a year or two. More like 4 or 5 years.
I have friends who were the DINKS and saved $100k but it took them 5 years and good discpline (they made about $125k combined.)
But I too know plenty of double professional income couples who have to borrow from the bank of mommy and daddy to afford the downpayment on the house (usually $50k or so.)
JMM, just pointing out what I see.
A couple of hundred grand is a trust fund to me since I pretty much had lint in my pocket when I got out of college. Yeah, it ain’t like Pritzker money, but starting off life with a few hundred stacks in the bank to start a business or buy a home definitely gives you a head start.
I can’t hate on folks though if they are that fortunate. Life ain’t fair.
It’s been my experience, just anecdotally, that those that are given downpayment money or other financial help from parents are asking for money just a few years later (to pay for private schools, vacations, the new kitchen etc.) I’ve never seen those couples actually strong financially- despite the parents help.
I’m sure there are some examples which break this mold but if you’re not saving your own money to buy the house it’s unlikely you’re going to be a great saver or money manager after you buy the house.
I was just talking to a guy in his early 50s about an hour ago who told me how he was living in a townhouse in Old Town because the high rises in the area are way too expensive and not to mention the huge assessments. What’s interesting is that his family owns an enormous and very profitable private company in the city. His father is worth hundreds of millions if not more. You have to be impressed with those values and that approach to raising your kids.
Not surprising. The way you make a lot of money is often by being cost conscious in your own life, and being picky about where and when you invest,
On another note, parents give their kids a lot of money because they want to provide opportunity for their kids, in their minds. They aren’t thinking about future financial dependence. It also could be for estate planning purposes. With $10 million at age 62, wouldn’t you give your kids money to help with their down payments?
“With $10 million at age 62, wouldn’t you give your kids money to help with their down payments?”
No, I wouldn’t. The problem is that most of these people lose touch with reality after having been rich for decades. It’s even worse as some of them are second+ generation wealthy, which means they may not have had to truly work for it themselves.
The fact that people don’t save any money is only part of the problem. Many make horrible decisions with the money they do have. We have such an insane homeowners culture in the US (and in Chicago in particular). People make a huge financial commitment to purchasing a home when they hardly understand the transaction. My parents’ generation’s bad habits were hidden by insane economic growth — buying and holding anything from ’70-’00 would have resulted in fantastic returns.
That’s not to say people shouldn’t buy a home or invest in the stock market. The problem is that people blindly listen to “renting is throwing away money” or “the stock market returns 10% per year” and don’t care to do any analysis of their own.
I’m in my mid 20’s. I know few people who have a net worth of greater than 10 or 20k. I think what some people don’t realize is that 1) cost of education was much higher for my generation (more debt) and 2) it’s not even close to a given to get a 40-50k job out of school and 5% annual raises. I don’t think these kids are going to just cruise on up to 80k per year by their mid 30’s, but hell, who knows.
also big lol @ someone making 200-300k per year and not being able to save money for a 600k home. that’s pathetic, unless they are sending a bunch of kids to private school or something.
Dave M, correct neither of us have cars. Two hour commute each way on foot, cta, metra, and pace… but it saves me gas, insurance, parking, maintenance, etc. and beats an hour plus sitting in traffic.
JMM, $3k/mo is on two salaries in that range, not one. So $1500 each.
Tay, I agree with you there. People think they will have a 900% return on their home like their parents had from owning over the past 35 years. It could happen, but it will probably be more from inflation than anything. The problem is in the near term there has been no inflation the past year, and probably will be 0 in 2010 as well.
That is pathetic that rich people can’t save for their own down payments. I’m not buying the whole student loan payments take up so much of their income they can’t afford to save enough.
“Maybe that’s why I like this place so much, looks like there’s a lot of other cheap bastards here.”
Yep.
You know what my dad gave me when I graduated from college?
Ownership of a credit card balance he claimed he had been paying throughout for school supplies! I did use it judiciously for books and not junk food or beer, but since he never paid the balance down the interest accrued was insane.
this is when I learned that very, very smart people (my dad has engineering and law degrees from Washington U) can be knuckleheads when it comes to cash flow.
