Market Conditions: Are Rents About to Skyrocket Downtown?
There has been lots of talk both locally and nationally that rents are about to take off.
Renters beware: Double-digit rent hikes may be coming soon amid rental vacancy rates that have dipped below the 10 percent mark, where they had been lodged for most of the past three years.
“Young people are starting to get rid of their roommates and move out of their parent’s basements,” said Peggy Alford, president of Rent.com, predicting the vacancy rate will hover at a mere 5 percent by 2012. With fewer units on the market, prices will explode.
Rent hikes have averaged less than 1 percent a year during the past decade, according to Commerce Department statistics, adjusted for inflation. Now, Alford expects rents to spike 7 percent or so in each of the next two years — to a national average that will top $800 per month.
In the hottest rental markets, the increases will likely top the 10 percent mark annually for the next couple of years. In San Diego, Alford anticipates rents will rise more than 31 percent by 2015. In Seattle rents will climb 29 percent over that period; and in Boston, they may jump between 25 percent and 30 percent.
Locally, construction continues on new rental towers and failed condo buildings are also being converted to rental buildings with the latest apparently being Lexington Park at 2138 S. Indiana in the South Loop.
From Crain’s:
Completed in fall 2009, the building has sat nearly empty for more than 18 months, as the South Loop condo market has shown few signs that it’s pulling out of its depressed state.
One bedrooms are expected to rent in the range of $1300 to $1600 a month with 2-bedrooms between $1700 and $2100. By comparison, the 1 bedrooms in Terrazio are renting for $1500.
Are downtown rents going to skyrocket in 2011 and 2012?
South Loop condo tower converting to apartments [Crain’s Chicago Business, Andrew Schroedter, March 15, 2011]
Rents could jump double digits as vacancies drop [CNN, March 15, 2011]
Sounds to me like wishful thinking. Just because developers have an outsized cost basis from over-extending during the boom does not mean they’ll be able to pass along these costs.
When they aren’t able to pass along increased costs to improve their bottom line and return to profitability a lot of these will go bust. Don’t expect to hear this from Peggy Alford who is beholden to these developers.
Simple solution: Find individual condo owners on Craigslist. Although it can be a pain in the ass to get around all of the scum-bag agents that list their “services” hundreds of times per day on various street addresses and condo buildings.
Joey Zekas does a good job of calling out these realtard agents on his site. Hopefully he contacts the people at craigslist to let them know who is spamming their site.
All those economic data services that track vacancies don’t track condo owners renting out their units. That’s a huge miss in this environment. On top of that, as stated, you have new construction adding supply to the market. –> definitely NOT a tight market for rentals.
Sounds like this is the same “news” from people who were telling us several years ago “if you don’t buy a house you will be priced out forever”.
So we all better rent or we will be priced out forever. LOL.
Rents are a completely and totally related to income. In the past 30 years the mortgage market was manipulated (especially the last ten years). However, rents can not be manipulated because it is associated with income.
I am seeing the exact opposite of what this article is stating. There are a lot of vacancies and there is a huge number of shadow inventory of homes that haven’t hit the marketplace. Only time will tell. But as for me, my rent has stayed the same for the last three years.
Nonsense. Patently absurd. The CEO of rent.com should be fired for incompetence.
As a recent buyer, I’m all for rents increasing. However, I simply do not see it happening in the next couple of years. I know that I could go out right now and rent some pretty great places at below their costs of ownership. (Great places, yes, though not meeting all Unicorn Criteria.) I’m afraid the Crain’s article is just more industry hype (aka “press release journalism”).
“Nonsense. Patently absurd. The CEO of rent.com should be fired for incompetence.”
Why? As CEO of rent.com, like most CEOs, she is first and foremost a saleswoman. She is a saleswoman to the developers and tells her customers what they want to hear.
And they really need this false hope for their entire business depends on it. Developers are likely hemorrhaging money as current rents are likely below their cost bases as noted above. They’re trying to avoid default but it will ultimately be futile for most of them–real estate is a leveraged business.
Agree total fiction – we just offered 10% below listed rent price and they hit our bid with zero negotiation. Made my wife wonders if we were getting ripped off. We are paying around $1.80 per sq ft in the Gold Coast.
Also there are condo units seized by boards trying to re-coup investments. My wife made be look at two of them in the S Loop (disgusting!).
How does she quantify that there are fewer units on the market? I don’t think supply will drive this. If rents do go up it will be because companies start hiring again.
Living in NYC for so long I am kinda open to the idea of rents running counter cyclical, but this is a joke.
Argument more or less is all these unemployed youth, who are still unemployed, now need a place despite being practically on food assistance. Since banks won’t lend them money, being unqualified, they must rent, and since millions of homes that should be on the market after being foreclosed on still are not on the market they have no inventory to choose from and must accept whatever increase is shoved at them. Of course this 1% a yr increase will suddently soar to 10% and after 3 years never cause anyone to buy insead of rent.
But boy has this quote gone viral everywhere!
I think this is a case of YMMV. Every unit for rent and ever renter has a different situation. Yeah, the people who really want to live in ELP will pay always pay a premium to live there. Someone willing to live outside the GZ will get a deal.
Moving is a hassle and there is a cost associated with it, whether you hire movers or do the friends & pizza/beer route. For a less than $100 increase in rent, most will stay and when they finally leave, your price is set for the next tennant
“Moving is a hassle and there is a cost associated with it, whether you hire movers or do the friends & pizza/beer route. For a less than $100 increase in rent, most will stay and when they finally leave, your price is set for the next tennant”
This is looking at it one-sided… How much does it cost the landlord if the unit goes unoccupied for a month? What if it’s more? Unless they rent on their own, they are paying someone to do the listing and showings? In my mind, a landlord should be reducing my rent every yr I stick around.
“For a less than $100 increase in rent, most will stay and when they finally leave, your price is set for the next tennant”
Depends on the tenant. If it’s the tenant who has no problem paying $4.50 for a box of cereal then yea, maybe.
But the landlord should note that people talk and if they raise rent and the tenant’s friends found a nicer place for the same rent or cheaper, that tenant won’t stick around long. And people LOVE to brag about what a great deal they got on an apartment–when it happens they can’t keep their mouths shut about it.
Mike HG,
I read the Craigslist postings constantly, as I’m considering a job in Chicago and trying to price apartment rent. I don’t plan on renting from one of these services that spam, but is there anything to worry about with them? Other than putting their listings out constantly?
It’s hard to know where to rent and where to avoid. Thanks!
there are many people stuck in 2/2’s that will be willing to rent to the masses that will encounter these said rent increases.
IDK, $500 for movers (w/o tip) a few weeks inconvenience or pay $1200 extra to a greedy LL?
its a tough call but if i decided to stay i would make my LL pay in annoyance for the next year. go ahead raise my rent $100 because the shills in the suntimes tell you its ok, but be waiting for the 3am phone calls 🙂
Mike HG,
Most condo rentals are listed in the MLS and easily searched there at any reputable broker site.
We’ve written extensively about the problems with apartment locators – which we used to call “maggots” but now refer to as “bedbugs.”
And, we’ve launched yet another of the campaigns we’ve conducted over the years to clean up industry practices and benefit consumers. A lot of effort goes into this behind the scenes.
Help spread the word about practical, effective steps that people in the industry can take to enable renters to find their properties more easily on Craigslist:
http://yochicago.com/an-easy-way-to-clean-up-craigslist-apartment-ads/20534/
We’ve also made available a series of rental guides that link directly to every major apartment complex in downtown Chicago. A much easier way to see what’s available than using Craigslist for the areas we cover in the guides.
We’ve tracked downtown condo rental inventory listed in the MLS for the past 17 months and have seen inventory decline by 50% during that period.
Craigslist could easily stop the abusive, repetitive ads but doesn’t, and has taken no action on the reports we’ve made. I’ve lunched with Craig twice and believe that he’s firmly committed to encouraging these abusive practices because they serve longer term interests of Craigslist. But that’s a different, much more complex story.
“How much does it cost the landlord if the unit goes unoccupied for a month? What if it’s more? Unless they rent on their own, they are paying someone to do the listing and showings? In my mind, a landlord should be reducing my rent every yr I stick around.”
I always use this to my advantage when re-upping my lease. It never fails, I always get a letter in the mail a few months before my lease expires encouraging me to lock in slightly higher rates for next year. A lot of people just do it without ever setting foot in the management/leasing office. All you have to do is go in there and bring this up. Then I always bring up that, if I leave, chances are that someone is going to bring in one of these “maggots” or “bedbugs” to show them the place and they’d also be out that commission. In the end, they usually see it my way and realize it’s much more profitable for them to keep me as a tenant at a slightly reduced rate than to have to deal with all those losses.
On another note, I’m thinking about renting in the south loop (proximity to work, lots of stuff available, new places, etc.–although I’d never buy there). I plan on going to all of these buildings, looking at the places and getting their rates. Then taking those rates to the next place, telling them and seeing if they’ll beat it, and continue on until I can get the best price possible (very much like car shopping—if you do car shopping intelligently).
“We’ve tracked downtown condo rental inventory listed in the MLS for the past 17 months and have seen inventory decline by 50% during that period.”
Curious Joe, do you have that data to historical availability?
Joey Z,
Many people here differ with you on every occasion possible, But i know we all thank you for your fight/crusade against the craiglist “maggots”.
when we were looking for a rental in OMP, first place we went to was craiglist. and dear gosh its horrible and being wet behind the ear on downtown rentals wife called one of those guys. she said it felt like a used car salesman not letting you off the lot.
so thank you again for trying to clean up that stuff
The landlord also has to paint and turn over the unit, along with spend time running a credit check and advertising for prospective tenants. This cost often is more than they want to deal with and they outsource it to an apartment finder and pay the commission. Landlords think they can pay shills to convince the public that rents are going up 10% this year, but people are smarter than that. The market will clear at a much lower average increase across the green zone, and I’m guessing 2% at most, based on the level of shadow inventory that owners/banks want to rent. This article is hilarious.
Why are the rental finder companies “maggots”? I used Chicago Apartment Finders once and found them to be quite nice and low pressure.
it’s been almost a decade since I last rented and i don’t recall more than a $25/month increase. Again, in my instance, it just didn’t make sense to move just to save $300 when I would spend that renting a truck and getting friends or movers, etc. I’m not as good a negotiator as Kevin, or maybe I’m just lazier. 😀
gringozecarioca,
The data, by ZIP code, and a summary chart, are publicly available in a Google Doc that’s typically updated weekly on Friday:
https://spreadsheets.google.com/ccc?key=0AtbN6wIddVZ9dC1Bb00yT3hVZlN0aGU5ZlhQd3ZOOFE&hl=en
“Why are the rental finder companies “maggots”? ”
When they spam hundreds of listings daily listing all sorts of buildings, neighborhoods & addresses it reduces the search functionality of craigslist for prospective tenants who may want to go the direct route.
For instance search on south loop or lincoln park and see what crap comes back.
Joe,
Search maggots or bedbugs at YoChicago for an explanation.
See the phony reviews of bedbugs at Yelp, including the one you reference.
I’m signing off at this point.
Not that crazy of an idea… (not that I believe its true either)
I mean nobody is buying right now, so everyone must be renting right? People need a place to live! More demand + same supply = prices increasing
Also, if you take a look at inflation data, inflation is finally back baby (3%+)
http://bpp.mit.edu/daily-price-indexes/?country=USA
I noticed that the $25/month hike my old landlord tried when advert my old unit didn’t go so well, it’s now on the market for the exact same rent I paid… 800 SF 1 bed at Corneilia and Paulina anyone?
