Market Conditions: Chicago Journal Reports Foreclosures Spiking in South Loop and Near West Side
We’ve been chattering for awhile about the foreclosures and short sales in the South Loop.
The Chicago Journal reports that foreclosures have jumped 54% in the South Loop in the first six months of 2010.
When Mohammad Valadan first starting hearing about the South Loop in the media several years ago, it was described as a rapidly expanding neighborhood. In short order he decided that residential real estate in the area had lots of upside for someone, like him, looking for an investment opportunity.
On Aug. 7, 2006, he and his wife took out a $118,320 mortgage to purchase a unit in the building at 1620 S. Michigan Ave., a new construction condominium tower that now contains 249 residences. The idea was to rent out the unit, earning a bit of income each month.
“It was growing and everybody was talking about it,” Valadan said of the South Loop. “I bought and a lot of my friends bought.”
Valadan’s was the sixth foreclosure suit to hit a unit owner in 1620 S. Michigan this year, Circuit Court of Cook County records show. The seventh, filed on May 16, foreclosed on a mortgage taken out by Romelia Montoya, a Cicero resident who works in human resources. As was the ninth.
Montoya said she closed on two units in 1620 S. Michigan in 2007, hoping to eventually resell them. She soon had them rented out — one to a flight attendant, one to a relative. Another flight attendant, she said, later moved into the second unit as well. Even when both were occupied — the tenants were gone by October 2009 — the finances were difficult. The tenants’ combined rent of $2,400 didn’t cover her two mortgages, which ran to approximately $3,600 each month.
“The plan was to refinance and that didn’t happen, and my cash reserves went away,” Montoya said.
The economic crisis and struggles of the housing market blindsided her.
“For years you figured the bottom’s going to drop, the bottom’s going to drop and it never did … and then it dropped,” Montoya said.
Three South Loop buildings are mentioned in the article:
- 1620 S. Michigan: 14 foreclosure actions through June
- 1720 S. Michigan: 22 foreclosure actions through June
- River City, 800 S. Wells: 22 foreclosure actions through June
Here are some of the statistics, compiled by the Woodstock Institute, for the first 6 months of 2010:
- South Loop: up 54% to 131 foreclosure actions
- Near West Side: up 72% to 227 foreclosure actions
- Loop: up 120% to 132 foreclosure actions
- Citywide: up 38%
A lot of the buyers in the South Loop appear to have been investors.
The investor issue is evidenced by interviews with borrowers and by “second home riders” attached to mortgages.
Foreclosure filings also sometimes indicate borrowers who live far from Chicago. A New Jersey couple, for example, faces a foreclosure filed on Feb. 25 for a unit they purchased in 1720 S. Michigan.
Michael Murphy, who sells real estate in the South Loop for Prudential Rubloff, said some South Loop and West Loop developers sold heavily to investors who “thought they would close and they would think they could flip” the units.
“Now they’re stuck,” he said. “They can’t get rid of it. They can’t rent it.”
What comes next for the borrowers — and their units — depends on the person and circumstance.
Valadan said he wants to restart payments on his loan, pending a modification. But Montoya has determined that if her units aren’t sold to an investment group in a short sale — where the lender agrees to sell a unit for less than the balance due on the mortgage loan — she will give them up to the bank.
“I have no choice,” she said.
Several never made ANY mortgage payments on their properties. This is what I have been bringing up again and again with regard to the price declines continuing.
It is taking years for these properties to work their way through the system. Sometimes up to 4 years.
When will prices stop declining? When all of these properties are finally through the system.
A man who in September 2007 had taken out a loan valued at $284,800 for a condo in 1720 S. Michigan had paid off less than $300 on the principal by November 2009. Another buyer in the same building had not paid a single cent toward his $326,619 mortgage 13 months after the mortgage was recorded.
Valadan, who said he has hired an assistant to bargain with his lender, is still hoping for the best. In spite of the problems he has experienced with his South Loop unit, the property remained, he said, “a good investment.”
I encourage everyone to read this article as there is a lot of good information in it and very few of the media outlets in Chicago are covering the housing market to this extent (and with this kind of detail.)
Yay for the Chicago Journal!
Foreclosure filings rise; Pace quickens on Near South, Near West sides [Chicago Journal, Micah Maidenburg, July 28, 2010]
This article nails on why I decided to rent rather than own. Why take a chance on a condo if all of your neighbors are being foreclosed on? The assessments go up then, and you’re stuck footing the bill. Plus, I would have had the time of my life getting back the price I paid for the unit when I would have had to compete against foreclosures and short sales. Add in a ton of fees by the realtors and banks, and “I’m one happy son of a gun!”
Ouch, two of the condo buildings with all of the foreclosures are CMK buildings 1620 and 1720 S. Michigan. This reassures my decision not to buy at 235 Van Buren.
It looks as if these buyers got “CMK’ed” as G would say.
So I don’t know what to believe now. Citywide foreclosures up 38% according to the article. Yet the Realtytrac data doesn’t paint that bad of a picture: http://www.chicagonow.com/blogs/chicago-real-estate-getting-real/2010/07/chicago-foreclosure-activity-up-11-in-june.html
Gary: you should believe it is worse than you could ever possibly expect. And its not getting any better.
Lets not forget the parking garage of River City flooded two weekends ago with the massive rains, causing an evacuation and likely doing significant vehicle damage to cars parked in their underground garage.
Pretty typical… I have been pointing out forever that most the foreclosure “victims” are nothing but specuvestors.
Investors are one of the reasons I would never consider buying in a high rise. Some of the buildings are approaching 50% renters now.
Things will not get better until people stop renting and start to buy. There is only one way to get people to do this in such a scary market: major sell-off, lowering prices to cover and reflect the terrible risk — i.e., that your neighbors will move out, stop paying assessments, and go into foreclosure, leaving you unable to sell in the case you lose your job. Not only does the pricing fail to reflect this risk (sorry, Clio), but sellers are wanting to shift the risk to the prospective buyer. In this “buyer’s market,” I am being asked, in my current deal, to (1) waive my appraisal contingency, such that I’m stuck with buying if it appraises below the offer price (WTF?), and (2) waive my financing contingency, such that I forfeit my $10K if for some reason (which would likely be something to do with the building, not with me) my lender pulls my financing (again, WTF?). This is not the first time that I have been asked to waive those contingencies and to take risks on a place I do not even own yet. Sorry for the rant, but given the risk of buying right now, and given how hard it is to get financing, and given how hard it is to negotiate price and terms, etc., with sellers who are frustrated with having to take a loss, I’m ready to give up.
Slightly off topic… does anyone have any inside scoop on 616 W. Fulton (China Club lofts)? I looked at a couple places there about a year and a half ago and liked the building and the units. Seemed pretty stable as well, but now I see lots of units in that building up for sale.
What do people think of contract sales/seller financing? Although there ARE a lot of short sales/foreclosures, there are several more properties in which sellers have a moderate to significant amount of equity.
I ask because it could be a “win-win” situation. If a seller could offer 4.5 % financing for a 3-5 year term (at which point the buyer has to obtain independent financing), it might serve both parties well. For the buyers, they wouldn’t have to worry about financing and for the sellers, a 4.5% return is actually very good right now!!
This article is deceptive to the common person who has no idea how to interpret data (especially when percentages are involved). For example, it states that foreclosures in the south loop are up 54% – however, the actual number of foreclosures is only 131. So, if you do the math, it means that the number of foreclosures increased from about 85 to 131. Yes, that IS an increase, but 54% sounds so much worse than the increase of 46 new foreclosures. Also, 131 forclosures in a market where there are nearly 1000 units for sale accounts for less than 13% of the market (bad, but remember there are still 87% NOT in foreclosure).
Yes- you have to dig into the numbers to see what they really mean and not just go by percentages.
But if you add in the short sales with these foreclosures in the South Loop I would estimate it’s at least 20% to 25% of the listings (as being “distressed.”)
That’s why prices will continue to fall. “Regular” sellers cannot compete with those lower prices.
I’d bet, too, that most of this data refers to condos, not townhomes or SFH’s?
Clio,
Why so optimistic regarding housing in the south loop?
Are you a realtor or seller or recent buyer?
What is interesting is that I have been looking to buy short sale/foreclosed properties for the past 6 months but cannot find anything decent or tempting. They are usually small units that cost less than 300k. I honestly cannot find any larger, nicer units in good locations/ buildings that are short sales/foreclosures. I have looked in the Park Hyatt, Carlyle, East LSD (though most of these are coops), Palmolive (there is 1 foreclosure/short sale but it is not a deal by any means). Does anyone have insight into luxury (over 500k) foreclosures in the city?
How could anybody ever figure that an “investment” that you paid $3600 a month for but only brought in $2400 a month for was a good deal for the investor?
If a property cannot “cash flow” it’s not a decent investment.