I think the discussion above shows that its not as easy as it seems to save $80k for a down payment on a $400k place. It takes multiple years of financial prudence and usually a co-saver. The lack of earned interest on the savings makes it even more difficult. Toss in a kid or two and/or large student loan payments and the difficult becomes nearly impossible. This does not bode well for future pricing of real estate in the green zone.
Just to clarify, the down payments I am seeing are quite large. In addition, it isn’t like these folks don’t have savings. Most have quite substantial 401k/retirement balances and pretty hefty cash savings as well. What is going on is in the the past you would get two BigLaw attorneys spending say $750k on a town home in LP. After a year of working or so, they would easily have 10% down which was pretty much all that was required.
Under the new lending guidelines much larger down payments are required at this price point. Instead of waiting to save up all of it, I see more and more supplemental gifts and “loans” from parents so they can put $200k or so down on a property. The amount that comes from the kids and parents can vary but typically it is 50/50 or say 75/25. Also, many substantially reduce mortgage balances over time. For a lot of the refinances that have been going on, many have totally eliminated second mortgages or put additional equity into their properties so they can refinance if appraisals come in lower.
This isn’t quite the same as someone getting a 3.5% down payment as a gift from Mom & Dad because they couldn’t save it up.
Short memories on the lack of earnings on savings. (let’s not consider the market returns prior to 2007).
In 2007 you could be easily get 4+ % on your money market accounts, vs. of course the pathetic interest rates today.
I know a friend who tossed $40,000 of his $50,000 savings into the stock market last March, and he is up 66% to date and now has over $80,000 saved. He pulled out all of his original investment and his gains once they went long-term, and will pay 15% tax on it, but it’s all about timing. When you are young, it’s good to take some calculated risks in order to get ahead. I’m not sure real estate is a calculated risk though, unless you are staying 7 years in the place.
I’m curious how many big law attorneys are hired in Chicago annually out of school this year. 400? Used to be 500 in good years? Not a large population segment in my opinion.
IIRC the biglaw class of 2005 in Chicago was approximately 600 and they made b/w $125 and $160 a year. The tier of lawyers right below went to mid-sized firms and made somewhere between $60-$90 depending on the firm. That class was maybe twice as big as the biglaw, but that’s just an estimate. The remaining lawyers, approximately 50% of all licensed lawyers, got jobs in small law or no law at all. Small law probably made $45 or $50 or $60k.
The fact that Sidley deferred their 2010 graduates to start in January 2012 means something. There’s a lot fewer new biglaw lawyers, so the market of higher paid young professionals moving to Chicago has shrunk.
Biglaw, Investment Bankers & Traders, Management Consultants, Private Equity, Doctors finishing residencies, Brand Managers, and General Management are what I see most often for careers of the $100k plus salaries. The total population of these folks is quite large in Chicago.
My point is that the population of the new young professionals earning high salaries is shrinking, except for the traders, who seem to be growing. I didn’t even mention all of the cut-backs in the law and accounting firms of their current employees. This will only lead to more parents helping their kids with down payments in my opinion.
“In 2007 you could be easily get 4+ % on your money market accounts, vs. of course the pathetic interest rates today.”
Tell me about it. When I first opened an ING Direct savings account I was getting 4.6%. It’s now been hovering slightly above 1% for over a year. If interest rates would just go back to where they were I could quadruple my monthly payment, which would be even more since I have more money saved now too.
Dave: It is definitely shrinking from the boom years, but there are still plenty with jobs earning a decent buck.
Dave M if you think there hasn’t been inflation over the last 2 years I suggest you check again at BLS.gov
There’s been very little inflation over the last few years and if you replace the OER (owner occupied rent equiv) with the Case-Shiller index then you might actually get deflation, IIRC
there is always inflation. the question is in which sectors, and how are government officials jerryrigging the stats by including cheap consumer goods made overseas to artificially pull it down.
http://www.atimes.com/atimes/Japan/LD07Dh01.html
Japan caught in deflation conundrum
By Christopher Johnson
TOKYO – If you live in Southeast Asia and need cheap clothing, come to Tokyo and check out these prices: 700 yen (US$7.45) for jeans, 1,000 yen for women’s boots, and 7,800 yen for men’s suits – about a third of what they cost a decade ago, when Japanese used to go to Bangkok and Hong Kong to shop.