WOW – this is obviously a site full of renters!!! Almost every single post vehemently denies the reality of rising rents (read the articles, etc.). Whenever there is a news story about falling prices, almost every post agrees. Now the media presents a story about rising rents, and they are all stupid? Come on – get real…….
The fact that there are condo owners willing to rent out their units says nothing about pricing. Believe it or not but most condo owners are LESS flexible than apartment buildings. Also, these accidental landlords may rent for a short term but then are likely to kick you out after a year to sell the place – and things will be worse for renters in 2012-2013.
In addition, people write that costs can’t be passed on to renters – uhhhh yes they can and WILL. Do you honestly think that a landlord is going to accept double digit increases in taxes/maint. without passing the cost on? Are you all morons or just delusional. WTF would any investor eat more and more costs when the supply is falling and demand is increasing. Sure you guys may have gotten a few deals in the past few years but from this date forward watch out.
Thanks Joe.. Just by coincidence about ten seconds ago saw the editor of a video I finished watching was you.. 1/2 flr 189 E LSD I think.
Seller have an offer on those clown paintings?
Crain’s had a piece yesterday on how young professionals are living with roommates for longer, so even when they are moving out of their parent’s homes, I would think that the impact won’t be that great, especially on one bedroom apartments. Combine that with the other factors mentioned above (lower wages and more vacant investor condos) and I don’t see any upward pressure on rents. Of course if you have lots of units to rent, you may see things differently.
Crain’s link:
http://www.chicagobusiness.com/article/20110312/ISSUE03/303129986
Paying higher prices for fuel and food will leave even less money left for housing. Combine that with more supply and I don’t see how housing will be helped.
“Also, if you take a look at inflation data, inflation is finally back baby (3%+)”
The whole reason I got into real estate in the early 90s was because rents in Boston were so ridiculously high – I see the same type of thing (but to a lesser degree) in Chicago. Seriously, back then, to rent a decent 1 bedroom in a decent area, you were talking 1600/month (and this is 15-20 years ago).
My question is, though, “why SHOULDN’T renters pay a premium” over homeowners? I know that if I rented, I definitely would pay a premium not to deal with all the shit landlords have to deal with!!!! (OK – I am very irritated this morning because I am heading over to one of my houses in Hinsdale to fix the fence, plaster some cracks, re-caulk some of the crown molding and fix the fascia board/soffit where some animal tried to get in – and I AM SUPPOSED TO BE ON VACATION)!!!! So – renters – accept the higher rent and be glad you don’t have to deal with this shit!!!
Juliana: Inflation can lift incomes as well which in turn lifts everything else. You are assuming the size of the pie remains static, which it may but LT does not.
Inflation doesn’t just “lift” incomes. Supply and demand baby. As long as unemployment (and underemployment) remain high, there is no reason to think wages will go up.
“Juliana: Inflation can lift incomes as well which in turn lifts everything else. You are assuming the size of the pie remains static, which it may but LT does not.”
“Also, these accidental landlords may rent for a short term but then are likely to kick you out after a year to sell the place”
I think most would like to but have been unable.
“Do you honestly think that a landlord is going to accept double digit increases in taxes/maint. without passing the cost on?”
He will try, whether he gets it or not remains to be seen, kinda the deperately need blood but can’t take it from a stone thing. Rents do have a cap at income levels, without income increasing rent can only go so far.
“WTF would any investor eat more and more costs when the supply is falling and demand is increasing.”
He won’t. I used to see this in NYC which is rental dominated all the time. counter cyclical rental pricing, could still be losing on asset at same time win/lose for owner..
“morons or just delusional”
speaking for myself….moron
I have no doubts that landlords will raise rents.
The caveat is that their units will remain vacant for longer periods of time, if they can be rented at all.
Just like with housing prices. Sellers can ask whatever price they want, it doesn’t mean that they’ll actually get it.
Joey Zekas,
I second groove and thank you very much for your fight on the “bedbugs” and also on realtards that claim to have special certifications when they really do not. I also like the site for real estate news.
Hathorlive,
use yohicago.com rental guide to buildings that are located all over the nice neighborhoods of the city. Otherwise your kind of stuck with craigslist.
Does redfin show current rentals on the mls?
Clio, your points are well taken, I often weight the fact that I do not own the place when I do simple tasks, like caulking my bathtub over the weekend… However, you have brought up a lot of positives for homeownership that also deserve a premium. I would say that there is give and take on both sides but the overwhelming liability is on the ownership side which, to me, should cause a discount to the puchaser.
Hey anybody in for starting a mover company?
with idiots raising rents i bet we will make a killing this year. what do you think chinese bubble wrap cost and what is its lead time?
yahooo inflation!!!! how the hell did anyone get people to buy into it being a good thing?
High money supply leads to higher purchases (either in quantity or price) leads to more jobs and higher income. so yes, “Supply and demand baby”
juliana, unemployment is [slowly] improving, and if you work in the energy or food industry, inflation is a good thing for your income is it not?
Just because TV’s and other discretionary goods deflate in price, doesn’t mean that necessities such as housing will deflate either.
And that article you linked, big whoop an extra 2% of people are living with room-mates. its not like 10% moved back in with their parents or anything drastic. Pretty common sense that when times get tough, a roommate is a good way to save money.
Employment prospects are improving compared to two years ago, (its unbelievable the number of new businesses I have seen started just in my neighborhood) and with rising energy/fuel costs, I would imagine that bodes well for inner city premium housing due to the easier carrying costs than living in the burbs in a big house you have to heat and driving everywhere
“Are you all morons or just delusional. WTF would any investor eat more and more costs when the supply is falling and demand is increasing.”
Delusional? Mmmm…actually maybe I’m just a moron. Are those my only two choices?
Trying to get over your brain numbing childishness and anger, your second sentence get’s to the heart of why I, and others here, are skeptical that rents will be skyrocketing. You seem to believe that even though there was a huge glut of cheap condo buildings built and apartment buildings converted to condos that the number of units available is dropping sharply. I disagree. True, many of these units aren’t yet available. But they loom large over the entire market. A shadow inventory of rentals, if you will.
And as for demand increasing: that is probably true given we are in the midst of a weak recovery. However, the CEO of rent.com believes demand will be stronger than in 2005, which I find laughable. Not to mention the fact that I’m simply not sure we’ll be seeing a sustained recovery. You think 2011 will be a bull year in the markets?
I don’t see unemployment improving. Depends on which statistics you look at. And in the energy and food industry, margins are getting squeezed, so there is no reason to increase wages. Corporations have no reason to be generous and as government workers start feeling the squeeze of budgetary problems more will get layed off.
“juliana, unemployment is [slowly] improving, and if you work in the energy or food industry, inflation is a good thing for your income is it not?”
High money supply leads to higher purchases (either in quantity or price)
Fair.. true.. no control over WHERE that money goes and thus WHERE that higher price is reflected but statement nonetheless is true.
leads to more jobs and higher income… higher prices if not met with relatively equal increases in income usually causes margin supression for companies that can’t pass through the costs first resulting in loss of income and jobs.. I don’t think income goes with it…
When we stopped being savers and looked solely to on-going cashflows that were (relatively) positively correlated to inflation. While locking large expenses that weren’t. For example, my annual raise (all things equal) roughly is tied to inflation, so is Social Security (and some other income streams out there). Remember when inflation was low and all the oldies were bitching that there was no SS increase? If inflation kicks up, many of the things that correlate to that will follow the trend. Also, those things like fixed rate mortgages? The home purchaser wins big there. Especially (IF) there is an increase in the price of the house due to the higher availability of income.
“how the hell did anyone get people to buy into it being a good thing?”
Gringo, yes that is refered to as a “leakage” the time frame for what I laid out is rather long but it does follow.
formerroscoevillager… and i thought it was because anything, regardless of the destruction it causes elsewhere, to get the price of the house above the banks loan value would save the banks and feds ass. to me everything else you say sounds like a big net zero and a superfuckfest to anyone holding cash at .14%
sounds to me like something has to give on that rate if what you say is true…
clio, please change your name to KnifeCatcher already…
You also might be outlining a “hyperinflationary” environment where inflation skyrockets and you have people buying a loaf of bread witha wheelbarow of cash. That would be really bad. Low inflation, yes ST margins are squeezed but it does tend to even out.
“800 SF 1 bed at Corneilia and Paulina anyone?”
How much rent do you pay? Is an off-street parking spot included?
“So – renters – accept the higher rent and be glad you don’t have to deal with this shit!!!”
Higher rent? Hahaha no. I won’t deal with that crap AND I won’t take higher rent–I’m a comparison shopper and there are always deals out there. Some of the best ones never even appear online.
“However, the CEO of rent.com believes demand will be stronger than in 2005”
The cost of doing business in Chicago is so much lower in 2011 (LOL) than in 2005 and personal tax rates are so much lower (LOL). There are so many more jobs that pay so much more in 2011 vs. 2005 (LOL). And there are so many fewer condo units and apartments available in downtown Chicago (LOL).
The CEO of rent.com is full of laughs. She should go into stand up comedy.
The President of Rent.com isn’t exactly an objective source. I live in the South Loop and have been casually looking around at apartments and condos in the SL, downtown, and in River North — these areas, especially the SL, are GHOST TOWNS. Drive down Indiana Ave south of Roosevelt after dark sometime.. Those buildings are empty and the same goes for many buildings in the loop. I can look out of my windows at these places and they’re are rarely more than 3-5 lights on at a time. It’s simple supply and demand. Rent’s aren’t going to “sky rocket” until the supply dries up, and that’s not going to happen any time soon.
It really is a “net zero” (on paper) as you say.
There is, however, a reason that higher inflation could to lead to higher rent.
Course, I’m cash heavy with a future downpayment so pure cash is not where I would look to hold my funds, something more inflation-linked…
“It’s simple supply and demand. Rent’s aren’t going to “sky rocket” until the supply dries up, and that’s not going to happen any time soon.”
And if the buildings are empty somebody is on the hook for the carrying costs. Stubborn landlords can hold the line on pricing to their detriment if they so choose. I’m of the mind that not all will and many will wind up subsidizing someone’s rent.
““morons or just delusional”
speaking for myself….moron”
I would have thought you’d have added:
(c) seriously, WTF, stoned
and gone with that one.
Bob, it’s 1110 with easy street parking (wife commutes by car daily and did not have trouble parking in front of the door every night).
My personal opinion is that inflation is tied to the cost of energy which remains high primarily due to speculation and (alleged) supply issues in the middle east. The next round of debt defaults will surely begin – be it credit card defaults, student loans, CRE, and the next round of strategic defaulters after the current soon to be large price declines….that will all offset inflation, because debt default is deflationary. Last time oil hit $140 a barrel, it dropped to $30, and then the pump of the stimulus, and then next we’ll have another crash, and so forth. Japan has been trying this forumula for 20 years now.
“i thought it was because anything, regardless of the destruction it causes elsewhere, to get the price of the house above the banks loan value would save the banks and feds ass.”
Saving the banks and the feds is, by proxy, saving taxpayers, too, at this point. Screwing them, as well, of course.
“True, many of these units aren’t yet available. But they loom large over the entire market. A shadow inventory of rentals, if you will.”