As for contract sales, they might have been a good deal for the seller back in previous housing bear markets, where you did not have so many bad loans out there already. But now it would be very risky to offer seller financing, unless the buyer had a substantial downpayment and you were prepared to carry that loan for a long time, like about 30 years. It would be very risky to make a loan contingent upon the buyer being able to refinance in a short time frame, like four or five years. You have no assurance the buyer will be able to refinance, unless he made a substantial down payment.
I’ve been sticking my toe in the water every few months for a couple of years now and every time I do, I recoil because the water is too damn cold. Other people must be thinking the same thing because it looks like, at least where I want to live, new sales activity has pretty much come to a complete halt. It’s like someone flipped a switch.
“Sorry for the rant, but given the risk of buying right now, and given how hard it is to get financing, and given how hard it is to negotiate price and terms, etc., with sellers who are frustrated with having to take a loss, I’m ready to give up.”
Yeah properties at river city are currently worth $0
I know someone who rents there and they can’t even get into their place to get clothes due to no power or something
“Clio, Why so optimistic regarding housing in the south loop?”
No – I just hate fear-mongering!!
“If a property cannot “cash flow” it’s not a decent investment”
Not always true. What about land investments (although I know that is not what you mean).
True, losing money on a monthly basis is not a great idea, but the alternative (losing 150-200k) by selling is even worse. Everyone is hurting now (expect for renters) so I am just trying to minimize losses.
“Does anyone have insight into luxury (over 500k) foreclosures in the city?” Clio are you kidding me? Your contributions, when read together, don’t make much sense to me.
interesting article…but i don’t think one can feel so assured in their decision to rent based on an article that sights some of the most recent construction, shadily financed buildings in town.
there are some buildings with long term tenants and sound management that have not and will not see much of an impact due to foreclosures.
if anything, they may benefit as buyers seek out buildings that are the polar opposite of 1620 S Michigan, etc.
while prices could easily continue to drag in certain buildings, i suspect that prices are in the process of stabilizing/turning higher in better buildings.
jmho.
“Clio are you kidding me? Your contributions, when read together, don’t make much sense to me.”
Quite simple – I will only sell and take a loss on some of my properties if there is another better deal I can get (ie, sell 3 units at a 400-500k loss but buy something better suited for me at a 400-500k discount). I get a tax write-off and transfer into something that may be potentially more profitable in 10 years.
old hickory,
a receding tide lowers all ships including the more expensive yachts.
Further price declines across the board will be most assuredly returning this fall and winter.
This is 2008 redux. sharply higher supply, sharp drop off in sales volume (post-tax credit), longer listing times, little or no price reduction (maybe even a little increase over the last few months)….
This is exactly the same brew from 2007/2008.
I told you things were slow….The 2007/2008 deja vu is frightening yet exhilarating at the same time.
What’s next?
http://noir.bloomberg.com/apps/news?pid=20601087&sid=awnM5ZSwv_ZE&pos=1
Pending Sales of Existing U.S. Homes Decreased 2.6% in June
By Courtney Schlisserman
Aug. 3 (Bloomberg) — The number of contracts to purchase previously owned houses unexpectedly fell in June, indicating demand kept unraveling after the expiration of a homebuyer tax credit.
The index of pending home resales dropped 2.6 percent from the prior month, figures from the National Association of Realtors showed today in Washington. Economists projected a 4 percent gain, according to the median forecast in a Bloomberg News survey. The expiration of a government tax credit on April 30 caused the gauge to slump 30 percent in May, the most since data began in 2001.
“What’s next?”
We’re all doooooooomed! Meteor’s smashing, tidal waves crashing, burning hell fire of death, anarchy, chaos, and doooooooom!
hd,
you have your thoughts on the future. i have mine.
i believe the failure of the dollar-based monetary system is the name of the game. everything else is a ripple effect.
I believe Helicopter Ben and Negative Rate Yellen are going to drive this boat right off a cliff, all the while smiling for the camera and telling us we’re going to be just fine. I think that’s what they’ve been put there to do.
but that’s just me.
i don’t think real estate is the go-to asset in these times, the real return going forward may not be much, but i believe the nominal return will be much, much better than sitting in cash.
time will tell.
Sonies, for some people, things are that bad. For everyone else awaiting affordability, this news is like the end of a long cold winter and green buds are just starting to bud on the trees.
HD for some people, no matter how awesome the economy is, things are “that bad” for them because they are idiots who have zero financial acumen or common sense.
But I’m glad that I found an affordable place, since I wouldn’t have been able to afford my place 3-5 years ago (I still laugh when I see my place on HGTV and laugh really hard at part where they show the asking price they wanted)
Duh.
“the gauge … slump[ed] 30 percent in May, the most since data began in 2001.”
Data only goes back to the start of the boom? What use is that, really?
Pessimism is off the chart here today. The “up and coming areas” are getting hit hardest because they never had a chance to stabilize. You need investors to initially go in and full time residents will eventually follow but the market did not get the chance because of the recession and the city of Chicago allowed too many new construction buildings to break ground in the South Loop.
From the big picture standpoint, I see new residential new construction at a halt which is a very good thing. We need job creation but business owners are very fearful of the rhetoric coming out of Washington. We have become a society of employees when we really need a society of entrepreneurs to get us out of this mess.
There has been so much back and forth on this site, but the truth is that nobody knows with certainty what is going to happen. How many times have we looked to our leaders (financial, political, etc.) and believed what they have told us when they were 100% wrong. The funniest thing to look at are the financial hourly reports. When some indicator has been announced and the dow is down, the headlines will read: “Dow down on home sales report”. Within hours, the Dow will rise and the headline will change: “Dow up on home sales report”. Basically, my point is that very few if anybody knows wtf is really going to happen!!
One other observation that I made is that while most people on this site are very practical and financially sensible, many people out there are NOT. There are several intangible factors in one’s decision to buy housing. Many people feel like their house is an extention of themselves. Most people are NOT practical – they want to impress, etc. Just look at their behavior in buying cars. If everyone listened and adhered to financial sensibility, everyone should be driving inexpensive low-maintenance cost cars. Of course that is not the truth – so you cannot assume that people, given the chance, will make financially sound decisions on housing.
clio – sure, people buy fancy cars. what does that cost, at most, $50,000 or $60,000?
However, when people start buying irrationally $500,000 or $600,000 homes, or multiple homes, it destroys the economy.
I rented at River City in the mid-1990s before the condo conversion, in one of the 3/2.1 duplex units facing north. We had a fantastic view of the skyline, and the building had other amenities (in-building but overpriced market, fantastic rooftop deck, free shuttle to the loop, etc.). It was a cool building, but I think the garage flooded twice in the two years I lived there and since the transformer was in the garage, we suffered from several days of no power (and of course, ComEd provided no relief, since it was a building issue, not a ComEd issue). Needless to say, when the building converted to condos, I had no interest in buying.
the difference HD, is that 99% of cars will be worth nearly zero in 10 years of use… the same can not be said for housing
There’s good debt and bad debt, you should be smart enough to know the difference and I think you do
“Sonies on August 3rd, 2010 at 8:37 am
“What’s next?” We’re all doooooooomed! Meteor’s smashing, tidal waves crashing, burning hell fire of death, anarchy, chaos, and doooooooom! “”
Jesus is Coming….so look busy.
“The “up and coming areas” are getting hit hardest because they never had a chance to stabilize. You need investors to initially go in and full time residents will eventually follow”
Shortly after I broke away from my families RE business and established my own, I focused only on areas that needed regentrification (up and coming ‘hoods). After a few years of doing projects in these areas, I withdrew totally as the risk of finding others to contribute to the hoods to the extent I was just were not there. While I was fortunate to never have incurred any losses, many others did which forced these areas to be totally abandoned by renovators. The only people who are still buying in ‘up and comings’ are DIYers who plan on using the properties for their own shelter for 5-20 years. Spending reno cash then planning on sitting back and collecting rent just did not then nor does it now make ANY sense.
“Needless to say, when the building converted to condos, I had no interest in buying.”
Wow. Living there was so bad that you didn’t even mention the *ludicrous* prices they were offered at.
As I have said repeatedly both here and on other RE forums, STAY AWAY from short sales and foreclosures IF you are purchasing them as investments to rent. Anyone with a shred of common sense would see this is the case.
Even if you are buying as a DIYer and plan on staying your property for years to come, it is still a huge risk, esp in multi unit buildings, as you run the risk of slummy renters ruining the building and having your assessment charges skyrocket. This goes for both conventional sales and short sales.
The ONLY people who should be buying ANYTHING now are those who have the resources to purchase property in cash without a mortgage.
Is there a single person here that can honestly say that they anticipate an increase in salary in the next year? How about the year after that?
Despite your stagnant income, do you find yourself doing more work than you did two or three years ago?
After you answer those questions, think about this one: Are you prepared to spend four hundred thousand dollars with high assessments for a decent 2/2 in the south loop? How about $350 in a building with high foreclosures? $300 in an all cash deal?
We talk on this site all the time about how stupid the average person is and how they throw their money away on overpriced properties.