For 12 straight months, prices in Japan have been falling, the country’s Statistics Bureau said last week, and land prices are roughly half what they were 20 years ago. Prices fell by 1.2% in February from a year earlier. The finance minister and Bank of Japan board members are promising to stem the price slide, and many financial analysts are warning that further “de-flay” could delay any economic recovery.
* * * * * * * * *
Wait, Russ, did you really say brand managers make over 100k? Don’t tell Bob that, it might make him more miserable than he already is.
Truth of the matter is that Russ is right. Chicago is a big city that is relatively prosperous. That means there are people running around that actually make enough to afford these places. Not as many as before sure but they exist. Russ also left out the hundreds of small family businesses that employ family members at above market salaries.
My point was that there are fewer who do earn over $100K (probably 10%-15 fewer) including newbies, and there’s not the level funny money flying around any more, with the exception of the FHA 3.5% loans. At the end of the day, there will always be people with enough money to buy in the Chicago, but they will be less likely to stray far from the best neighborhoods because the population of buyers is smaller than it was in 2005 and 2006. I didn’t even bring up the fact that almost half of all condo owners are underwater on their mortgages who are trapped in their place unless they bring money to the table to sell.
True, speculative neighborhoods are out.
So many condo buyers are so under water because most of them put nothing in to begin with. But many aren’t that deep under and rental is a great option unlike for SFHs where the market is illiquid and the premium to rental parity is staggering. Personally, I feel like 2/2s are selling below rental parity in LP right now.
JMM:
I guess it depends on your circle of friends. I honestly don’t know too many people who DON’T make $100k or more. I am not trying to be funny either. Practically every late 20s and mid 30’s person I know socially who has a professional corporate job makes over $100k. If they don’t, they are pretty close to it. It doesn’t matter what field they are in either… I left out the engineers, advertising, PR folks, finance managers at f500 companies, sales people (pharma, insurance, ad sales, etc), too.
I don’t know why folks on here think everyone in Chicago makes $35k and $100k jobs are rare. They are not in a city like Chicago.
I know very few who individually earn over 100K, with the exception of attorneys. All are college educated, many of which have master’s degrees including MBA’s at good schools. Russ, you must be hanging out with the mid-30’s crowd more, or a small subset in a particular suburb. The people I know have taken a big hit on their incomes, where in 2008 they may have been making $100K, but now in 2010 are expecting $90,000. They aren’t expecting much of a comp adjustment this year either. It’s the new reality for many people.
Russ:
Totally agree but not everyone went to Kellogg right? Average starting salaries for MBAs is probably 90 to 100k. And that is average, weighed down by corporate rotational positions, etc.
So yes, by default, it would seem strange if you did know many people under 100k in income. But lots of posters here are younger, far less accomplished in their careers and understandably envious of the income / wealth they do not (yet) have. To them I say, patience grasshopper…
Most of the people I was referring to are 28-31. Perhaps at 33-36, a lot more are making that kind of money. I would put the average starting salary for MBA’s at $85,000. Signing bonuses are not what they once were either.
Wealth and income come in stages. Those are excellent salaries. Imagine living on that in NYC.
On one hand, some lament the homeowner culture. On the other, people seem envious of what they cannot (yet) afford. Seems to be this is hypocritical thinking.
Starting salaries for graduates from top-tier MBA programs has held steady at 100-105 despite the downturn. That being said, all-in comp is down significantly with IBanking bonuses down(although quietly up from the last 2 years) and bonuses in consulting, general mgmt shrinking, but they’re not on the absolute scale of the bankers anyways.
Past Booth and Kellogg you are seeing significant decline in starting salaries to the point where it doesn’t make much financial sense to be a career switcher in these programs. They do still serve as great programs for those looking to break into senior mgmt in present firms, which should catapult earnings power.
Basically there’s still a lot of high-power earners in the business fields with both Booth and Kellogg pushing through 500 full-timers each per year and an increasing portion of their part-time programs as pseudo-fulltime. I agree that depending on your social circle and occupation you begin to realize the plethora of high-earners in chicago so long as you can distinguish between the earners and pretenders.
It’s not envy JMM. Having a large house with a large mortgage is not wealth – it’s debt. Don’t ever confuse debt and wealth. They are not the same. The large debt many homeowners have taken on during the last 10 years has driven up the cost of housing for many regular folks – making it difficult to obtain a home without taking on significant amounts of debt. It wasn’t like this 10 years ago but rest assured, it will correct itself in time.