While this may be true, nobody knows when and if these units will come on the market. When they do, will they be in any condition to rent. Also, you guys fail to understand what sharks investors really are. I am a very nice guy – but the same cannot be said for ANY landlord/investor I have met. They are tough – tougher than most businessmen I have dealt with – good luck trying to get these guys to agree to what you think is a fair rent.
Bob: “people LOVE to brag about what a great deal they got on an apartment–when it happens they can’t keep their mouths shut about it.”
If you didn’t get as good a deal (for you, yeah, counter factual, but go with it), would you feel scorn from the people doing the bragging?
“clio, please change your name to KnifeCatcher already…”
why am I a knife-catcher? oh – because I said rents are increasing? That makes a lot of sense.
Exhibit A: Me spending the weekend caulking a bathtub and fixing cabinet hinges in my rental.
“good luck trying to get these guys to agree to what you think is a fair rent.”
“The next round of debt defaults will surely begin … CRE”
You have an odd definition of “begin” as it relates to CRE defaults.
OK – wait, I have to clarify my stance on the subject…… I think that rents of certain units in certain buildings in certain areas will skyrocket – not so sure about the rest of chicago. Chicago is different than Boston, LA, SF and NY because there is so much land and it is overbuilt (think Phoenix, LV, even Miami). However, there is only one gold coast and only certain very nice buildings. Rentals in such buildings and areas WILL go up and be untouchable – the other outlying areas, I am not so sure.
“Also, you guys fail to understand what sharks investors really are. I am a very nice guy – but the same cannot be said for ANY landlord/investor I have met.”
bahahaha
that totally reminded me of this great scene from Futurama…
That Guy: There are two kinds of people: sheep and sharks. Anyone who is a sheep is fired. Who is a sheep?
Dr. Zoidberg: Errr, excuse me… which is the one people like to hug?
That Guy: Gutsy question. You’re a shark. Sharks are winners, and they don’t look back because they have no necks. Necks are for sheep.
Good luck with that. I think being cash heavy is a lot safer at this point that the alternatives. At least until the dust settles.
“Course, I’m cash heavy with a future downpayment so pure cash is not where I would look to hold my funds, something more inflation-linked…”
“why am I a knife-catcher? oh – because I said rents are increasing? That makes a lot of sense.”
From what I have gathered reading your postings you own many rapidly depreciating assets. You have also been calling bottoms for quite some time now.
anon…
“(c) seriously, WTF, stoned”
Just came in from the terrace under the perfect state to see that comment and just lost it… wasn’t at the time… am now 🙂
“Saving the banks and the feds is, by proxy, saving taxpayers, too, at this point. Screwing them, as well, of course.”
Sadly very very true…
formerroscoevillager – I think I lived in that building – rent is not very negotiable, and I moved out when he wouldn’t budge on the $25 rent increase a couple years ago. I think I was paying $1,050 at the time. People are doing this all over the city. I had to pay to move, but it was worth it because I found a much better unit to live in.
“You have also been calling bottoms for quite some time now.”
For some reason, I find this absolutely hilarious.
“For some reason, I find this absolutely hilarious.”
a)Moron
b)Delirious
c)Stoned
d)
d) Endlessly sophomoric?
For anyone who cares, I had to review the Redfin of a house in a southwest exurb, and that little chart at the bottom of the listing that shows the selling price psf of homes? It has showed that the selling price psf of homes in the same zip as this random SFH subdivision have dropped from about $100 psf as of May 2009 to less than $60psf as of this month.
I know that the exurbs have been hit hard and those price declines don’t translate into declines in the green zone but wow, you can live in a 2,000 sq 5 years old home off I-80 for $120,000. Scary stuff for those people who paid double that in 2005.
Dave, he must have learned his lesson then, I asked for and got a reduction and no increase over 3 years. He was also amenable to changing the end of the lease from Jul to Apr when we said we were having a baby.
“Good luck with that. I think being cash heavy is a lot safer at this point that the alternatives. At least until the dust settles.”
Considering the BOJ is alerady at zero and you can’t go below and they just pumped in 700B of monopoly money into their banking system means USD will strengthen.
Also Fed can’t do much more at this point except expand the size of it’s balance sheet. But at least the bankers are first in line for any help just like Japan.
Global recovery is endangered at this point, big time. I thought it was going get derailed by a European sovereign debt crisis but lo and behold mother nature expedited it.
Oh yeah and one of the Japan reactors now appears could go BOOM very soon. Not regular boom like the others but a big Chernobyl style meltdown.
“WOW – this is obviously a site full of renters!!! Almost every single post vehemently denies the reality of rising rents”
So you think that commenters on this site are only capable of making comments that include obvious bias or their ‘wishful thinking’?
Maybe some here are smart enough to analyse the situation and come to a conclusion, regardless of what they would prefer.
I said this before, and I’ll say it again: 10% rent increases is a lot of wishcasting. It’s not going to happen.
2010 saw a lot of concessions and Landlords are looking to increase rates going into 2011, but whether or not that is going to reflect on Lease renewal rates (rather than market rates) is another matter and dependent on the Landlord.
The big buildings have taken a lot of hits, and the glass skyboxes of downtown are still offering free rent concessions while places in LP and LV have, for the most part, stopped.
So 10%? Forced meme is forced.
“d) Endlessly sophomoric?” – I insist that is absolutely impossible!
Well actually the last few days I was in the country, and for the first time, all over the cow shit, there were a ton of shrooms… and I found myself thinking am I too old for that now… 🙂
“I found myself thinking am I too old for that now”
I’d say no, but I’d also say that you need to be *really* certain about any wild mushrooms in any context, whether sorels or anything else.
Little anecdotal evidence that actually backs up the claim about rents rising. I live at 900 S Clark and the rent on my 3 bedroom was $2650/mo. When it came time to renew the lease, I was told rent would now be $2925. I liked the place but not for 300 more a month. So I’ll be moving out come April.
no worries.. not goin near them… and yep, the wrong mushrooms can easily be a game ender…
….got me thinking how a nice chicken marsala right now would be f’n awesome.
“I found myself thinking am I too old for that now”
Thought about cultivating some magical mushrooms at one point to jump start my spirituality, but came to the same conclusion. Ended up dusting off the meditation cushion instead. Still haven’t been able to tear myself away from reality and the slow-mo train wreck though. Some new horror keeps cropping up that grabs my attention.
“Some new horror keeps cropping up that grabs my attention.”
and they will continue too.. but that’s why we must enjoy it all also… btw.. were you the one who hated Rio? Whoever made those comments I found along a timeline to have been perfect.
No, that wasn’t me. Never been there and don’t think I could adapt to anyplace that doesn’t have English as its primary language. Old dog. I think I’m stuck here in the USA for better or worse. But I do have my armageddon farm where I can play earth mother if I can ever get my mojo back.
“btw.. were you the one who hated Rio? Whoever made those comments I found along a timeline to have been perfect.”
“Still haven’t been able to tear myself away from reality and the slow-mo train wreck though. Some new horror keeps cropping up that grabs my attention.”
I don’t let all the bad news affect my psyche. I have an internal middleware in my psyche and I can control which parts get through (when sober), the bad parts don’t. And when I sense someone trying to guilt my psyche or let any bad parts get through I immediately recognize it and adopt an F U you aren’t interfering with my happiness (nor getting my money). If me feeling bad about a bad situation can’t make it better it’s just undue stress on _me_ & that I don’t need.
Also my drug free message for the kids: indulging in things that alter your psyche could make you even more of a debbie downer.
This article and all our comments are speculation at best. There are too many unknowns to make any reliable prediction. I would have bought an article caliming rents will soar if it was based on analysis of trends in fact pointing out that this is the case. This is a fun discussion at best with no value.
Re: money supply increases, QE, inflation, etc.
If one follows the money…….. it’s hard to see how this inflation ends up in the hands of 21-40 year old Chicago renters.
The money goes from the Fed, to the US Treasury, to Federal Gvt. which spends it on bloated salaries, welfare, entitlements, and the military/industrial complex. So how does any of this newly created money end up in the hands of healthy, young, middle class people in the Midwest? If there’s inflation, it shouldn’t show up in the buying power of Chicago’s single renters! Also, if the Fed makes newly printed or cheap money available to primary dealers/banks/Wall St., again, how does this end up in the hands of young Chicago renters? It doesn’t, in the latter case the money ends up being invested by the Hedge Funds/Wall Street and never gets into circulation at the level of the Chicago proletariat.
ah juliana, I believe you may be suffering from “Scared Midwestern Suburbanite Housewife Syndrome” or SMSHS. It is typically caused by religiously watching either the evening news or an all hours news network.
Learn to filter through the BS, juliana, you will be much happier.
I have seen empirical evidence that supports the article.
Last week, I was in the east tower lobby of Alta at K Station (848 apartments spread over two towers, Fifield’s apartment complex at 555 W Kinzie St), and the lobby was hopping with activity, and I never thought that location would be successful for rental, esp. the west tower, which is not a quick walk to the Loop.
I’ve found that it isn’t until you have unlimited availability that you have a chance to realize the downside of self-medicating and a new appreciation of normal. And that goes for both legal and illegal substances.
“Also my drug free message for the kids: indulging in things that alter your psyche could make you even more of a debbie downer.”
“Paying higher prices for fuel and food will leave even less money left for housing. Combine that with more supply and I don’t see how housing will be helped.”
Workers demand higher wages to maintain same standard of living. Skilled workers demand even more to replace baby boomer knowledge exits. Higher wages get paid. Landlords pay more to fix apartments due to labor and labor component in materials, as well as the raw materials themselves, rents increase. And higher wages mean renters can pay higher rates.
If I were foreign and completely unintelligible (verbally at least), I would be an econ prof.
“Workers demand higher wages to maintain same standard of living.”
Low skilled workers told to goto hell by employer. Ready pool of available labor willing to work at lower prices.
“Skilled workers demand even more to replace baby boomer knowledge exits. ”
100 baby boomers retire. Due to productivity/offshoring gains only 70 US replacements are needed. They demand 20% increase from baby boomer wages. 70 * 1.2 = 84% of baby boomer wages.
“Higher wages get paid.”
Yet aggregate wages fall.
Doesn’t make sense to me. Replacing baby boomers assumes they have the dough to retire. Many of them don’t. There are a lot of disillusioned workers who have dropped out of the labor force and will drop back in at the first sign of recovery, not to mention underemployed college grads. More supply means downward pressure on wages.
“Workers demand higher wages to maintain same standard of living. Skilled workers demand even more to replace baby boomer knowledge exits. Higher wages get paid. Landlords pay more to fix apartments due to labor and labor component in materials, as well as the raw materials themselves, rents increase. And higher wages mean renters can pay higher rates.”
“I believe you may be suffering from “Scared Midwestern Suburbanite Housewife Syndrome” or SMSHS. It is typically caused by religiously watching either the evening news or an all hours news network.”
+1
LMFAO!! Ahahaha thanks for the laugh it’ll make me lunch funnier.
jmm… I vote for bob on this one…
“There are a lot of disillusioned workers who have dropped out of the labor force and will drop back in at the first sign of recovery, not to mention underemployed college grads”
Their skills get stale whilst out of the workforce and college grads have no practical experience which means significant training and investment.
I know you aren’t an employer and you do not operate a business, but you should know what you don’t know. Talk to those who do and they will tell you. From a macro perspective, this is why full employement is being discussed as potentially much higher than before the crisis. Much has been written about this recently. Unfortunately, some people will never get jobs again as the economy has passed them by. Those who do have the skills are in significant demand, unfortunately.