Personally I think we just ran out of suckers. The suckers are all dead broke and the next generation of suckers doesn’t make enough money to be able to afford any of these places, as a foreclosure or otherwise.
Long way to go…
well said chicagobull, well said.
Sonies: there is no good debt/bad debt. Debt has no moral proclivity. Debt is debt.
“Basically, my point is that very few if anybody knows wtf is really going to happen!!”
Those people who are heavily vested in RE, myself included (in multiple cities) had the strong common sense to stop investing to make money by either reselling or renting when this whole mess started a few years ago.
I haven’t purchased any properties with the sole intent of making money for 2.5 years. While I have purchased a few places, I did so with the intention of having these places for my own project residences or for my crew members/family where there was a guarantee of them selling or having them become long term renters. That part of my business is done for the time being…’deals’ or not. We are only taking on renovation projects that are owned (w/o a mortgage) by others. No risk for me and I am performing a service which does not equate a risk for anyone involved. People who are moderately to very wealthy are now renovating their existing homes instead of buying as they did in the past for the sake of owning a new home every few years.
“One other observation that I made is that while most people on this site are very practical and financially sensible, many people out there are NOT.”
Remember, 99% of posters here are not in the market to buy now…or probably any time in the future. It is rare that serious buyers will actually post here.
“Many people feel like their house is an extention of themselves”
For the most part, this is true. Buying a home, in the past before all this mess, was an emotional one, and most were done as a way of impressing others. Who actually needs to live in the new Ritz Carlton tower? No one NEEDS to live there, but their wealth convinces them they have to live there to be recognized for their $$$. Fact of life, it IS all about where you live, what you drive, what you wear and where you eat.
“After you answer those questions, think about this one: Are you prepared to spend four hundred thousand dollars with high assessments for a decent 2/2 in the south loop? How about $350 in a building with high foreclosures? $300 in an all cash deal?”
Although you are 100% right – I cannot tell you how many people DO want to go out there and spend money on their housing. Honestly, they ARE willing to spend whatever they can to live better than they do right now. The younger generation is EVEN worse. I have a ridiculous number of clients right now looking for places – all of them have champagne tastes on a beer budget BUT would definitely stretch their limits if it meant buying into their dream house. Again, people are NOT sensible when it comes to their personal housing/living situations.
“Is there a single person here that can honestly say that they anticipate an increase in salary in the next year? How about the year after that?”
Yes. I can say that I will make more money, without personal risk to my own wealth, by doing renovations…some VERY costly…for those who were in the habit of upgrading every two or three years for the sake of BEING the Jones’.
Already in the first half of this year, my business has seen a huge increase in cash flow over the past two years. And again, it has been virtually risk free for me.
“….do you find yourself doing more work than you did two or three years ago?”
Yes, I have been turning down projects since the middle of last year and we are totally booked up for next 18 months. So there is still an opportunity to make a huge amount of $$$ for those who have made RE their careers. It is simply a matter of changing the focus of what kind of work was done in the past. No gloom and doom for me!!
And to think when I first started posting on this site, I was accused many times of being a foolish person for spending so heavily in this Industry.
I was told many times the decisions I made were stupid and I would be broke in a few years!!
Good times now!!
“Who actually needs to live in the new Ritz Carlton tower? No one NEEDS to live there, but their wealth convinces them they have to live there to be recognized for their $$$. Fact of life, it IS all about where you live, what you drive, what you wear and where you eat”
Truer words were never before spoken!!! I don’t know if you were being sarcastic, but this IS what most people believe – and, for the most part, it is true. The differences in treatment/reaction I get when I drive my Jeep Grand Cherokee and my Lamborghini Gallardo spyder is UNBELIEVABLE!!! For those out there who think that most people aren’t into flash and glitter, take a ride w/ me in my car – you will see what the people really want!!!! No matter what is happening in the economy , people DO NOT CHANGE. The successful entrepeneurs are going to be the ones who figure out how to deliver a sparkling package to people with lesser financial means.
@ Old Hickory:
“there are some buildings with long term tenants and sound management that have not and will not see much of an impact due to foreclosures. if anything, they may benefit as buyers seek out buildings that are the polar opposite of 1620 S Michigan, etc.”
My personal experience backs this up. I am looking for a studio or 1 BR to keep my expenses low.
I looked at a foreclosed 1BR condo in a 10 unit building in Albany Park last summer for 30K. The building had gone condo around 2006. I am assuming the buyers took out subprime mortgages for the most part. The unit I was considering needed extensive work, and it appeared the developer had run out of money before renovating all the units. 30K seemed like a good deal on the surface, but the building could have gone either way at that point. Three quarters of the building looked like it was occupied. It was a pretty risky proposition. The listing agent would not return my agent’s calls or provide any information. I got cold feet and backed out. I walked by the building recently and it looks like only one apartment is still occupied. There are broken windows. The lawn was overgrown with weeds and there were broken lighting fixtures in the lobby. There were several lockboxes attached to the gate. So yeah. That would have been a bad move to buy there. The buyers in that building who all obtained mortgages around 2006 and 2007 with no money down probably walked because they had nothing to lose. These are the types of foreclosures to be wary of.
However, the low prices of foreclosures and short sales in these recent smaller condo conversions are pulling prices down across the board, and I think it’s possible to get a deal in one of the older, more established highrise buildings. If you take a building which went condo in the 1970s, you’re not going to get such a high percentage of owners with “magic mortgages”. These are sleeper buildings. They are not sexy. A lot of them are on N. Sheridan Road in Uptown and Edgewater. You’re not going to get the latest finishes. But you can get a good solid, stable product with 24 hour security and heat and cable included close to the lake and the Red Line. Then you can renovate it as you please. Please just perform your due diligence and scrutinize the building’s reserves, financials, planned improvements and board meeting minutes. Get comps from your agent and look at how many units if any have gone into foreclosure or short sale.
I don’t think prices in these highrises are going down. It seemed like there were more deals last summer at cheaper prices…
LOL cleo you are a trip
You spend years on the internet waiting for comedy gold like this.
I tip my cap.
“The differences in treatment/reaction I get when I drive my Jeep Grand Cherokee and my Lamborghini Gallardo spyder is UNBELIEVABLE!!! For those out there who think that most people aren’t into flash and glitter, take a ride w/ me in my car – you will see what the people really want!!!!”
with all the negativity out there I’m glad to bring a smile or laugh to somebody
a cribchatter romance match made in heaven would be clio and westloopelo.
“a cribchatter romance match made in heaven would be clio and westloopelo.”
Yeah, but what does he look like? LOL
Plus, I don’t have a Lambo or any plans on buying one. New car yes, Lambo no. Why would anyone have one in Chicago where the crappy roads would tear out the undercarriage and you would only be able to drive it 4 months out of the year? Although I did see a number of them on Michigan Ave last month. Car show maybe?
“Is there a single person here that can honestly say that they anticipate an increase in salary in the next year? How about the year after that?”
I’m sure there are people who can (if they had the bad manners to do so) answer yes to both questions. Sad truth about this economy is the accelerating divergence between haves and have nots.
The South Loop and Near West Side are not the entire Chicago market. Those two areas have been particularly hard hit due to vast over supply, poor workmanship, lack of differentiation and high assessments. They will continue to have major problems for many years, especially once common elements need repairs and the coffers are empty.
Many other areas in the city (except south side) have only some over supply or, in rare cases, saw a decrease in supply due to unit combinations and the inability of developers to gain approval for increased FAR. The south side has seen a decrease in total supply because the city keeps razing units, but the available supply has increased was the population has declined.
“Yeah, but what does he look like?” – I am extremely good looking – and obviously incredibly modest/humble!!!
“Why would anyone have one in Chicago where the crappy roads would tear out the undercarriage and you would only be able to drive it 4 months out of the year?” – one word: ATTENTION (and all of the benefits that come with it). Actually, when I compare the loss of nearly 300k for the car with the loss of 300k on any investment property I own, I realize that at least I got a lot of pleasure out of my car (as opposed to the real estate)!!!
chicagobull on August 3rd, 2010 at 10:17 am: “Is there a single person here that can honestly say that they anticipate an increase in salary in the next year? How about the year after that?”
Yes. Our raises are 6-12% with 30-40% bonuses. There are some people in the city who still can ask a premium for what they do.
gubbermint jobs will be getting raises
Don’t worry, your 6% to 12% raises will be short lived and the rest of the those in the economy that are overpaid will be washed out soon enough. Round 1 in 2007/2008 picked the low hanging fruit but Round 2 2010/2011 will take out those who though their $100k a year do nothing or union/gubmint/tenured jobs were secure.
I thought westloopelo was male and clio was female. Or are you both male?
“- I am extremely good looking – and obviously incredibly modest/humble!!!”
Good answer…so when do you want to meet to satisfy HD’s fantasy of living vicariously through another’s online love life?