And as far as income in stages – it’s going to require boomers quitting their jobs and being able to retire which opens up higher paying jobs for the younger generation.
So basically, you are saying that an MBA at Kellog and Booth will put you over the hump. Just curious if that is an average or a median. Either way, I-banking and consulting skew the average upwards. For those with an MBA working for a company, the starting pay is lower from both of those schools (I know this based on the number of grads from both schools I know).
“I honestly don’t know too many people who DON’T make $100k or more. ”
ohoh. Now Russ has admitted to living in candyland, too.
I’d agree. In my experience about 10 years post MBA people end up as partners, managing directors, divisional vice presidents, etc and you are all making quite a bit. But it never seems to go as far as you think.
The late 20 somethings that make a lot now often get burned out, peak early or end up in unhealthy lifestyles. Being a lawyer sucks, doctors cannot stay married and investment bankers end up beaten up with no hobbies by age 50. Slow and steady wins the race.
IMO there aren’t many pretenders either. But that is just my circle.
“So basically, you are saying that an MBA at Kellog and Booth will put you over the hump. Just curious if that is an average or a median. Either way, I-banking and consulting skew the average upwards. For those with an MBA working for a company, the starting pay is lower from both of those schools (I know this based on the number of grads from both schools I know).”
That’s median and simply the base salary figure. Surprisingly enough median for ibankers is slightly below as base isn’t the driving component of their comp. Company finance roles are fairly consistent with the overall numbers as well. It’s pretty hard to hir an MBA out of there and lowball them, unless they’ve exhausted most options and are feeling the pinch at or after graduation.
So HD you believe we should all own homes, just that they should be much cheaper? That to me is the same hone ownership culture, just a cheaper version. Only when people convince themselves they are equally happy to rent or buy will things be at parity.
Which by the way is TRUE in LP. Our old condo rents for far more than we could sell it per any rent/own calculator. Given there is no mortgage and its a great rental property, there is no reason to sell. But it amuses me when people think prices should be so much lower. Only perhaps if rents were lower. But they have been very consistent in core neighborhoods (much to my surprise). So in fact perhaps it IS a good time to buy if you are below purchase / rental parity?
“making it difficult to obtain a home without taking on significant amounts of debt. It wasn’t like this 10 years ago but rest assured, it will correct itself in time.”
Why would it be easy to acquire a home without taking on debt? How long would it take you, by yourself, to build a home? How would you pay for the materials, even if your “salary” was free?
Frankly, dedicating 25% of my paycheck to having a house & yard seems like a pretty good deal.
Yes, JMM, your numbers did make sense a few weeks ago when you showed that in a few blocks of a few nice areas, it might be at parity or cheaper to buy a 2/2.
But for other areas of the city, the fact that over 14.0% of mortgages are 30 days plus DQ should tell you all you need to know about home affordability.
A few home sales here at reasonable prices doesn’t change the fact that most listings are severely overpriced.
“dedicating 25% of my paycheck”
You fool! You have a HH income in the top-X% and spend so much on shelter, you’re making it hard for others to buy a nice house in the neighborhood they prefer for less than it costs to rent an uptown studio! Why do you have soo much hate for your fellow Americans?
That’s all so relative. I just got off the phone with somebody who is losing her home. She owes $140k a home that she bought in ’05 that probably sold for a little more than $100k in the 90’s. Her husband’s hours were recently cut and now they can barely make ends meet. That lower end of the market keeps going lower while the higher end has remained steady.
The $64,000 question is whether the absolute difference in price between a condo in albany park and Lincoln Park will continue to widen or will it shrink. or, does a lowering tide lower all ships (except lincoln park ?)
“Frankly, dedicating 25% of my paycheck to having a house & yard seems like a pretty good deal.”
“But for other areas of the city, the fact that over 14.0% of mortgages are 30 days plus DQ should tell you all you need to know about home affordability. ”
If 100% of the mortgages on the least desirable 14%+ of Chicago houses are DQ*, what does that actually tell us about the affordability of the most desirable half? Or if 100% of “investor” mortgages are delinquent, what does that tell us about the affordability of o/o units?
Not much, eh?