“Low skilled workers told to goto hell by employer. Ready pool of available labor willing to work at lower prices.”
Check your collective bargaining agreement if you employ in Chicago and see what it says.
I know it works for you in your head, but its not how it works in practice.
The other problem with the rising wages theory is that it doesn’t consider the alternative: a lower standard of living instead. I’ve seen far more people have a reduction in teh standard of living over the last two years than I’ve incrase their standard of living. I have seen people make more money during this recession and every time, yes, every time, the person has been involved in the FI of the FIRE economy – finance and insurance. It’s been a reduction for everyone else.
“100 baby boomers retire. Due to productivity/offshoring gains only 70 US replacements are needed. They demand 20% increase from baby boomer wages. 70 * 1.2 = 84% of baby boomer wages.”
Sorry but offshoring is a mature concept and one that was not and will not be precipitated by retirements. Good luck finding HR folks who understand ERISA labor laws in India.
“Sorry but offshoring is a mature concept”
Since some Indian offshoring companies are already re-offshoring to China, this is a reasonable position. There will probably be some round tripping associated with any USD erosion, too.
wages arent falling, they fell slightly in 2009 but that has been the exception over a 60 year period. most professional opinions are that wages have increased in 2010 and will continue to increase in 2011
“The other problem with the rising wages theory is that it doesn’t consider the alternative: a lower standard of living instead.”
Worked well in the mideast right? People only overthrew governments because the standard of living was dropping, so why shouldn’t we expect that here? A big chunk of that equation was rising food costs, in fact, record highs.
Hell people organized an anti-tax tea party when taxes were at record lows, so one can only imagine what happens if living standards actuall were to fall.
Check what happened in Wisconsin and Iowa. As the “greedy unions” are demonized the pressure on public employees to make concessions will grow, IMO. If Chicago is broke and can’t squeeze any more out of property taxes, they may have to do the same.
“Check your collective bargaining agreement if you employ in Chicago and see what it says.”
“There will probably be some round tripping associated with any USD erosion, too.”
Many call centers ditched the concept entirely due to service level issues. The call center business in the U.S. is booming.
Girlfriend I ain’t watched any evening news in years. The closest I get to television news is Dylan Ratigan and Meet the Press. All the news I get comes from the blogosphere.
“Oh juliana, I believe you may be suffering from “Scared Midwestern Suburbanite Housewife Syndrome” or SMSHS. It is typically caused by religiously watching either the evening news or an all hours news network.”
hd… Thats where i go too… Wages stagnate, prices rise and lower middle class people dont have new flat screens, microwaves, and a lexus
I called discover to increase my credit limit (the higher the better to keep that baby above 800) and the recording tells you that the call center is in Delaware or Arizona.
Oh, and I had already quit listening to mainstream propoganda when you were caching your knife buddy.
“If Chicago is broke and can’t squeeze any more out of property taxes, they may have to do the same.”
Really? Because private employers don’t have unions? There is no such thing as a NRLB? Did you forget that?
Anyway, it’s nice that you read the headlines, but it takes some knowledge to understand how they impact the economy.
Most public employees do not have collective bargaining rights anyway so yours is not a significant point. Why? Because most are federal employees. I believe, but don’t care to verify, that the federal government is the largest employer in the state anyway.
“I called discover to increase my credit limit (the higher the better to keep that baby above 800) and the recording tells you that the call center is in Delaware or Arizona.”
New law actually. Part protectionism, but whatever.
private unions are a very small percentage of the local economy and have been far more likely to make concessions and be realistic about the state of the economy. public unions are a completely different story. I too know a thing or two about unions.
In professional services (law, accounting, consulting), pay is still down from 2007 and 2008, and also the number of people working in those professions is still down by a decent margin. The way these firms are making higher profits in 2011 than 2010 is by paying their people less at the same level as they would have in 2007 and 2008 (due to lower/zero/negative raises in 2009 and 2010), while also requiring them to work 10-15% more hours. In Chicago, these people make up a significant percentage of the green zone population. How will they all of the sudden be willing to pay 10% more rent or even more?
“Oh, and I had already quit listening to mainstream propoganda when you were caching your knife buddy.”
Really, when I bought a home in 1997 that has been fully paid for close to 10 years? Perhaps you meant someone else.
well juliana, if you read it on the internet, it must be true…
Don’t forget that it was under Blago that much of IL state employees were unionized. I’ve heard horror stories where non-union supervisors recieved furlough days and the unionized subordinates received raises giving the union employees higher salaries than their own bosses.
lol. who listens to mainstream media here? I bet you believe the fed’s version of inflation too. Never mind food and energy costs as long as your ipad is cheaper, right?
“most professional opinions are that wages have increased in 2010 and will continue to increase in 2011”
“In professional services (law, accounting, consulting), pay is still down from 2007 and 2008, and also the number of people working in those professions is still down by a decent margin. ”
And 2007 was a record year on Wall Street and about 50% higher than in 2003 (made up no time to verify but should be directionally accurate).
“How will they all of the sudden be willing to pay 10% more rent or even more?”
Comp is up. Hiring is up.
The blogs I read are for the most part in the top 25 financial blogs. But yeah, I gotta find my info somewhere, not off the top of my head or in wishful thinking.
“well juliana, if you read it on the internet, it must be true…”
yeah, that was directed at sonnyboy
“Really, when I bought a home in 1997 that has been fully paid for close to 10 years? Perhaps you meant someone else.”
Total comp is still down, especially when comparing an individual’s level in the organization. What planet are you living on?
“Don’t forget that it was under Blago that much of IL state employees were unionized. I’ve heard horror stories where non-union supervisors recieved furlough days and the unionized subordinates received raises giving the union employees higher salaries than their own bosses.”
Yes it’s all BS. But IL is not WI. And the unions are powerful here which will further drive a need for wage concessions.
Anyyway, the type of housing discussed here is not blue collar union housing. Better to look at the bonuses William Blair / Huron / Aon paid its young people as the direction wages are going amongst buyers of these properties (or renters).
“Total comp is still down”
From a record year? Sure. The Nasdaq is still below 5000 too.
If comp is up for people with 20+ years of experience, this little to no affect on the rental market as these people already live in their cushy North Shore homes that they purchases in the 1990’s for half of what they would cost today. The top people are taking a larger share of the pie, which is making younger people out of luck until those people finally retire.
Yeah the banksters continue to loot our economy. Watch Dylan Ratigan if you want to get a different take on that.
“And 2007 was a record year on Wall Street and about 50% higher than in 2003 (made up no time to verify but should be directionally accurate).”
Total comp at Aon and William Blair is also still down from 2007 and 2008 for the lower levels (analyst and associate), due to lower bonus pools. It may be up for directors and higher, but those people are rarely renting anyways.
oh i’m a knifecatcher now because I listened to propaganda?
lol good one, but my place is still cheaper on a monthly basis to have purchased than to rent, so I really don’t care what you think about my non bubble purchase in march of 2009 and I don’t plan on selling any time soon so I dont’ really care about other people and bank sales going on right now.
time will tell who is right, but I am the professional investor while you are the housewife, we all know who’s opinion is respected more when it comes to financial matters
Yeah, you listened to the realtards who convinced you that it was the right time to buy instead of the bears who warned you that the worst was yet to come. You could have done better, and now you’re stuck in a 2 bedroom condo that you will have to live in for a long time or be willing to put up the difference in what you sell it for.
And I ain’t no housewife. I’m a farmer. Keep up with the program.
“oh i’m a knifecatcher now because I listened to propaganda?”
In this market you’d have to be an idiot to agree to more than a nominal ($25-50/mo.) increase in rent. Too many other rental (and purchase) options.
Wait – once again I am so confused why everyone looks at their house as a bad investment. When you think about it – it is the best investment when you consider other daily/life expenses:
– cars
– clothes and accessories
– haircuts
– manicures/pedicures
– entertainment
– vacations
– food
Seriously, why don’t people realize that housing should NOT be compared to the stock market (unless you are an investor in a non- owner occupied situation) and start realizing that not only is it a necessity but it also is the best “necessity-based investment” there is.
I’m not stuck, because I was planning on living there for a long time anyway, nice logic. Even if for some reason prices continue to plummet, when I want to upgrade my residence that house will be cheaper as well so who cares
The public unions are more powerful, yes they are. Unfortunately, our city, county and state will eventually have a day of reckoning. They’ll keep dancing until the music stops.
“Yes it’s all BS. But IL is not WI. And the unions are powerful here which will further drive a need for wage concessions. “
“When you think about it – it is the best investment when you consider other daily/life expenses:”
No the equity component is indeed a forced savings vehicle, in a stable real estate market. Which we are not in.
However, even dismissing future real estate pricing moves as pure speculation: when you factor in once you cross over into ownership status 1) you have decreased mobility for pursuing job opportunities in other areas (without becoming an absentee landlord) and 2) you have a giant cross-hare on your back for the taxman.
And face it: in Chicago it’s cheaper to rent the same exact unit as it is to own. This is even before you consider the likely future depreciation from owning. The cash flows aren’t the same for comparable units. And thats where you effed up big time, clio, and got caught holding the hot potato.
Hope you’re not planning on propagating in the near future as things could get mighty tight. And I suspect condo prices will have a much larger correction than SFHs.
“I’m not stuck, because I was planning on living there for a long time anyway, nice logic. Even if for some reason prices continue to plummet, when I want to upgrade my residence that house will be cheaper as well so who cares”
The day of reckoning in Illinois will be 2015 or so. They won’t be able to pay the pension obligations for much longer at the current rate because so many people from government are living longer – they often are retired 10 years longer than they worked. Awesome system.
Yeah let me tell you, its so impossible to raise a kid in a 2 bedroom condo (coming from the mom living in Naperville)
“Hope you’re not planning on propagating in the near future as things could get mighty tight. And I suspect condo prices will have a much larger correction than SFHs.”
Except there’s thousands like him. And Sonies can probably buy his way to above water if need be (he’s a trader).
But there are thousands of stuck yuppies indeed. And their kids will need to goto school somewhere. That likely won’t be private school as they stretched their budgets for the 350k+ condo. So it will be public school.
Demographics will change with an influx of the BETTER demographics. They will grow up learning the truth about racial reality and not in some leafy suburb where few minorities exist and their impressions are from hollywood and the TV that present a false facade. They’ll learn to reject liberalism wholesale. Either that or they’ll become wiggers.
My gut tells me it will be a little bit longer.
“Dave M on March 16th, 2011 at 11:38 am
The day of reckoning in Illinois will be 2015 or so. “
“However, even dismissing future real estate pricing moves as pure speculation: when you factor in once you cross over into ownership status 1) you have decreased mobility for pursuing job opportunities in other areas (without becoming an absentee landlord) and 2) you have a giant cross-hare on your back for the taxman.”
OK – counterpoints:
1. real estate has NEVER depreciated in the long term/long run – it has always appreciated.
2. rents have NEVER gone down in the long term/long run – they have always increased.
3. tax increases will be passed on to renters – everyone so stupid, delusional, moronic AND high to think that costs are NOT going to be passed down to them. It really is common sense. Sure, one person could negotiate a specific rent on a specific property down – but that is the exception – rents ARE going up and will continue to go UP (while your mortgage payment stays the same for thirty years) – and while it is true that the tax portion will increase, it will not increase at the same rate that surrounding rentals will.
4. (and probably biggest point, bob) – you are correct and smart in renting as a single person – however, if and when you have a family you will see that renting fast becomes a TERRIBLE option. This is because there is a lack of nice rentals that would suit a family. Furthermore, these rentals are EXTREMELY expensive. At that price point (the price point of a family rental) it would be better to buy a place and fix it up/ keep it.