And yes clio, I totally agree with you about the satisfaction received out of the purchase price of your Lambo vs losing the same amount due to a dull housing market. I too lost a good portion of my RE portfolio by purchasing properties in Chicago which failed to sell… even after significant improvements were made to them.
If you are going to spend (or lose) a good amount of $$$, at least say you got some enjoyment out of it.
Without saying which model I recently received (after a long 9 month wait) I too am enjoying driving my new car outside of the city during the summer months and can’t think of a better way of spending my hard earned $$$. Just gotta say though, the condition of major streets here in NYC are so much better than those of Chicago.
As stupid as I felt doing it, I actually spent some time cruising around seeing which streets in my hood I would need to steer clear of to avoid damage to the suspension and it’s expensive and rather delicate components.
“I thought westloopelo was male and clio was female. Or are you both male?”
Yeah yeah, I’m here…I’m queer…so get used to it.
Can’t speak for clio though…
why so serious though and what does it really matter, I think we were joking around…even HD too, I think.
I’ve not hidden anything about my orientation since I started posting here and the only poster who took issue with it was Kenworthey.
Either way it don’t matter to me.
“I’m sure there are people who can (if they had the bad manners to do so) answer yes to both questions. Sad truth about this economy is the accelerating divergence between haves and have nots.”
Yes…and since CC is the bastion of good manners it was unexcusable for me to divulge such information. NOT.
Re: the divergence between the haves and have nots, the divergence between those playing internet RE genius from their armchairs and those who take major risks with their capital in this economic mess is even greater.
“The differences in treatment/reaction I get when I drive my Jeep Grand Cherokee and my Lamborghini Gallardo spyder is UNBELIEVABLE!!!”
clio,
i would like to knock you for your wonderful internet persona, but the #1 selling car that millionaires purchase is the Jeep grand cherokee. and most people that by a lambo will use every possible chance to talk about.
hey guess what kind of car my internet persona drives?
btw, south loop is wonderful but to buy would be gambling.
“Quite simple – I will only sell and take a loss on some of my properties if there is another better deal I can get (ie, sell 3 units at a 400-500k loss but buy something better suited for me at a 400-500k discount).”
That is a little “too” simple, Clio, as I think are many of your posts. Were you paying attention yesterday when Sabrina reminded us of the 8% loss people take just in transaction costs when they sell a property? (And was the reference to your fancy car ownership really necessary?)
“hey guess what kind of car my internet persona drives?”
a 1987 Buick Regal with 22″ spinners?
excuse me, westloopelo, but I have never taken issue with your, or anyone’s, sexual orientation, in my entire life. I have taken issue with your being a pretentious asshole whose online persona is almost too preposterous to be believed, but that is a different matter altogether.
“a 1987 Buick Regal with 22? spinners?”
LOL, screw you 🙂
guess what the real groove drives?
“guess what the real groove drives?”
A honda odyssey… haha loser! 8)
man everyone is so crabby today, go smoke a J people!
“A honda odyssey… haha loser! 8)”
its all love, LOL, screw you again you baztard 🙂
we are on hold for 3 years on the mini van. i ended up trading in my generic family sedan for another generic family sedan (a faster one)
HEHEHEHE I knew that would get you out Kenworthey!!
Yes, you most certainly did get your panties in a wad over comments about the subject… Anon posted a comment that straightened up the subject…and I am sure he will again.
Regardless, I know you still love me.
you are welcome–more than welcome–to cite to any post I made taking an issue with your sexual orientation. Early on, I called you out on what sounded like inconsistencies with your internet persona. Anon(tfo) argued that your internet persona, obnoxious and preposterous as it is, has actually been consistent after all. So yes: you (or rather, “you”) are consistently a preposterous, pretentious asshole.
He’s a New Yorker do you really expect anything less?
I know you love me, want to be with me and finally, want to be me!!
I would take you up on your challenge to cite the post, but you are not worth the time it would take to scrape dog shit off my shoes…or even worth the dog shit itself.
westloopelo,
you seem to consistently get the same negative reactions I do (on the internet and in public – bars,etc.). do you think you are obnoxious or do you think people are jealous? a combination, perhaps?
“i would like to knock you for your wonderful internet persona, but the #1 selling car that millionaires purchase is the Jeep grand cherokee. and most people that by a lambo will use every possible chance to talk about”
maybe I am slow, but I don’t understand what you are trying to say.
Clio, you are easily my new favorite poster.
“Anon posted a comment that straightened up the subject”
I’ll just say (1) I don’t think KW ever doubted you prefer men, and (2) I would be *shocked* if she cares one way or another, and (3) Why can’t we all just get along?
“Clio, you are easily my new favorite poster.”
Slipping a little into the style of the Heitman.
Groove77:
If I recall it was to be that Toyota minivan with the dual sliding doors. 🙂
Or to quote Chris Rock:
“dey spinnin’ nigguh dey spinnnnnnnnaaaan’!!!”
so the question is what’s it going to be G77?
Spinners?
Hydraulics?
Neon?
clio,
Actually I don’t draw negativity in any place other than this forum. Which is to be expected as I tell it like it is and reveal a lot about my involvement in the RE industry. I have revealed a lot about my self and what I do and for some reason it seems to light a fire of anger under some of the more pompous asses here.
Pete, a poster who no longer frequents this site because of the jerks had an accurate summation as to why this is the case. Basically, he told them that they showed anomosity (or their asses) towards those who really were employed by and involved in RE and who themselves were merely armchair spectators and commentators. So using his fairly accurate assessment of the low blow comments, it shows you where and why the chips fall as they do.
If you do follow this site and the some of the regulars who post MOST, but not all, are far from being involved in any capacity at all, with Real Estate. Many are merely renters who have never owned a property before. Taken in that context, you can understand the jealousy and hatred shown in their inflamatory posts.
In RL, I am very reserved and keep to myself…the exact opposite of being obnoxious or in any way overbearing. This is a personal characteristic I have revealed a few times here before when I get slammed by the ‘I want what you have or I will hate you for it posts’.
A very High School unpopular girl vs cheerleader dating the quarterback type of a thing…very juvenile behavior that I sometimes get pulled into. Pure jealousy is all I can say about it. I don’t let it bother me and I actually get my daily amusement from it…as you should too.
Keep posting as you do and let them get their frustrations out here as those who post the most hateful comments are most likely impotent and cannot release frustration in any other way.
So contrary to what Kenworthy (not sure of it’s gender…at times it seems very effeminate and others hyper masculine) is shouting about (this time never any negative feelings about orientation), I feel there is some anomosity because of that fact…add that to the successes and $$$$$ I have had as a renovator… and there you have it.
“If I recall it was to be that Toyota minivan with the dual sliding doors. :)”
yes, it almost was, and with the 4wd too.
“Spinners?
Hydraulics?
Neon?”
cant do spinners and hyrdos, the spinny part will fly off 🙂
Haves vs have nots
I strongly dislike this comment as the haves created their wealth in 80% plus of the occasions from hard work. For those who get the inheritance, they can either build it or burn it (most engage in the latter). Complain at the government and not the haves because the haves are the ones funding charities, providing jobs and paying the vast majority of federal taxes. The divergence in any recession does come from the ‘haves’ having more staying power through higher cash reserves. As I heard Dennis Miller once say, “I want my children to feel like there is an abyss chasing them.” We need to stop the wealth envy as a society and focus on entrepreneurship.
Amen, “Think Small”. I wish everyone realized this.
clio – sure, people buy fancy cars. what does that cost, at most, $50,000 or $60,000
Man was I late to the daily show. Today’s episode on CC was really entertaining. Since we are on the subject of cars here is another thought. I was speaking to a friend about how his home is his biggest investment and is currently down in value. He estimated it to be around 300K in todays market.
I explained that it was likely not his biggest investment. He was puzzled. At the moment they drive an Escalade and a Lexus sedan. My guess is that they currently have 90K tied up in the driveway and that they trade up about every 4 or 5 years. this means that over 20 years they have easily spent more new rides than on the roof over their heads. Thoughts????
jp3, not sure I would consider a car as an investment, unless you were buying something like a shelby cobra. Generally the goal of investmenting is to make money over time, not to lose it.
“Haves vs have nots
I strongly dislike this comment as the haves created their wealth in 80% plus of the occasions from hard work.”
“Amen, “Think Small”. I wish everyone realized this.”
My comment, so I’ll respond. The idea that most “haves” created their wealth from hard work is self-important fantasy. In my comment I was actually referring, in part, to myself.
My income has grown significantly while the economy has gone to shit. These diverging lines (general economy v. my personal economy) have made me, personally, much better off than I could have every expected.
Do I work hard for my growing income? Yes, of course. But is hard work the reason I’m in this position? No. It’s hard work plus a hell of a lot of good fortune. I.e., born in America, born to parents who care about me, born healthy, born intelligent, happened into good people interested in my professional development, ended up in the right place / right time on several key occassions in my life, etc., etc.