*yes, I know that’s not the reality.
I think it’s hilarious when people say “I can afford my house so therefore housing is reasonably priced” which shows that when you have your blinders on you can’t see much else. 14% DQ rate. chances are a neighbor or two on your block is late on his mortgage.
And when that house sells in foreclosure for a huge loss, how will that make you feel?
HD:
“The $64,000 question is whether the absolute difference in price between a condo in albany park and Lincoln Park will continue to widen or will it shrink. or, does a lowering tide lower all ships (except lincoln park ?)”
are you trolling? ARE YOU TROLLING? shhh….please….shh
be.
verily.
quiet.
otherwise we have have the *insert music filled with dread* Return of the SHill
I’m not in law school any more so don’t bother with the hypothetical or irrelevant situations.
14.0% dq rate regardless of the loans is unprecedented and should make someone pause.
Housing in the future will be cheaper than it is today. Even in LP. I promise. I just might be a little off on the timing.
“*yes, I know that’s not the reality.”
Alright folks, lunch is over, close IE and get back to work
“I’m not in law school any more so don’t bother with the hypothetical or irrelevant situations.”
You’re a lawyer, so don’t bother trying to use one statistic to infer another statistic. As a wise man once said to me, if you knew how to do math, you’d have gone to business school.
The DQ rate does *not* tell us all we need to know about home affordability.
Here is what I’d vote for. No increase in housing prices and no decrease in housing prices. That way we’d all know housing isn’t a speculative play and its not knife catching either. We equitize over time and end up with more equity tomorrow due to our own hard work. Pretty novel concept?
I think what happens is people get so wrapped up in what they want next. They are always looking at what other people have, without knowing how they got there (ie. received $100,000 in down payment assistance from a parent). In addition, people assume their neighbors with the nice car are making a lot of money, but in the end maybe they aren’t and they are just putting on a facade and are truly trapped in their lifestyle due to their debt levels.
“In addition, people assume their neighbors with the nice car are making a lot of money, but in the end maybe they aren’t and they are just putting on a facade and are truly trapped in their lifestyle due to their debt levels.”
And to take it a step further, you then have the people that think that everyone with a nice car/nice house is living paycheck-to-paycheck, burdened by debt, and can’t possibly be living the lifestyle they portray.
It’s fairly easy to figure out who is living paycheck to paycheck. You figure out what they do, you reverse engineer the mortgage payment from CCRD, back out the car payment, look at their lifestyle and make an assessment based on your own finances.
I have clients who move boxes for a living getting paid in the low six figures; they drive nice cars, have homes in the suburbs with 3 car garages and put their children through private schools. Yet they have $70k in credit card debt, a $330k mortgage, a $600 a month car payment and close to zero savings. six figures sometimes just isn’t enough and it doesn’t really go all that far.
On the flip side we all know the 60 year old guy who doesn’t spend a dime, drives a late model american car, lived in the same house 30 years and is probably sitting on a cool couple of million.
But there are more people with signficant debt loads than there are milliionaires.
I’ll throw some gas on this fire.
I’m sure most of the posters here share relatively decent upbringings. Think back to your parents’ “rich” friends from when you were a kid. You know, the ones with the kids who seemingly had everything that you wanted. I think about this a lot. More and more I come to find out that most of “those people” have just been crushed and are basically now destitute.
Talk to some people from Winnetka or Kenilworth sometime. You’ll find that very few of their parents still live there, even crazier, you’ll find that most have downgraded considerably.
Of course these little test don’t work that well for “true” old money families, even though those are the folks who have lost the most in the market blowouts of the last two years.
My Wednesday moral: The pretenders aren’t going to be around for much longer. It’s getting too expensive to pretend, even in Chicago.
How many people do you think there are percentage-wise who are good savers in Chicago that have college degrees? 10%?
Also, how many renters are out there that have been waiting to buy, but have been putting money away the past 3 years as the market crashed? At this point, they may continue renting.
HD: Points being – (1) you don’t know and (2) why should you care enough to do the shoddy analysis you describe?
My parents’ rich friends seem to be doing “ok”. They all retired in their mid-50’s and didn’t go back to work or quit their country club.