There are more points but i have to get back to fixing that damn hinsdale house!!!
My kids love Naperville and never want us to sell their home there. They are old enough to hold down the fort while we spend the green months at our farm, where we grow organic produce and raise chickens. This year will be adding goats and sheep this year. We have a terrific bartering system set up with neighbors, who we like better than the suburbanites we left in Naperville. I’m at my farm right now looking out over the river that we will be fishing in around the same time wild turkey hunting season begins. Where are you getting your information from sonnyboy?
Yeah let me tell you, its so impossible to raise a kid in a 2 bedroom condo (coming from the mom living in Naperville)
because housimg fits in a balance sheet, has a cash flow compoment, changes value, can be replicated by alternatives… Is mosts largest asset which makes people entertainingly defesive multiplied by the my home is the gretaest sensation…. Nothing like a haircut or dinner.
I hope you’re right seeing as I have Illinois general obligation “College Bonds” maturing up through 2017 that are making me a little nervous.
“My gut tells me it will be a little bit longer.”
Oh – wait another point I wanted to make about kids growing up in foreclosures/hotels (like that 60 minutes special highlighted) or recent college grads having to move back home or people needing to have roommates for financial reasons. – people think that growing up poor or living through this recession will teach these kids and young people to be frugal and better with their money – well, actually the opposite is the truth; this type of living creates a greater desire to live well and creates greater fantasies of living in a mansion in the suburbs or great condo in the city. Then, with these fantasies serving as primary motivation for these young people, all they need is for some shark to give them the opportunity to live like kings and you have yourself another bubble. Mark my words – in 10-15 years, we will be in another bubble because of current times.
Yeah, and he’s probably long equities given his sunny nature. Just being a trader doesn’t make you a good one. Especially these days. I should know since I’m married to one.
“And Sonies can probably buy his way to above water if need be (he’s a trader).”
“I hope you’re right seeing as I have Illinois general obligation “College Bonds” maturing up through 2017 that are making me a little nervous.”
uhhh – you might want to buy another goat….
STarting drinking again early today? These racist comments are getting on my nerves and I’m usually pretty tolerant of everyone, including racists. But you know nothing about the suburbs, often times the suburbs are more diverse than the city which is completely segregated. I went bowling earlier this year at my old suburban bowling alley and my goodness have demographics changed dramatically in the nearly 20 years since I left.
“Demographics will change with an influx of the BETTER demographics. They will grow up learning the truth about racial reality and not in some leafy suburb where few minorities exist and their impressions are from hollywood and the TV that present a false facade. They’ll learn to reject liberalism wholesale. Either that or they’ll become wiggers.”
“real estate has NEVER depreciated in the long term/long run – it has always appreciated.”
In the long term/long run someone has never lived much beyond 100 years.
“rents have NEVER gone down in the long term/long run – they have always increased.”
The dollar has depreciated 95% since the 1930s.
“3. tax increases will be passed on to renters ”
No they won’t, it will be split the extent to which depends on many factors. You assuming they can pass it all along is akin to assuming a business can pass along 100% of a cost increase to it’s customers. Had you ever worked for one you would understand this isn’t the case at all.
The increased taxes will actually wind up LOWERING the price of the real estate as a contingent liability associated with said housing unit has increased. Also the renters have more leverage as they can move with rather insignificant costs. The owner cannot sell without incurring significant transaction costs (if they even can sell many cannot as are underwater).
Clio if they could pass along all of their costs you wouldn’t have people renting out their condos AT A LOSS–which many are doing.
Now is probably among the dumbest time to purchase real estate in the past 50 years for the majority of people. The only time dumber was 2003 until today. Most of this relates to the job mobility issue, though.
“general obligation” means taxes will pay for them, so you don’t have much to worry about
At the current rate, those who will be most successful will be farmers who are also growing their own food as well as that to sell in the market. This rapid inflation along with low wage growth will make things interesting. Taxes in and around cities will rise to obscene levels until people revolt.
Unless the state declares bankruptcy, but thats not possible, right?
“general obligation” means taxes will pay for them, so you don’t have much to worry about
Anyone that thinks offshoring relates to customer service level jobs needs to hop in their time-machine and google the term “BPO” five years ago.
If your white collar job can be done remotely, it’s going to be offshored. Get used to to it.
Real wages in the US for anyone who isn’t a rainmaker, dynamic public speaker, level 10 charmer, or genius are going down from here. There are fifty people that can and will do your job for an 1/8th of what you do it for in India. There are 100 people in China that can and will do your job for 1/20th of what you do it for.
Guess what they’ll do it for in the Philippines.
Lol @ rents going up and lofl @ your prehistoric notions of protectionism.
“But you know nothing about the suburbs”
This I concede insofar as Chicago suburbs. My suburb only had a few and a far lower per capita spending than an urban school mere miles north from ours which had a much higher per capita student expenditure. The test scores at my school were dramatically higher despite the much lower amount of funding. You don’t have to believe me but this is true. Oh yeah most of the students/peers at my school came from two parent households. I’d be willing to bet money most of those in that urban district didn’t, and also that it was the father absent.
Would you like to make a wager?
“Unless the state declares bankruptcy, but thats not possible, right?”
Correct. States are not covered by the bankruptcy code. Doesn’t mean they can’t default on the bonds, tho, just like any over-leveraged, 2d/3d world sovereign state.
“If your white collar job can be done remotely, it’s going to be offshored. Get used to to it.”
Well offshoring mostly applies to larger companies. Smaller and smaller-medium ones don’t have the capital nor breadth to benefit from the cost savings as much. But it’s also large companies that tend to pay the highest wages of corporate america for rank & file.
“Unless the state declares bankruptcy, but thats not possible, right?”
oh its possible, just not very likely as it would destroy any future borrowing power
We aren’t even close to Californian tax rates, trust me the 5% income tax sucks but we have a long ways to go before BK is even on the table. And who knows, IL might be “too big to fail” anyway with our retarded federal government in control of the printing press.
“oh its possible, just not very likely as it would destroy any future borrowing power”
Like I said, “declare bankruptcy”, not possible; default, possible, but unlikely.
ah right
but anyway, general obligations are usually close to the last to get defaulted on, so juliana doesn’t have much to worry about with a 6 year maturity.
If they were like 2040 bonds… then I might be a bit concerned lol
Reading blogs for news makes you get much more one sideded analysis of the events as people tend to go to sites they have favorables views on. In fact, lack of good evening news on American TV is a sad thing.
States can go theoretically go into receivership despite not being able to file BK. No real precedent though.
Our tax rate is no NY or CA tax rate but I don’t how much more taxes we as population can stand before the likes of Quinn and Cullerton and Madigan get tossed to the curb. Its only an election cycle or two away.
“2. rents have NEVER gone down in the long term/long run – they have always increased.
3. tax increases will be passed on to renters – everyone so stupid, delusional, moronic AND high to think that costs are NOT going to be passed down to them. It really is common sense. Sure, one person could negotiate a specific rent on a specific property down – but that is the exception – rents ARE going up and will continue to go UP (while your mortgage payment stays the same for thirty years) – and while it is true that the tax portion will increase, it will not increase at the same rate that surrounding rentals will.”
Are you kidding me, clio? After 2001, rents cratered in the GZ! CRATERED! I remember getting an ELP studio for $585/mo AND 1 month free on top of that — for a net effective rent of ~$535/mo — in 2004. I distinctly remember a neighbor of mine who was paying $665 at the time and was irate about it.
It wasn’t until 2007 that rents were going back to 2001 levels, and in 09-10 rents dropped again precipitously with the freebies going out all over the place.
The freebies have stopped, and there will be an attempt to raise rents. But that’s raising them based off of low discounts and incentives coming out of 2010. It’s not like they’ve been level since 07-08.
I don’t believe it will happen either, and I’m still holding on to my bonds. But I would never say never, given the lack of vision in Washington. Reading stuff like this doesn’t make me feel any better:
http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html
“Like I said, “declare bankruptcy”, not possible; default, possible, but unlikely.”
Can the fact that people are vary of buying, postpone their move towards the suburbs and result in higher rents in town?
Sorry the link didn’t work, NY Times article from January 20th was “A Path Is Sought for States to Escape Their Debt Burdens” if you care to google it.
“I don’t how much more taxes we as population can stand before the likes of Quinn and Cullerton and Madigan get tossed to the curb. Its only an election cycle or two away.”
Never underestimate the stupidity of their opponents either, though. Quinn was able to get re-elected by scaring women that Brady was going to interfere with their reproductive rights, even though he would have no ability to do so given the democrat legislature.
Essentially tea partiers were dumb in that they over-estimated the broader electorate’s ability to discern between those two things.
The only republicans that get elected in Illinois seem to either be from rural districts or for statewide offices RINOs that vote like Democrats like Kirk. I bet sailor Kirk likes him some gays in uniform.
“But I would never say never, given the lack of vision in Washington. Reading stuff like this doesn’t make me feel any better: ”
Well, if we assume change of law, it’s possible that you could repaid in packing peanuts instead of USD. But I avoid speculating about defaults based on possible changes in law.
Did you guys see in the Tribune that the Villa Taj in Burr Ridge is flooded with water and declared unihabitable?
http://www.chicagotribune.com/news/local/ct-talk-villa-taj-0316-20110315,0,999003.story
“Never underestimate the stupidity of their opponents either, though. Quinn was able to get re-elected by scaring women that Brady was going to interfere with their reproductive rights, even though he would have no ability to do so given the democrat legislature.”
Right, that could never happen, could it? It isn’t like Republicans in congress are attaching riders to funding bills attacking social services and pushing pet issues. That would be crazy, right?
Look, until Republicans can honestly distance themselves from bible-thumping social conservatives, you are going to have a huge block of voters that simply aren’t going to vote for them, no matter what those voter’s opinions are on fiscal issues. An alternative, I suppose, would be a viable third party that eschewed such idiotic social engineering and focused on issues that matter, but good luck with that.
Anyway, I’m not so sure that the majority of the populace buys into the whole “the deficit is going to ruin our society” schtick. It’s popular with the tea partiers, but I’m not at all convinced it has basis in fact, let alone popular support (jobs, jobs, jobs, is what people care about if the polls are to be believed).
Me? I don’t think the level of taxation or our deficits are the main issues. I think it is how we are spending our money as a society. Too much dumb money going into medical care, the war on drugs, cheap unsustainable food, etc. Deficits are a red-herring. We need to spend our money more efficiently on things that are going to advance our society and grow our country. And fix the GD tax code while you are at it.
Oh yeah – everyone in the u.s. continues to get poorer and poorer – what a joke!!!
http://finance.yahoo.com/news/US-millionaires-population-cnnm-649773567.html?x=0
I keep reassuring my self that such stories are merely trial balloons put out in the media for reaction. But they do give me pause.
“Well, if we assume change of law, it’s possible that you could repaid in packing peanuts instead of USD. But I avoid speculating about defaults based on possible changes in law.”
I could seriously use an income boost. My taxes have gone up, my condo assessments have increased, yet I haven’t raised rents in years. The crummy economy and stable tenants convinced me that it wasn’t worth it.
However, since I’ve dumped my downtown and south loop properties (those rental market became way too saturated for my liking), I’m comfortable with raising rents for the remaining units, but only about 3%-5%. I think I can do it because they’re nice properties in good buildings and my competition, for the most part, is pretty mediocre.