Anybody wealthy who thinks they “earned” everything they have is a fool just asking to lose it. Anybody wealthy who turns their nose up at people with less than them is a fool just asking to lose it.
Bob, you sound like an angry moron. I didn’t say anything about taxes. I didn’t say anything about who was to blame for anything. I didn’t say anything about class warfare. In fact, if you actually read my post you’d pick up on the fact that if any class warfare happened in this country I’d be on the firing line, not the firing squad. Who knows where you’d be. Probably slobbering some irrate nonsense on a blog somewhere.
“My comment, so I’ll respond. The idea that most “haves” created their wealth from hard work is self-important fantasy.”
“Anybody wealthy who thinks they “earned” everything they have is a fool just asking to lose it.”
It is alanon who is the moron, here folks and lives in a fantasy world. The only lazy people who get rich are those that win the lottery. My parents are millionaires not because they got lucky, they’re millionaires because they were prudent and made the right choices in life and worked hard. Alanon makes it sound like achieving one’s financial goals is a fantasy or a game of chance. The choice is if you make the right life decisions you have a much better chance of advancing your societal standing (or wealth) than otherwise. You’re damn right they earned it. And they’re not likely to lose it because they didn’t earn it gambling on “hot” asset classes like tech stocks or real estate.
Don’t listen to the alanons of the world who say to heck with it all luck is such a big factor that the government needs to get involved. He is a fool.
I guess my parents choices, as well as a friend of mine who also happens to be wealthy, were pure luck and happenstance in alanon’s view. Their conscious decision making process had nothing to do with it–it was predetermined!
Bob, it sounds like your parents are good people. But you’ve proved my point. You were raised by millioinaires. If you can’t see:
1. How that has benefited you;
2. How YOU did nothing to “earn” that benefit; and,
3. How most people do not start life with that benefit,
Then I feel sorry for you.
+1 to the post below from alanon. this is a great post.
as a renter by choice i am still shocked by how many of my 20 something friends long to own a home in the city. it’s a good thing because we need people to start buying again, the problem is all of these kids who have been brainwashed by their parents good real estate fortune are not making enough money to buy anything decent. it’s really remarkable how hard it is for kids coming out of college these days to get ahead in the world. the top 1-5% are just as well off as they always were (and then some), everyone else…yikes.
“My income has grown significantly while the economy has gone to shit. These diverging lines (general economy v. my personal economy) have made me, personally, much better off than I could have every expected.
Do I work hard for my growing income? Yes, of course. But is hard work the reason I’m in this position? No. It’s hard work plus a hell of a lot of good fortune. I.e., born in America, born to parents who care about me, born healthy, born intelligent, happened into good people interested in my professional development, ended up in the right place / right time on several key occassions in my life, etc., etc.
Anybody wealthy who thinks they “earned” everything they have is a fool just asking to lose it. Anybody wealthy who turns their nose up at people with less than them is a fool just asking to lose it.”
Re: luck vs. hard work — people who are successful tend to underestimate the amount of luck that was involved and people who aren’t successful tend to overestimate the amount of luck involved. But anyone who thinks you can get rich (or even just get by) on hard work alone is hopelessly naive.
Yes, I work hard, and yes, I made some good decisions. There are many, many people who work a lot harder than I do and who don’t make nearly as much money.
Alanon might be confusing “good luck” with “sensibility” and “benefit” with “opportunity”. I had the opportunity to grow up in a very wealthy area. Money spoiled these kids more than it did to help them (unrealistic expectations, absentee parenting, overstimulation, etc.) Really, it did so much that I wrote a thesis in college titled ‘Poor Little Rich Kid’ – it was actually a serious dissertation on the DISADVANTAGES of growing up with money. There are a lot – but of course nobody wants to hear it. They just want to complain louder and louder about how lucky you were, etc.
That being said, it IS true that if you have sensible parents who are able to provide a stable environment and instill high moral values, you generally have better opportunities to make something of yourself.
“You were raised by millioinaires.
1. How that has benefited you;
2. How YOU did nothing to “earn” that benefit; and,
3. How most people do not start life with that benefit,”
You aren’t very good at reading comprehension. My parents both came from humble beginnings and one never even graduated college with a four year degree.
My upbringing did benefit me immensely, but not because of any wealth they were building at the time: they taught me to live below my means, modestly, and not to always splurge on instant gratification or to try to keep up with the Joneses.
I don’t stand to benefit at all from them financially: long-term care costs are very high and I hope they live long to exhaust their accumulated wealth. And they’re not stupid like many other baby boomer parents who loan their kids 50k for a downpayment on a place–they know if they did that me and my sibling(s) won’t understand the value of a dollar and it won’t help us to be financially savvy and make right, calculated, decisions on the net.
“You aren’t very good at reading comprehension. My parents both came from humble beginnings and one never even graduated college with a four year degree.”
Bob, none of this was in your post so there’s no way I could have picked up on it from any “reading comprehension” (which I assure you I am very good at).
In any case, it’s irrelevant. So is the fact that your parents don’t give you money for a down payment. Point is, because your parents worked hard, you were raised in an environment that many kids dream of. You are lucky for it. That’s what I’m talking about: luck. You had it. Congratulations. Now realize it stop pissing on people who didn’t.
Another point to bring up is the significant difference between working hard and working smart. I worked hard when stocking shelves at walmart, and cutting grass, painting classrooms, and cleaning bathrooms when I was a part time janitor. But I worked smart when getting my b.s. In college. The latter helped me much more when it comes to building financial wealth.
I never pictured Westloopelo as gay. Just really, REALLY old.
One aspect of life that is totally luck is parenting. Those that have good parents are light years ahead of those that have parents who are alcoholics, druggies, felons, or that lack any intelligence or parenting skills.
Tay said: “the problem is all of these kids who have been brainwashed by their parents good real estate fortune are not making enough money to buy anything decent. ”
The problem isn’t that these kids aren’t making enough money, it’s that real estate is too expensive relative to their income. Our housing stock is here, it’s not going anywhere, and it needs to be sold to the next generation of homebuyers. Taken to it’s extreme, sellers will all die and SOMEONE will buy the home for whatever price the market is willing to bear.
Unfortunately many sellers will be unable to sell their homes for a nominal number as large as they would like because my generation’s finances don’t allow them to pay as much as they would like.
The sellers who realize this now will fare best in the long run.
Thing is HD most people don’t _need_ to sell. And clio has a point about 1k monthly losses being nothing compared to trying to realize a 200k+ loss now when the market could turn.
These CMK buildings are getting “CMK’d” I think because CMK had entry level properties with tons of units. Many of these folks don’t have the liquidity to ride out the market.
Gives some hope to me, and probably others, that the lower end of the market could be adversely impacted more than the mid-range. Not sure if the increased foreclosures would outweigh the gain from the FHA playing such a big role though at this segment.
For instance another “higher end” building in the S Loop is 1235 S Prairie (Museum Park Tower IV). Lowest price is a 1bdrm for 277-285k and theres been little movement there with few units for sale.
Could be the S Loop blows up on the lower end but some buildings escape the downturn? So far signs say so.
Old Man’s Laws of Wages
1. I’m overworked, you’re overpaid.
2. My raise is the result of merit, your raise is the result of greed.
3. My raise is good for the economy, your raise causes inflation.
4. When I make more money it’s good for me, when you make more money it harms you.
5. The laws of economics are trumped by laws of ballistics.
With all the crazy discussion on this post, I can’t find the question someone asked about why there are not more foreclosures at the upper end (in the Park Hyatt, Palmolive etc.)
From what I’ve seen so far, sellers in those buildings have the capacity to just take losses. In other words, they have enough equity and/or wealth to just throw in the towel and sell for the loss (eventually.) That’s what we’ve already seen happen with at least one of the units in the Palmolive.
This unit sold for under the 2007 purchase price AND the listing said they had put $1 million in upgrades into it. So you do the math on how much was lost here. Yet this was not a “distress” sale.
http://cribchatter.com/?p=7987
I’ve just spent the last few days helping someone with tenant issues. You’ve got to be a special person to put up with the nonsense that goes on. I’ll never invest in a rental property or invest in a condo unit for investment.
“because your parents worked hard, you were raised in an environment that many kids dream of. You are lucky for it.”
IDK bob was raised in Ohio,was that really lucky? i cant really say that many kids dream of that. 🙂
ummm my pops was able to allow my mom to be a homemaker, buy houses (eventually one in a good hood), cars, and take care of his family easily.
no way in heck could anyone do it TODAY on his salary (inflation calculated), it was different times and your parents will teach you what they learned. the basics like work hard for your employer and they will take care of you, buy a house to establish yourself (and family) and give back to your community.
this stuff they teach you does not comply with todays requirements.
the late 80’s 90’s 2000’s have really fcked up this thing we call standard of living. we all know who fcked shyt up and we all know who will have to pay for it. (not the bastardz that fcked it up).
the world is not what it was when your parents raised you. back then the middle was a sizable portion, and we all know the middle fronts the bills. less middle less bills paid. the divide gets greater with each decade and leaps by each recession.
all the blah blah blah i babbled comes down to cost of living is higher than wage can truly support (even more without easy credit and home profit). and peoples “expected” standard of living is higher than the reality. and even with the shyt going on 80% ideals and views still havent changed.
i say its time to start building a 50’s bomb shelter and stock up on duct tape, twinkies and canned beans because its not going to end well.