Typical Top Tier B-school salaries for first year that I see:
Consulting: $115-$130k base with $20-$40k signing bonus. Variable year end comp. Usually around $20-$50k
Banking/PE : $100-$115k base. Signing Bonus $30-$50k. Good year can yield $250k year end bonuses. Bad year.. $40-$50k. Or laid off.
Brand Management, Corporate Rotation, General Management: $85-$120k No sign on up to $20k or so.
BigLaw: Anywhere from low 100s to around $200k. I have seen quite a few leave teh white shoe firms and take a corporate in house counsel job for $125-$175k
Most people get tired of the rat race. Very few make partners/MDs or wind up in the C-suite. My friends from b-school 10 year out make from $100k up to around $5 million. Most are in the upper $100s/low $200s living relatively simple lives. Very very few b-school grads will make north of $250k. Most trade down for corporate middle management jobs so they can have a better low key lifestyle.
Brand management screams Kellogg.
It must be nice having a very low key simple lifestyle making $200-250K.
Since when does BIGLAW pay $200K starting salary? It got up to $160 recently, but never reached $200 even with bonuses. Maybe in year 3.
I call nannies on the “low key” lifestyle of anyone in corporate America making more than $120k. Those people are chained to their job and travel 5 times or more a month.
That or they are WAY overpaid.
A good rule of thumb is: high earners worth their salt have black bags under their eyes.
You can generally figure out what someone makes. Russ just laid out starting salaries. government workers salries are all online. small biz owners is a little more difficult.
secondly, it’s not a shoddy analysis. It’s called a schedule I/J and I’ve gotten pretty good at figuring it out for the general masses.
In case you haven’t noticed, I’m not one of those people who won’t talk about money or what other people make. the whole not talking about money thing is so old school.
I deal with personal finances all day long, 6 days a week, and there’s no ghost in the machine when it comes to affording a lifestyle.
“Jon on May 19th, 2010 at 1:25 pm
HD: Points being – (1) you don’t know and (2) why should you care enough to do the shoddy analysis you describe?
\
“Jon on May 19th, 2010 at 1:25 pm
HD: Points being – (1) you don’t know and (2) why should you care enough to do the shoddy analysis you describe?”
Biglaw is at $160k, but smaller firms definitely less. Quite a few deferred start dates in law too. But the third years and fourth years seem to be making around $200. I forgot I was listing 1st year.
Kellogg is THE marketing school. But a good number from other schools go into brand. Honestly, brand and corporate rotational are aren’t as sexy as consulting/banking right out the gate, but I see more brand folks making their way up into the upper echelon running business units at the f500 than the consulting/banking crowd. The consulting/banking folks wind up in corporate strat departments.
$200k-$250k is good money but you ain’t “ballin” by any means. At some point, you realize you don’t need to make $1 mill a year to be happy. You make just enough to where your bills are paid, you put away a decent chunk of change for retirement, take a decent vacation, and you can get home and see the wife and kids at a decent hour.
Most don’t have the luck nor drive to get much higher.
I agree with Russ on the b school cohort. HH income of around 300k and you can afford any practical “low key” lifestyle in Chicago. 200+ and you are doing very well. The rest is icing / gravy / extra credit. This is precisely why successful people trade down to see / raise kids and actually live life. Honestly, I wouldn’t want much more income — there are better ways to build wealth. That still doesn’t explain why Russ is a mortgage broker lol.
Regarding chibulls comment re: the certain areas of the north shore I disagree completely. Most who leave are trading down due to empty nest or divorced or some other life change. Some transfer to jobs elsewhere in the country. When we were buying our house (granted this was a while ago) the reason for sale was one of three things: death of owner, divorce or relocation. This was during a recession and things weren’t good (though better than they are now). I’d add downsize for over zealous boomers as reason number four today.
So they trade down from $500K to $300K? That’s way out of my league either way. Must be nice to have that option.
There are people out there that are money smart. And don’t get a dime from parents or family or trust funds or little lotto.
To blow my own horn 🙂 how we dropped just over 50% down payment was i busted azz working a second job on the weekend doing side construction jobs. Wife did a second job working at a bar/club.
We paid for our wedding in full by ourselves, student debt paid off, and after that all was saved for the dp. Opm (other peoples money) is great and all but paying interest is a huge waste if that money isn’t make a click over than the interest being laid out.