I imagine some landlords are getting chubbies reading the recent news, but I doubt they’ll be able to jack tenants with 10% hikes. A gradual increase can be justified, a double digit bump would potentially be met with an exodus. I’d rather keep a stable tenant happy than deal with a vacancy.
I wonder how much was due to equities and wonder where that stands today? How is your portfolio doing Clio? Buying the dip? I see a little bounce there…
“Oh yeah – everyone in the u.s. continues to get poorer and poorer – what a joke!!!”
I don’t normally agree with Clio, but we have a family now and the move into our new place was brutal. We bought this time though so we never have to move a family again (at least not soon I hope so). As a single in my twenties, i used to move every year or every few years, but finding a rental that will accommodate us and doesn’t suck isn’t that easy. Sure, this doesn’t apply to the young kids and 1 and 2 bedroom apartments are commodities but not so much the 3 and 4 bedroom places. I sort of doubt that families are a big enough part of the rental market to make much difference (and I’m too lazy to look it up), but I think Clio’s point about families needing stability is often unfairly marginalized here.
CLIO: try reading. seriously, it is your friend.
“In the prior year of 2008, the millionaire population plunged 27%.”
This is almost entirely due to fluctuations in invested portfolios. And the million dollar mark (especially for investments) is an incredibly arbitrary statistic to play with…which is why the media loves it so much. It goes up, it goes down! The drama! The heartbreak! The comebacks!
And anyway, we are talking about roughly 2 percent of the US population (granted I’m completely fudging this given we are talking about households and the article blurs the two considerably, but the point is the percentage is small). Think about that for a second: roughly 2 percent of the population has a total net worth of over a million dollars.
I’m sure that tiny fraction is feeling flush now that they are over the million mark again, though. I’m going to start holding my breath until they start snapping up those plentiful, rock-bottom priced 2/2’s in the greenzone…
Of course don’t matter – to you. But it will matter to my children and grandchildren and the future who will actually repay the debt. Ignoring the deficit and the national debt doesn’t make it go away – even if you deem the hysteria not based in fact.
Please, just exactly what are we going to do? Are we going to keep rolling over the debt? Will we print our way out of it? Will we default or will wer take the necessary austerity measures to actually repay the debt?
Unfortunately, deficit spending with government is the same as household deficit spending – it is taking from the future to pay for consumption today. Eventually that money will need to be repaid, though inflation, default or austerity, or taxes, or a combination of all four. And none of those choices are favorable.
Don’t let your anti-republican, anti-tea party fervor cloud critical thinking.
“Anyway, I’m not so sure that the majority of the populace buys into the whole “the deficit is going to ruin our society” schtick. It’s popular with the tea partiers, but I’m not at all convinced it has basis in fact, let alone popular support (jobs, jobs, jobs, is what people care about if the polls are to be believed).
Me? I don’t think the level of taxation or our deficits are the main issues. I think it is how we are spending our money as a society. Too much dumb money going into medical care, the war on drugs, cheap unsustainable food, etc. Deficits are a red-herring. We need to spend our money more efficiently on things that are going to advance our society and grow our country. And fix the GD tax code while you are at it.”
“Think about that for a second: roughly 2 percent of the population has a total net worth of over a million dollars.”
ABSOLUTELY 100% NOT TRUE – do you know how many real millionaires there are? Of course not – anyone with over 2 million dollars knows how to legally hide their money (not from the govt or creditors – but from leeches and morons of society). There are SO MANY ways to hide your money. There is absolutely no accurate way of determining how many millionaires there are – but let me assure you that there are MANY more millionaires than what is being reported. The fact that you believe the 2% rule makes me believe that you are either very young, naiive, ignorant, or a combination (and no, I am not being insulting – but this is just common sense and common knowledge).
Basically the rich will get richer and the poor and middle class totally screwed.. I’m signed on to that belief.
Clio, so are you inferring there are millionaires out there that reduce their reportable assets to below 1mm? Wouldn’t that impact lifestyle, assuming you were ultra high net worth? I would think you need at least a million bucks laying around in working capital, and would therefore still be reported as a millionaire…
“Basically the rich will get richer and the poor and middle class totally screwed.. I’m signed on to that belief.”
um… duh, it has always been that way, for thousands of years
““Anyway, I’m not so sure that the majority of the populace buys into the whole “the deficit is going to ruin our society” schtick. It’s popular with the tea partiers, but I’m not at all convinced it has basis in fact”
There are two main reasons I’m on board with the mentality:
1) Look to Europe and it’s sovereign debt crisis. They’re in deep, deep, poo with many nations bonds in junk territory with spreads widening weekly. They’re going to have to pay significantly higher borrowing costs going forward, leading to a sharp reduction in their governments ability to spend. Sharp, hatchet like spending cuts await them. It could potentially happen here and I think one of the only reasons it hasn’t yet is the USD is still the world safe-haven currency.
2) I am against most of the social engineering our government has been engaged in since the 1940s. I know the best way to turn back the clock on these things is to cut up the credit card. In other words the cuts would do much more to curtailing these things than could be done legislatively. They can spend all kinds of money on stupid things in times of plenty. Time to gut the beast.
“reduce their reportable assets to below 1mm? Wouldn’t that impact lifestyle, assuming you were ultra high net worth?”
I doubt someone who had $30mm+ (for UHNW) of investable assets could hide 97+% of them without running the risk of a money laundering investigation.
“Don’t let your anti-republican, anti-tea party fervor cloud critical thinking.”
Really? That is what you take away from my post? Reasonable discourse in this country is fucked… I honestly don’t know if you could jerk your knee any harder.
I honestly am not saying that the deficit doesn’t matter (I’ll leave that to our elected officials when it suits their current political needs). What I’m saying is that in order to tackle all of the issues the country is facing, the answer isn’t to dramatically cut spending and taxes. And that includes the deficit. I’m honestly not a fan of the amount of money IL takes out of my pockets or the way they spend it. Ditto for the feds. But I’m not naive enough to think we can just cut our way into the black. That isn’t the way we are going to compete on the global stage over the long term. We need a healthy, educated workforce, belief in the future and enough production to tax to fill our government coffers and pay down our debt. You don’t achieve those things through slash and burn.
But believe whatever you want. Try this on for size: I was one of the instigator, thug union workers protesting in Wisconsin. And am a descendent of Marx. My blood runs redder than yours, comrad…
Sufficiently cartoonish for you?
pretty easy to open a swiss or cayman islands bank account and use online capability to wire funds eh… not sure what the point of that would be but still
“But believe whatever you want. Try this on for size: I was one of the instigator, thug union workers protesting in Wisconsin. And am a descendent of Marx. My blood runs redder than yours, comrad…
Sufficiently cartoonish for you?”
Not until you talk about Maobama and his glorious revolution.
‘”pretty easy to open a swiss or cayman islands bank account and use online capability to wire funds eh… not sure what the point of that would be but still”
uhhh – no it’s not – not anymore, at least….
right, so you’re lying again
sonies – banks have to report anything over 10k being transferred or taken out. It is also illegal to transfer money to another country without reporting it to the government. There are so many issues – even for me and we have property in the Cayman Islands !!!! Believe me, if it were so easy, everybody would be doing it and there would be no need for all of the money laundering that takes place in the US
if we taxed the 400 Richest Americans, it would equal $1.4 Trillion Dollars (unsure on timeframe, google for exacts)….what defecit?
Imagine if we eliminated tax cuts for the rich?
“pretty easy to open a swiss or cayman islands bank account and use online capability to wire funds eh… not sure what the point of that would be but still”
People obviously do it but it’s asking for lots and lots of trouble… Absolutely no reputable lawyer would recommend you doing that, actually anyone worth anything would advise you vehemently against doing it.
looks like we need this
http://twentytwowords.com/2011/03/15/a-flowchart-to-help-you-determine-if-youre-having-a-rational-discussion/
Bob: I actually agree with you on both those points. I don’t necessarily agree that now is the best time to be tackling the deficit (given the shaky state of the economy, unemployment and IMO a coming correction in the markets). But it does need tackling. And I totally agree about social engineering. I realize people were sold on the American dream of home ownership and unlimited shiny new toys, but we need to re-brainwashing to promote fiscal restraint and good decision making. (which, btw, is one reason it pisses me off so much when people on this board are so pro-buying-RE…it is NOT always a good decision.)
It was tongue in cheek at clio’s obviously stupid statement of, and i quote “There are SO MANY ways to hide your money.”
care to share with us CLIO? Or are you admitting to participating in money laundering and/or illegal income sheltering?
“um… duh, it has always been that way, for thousands of years”
Actually my wife said it well to me years ago and I didn’t comprehend it then. “Poor people in your country live like rich people in many other countries” My bet is not many flat screen tvs’ new microwaves, and lexus’ for the middle and lower middle class like last decade.
“Reasonable discourse in this country is fucked… I honestly don’t know if you could jerk your knee any harder.”
As someone who detests Democrats, their ideology & agenda I actually applaud the lack of civil discourse these days and consider it a strategically good thing.
After seeing the electorate vote for a former community organizer, first-term state senator from Illinois with zero executive experience because he fit into a certain storyline and fit a diversity quota I’m not sure it’s civility is warranted. Heck same could be said of those who voted for W the second time ’round. But W’s party doesn’t tend to pick on my demographic so I’m not as interested in it’s demise.
If the lack of civil discourse means the end of the Democratic party as we know it I’m all for it. I think it very well may be as their core constituencies are under significant stress. Break the unions and you break the Democrat party.
“But I’m not naive enough to think we can just cut our way into the black. That isn’t the way we are going to compete on the global stage over the long term. We need a healthy, educated workforce, belief in the future and enough production to tax to fill our government coffers and pay down our debt. You don’t achieve those things through slash and burn.”
Both parties are pro-globalization. Not much of a hope for America’s future in that case because our regulatory and tax regimes are significantly more stringent than what is available to overseas manufacturers and businesses.
And whose to say our population can effectively compete with more health & education? India has plenty of educated people willing to work for 1/5 our wages, as stated above. You aren’t going to effectively beat them on cost NOR on education. They’re generally really smart people.
There’s not much hope with both major political parties being vehemently pro-globalist. But I can watch with eager anticipation the one party’s demise that has engaged in social engineering to my demographic’s detriment both implicitly and explicitly.
“which, btw, is one reason it pisses me off so much when people on this board are so pro-buying-RE…it is NOT always a good decision”
Long term it is always better to buy.
“if we taxed the 400 Richest Americans, it would equal $1.4 Trillion Dollars (unsure on timeframe, google for exacts)….what defecit?
Imagine if we eliminated tax cuts for the rich?”
Yeah – and if we made the prettiest women sleep with all the men, wouldn’t that be great too?!!!! My point (and, yes weak analogy) is that the rich people have a right to their money – they earned/inherited it – it is NOT COMMUNITY PROPERTY. Seriously, why don’t you guys understand this simple concept. I am not a rich person – but I don’t want someone who has a lot of money to pay more than me. I say let’s do a flat tax – that way the rich still pay A LOT more – but it is not unfair.
“if we taxed the 400 Richest Americans, it would equal $1.4 Trillion Dollars (unsure on timeframe, google for exacts)….what defecit?
Imagine if we eliminated tax cuts for the rich?”