“Unfortunately many sellers will be unable to sell their homes for a nominal number as large as they would like because my generation’s finances don’t allow them to pay as much as they would like.”
I hate generalizations like this.
First of all, don’t lump everyone in your generation into one financial category. There are plenty of people in “your generation” making much more money than people in your “parent’s generation”.
Second of all, it is common for younger people to make less than more experienced people – this will change with age/experience.
Third of all, we are coming out of a recession. Jobs are scarce but, despite all the doom and gloom, this WILL change.
Fourth of all, you haven’t had enough time to save money. Although it doesn’t seem like it, give it 10 years – you will be in another financial state than you are now.
“My guess is that they currently have 90K tied up in the driveway and that they trade up about every 4 or 5 years. this means that over 20 years they have easily spent more new rides than on the roof over their heads. Thoughts????”
you can sleep in a car but you can’t drive a house?
“Third of all, we are coming out of a recession”
LOL. You mean coming out of a GDP recession?
http://finance.yahoo.com/news/Geithner-unemployment-could-rb-1430262539.html?x=0&sec=topStories&pos=6&asset=&ccode=
Its okay Timmy says increased unemployment is temporary.
“Fourth of all, you haven’t had enough time to save money. Although it doesn’t seem like it, give it 10 years – you will be in another financial state than you are now.”
HD will be because he lives like its December 2012 every month of his life. While its not the end of the world I tend to agree with him that things look bleak. But in all honesty most of us will be in another financial state 10 yrs hence and predicting so is far from rocket science. The only people that likely won’t are those that are broke and always have been. Those people are a constant and they WILL still be broke in 2020.
“IDK bob was raised in Ohio,was that really lucky? i cant really say that many kids dream of that.”
Never raised in Ohio, so fail on that part. Lived there for a time.
“i say its time to start building a 50’s bomb shelter and stock up on duct tape, twinkies and canned beans because its not going to end well.”
Well you’ve got company, kindred doomsayers in any case–just give these guys a call:
http://www.usatoday.com/news/nation/2010-07-28-doomsday28_ST_N.htm
Don’t worry Groove we won’t stop by unless we need to 😀
All I meant to do was guess at why the number of distressed props in the woop and sloop are increasing even as prices fall.
Turns out it has nothing to do with there being a lack of financially suitable buyers because everyone has a wildly successful real estate business, a Lamborghini, a 16% raise, and millionaire parents to go along with their unfortunately titled thesis and their class guilt.
There’s also a can of beans in there somewhere.
Look, the suckers are obviously broke. If they weren’t broke, the places in LV, sloop, and woop that have come down 30-40% off their highs would be closing faster than Clio’s Gallardo Spider.
If this blog’s comments are any indication of the actual state of the RE market, we’d probably better heed Groove’s apocalypse advice. The level of self deception on this site is insane.
Doode,
nice find Bob, i have watch too many movies so i would rather not buy a spot in a communial shelter. it would be safer just to have my own family shelter and not tell anyone 🙂
Bob, I think you have found HD’s perfect investment.
Bob, how soon we forget…http://cribchatter.com/?p=2840
All at the seemingly immune $500-750k pricepoint.
“I never pictured Westloopelo as gay. Just really, REALLY old.”
Well I, at age 51, will take this as a compliment…a HUGE compliment as to me wisdom, education, knowledge, experience and common sense = old age.
Here is my take on how one should lead their life to realize their goal of becoming a successful and wealthy individual. Can you be a successful individual without being wealthy? Of course. But in our world, you must have these material assets to be viewed by society as a success.
LUCK is defined as being born into a wealthy family. It is the foundation on which you can build your life.
Receiving a proper EDUCATION is the goal of parents having enough wealth to put their children in an outstanding institution and on the path to success.
HARD WORK by the student with wealthy parents is what needs to happen in order to excel during the educational portion of one’s life.
COMMON SENSE is what drives one to utilize this hard work to achieve their own personal goals.
PERSERVERENCE is what drives those who possess the above to achieve the life they want.
Setting high but attainable GOALS then reaching and surpassing them is the commulative result of all the factors listed above.
All of this then brings you back to square one…becoming a WEALTHY and SUCCESSFUL individual just as your parents were and is the end result of what your parents set out to do on the day you were conceived.
I agree with Groove that the economics are all screwed up in Chicago and this country.
The best time to be born in terms of opportunity would be between 1945 and 1950.
Imagine a man born in 1948, graduates from college in 1970, gets a job at a decent company with a pension plan, gets married, saves up for a house for 4 years and buys one with 20% down. The downside would be the Vietnam war obviously, but if let’s assume he managed to stay out of that due to college education and draft #.
He has 3 kids and the wife stays home because husband’s income is more than enough to support the family. He works about 45 hours a week and his income steadily rises all the way throughout his career. By 1981, his family is able to sell their home and move to a larger one in a wealthier suburb. By 2003, his pension benefit has grown significantly, and he decides to take a buyout from his company and retire at 55. He saved throughout the 1980’s and 1990’s and amassed sufficient funds to live on comfortably for the rest of his life.
His children, however, don’t appear to be so lucky. Will they have the same opportunity to do the same thing as their dad?
don’t tell the truth dave m and groove; the grumpasaurus will assault you with class warfare and you-all being poor-loser accusations.
Dave M,
But what if that guy:
-heloc’d the $#@! out his home
-put his kids through private school/college
-new car every 4 years
and relied on his earnings from 55-65 to finish off his cushy retirement…..THEN WHAT!?!?! He’s screwed!
Sadly there are a lot in that situation, but I kid.
The luck thing is pointless to argue. Anyone reading this is in the grand scheme of things quite lucky compared to the billions in the world who literally could not be spending their mornings bantering about this even if they cared enough to want to do so. Best thing is for people to realize that luck exists and put themselves in as many situations as possible where they can get lucky and make sure that they don’t break themselves when things don’t work out. Life is really simple actually, people make it a lot harder than it needs to be.
but yeah i do agree, being born right after WWII in America was probably on average the best time/place combo to be born in the history of the world.
“but yeah i do agree, being born right after WWII in America was probably on average the best time/place combo to be born in the history of the world.”
Agree completely… While life does NOT suck, it is really hard to get a head as a person entering my 30’s, and luck is def. involved in getting a good job
You mischaracterize my zealousness. I’m not doom & gloom, the sky is not falling; but housing prices will continue to crash – and the next generation of buyers will again have affordable housing. This is a good thing. I don’t seem any doom and gloom there.
“#valasko on August 4th, 2010 at 7:37 am
Bob, I think you have found HD’s perfect investment.”
“The best time to be born in terms of opportunity would be between 1945 and 1950. Imagine a man born in 1948….His children, however, don’t appear to be so lucky. Will they have the same opportunity to do the same thing as their dad”
ARE YOU SERIOUS?!!! Stop your f’ing whining – there is not a single generation (as a whole) that had it better or worse than any other. That “man born in 1948” didn’t have many of the opportunities/benefits that your generation has. The reason “your generation” is not doing well is b/c you are a bunch of whiny little entitled brats who believe everything should be given to them on a platter. GROW UP you f’ing moron!!!!
HD, the problem with your analysis is that to don’t consider wage deflation and the ecomomny. Also it is my opinion that the next generation in this country will not meet there parent’s standard of living, retirement age, etc….. so maybe I am the doom and gloomer.
sorry “to” should be “you”
“ARE YOU SERIOUS?!!! Stop your f’ing whining – there is not a single generation (as a whole) that had it better or worse than any other. That “man born in 1948? didn’t have many of the opportunities/benefits that your generation has. The reason “your generation” is not doing well is b/c you are a bunch of whiny little entitled brats who believe everything should be given to them on a platter. GROW UP you f’ing moron!!!!”
I hereby dub thee “YOU SPOILED BRATS!!” or YSB for short. Welcome to intertubez royalty.
clio,
you own a Lamborghini, anything you say now or in the future hold no weight. sorry it is law
“you own a Lamborghini, anything you say now or in the future hold no weight. sorry it is law”
this is the future of the u.s. – is it any wonder that we are heading for trouble?!
I agree there will be wage deflation which goes along with price deflation in housing.
Regardless, like Ive always said, there housing stock is here, it’s not going anywhere, it can’t sit vacant forever. People will eventually reach an equilibrium with incomes. However, it is going to be a painful adjustment for some.
“#valasko on August 4th, 2010 at 8:53 am
HD, the problem with your analysis is that to don’t consider wage deflation and the ecomomny. Also it is my opinion that the next generation in this country will not meet there parent’s standard of living, retirement age, etc….. so maybe I am the doom and gloomer.”