You can make the argument that i bought a fixer upper in a questionable hood, but that allowed even more cash to be put away and invested. (For me invested extra safely with little returns, but returns nonetheless)
as RE_novice has the same friends that spend like kids at a baseball card shop and are just watching them dig a deeper whole. I can spend with them but with interest free cash and plus able to know when to take a frugal month or two to get back on track.
Its all about not having that entitlement feelings that keep me grounded.
Btw the best topic to talk about is me! i don’t think i can ever stop
$200k will barely buy you a summer home in Wisconsin. You need to make a lot more if you want a summer home with frontage on Lake Geneva. sheesh.
“It’s fairly easy to figure out who is living paycheck to paycheck. You figure out what they do, you reverse engineer the mortgage payment from CCRD, back out the car payment, look at their lifestyle and make an assessment based on your own finances. ”
Or you could not be a creepy wierdo and not give a shit and worry about yourself.
“Or you could not be a creepy wierdo and not give a shit and worry about yourself.”
Well said! That was really my point earlier. And I stand by my statement that it is a shoddy analysis. And if you have to back out a car payment… never mind.
My career for the last four years has been laying out people’s incomes and expenses. Doing it for a neighbor is no different. sheesh. we analyze people’s real estate decisions all day long on this site, i take it a step further an analyze how they afford their real estate decisions. my god, you should take your own advice and worry about yourself and not me.
Dave:
They don’t really trade down, but more like get off the train. I know a few banking guys that were pulling in some nice coin, but decided to trade down like you are saying from upper six/seven figure to a $200-$300k type job.
For most it is just getting off the career track to a more stable and less demanding job. At some point in your career, it will slap you in the face that you probably won’t be making Partner at McKinsey or that you have other priorities in your life other than just working. You realize you don’t need a ton of money to really be happy. This happens to the vast majority. So they get off the train to a somewhat slower paced and less demanding career.
There is a reason the turn over is so high in professional services like consulting, banking, and law. The jobs absolutely suck donkey toes the vast majority of the time. The travel sucks. The hours suck. The work can be very tedious and boring. For every deal you work on that makes the front page of the Wall Street Journal, you have 10 others at some chicken plant in Arkansas for your weekly commute.
JMM, I am still trying to figure out how I wound up in the mortgage business. If you are good at it, it pays very very well (no cap on income potential) and you have a lot of personal freedom that you don’t get in corporate america. Having a great personal network of b-school types makes for a great client base. The most successful folks typically in real estate tend to be those that come from professional corporate backgrounds, but the vast majority of the people in the industry don’t.
“You need to make a lot more if you want a summer home with frontage on Lake Geneva. sheesh.”
what are those going for nowadays?
Ask JMM he’s probably in the market. 😉
“skeptic on May 19th, 2010 at 2:54 pm
“You need to make a lot more if you want a summer home with frontage on Lake Geneva. sheesh.”
what are those going for nowadays?”
No, not a big second home guy here. Have never understood why people get infatuated with those. I prefer one home to live in and that is that.
Russ, I agree the competition isn’t the A+ set but would have expected starting your own firm. I guess its independent enough that this doesn’t matter.
JMM:
Considered it, but I saw the market contraction coming and small mortgage lenders can’t survive under the regulatory requirements coming down from the Feds. Just easier to be an intrapreneur given the current climate. Almost all the upside, but hardly any of the downside. The Feds (and TBTF banking lobby) are trying to kill the smaller broker shops.
“The Feds (and TBTF banking lobby) are trying to kill the smaller broker shops.”
They should be as a large percentage of them are fucking scumbags
Sonies… Yeah, Countrywide, WAMU, New Century, World Savings (The Option ARM kings) were all small broker shops.
There were plenty of scumbag brokers, but don’t buy into the party line the big banks want you to believe. Big banks have been trying to figure out how to compete with brokers for years because they can’t on price, so they use legislative lobbying to try to hamstring brokers by getting states and feds to pass laws that only apply to brokers but not banks.
When the bubble burst, the banks immediately saw it as an opportunity blame brokers. Here is the problem… brokers DO NOT create mortgage guidelines or underwrite the loans. The big banks did all of that. They were sending all kinds of half naked blond account executives into mortgage broker offices attempting to get brokers to sell their subprime loans, option arms, and loose underwriting guidelines.