Yeah – and if we made the prettiest women sleep with all the men, wouldn’t that be great too?!!!! My point (and, yes weak analogy) is that the rich people have a right to their money – they earned/inherited it – it is NOT COMMUNITY PROPERTY. Seriously, why don’t you guys understand this simple concept. I am not a rich person – but I don’t want someone who has a lot of money to pay more than me. I say let’s do a flat tax – that way the rich still pay A LOT more – but it is not unfair.
This is a non-argument. Taxing the rich has nothing to do with any of the underlying structural issues which most people seem to ignore or discount.
“#a-fed on March 16th, 2011 at 1:40 pm
if we taxed the 400 Richest Americans, it would equal $1.4 Trillion Dollars (unsure on timeframe, google for exacts)….what defecit?
Imagine if we eliminated tax cuts for the rich?”
I think what clio is saying is hiding assets from public knowledge as opposed to hiding from the gov’t.
Thanks gringo – that is exactly what I am saying…. This can be done through trusts, children, LLC, etc. Do you honestly think that the assets that most politicians report are accurate? Give me a fucking break!!! I know so many people who, on paper look poor but actually are worth millions.
“I say let’s do a flat tax – that way the rich still pay A LOT more – but it is not unfair.”
I actually agree with clio on this one. I remember being in a public/govt econ class in undergrad and someone asked about justifying the equitability in a progressive taxation scheme.
The prof basically answered that it is more equitable because someone who earns $15k values that incremental dollar more than someone who earns $200k.
I pointed out that that was a value judgment he was interjecting into economics. Consider the drug addict who earns $200k: would he not place as high of a marginal utility on that next dollar of earnings as someone who earned $15k or more? Considering fiending drug addicts rob & kill people for as little as $20 I would say so.
Our government has no business making value judgments on how much money someone should have or how much they need to live a good lifestyle. Value judgments like that should be beyond the scope of our government.
And people don’t realize that the more value judgments are codified via policy and tax code the more distortive affects they have on our society and terrible unintended consequences.
HD – its def an argument. We are teaching the next generation the more money they make, the less societal repsponbility they have and giving the rich the excuse to be above people. Not to mention there wouldnt be as much of a national debt if the rich were taxed.
Clio – flat tax? no way. You make more money than I do, you should be taxed more. Your argument regarding women is a good one. I am better looking than you, I should have a hotter broad.
My one doubt about it Clio and the reason i would kinda think the number to be more accurate than you give weight to is simply because people at the threshold are NOT the people who are focused yet on asset protection. Things like captive insurance companies, Alska trusts, etc.. comes at a much higher number since it’s kinda an inconvenience and pretty expensive to set up. What I’m basically saying is the people that just pass a million are not hiding much and show up, and the people that are doing mitigation techniques are so much higher anyway that even if they make 90% disappear they still show up.
Just my feelings off the top of my head.
Uh-huh. As opposed to skimming it, stealing it, fraud, cutting corners, stealing from teh working classes. whatever helps you sleep better at night.
“they earned/inherited it – it is NOT COMMUNITY PROPERTY. “
“Not to mention there wouldnt be as much of a national debt if the rich were taxed.”
Silly argument, they would just spend more…
gringo, maybe you are right – but how do they come up with those numbers anyway? Are pension plans/401 k plans included? Are homes or 2nd homes or investment properties included? Is jewelry, cars included? and what about business owners – do you think that they over value or under value their business? Also, many rich people will NEVER truthfully disclose how much money they have to a 3rd party (even census people). So, basically, people are fooling themselves – there are a HELL of a lot more millionaires out there than anyone thinks.
Bob: I’m not sure that the demographics you cite are nearly as neat or solidly Dem/Rep as you believe. One thing that always amazes me is the number of people who vote for one party or the other even when it is clearly against their own (or their demographic’s) economic interests to do so. The pols know how to play it perfectly, though. Whether it be the Dems pandering to minorities or the Reps pandering to social conservatives, they play the demographic game until it doesn’t work anymore.
Demographics shift, though, as do “loyalties” when the votes don’t add up anymore. You might be safe betting on the GOP now, but to think they are backing the wealthy and big business for any reason other than campaign cash and political position is naive. And while you “detests” Democrats, their policy positions on a number of issues make a lot more sense than the Republicans. The same thing can be said of the Republicans, to be honest.
My point being: if you (and everyone else) would focus more on sane policy and prudent decision making rather than calling the other side your enemy and digging in on purely demographic terms, we’d all be a lot better off. Neither side is offering up totally reasonable policy and the only reason is our bitter adherence to sides and our demographics. It is sickening, wrong, and feeds the ugly political beast that is DC/Springfield.
“Uh-huh. As opposed to skimming it, stealing it, fraud, cutting corners, stealing from teh working classes. whatever helps you sleep better at night.”
WTF are you talking about HD?!! Seriously, who is stealing, committing fraud? Real estate people ? Are you kidding? Nobody is putting a gun to anyone’s head and telling them to buy, rent, squat, etc. We live in a free country. It makes me so FUCKING MAD WHEN SOME MORON has bad luck and then says that rich people get rich by “skimming it, stealing it, fraud, cutting corners, stealing from teh working classes”. Sorry you made poor life decisions – be a man and own up to it, loser.
““Not to mention there wouldnt be as much of a national debt if the rich were taxed.”
Silly argument, they would just spend more…”
And our economy would be stimulated more!
“Clio – flat tax? no way. You make more money than I do, you should be taxed more. ”
That’s not the definition of a flat tax. A flat tax, as it pertains to income, is a tax that increases proportionally to one’s income.
But in any case what would truly be equitable would be a regressive tax. Does clio receive any more benefit from police or our national defense, our roadway system or our parks than you? No. Most people derive the same utility from our government. So why should it be fair that some pay more for receiving the same level of benefit from governmental services?
A flat tax, while not truly as equitable as a regressive income tax, is a compromise and a fairly equitable one, IMO (it recognizes the disparities in wealth/income in a capitalistic society such as ours but codifies as little value judgment as possible into the tax code while doing so).
“And our economy would be stimulated more!”
oh yeah – and several men would be stimulated more if you look back at my example……. does this make it right?
It’s not bad luck when a con man mortgage broker who the client thinks he can trust to help him, jams a crap mortgage down the clients throat with a huge fee for the broker. Especially when the broker knows the client will have zero ability to pay it off.
CLIO seems like a troll. Where is Clio to defend his name?
“It’s not bad luck when a con man mortgage broker who the client thinks he can trust to help him, jams a crap mortgage down the clients throat with a huge fee for the broker. Especially when the broker knows the client will have zero ability to pay it off”
No – that is called ignorance and stupidity on the buyer’s part. There is no luck involved there – only common sense and a tiny bit of intelligence.
afed.. sorry but to me private and public spending are the same. Public is merely an extension of private as the only ability to procure revenue on the public side is to take it from the private side, or create it which is a more complicated argument but both net sum zero.
You can not get to three by adding one and one together.
Understanding the complexity of a mortgage is a heck of a lot more than common sense. Between points, adjustable rates and hidden fees even someone with a decent education and some financial background can get lost in a mortgage agreement. Half the people who live in U.S. big cities don’t even graduate high school. They were sitting ducks for unethical mortgage brokers and you know it Mr. Clio.
“One thing that always amazes me is the number of people who vote for one party or the other even when it is clearly against their own (or their demographic’s) economic interests to do so.”
The case could be made it is against my economic interests to vote R. However I don’t believe in voting myself money AND I detest what the D party has done via policy throughout the years to put my demographic at a disadvantage in many institutions and the workforce (which ultimately impacts me so ultimately I am not voting against my economic interests).
“You might be safe betting on the GOP now”
I only vote GOP so long as it works for me. The Ds are so in bed with engineering societal outcomes and pandering to racial politics that I don’t think I could ever vote for one unless they were a DINO.
“But in any case what would truly be equitable would be a regressive tax. Does clio receive any more benefit from police or our national defense, our roadway system or our parks than you? No. Most people derive the same utility from our government. So why should it be fair that some pay more for receiving the same level of benefit from governmental services?”
Why should Clio be paid anymore than a high school teacher who runs 3 clubs, coaches the volleyball team and works a part-time job during the summer? The high school teacher probably works harder and deals with more bullshit from parents and administrators. Why is it fair that Clio makes more money?
By which I mean: assessing “fair” and “unfair” based on any one person’s personal experiences, work ethics and income doesn’t make good policy. We are a society and must tend to the needs of our society lest it crumble and fall. Determining the most efficient way to do so doesn’t often intersect with fairness. See: the bank bailouts.
“You can not get to three by adding one and one together.”
Underpants Gnomes can.
anon.. you already had me at c)
You all are angry with the smart community organizer which is incidentally a public service to be elected as a public servant albeit in the highest office, hate poor kids and minorities getting help to go to top schools, but I have never heard you object to clearly intellectually challanged guy going to Yale because his daddy was rich. You seem to have also no problem with him screwing up the economy for so many years going to pointless wars on false evidence. I mean give me a break Bob.
“So why should it be fair that some pay more for receiving the same level of benefit from governmental services?”
Is it fair that you make more money than someone else, even though you work equally? Is it fair that person A has better opportunities than person B?
You shouldn’t need the same level of benefit from gov services because you have more money to handle yourself. Police? Get a better security system. Bad Roads? Buy a Humvee or a helicopter. Want a park? Buy a park, name it after yourself.
“The high school teacher probably works harder and deals with more bullshit from parents and administrators”
uhhh – try being in a situation when you are the only person that can save another human’s life and then talk to me about pressure and stress….. but that is besides the point – basically, society as a whole dictates who is paid what. I totally agree with you – many of my neighbors are business people and I don’t think they deserve to make as much as they do. I don’t think Oprah Winfrey or Julia Roberts deserve what they have – does it matter what I think? Of course not – salaries and incomes are based on the value we, as a society put on different things. If you don’t like it – move to wyoming or antarctica –
The flat tax argument is stupid on so many levels. Poor people need almost every penny of their hard earned cash to make ends meet. Someone earning 1 Million paying 10% tax ends up just saving remainder of his money or buying 20K shower curtains. Also I don’t even buy that many of the guys getting crazy high salaries even deserve it, think bankers bonuses.
Yes Clio, hence by having non flat tax, we have a correction mechanism that we apply to the system to stablize it. That is called feedback and any stochastic complex system needs it to stop things from blowing up.
“I don’t think Oprah Winfrey or Julia Roberts deserve what they have – does it matter what I think? Of course not – salaries and incomes are based on the value we, as a society put on different things. ”
There are lots better options than antatica, think most of Europe.
there must be exceptions in the tax system and a flat tax does not allow that.
why is it that Buffet supports this but very few other rich people? They would rather slaughter the sheep than pin-prick their finger…
“why is it that Buffet supports this but very few other rich people?”
Because he is smart enough to realize it will not happen for that very reason yet it will enable him to fool sheeple into believing that he is concerned about something other than profit.
I say flat tax, no deductions for anything. No corporate tax. The reason we have such a convoluted tax code is politicians are using it for political favors and social engineering.
Pick a number and that is it across the board. If it is income from w-2s, 1099, dividends, or whatever. Govie takes 10% (or whatever it is determined to be).
Life ain’t fair and never will be. If a flat tax hurts low earners more than higher earners, then that should be incentive for them to make more money.
Bob, don’t worry, the GOP is all about determining societal outcomes too, they just do it through the veil of big business instead of government, which If presented with a choice, I prefer the GOP method as the lesser of two evils. But I still don’t bother to vote here 8)
G – riiight; where is your data to support that comment? U must have had onde of those lunches with him
“G – riiight; where is your data to support that comment? U must have had onde of those lunches with him”
Your apparent pre-mortem beatification of The Oracle and recent knife catching are all the data points I need.
russ: “I think for people in the middle, the loonies on the far right are more frightening than the loonies on the far left (the enviromentalists, commies, etc).”