“this is the future of the u.s. – is it any wonder that we are heading for trouble?!”
the was a point in your life you had $xxx,xxx in your pocket burning a hole. at that moment you made a decision you wanted to trade your dollars for a car, within that moment you chose a lambo out of all the other choices. hey we all make mistakes but the difference is you had another moment and took it to type bragging about said lambo on the intertubez.
because of this a new law was made for you. sorry it has been written.
“but the difference is you had another moment and took it to type bragging about said lambo”
OK – I have only mentioned the car once – and it was NOT to brag. It was used to make a point that people, despite stating and believing that they want a simpler life and don’t need luxuries (and hate excess, etc.), actually still desire the upgraded luxury high end lifestyle – and if they can find a way to finance/pay for it, they will. I have NOT mentioned the car again – others keep writing about it (again proving my point).
Actually, to further prove my point, how many people do you think would buy my lambo if I offered seller financing at 0% for 10 years. The car cost 289,000 and is 1 year old w/2000 miles. If I offered it for 200k 0% for 10 years, the monthly payment would be 833.00 month. I already know that I would have at least 10 offers before the end of the day. People WANT luxury and WILL buy whatever monthly payment they can afford – that is why we are in this real estate mess.
In support of Clio, see this article from the newest Business Week:
http://www.businessweek.com/magazine/content/10_32/b4190050473272.htm?chan=magazine+channel_top+stories.
“but yeah i do agree, being born right after WWII in America was probably on average the best time/place combo to be born in the history of the world.”
And I’m going to have to state that being born between 1984 to 1988 has to be the worst time to be born in recent memory. College costs are rising around 8% a year over the past decade with many students being sucked into “liberal arts” degrees that have no real job potential other than serving “mocha choca froca’s” at the local Starbucks since their fields are overcrowded. Many students from public universities have more than 50k in student loans, while private school grads are looking at more than 100k in loans. Other students got sucked into for profit college’s that give degrees and certifications that are not certified by many state and national organizations so they are practically worthless. Then, while they were in school, many had trouble finding even part time work to help pay for their school. Some even did unpaid internships (totally illegal when it is done for a profit business). For those that did not go to college, manufacturing jobs are being sent overseas to China since God forbid someone be willing to pay a quarter more to buy an American made product or spend more than 10 seconds to buy one that clearly says made in America. Labor unions and constructions workers have a huge unemployment rate. Many new jobs today do not offer health insurance, let alone a pensions or matching 401k.
Clio. any truth to the saying that a Lambo is like a beautiful woman who is terrible in bed?
“People WANT luxury and WILL buy whatever monthly payment they can afford – that is why we are in this real estate mess”
because above statement i have removed the written law. thats the statement i was trying to make with my drunken before bed incomprehensible rant.
the new breed of people have fcked ideals and even with the mess stuff is in they havent changed their views or way they act.
btw, I still wouldnt take the car at 150k 0% for 10 years. i have better ideas with that money.
“Some even did unpaid internships (totally illegal when it is done for a profit business)”
Not true.
While I am sure you made your Lambo offer in jest, there would NOT be anyone interested in purchasing it…or the 10 offers you said would come up…as this is a different world today. There are VERY few people in the market right now for such purchases. Heck even lower cost cars are not moving what makes you think anyone would want a used Lambo?
Again I know you did this to make a point, but it is an invalid point to make.
And as far as making that Lambo statement, which was naturally taken by posters as bragging about your financial status, it will live with you for the remainder of your time posting here on CC and will be brought up at least once a week! Have fun with that but don’t get overly defensive about it….it’s not worth it at all.
“There are VERY few people in the market right now for such purchases. Heck even lower cost cars are not moving what makes you think anyone would want a used Lambo?”
Go to Gold coast Lamborghini/Bentley. Ask joe (the owner) how is business. Actually, you don’t even have to ask him- just walk in and see how many cars they move EVERY DAY!! There are a lot of closet rich people out there. (there are even more oogling the cars – I guarantee you that if I made the same offer at the store, at least 10 people would take me up on it IN MINUTES!!
LOL OK it’s not worth arguing over a hypothetical statement about an uber luxury car sale on a RE site.
As far as the upper level market being active in this economic time…no they are not busy!! I just got a high performance car and that sale was the only one of the month and caused the entire sales team to applaud when I drove it off the lot. It was a huge day for them as not one of these cars had found a buyer in some time….months actually. And this is in NYC where the amount of disposable income is probably 5X the amount it is in Chicago.
Invalid argument. Sorry as I do like you as a poster.
I guess my point, as it relates to real estate is that if you can make something affordable (on a monthly basis), you will find a buyer. In the past few months, the majority of the sales in my company have been contract sales and seller financing. When i offered all of my renters seller financing/contract sales agreements, 50% of them jumped at the chance. This may be a method for sellers with some equity to sell their properties. There is very little downside (as you hold title to the property) and you may be able to attract more buyers willing to pay a higher price.
One example is a 300k property (probably really worth 250k) The buyers put 0 down and I financed the rest at 5.5% w/contingencies that they get independent financing within 4 years. If not, the interest rate would increase. I know this is very similar to the exotic mortgages in the early 2000s, but the big difference is that I am the one taking the risk and, in the worst case scenario, if the buyers walk in 4 years, I will still have my house, and the market will likely be much better at that time (at least better than now). The benefit to the buyers is that they can take mortgage interest and real estate tax deductions (which make the contract sale cheaper thean renting). It is a win-win situation.
How do you convince the buyers to maintain the property in that situation?
Dave,
Most of them will treat the property better than a rental b/c they truly DO want and DO expect to purchase and hold title to the property one day (ie, they treat it like they own it from day 1).
MikeHG:
Being born in America in ’84-’88 is not a bad draw. See: Any country in Africa, South America, or Asia: [any time in the history of the world]. Hell, I’d take America ’84-’88 over 1900-1915 any day of the week and that’s just of the top of my head.
if you were born 84-88 you were too young or completely missed da 85 Bears. almost equivalent to being born in asia, my friend.
Recently I saw a used car that was financed over 90 months.
Yes, you read that correctly. 90 months. 7.5 years.
For a 2006 Chevy Malibu.
Purchased in 2009.
“I guess my point, as it relates to real estate is that if you can make something affordable (on a monthly basis), you will find a buyer. “
“being born right after WWII in America was probably on average the best time/place combo to be born in the history of the world.”
That’s me except I was born during the war; a war my father survived. Unfortunately my wife’s father survived the war but not what the war did to him. Her mother was also destroyed by what the war did to her husband. Killed both of them but not directly. I’m not so sure my wife thinks thinks of herself as so lucky. In fact it has marked her whole life. and not in a positive way.
The baby boomer generation, by most measures, has had it the best. Their parents, the greatest generation, tempered by the Great Depression and WWII, established the US as the preeminent economic, social and military global power.
The baby boomers were able to enjoy all of those benefits, but instead of passing those benefits on, or engancing them, they protested Vietnam, greatly expanded entitlement programs and ran-up soaring national debts – without producing enough children to pay for all of the future costs. And, even though they are living much longer, have more workable years, and are much more expensive to maintain in old age (medical costs) relative to their parents, they still want to retire at 65.
The generations born after the baby boomers will be paying the tab, either through increased taxes or reduced benefits. Unfortunately, most of the successive generations have a worse work ethic than their parents. I was hoping that this deep recession would reverse the trend, but the extended unemployment benefits encourage people to stay unemployed longer rather than a.) taking an under employed positionl; or, b.) being a scrappy entrepenuer.
“The generations born after the baby boomers will be paying the tab, either through increased taxes or reduced benefits. Unfortunately, most of the successive generations have a worse work ethic than their parents. I was hoping that this deep recession would reverse the trend, but the extended unemployment benefits encourage people to stay unemployed longer rather than a.) taking an under employed positionl; or, b.) being a scrappy entrepenuer.”
I’ll say it again: Soylent Green. The solution to all our problems (except overbuilding of housing).
Yup, it was all those baby boomers who bought the houses way behind their means with zero down mortgages.
“The generations born after the baby boomers will be paying the tab,”
Poor me (Gen X), sandwiched between the Boomers and Gen Y.
“extended unemployment benefits encourage people to stay unemployed longer”
Sounds right. I have an unemployed friend that was dreading going out and hustling for a paycheck someplace. He was relieved to be getting another 3 months of TV and beer.
“I’ll say it again: Soylent Green. The solution to all our problems”
Don’t worry – it’s coming. Obama’s “death squads” have been ridiculed as pure fiction, but they WILL exist in the future. Of course they won’t be called “death squads” but you will see that many procedures/treatments for the elderly will be either refused or will require such a high copayment that people will forgo treatment. There is no other solution to this problem – and the fact that the morons that voted for the healthcare bill, etc. can’t see this is absolutely unbelievable. Just do the math!!