Lots of talk about careers and who makes what. But I fail to see how any of this is going to somehow stem the decline in the Chicago housing market.
Truth be told: “Biglaw, Investment Bankers & Traders, Management Consultants, Private Equity, Doctors finishing residencies, Brand Managers, and General Management” are coming out of school with increasing amounts of student loan debt and although many claim Chicago has tons of these jobs and they are a dime a dozen, apparently 500k McCrapBox condos are a penny a dozen in Chicago and far more plentiful.
If people in Chicago buying these half million dollar places really had the income and wealth to support it, why does it appear that this owner cannot bring money to the table to move, as dissected from the analysis above?
If they were so income rich why can’t they bring money to the table? What percent of the market are wealth poseurs buying these half million dollar places who for all outside appearances seem to be “livin’ the dream”, but per the dissected analysis here really are paddling furiously just to stay afloat.
Cracks are already appearing even in the (sacred to CC) LP. Its a matter of time before numerous foreclosures or short sales start popping up.
I do agree with JMM that an often overlooked segment of high income is small biz owners, however even small businesses are suffering. Another segment of high income are well performing sales professionals, but these don’t appeal to dorky/wonk MBA types who don’t consider it prestigious.
As far as a top-tier MBA getting you “over the hump” you’d best carefully consider the value proposition, Jason as its 100k and no sure return on investment for full time. For companies that like their employees they often chip in with tuition and in that case it makes much more sense.
Chicago is literally bursting at the seams with Kellogg and Booth grads, so if you think it will be some big differentiator it likely won’t be. It is good for the network as Russ states.
“Biglaw is at $160k, but smaller firms definitely less. Quite a few deferred start dates in law too. But the third years and fourth years seem to be making around $200. I forgot I was listing 1st year.”
Don’t forget- only like 30% of the associates that start at a Biglaw firm even make it to 3rd or 4th year. And it’s even fewer that make it to fifth. So if you have an entry level class of 20 associates, by the third year maybe 7 of them are left (give or take.)
BigLaw is like the NFL. You last about 3 years and that’s it. Then everyone takes a salary cut to go work inhouse, at a smaller firm or in the government. I have a lawyer friend who went from $220k at BigLaw to $80k in the federal government. He wasn’t married and didn’t own a property- he rented- but he did manage to pay off his loans when he was at $220k and sock away a little bit before the big salary cut came.
“Only perhaps if rents were lower. But they have been very consistent in core neighborhoods (much to my surprise). So in fact perhaps it IS a good time to buy if you are below purchase / rental parity?”
Rents are falling like flies in Lakeview. Maybe LP is holding- my friends haven’t been looking there. But just a few blocks north very nice rentals are sitting on the market, sometimes for months, and are being lowered nearly every day.
As I said before- one rental agent told my friends who are looking that they can’t even ask for one month’s security deposit because none of the renters have that AND the first month’s rent.
It’s a good time to be a renter- as long as you’re willing to wade through all the yucky rental units until you find something respectable. My friends just rented a place in Lakeview that would sell for at least double what they’re paying in monthly rent.
Again, maybe Lincoln Park is the only neighborhood where it is now cheaper to buy some of these condos rather than rent. Everywhere else- that is not the case.
Sabrina,
Any opinion on rents in other very established places? Like Old Town. Streeterville and Gold Coast?
My guess is that rents have not fallen for the 1 / 2 bdrms in Gold Coast.
Maybe a little in Streeter, but it depends on what type of housing stock in Streeter.
I haven’t honestly looked in Old Town for quite a while.
chichow:
It all depends on location, amenities, how updated it is. The newest/nicest units aren’t dropping as much but you can still get a 2/2 in a new building for anywhere from $2100 to $2300 with the parking included. I’ve also seen some for $1900 to $2000.
One bedrooms are all over the place. You can get new construction for $1500 with the parking included.
I guess I am oe of the “Dinks”. What is a “dink” again?
However, I lived at home until I was making 40K after college with no debt and amassed 30% down on a condo in LV. I lived with a roomie in the city and was saving 1,500 a month plus interest. I was saving almost $2k a month. Living with a roomie with rent and utilities (no tv cable) was only $800 (rent was $675.00) in LV which was just a little more than half of a paycheck. Bought at age 27