I disagree, but then again, I don’t live in the people’s republic of Oak Park!
“I think for people in the middle, the loonies on the far right are more frightening than the loonies on the far left (the enviromentalists, commies, etc).”
Agreed and you can thank the mainstream media for that one.
“They vote Democrat because of redistributive economic policy. ”
Hispanics are pretty split–or were last decade around 60/40 lines for D/R. Latest polling indicates it was closer to 70/30 though.
“Poor people need almost every penny of their hard earned cash to make ends meet.”
Maybe if you made life tougher they wouldn’t be reproducing beyond their means. There is something wrong with our society when poor people tend to feel the entitlement to reproduce more than rich people. Guess who winds up paying for these kids? All of us (rich people pay for their own kids).
“Why should Clio be paid anymore than a high school teacher who runs 3 clubs, coaches the volleyball team and works a part-time job during the summer? The high school teacher probably works harder and deals with more bullshit from parents and administrators. Why is it fair that Clio makes more money?”
Anyone can be a teacher. All you need is a lot of patience and a clean criminal record. Its not hard all it takes is intent. Not everyone can get into med school. I could be a teacher if I wanted to (I don’t because I agree it ain’t easy and it ain’t for me) but I couldn’t get into med school. Also if the government were completely out of healthcare you’d see physician remuneration plunge.
“You all are angry with the smart community organizer”
I didn’t vote for W. He was a lemon.
I am disappointed in the community organizer though because he shows the same level of dedication, interest, and executive acumen as W.
He’s golfing while the Libyan rebels were strung out to dry. He’s filling out his NCAA brackets while Japan is dealing with it’s worst disaster in 65 years. He’s doing fundraising stops while the EU digs itself a financial black hole. Of course the MSM will never seize on this as they did W, but both are lemons.
Oh yeah and the great messiah can’t be bothered with such trivial matters as our national budget. Those sorts of minor details must be below the radar of one of such divine inspiration.
he fooled me.. then it dawned on me.. LAWYER.. of course!!!
HD: I think even Oak Parkers are getting more conservative these days. Loonies on the left at least bring in coffee shops, art galleries, restaurants, and farmer’s markets. Not too sure I want to live in the community from Foot Loose with the far right.
Personally, both scare me.
First time I voted for one of the two parties in years. Guess I go back to throwing my vote away until a real third party comes along. Teabaggers need not apply.
“he fooled me.. then it dawned on me.. LAWYER.. of course!!!”
“Loonies on the left at least bring in coffee shops, art galleries, restaurants, and farmer’s markets. ”
I just got a groupon to a nearby indie coffeeshop, making it not too much of a ripoff. I can’t wait I’m going to put on my tea party tee, bring in my WSJ and just sit there.
You don’t have to worry about coffee shop left loonies as the hipsters are too effeminate and passive aggressive. They’ll just make fun of me behind my back, which I am totally okay with. But they’ll really resent my presence. Maybe I’ll even buy a Glenn Beck book to bring in a read. I bet that would infuriate them.
Even my diehard Republican spouse has given up on that looney. Oh, the “discussions” we have. Turned my millennial son into a progressive. At least he cares enough to follow politics. And hubby is beginning to think of himself as a conservative independent. Even he is embarrassed of Michele Bachmann.
“I’ll even buy a Glenn Beck book to bring in a read. I bet that would infuriate them.”
Bob, I would hope you have something better to do with your time than infuriate effeminate and passive agressive hipsters.
“I would hope you have something better to do with your time than infuriate effeminate and passive agressive hipsters.”
Isn’t it evident yet that, some days at least, he doesn’t?
Of course, his proposed little piece of performance art is rather passive aggressive and hipster-ish, isn’t it?
anon(tfo), not only is it passive aggressive and hipster-ish, it is also ironic … glen beck wearing a tea party shirt in a coffee shop? The irony is so thick it is palatable.
Glenn Beck is so crazy it’s hilarious. He’s similar to David Icke in his methodology. He starts his arguments with credible sources, then once he has the audience’s trust he makes increasingly crazy claims.
“Of course, his proposed little piece of performance art is rather passive aggressive and hipster-ish, isn’t it?”
“anon(tfo), not only is it passive aggressive and hipster-ish, it is also ironic … glen beck wearing a tea party shirt in a coffee shop? The irony is so thick it is palatable.”
Damn you guys took the wind out of my sail in record time. I guess I need to find a way to be offensive to them sans irony.
Dan:
I am no longer surprised Alta, Echelon & Left Bank are filling up after comparing cost of buying a 12 yr old unit across Kinzie in Kinzie Park. These are well run, new or almost new w/i 1 block of EBC & offer unbelievable amenities at 10-15% lower cost than Kingsbury Plaza. Is 200 Squared still deep discounting and if so what impact has that on actual rents at Alta, Echelon & Left Bank?
“Damn you guys took the wind out of my sail in record time. I guess I need to find a way to be offensive to them sans irony.”
You could go full irony and try to circulate a union petition among the employees. The, when they ban you, rent the giant rat and picket the place.
I love the giant rat.
“Your apparent pre-mortem beatification of The Oracle and recent knife catching are all the data points I need.”
Ahhh pointing out my flaws to support yours…you’re a republican!
“The, when they ban you”
I gotta time my ban to coincide with the end of my groupons. It’s more of an art than a science.
“I gotta time my ban to coincide with the end of my groupons. It’s more of an art than a science.”
The beautiful thing is, if you play it right (that is, with some earnestness), they won’t ban you for quite awhile, as they are generally sympathetic to unionization.
Also, fun fact: the worldwide HQ of the IWW is about a block from the Chicago Tea Party HQ on Irving Park just west of Damen. I’m waiting for a Broadway-style street fight, preferably after a Sunday Cubs game.
Rents into general politics blah.
10% IS NOT HAPPENING. #backontrack
“I say let’s do a flat tax – that way the rich still pay A LOT more – but it is not unfair.”
This depends on what you actually tax. The truly rich don’t pay much in taxes because their money isn’t from “income” (which is what our system taxes.) Their money comes from assets (real estate, stocks and bonds.) The rich pay the lowest taxes of nearly everyone (except the very poor.)
This is why Buffett is always saying he pays less tax than his secretary- which is true. His overall wealth is taxed at an unbelievably low rate compared to hers.
“Long term it is always better to buy.”
Just drinking the kool-aid. There are plenty of circumstances where you can build more wealth than owning property- even if you’re a renter for 50 years.
First of all, rents always go up 10% in the summer. Whether they will go up 10% YOY remains to be seen, but I believe it could happen for the super-premium hoods – GC, River North, ELP, Streeterville. The condo inventory HAS gone down, and I’ve seen apartment buildings raising prices and dropping concessions. It’s case-by-case, of course, but this is what I’ve noticed in general.
The best quality units for the price will always be condos. For that, you need to search the MLS, especially downtown, unless you want to shoot your face off with frustration using craigslist. Do what Joe Z says, find a competent Realtor who can show you both condos and apartments. What blows my mind is how few Realtors have any clue about the rental building market. It’s like there’s these two separate worlds – scummy apartment agents and clueless Realtors (to completely over-generalize both)
Some people are willing to pay more for a smaller, carpeted apartment to get the high-end building amenities those places are offering. When it comes to pools, gyms, lounges, etc., apartment buildings have condos beat by a long shot. They also cost at least 10% more.
Also: “Believe it or not but most condo owners are LESS flexible than apartment buildings”
Sorry Clio, that’s not true. Some apartment buildings will comp you on the move-in or application fees, but that’s usually it. Don’t be fooled by the “1-months free” deal – that’s just them lowering the rent (not negotiating) by giving pro-rated concessions. That way, they can jack it up $300 when your lease expires. I’ve been amazed by the stories I’ve heard from people trying and failing to fight rent increases (I’m talking mostly about downtown Class A buildings). I guess they would rather pay a couple thousand in leasing and turn-over costs than keep a tenant.
“Mike on March 16th, 2011 at 9:49 pm
First of all, rents always go up 10% in the summer. Whether they will go up 10% YOY remains to be seen, but I believe it could happen for the super-premium hoods – GC, River North, ELP, Streeterville. The condo inventory HAS gone down, and I’ve seen apartment buildings raising prices and dropping concessions. It’s case-by-case, of course, but this is what I’ve noticed in general.
The best quality units for the price will always be condos. For that, you need to search the MLS, especially downtown, unless you want to shoot your face off with frustration using craigslist. Do what Joe Z says, find a competent Realtor who can show you both condos and apartments. What blows my mind is how few Realtors have any clue about the rental building market. It’s like there’s these two separate worlds – scummy apartment agents and clueless Realtors (to completely over-generalize both)”
Thread winner, right here. Great comment, Mike; very astute.
Some nitty gritty contention, though:
– 10% increases in the summer.
While this is typical, 2010 was a very different year in which most rentals dropped prices throughout the year as the market commanded a sort of desperate “race to the bottom” to not only clear up winter vacancies, but un-rented spring holdovers. I think 2011 will go back to the regular “rents increase as the year progresses” trend, but that’s just me.
– Super-premium hoods commanding super-premium rents.
There’s always a point where the market breaks. Tax rates and building codes zero in on these “prime” neighborhoods, but social networking and increased mobility has made “fringe” or “gentrifying” neighborhoods more lucrative than the tiny spaces of the lakefront GZ.
I think the giant elephant in the room is the fact that some management companies and landlords have over-invested in their GZ properties and now command giant rents for small spaces — and it’s tough to get them. The Loop is one thing, since it’s kind of its own bubble. LP, LV, GC? There is a lot of housing diversity.
If anyone thinks CC commentary is nasty about home listings, meet a renter. Condo-quality, GZ, in-unit laundry, $1000/mo or bust as far as the rental world is concerned. Most of ELP/GC/ELV is small and vintage, or 60s retro four-plus-one. It can be fantastically maintained. But no stainless appliances?! No in-unit laundry?! No green space?! How will I live? Blah.
– Good agent with MLS listings =/= good rental match.
Most rental listings are NOT on the MLS, and even then most owner-occupied listings are not. You’re right about realtors often not knowing two whits about the rental market, because it is not within their wheelhouse. Someone with MLS-access is not going to find you a “better” rental than your average, busted rental locator service agent.
Other than those points, I totally co-sign your comment.
I went with a Realtor to find the apt we just moved into. She had been helping us with the home search for purchase so I figured she should get something out of it now that the contract fell through and we decided to rent. We found a great unit (although the landlord was using Apartment Guys CANNOT EXPERSS HOW MUCH I HATE THEM. THEY SUCK) and were generally happy with what was available on the MLS for 2-3 beds in-unit laundry, covered parking and under 1600/mo vs craigslist.
I don’t see rents increasing in non-GZ apartments. We are increasing rents only on units that are not at market value, but not to market value to keep long term tenants.
another reason to rent?
Debtors prison is back… WTF!
http://finance.yahoo.com/banking-budgeting/article/112370/welcome-to-debtors-prison-2011-edition?mod=bb-budgeting%20&sec=topStories&pos=7&asset=&ccode=&cmtnav=/mwphucmtgetnojspage/headcontent/main/112370//date/desc/11/s4716429#mwpphu-container