“Of course they won’t be called “death squads” but you will see that many procedures/treatments for the elderly will be either refused or will require such a high copayment that people will forgo treatment.”
Okay–color me confused–are you *for* or *against* the government (ie all of us) paying to provide procedures/treatment which may or may not meaningfully extend the lives of the elderly?
Isn’t the expectation that grandma should get a (basically) free hip replacement the same fundamental attitude you’re decrying in young people wanting to live in Trump for $150k?
Try reading Atul Guwande’s ( sp?) article in last week’s New Yorker for a much more nuanced view of end of life care.
“Isn’t the expectation that grandma should get a (basically) free hip replacement the same fundamental attitude you’re decrying in young people wanting to live in Trump for $150k?”
sorry for the confusion – I am against the government involvement. Not because I don’t think nana should get a free/affordable hip replacement, but because there is going to be a HUGE waste of money (just look at Cook county hospital) AND nana won’t be getting her free/affordable hip replacement anyway. Basically, that last rant was against the morons who think that this new healthcare plan is going to solve a lot of the current healthcare problems. I know this is not the appropriate site, but: Tort reform would do much much more in curbing unnecessary medical spending. Of course that won’t happen as Obama and the rest of them are all LAWYERS.
“Not because I don’t think nana should get a free/affordable hip replacement,”
Really? I mean, really? Who’s going to pay for that? I’m well left of your expressed opinions here, but I think the attitude toward Medicare is a farce that is doing much to bankrupt us and its totally disingenuous to be against obamacare but for no changes to Medicare (as many, many people are–not necessarily including you).
WHO says that “a man born between 1945 and 1950 can get a job that supports a family and buy a house in four years?”
I was born in 1952 and can tell you what the 70s were like.
First of all, the economy tanked in 1970, about concurrent with the early adulthood of most boomers. Good luck getting a job between 1970 and 75.
Then came the oil shocks of 1973, that sent the stock market reeling into what is now about the 2nd worst bear market of the past 80 years.
With the oil prices came hyperinflation. You name it… food, housing, fuel, clothing.. the prices were ratcheting out of sight.
By 1975, I promise you that you could not support a family on a single average income. That was when mothers of young children started flooding the workforce.
Meanwhile, jobs were fleeing the country, and in 8 short years, the Steel Belt, made of all the Midwestern cities, including this one, who had built their wealth on heavy manufacturing, became the Rust Belt, as hundreds of thousands of jobs in high-wage industries such as steel and auto-making fled our shores, first to Germany, then to Japan.
Our generation was the last to have to deal with the military draft, and because we protested it, you all are spared it.
Housing was ratcheting up rapidly in price in the late 70s, and that’s when the first exotic financing, the ARM, was born.
Since that time, we’ve lived on borrowed money. However, the seeds of destruction were planted decades earlier.
Every generation gave something, and every one made its mistakes. You’d have to go much further back than the 90s to pin the “blame” for the debacle we’re now in, that of a country stripped of its ability to make an honest living and dependent upon hostile countries for essential resources.
THANK YOU LAURA!!!
We definitely need more well rounded and balanced discussions here. Every generation feels “shafted” (for whatever reason) but it IS important to explain that each generation has gone through several difficult times. Hopefully this will give the younger people some hope that things will change.
Or, the younger generation will just refuse to live out the bogus version of the “American dream” that has been taught to us over the years. What’s the point? Why not just save your money, don’t buy property, and refuse to live in the consumer driven lifestyle that is destroying the environment? That will really screw things up for those looking to sell.
You single out the boomer’s kids as being lazy, but of those who are working in the 23-33 age group, they are often working an extra 10-20 hours per week than their parents to earn less on an inflation adjusted basis than their parents. Awesome system.
“Why not just save your money, don’t buy property, and refuse to live in the consumer driven lifestyle that is destroying the environment?”
If everyone acted on this and truly believed it, it would be a great revolution. Think of what a wonderful world it would be – one where people weren’t judged on superficialities such as looks, material goods, education, social standing, profession, etc. OK – now wake up and smell the coffee!!!! Those superficialities and the desire to attain them are NEVER GOING AWAY!! The luxuries are too tempting to almost everyone – again, all of us property owners have to do is find a way to lower monthly costs so that these youngsters can buy our property (contract sales/seller financing, etc.).
You’d be surprised at the level of interest the sustainability movement is generating among young people 18-30YO. More and more actually care about their impact on the globe, and are ready to make changes to help.
Many young people see little to no potential gains in real estate in the next few years, so they are putting off purchasing for a while. Those who did buy are now trapped in their places, which is causing less young people to consider buying, especially condos. This is negatively impacting the market.
“You single out the boomer’s kids as being lazy, but of those who are working in the 23-33 age group, they are often working an extra 10-20 hours per week than their parents to earn less on an inflation adjusted basis than their parents. Awesome system.”
not to mention with FAR FAR FAR reduced benefits in addition to getting paid less in real dollars
Remember 401k matches that weren’t crap?
Health, Life, Disability insurance your employer covered?
Paid Vacation time?
Pensions (lol)?
Expense accounts?
Company Cars?
Miles?
yeah pretty much none of that exists today
Maybe the problem is that you guys waste too much time posting on internet sites about how bad your life is – instead of improving it by looking for a new job, getting a job, furthering your education, improving your position where you work now (I know – hypocrisy – but I am not complaining about how terrible my life is). The successful younger people are not ones that complain all day – they actually get off their asses and do something about it!!
“Remember 401k matches that weren’t crap?”
what is this thing you speak of, 401k match?
“Basically, that last rant was against the morons who think that this new healthcare plan is going to solve a lot of the current healthcare problems.”
What new healthcare plan? Medicare? Not new. And anyone facing “end of life” issues is most likely on Medicare.
Also, tort reform has done dick to reduce health care costs in Texas.
“What new healthcare plan?”
Please tell me you are not serious…
Under the new health care reform legislation Medicaid will expand to cover anyone making under $30K/yr and government subsidies will be available for others to purchase private insurance. More employers will have to offer insurance.
So, again, what new plan?
Actually, some people think the market will be much worse in 4 years and we will be suffering Japan style deflation or worse. And if rates go up, your inflated asking price will be even more unaffordable to potential buyers. But what do you care?!? You have money to burn!!
clio”I know this is very similar to the exotic mortgages in the early 2000s, but the big difference is that I am the one taking the risk and, in the worst case scenario, if the buyers walk in 4 years, I will still have my house, and the market will likely be much better at that time (at least better than now).”
“Actually, some people think the market will be much worse in 4 years and we will be suffering Japan style deflation or worse.”
yeah – and some people think it will be better – we all can find someone to endorse what we want to believe (me included).
“Our generation was the last to have to deal with the military draft, and because we protested it, you all are spared it.”
You say this as if the draft was a bad thing. Personally, I think bringing back the draft would have prevented many of our recent and more regrettable wars – especially if you get rid of the deferments. As there’s no draft, today’s young people don’t feel obligated to protest, which is why the country is SO DAMN BROKE!
Boo fucking hoo. All talk no action…
11 foreclosures @ 1620 S. Michigan out of 249 units over the last four years is not bad. That is around 5 percent of the units, which isn’t bad at all. I have a client who just recently bought into the building and the building has a sound reserve of 600k. These two projects are the popular projects in the south loop, but there are other buildings in the South Loop and West loop that have higher foreclosure rate. 1620 and 1720 are both approved for FHA financing. The people who post here are ignorant and just speak out of their asses like they know everything. I have yet to read a positive comment on any of the blogs here. People feel better about there situations bashing on other people’s decision.
“11 foreclosures @ 1620 S. Michigan out of 249 units over the last four years is not bad. That is around 5 percent of the units, which isn’t bad at all. ”
Any studios in the building? b/c it appears that well over 10% of all the studios in the city were f/c’d this year alone.
Wow–just got around to reading (well, skimming) this thread, which is easily the most entertaining on cribchatter in a long time.
My favorite part: clio paying about $50,000 over MSRP for his p**is-mobile. Awesome!
So floor mats are extra on a Lamborghini, too? Who knew? Still, I haven’t laughed out loud at a thread this many times while reading a thread since the days of Turd Fergusun.
Wait… do you think that Clio…? Nah.
“11 foreclosures @ 1620 S. Michigan out of 249 units over the last four years is not bad. That is around 5 percent of the units, which isn’t bad at all.”
How does the 11 square with the 14 this year through June number in the article? Are the 14 mostly/all incremental to the 11?
5 percent foreclosure rate doesn’t exactly seem good, although I suppose better than 10 percent.
“since the days of Turd Fergusun.
Wait… do you think that Clio…? Nah.”
Turd (thx for the refresher) was T2 and Blue something, too, and was extremely defensive about 600 NF, with no indication of owning other property or having a suburban manse, so, I doubt it. Much more likely to be brought to us by the proprietor of the Steve Heitman persona.