Market Conditions: Best April Since 2007 as Chicago Sales Rise 28.4%
The latest monthly sales numbers are out from the Illinois Association of Realtors. They confirm what we’ve been talking about for months: the market is hot.
Statewide, April sales were the best since April 2007 – which was near the height of the boom.
The city of Chicago saw a 28.4 percent year-over-year home sales increase in April 2013 with 2,331 sales, up from 1,816 in April 2012.
The median price of a home in the city of Chicago in April 2013 was $222,000 up 22.0 percent compared to April 2012 when it was $182,000. Chicago condo prices also saw strong gains for the month, posting a 21.1 percent jump to $272,500.
Here are the sales statistics for April since 2007:
- 2007: 2419 sales
- 2008: 1886 sales
- 2009: 1407 sales
- 2010: 1984 sales
- 2011: 1466 sales
- 2012: 1750 sales (I have 1750 from last year’s data- not 1816 as IAR says it was)
- 2013: 2331 sales
Here are the median prices:
- 2007: $289,800
- 2008: $300,000
- 2009: $218,000
- 2010: $225,000
- 2011: $169,000
- 2012: $184,400 (IAR says it was $182,000 but I have $184,400 from last year’s data)
- 2013: $222,000
“Housing numbers continue to indicate a steady market recovery in Chicago,” said REALTOR® Zeke Morris, president of the Chicago Association of REALTORS® and Operating Principal and Managing Broker, Keller Williams Realty, CCG. “We are pleased to see condo sales, in particular, regain their strength. The biggest challenge currently is a steep decline in inventory, which may pose difficulty for buyers looking for a wide selection in certain areas. On the other hand, it is a great time for people who are considering selling to talk with a REALTOR®.”
“The spring numbers are very encouraging, especially as we see substantial tightening of the numbers of homes on the market,” said Michael D. Oldenettel, CRS, GRI, president of the Illinois Association of REALTORS® and Managing Broker/Owner with RE/MAX Results Plus in Jacksonville, Ill. “While prices are inching up slightly due to strong demand, the interest rates continue to be a powerful lure for those who want to own a home and the spring housing market looks to be a strong one.”
The level of inventory statewide in April dropped 20.6% to 62,503 units. The average number of days on the market statewide also fell 19.8% to 89 days from 111 days in April 2012.
It was the best April since the boom years.
Will this level of activity be sustained through the summer months?
April home sales up 25.3 percent from a year ago; Statewide median price at $145,900 [Illinois Association of Realtors, Press Release, May 22, 2013]
I only hope that when this second housing rampage in a decade ends the way the first one did, with millions of defaults and foreclosures, cratering values, and another financial collapse, that the frenzy was driven by government policy just as the first one was. Somehow or the other, the “free market” has gotten the blame for the insanity and criminality of our financial class, the volatility of asset prices, and dangerous household debt levels combined with low savings rates and the lack of capital available for any useful purpose but for loans to chase inflating prices of houses, college tuition, medical care, and anything else for which the consumer is incentivized to borrow irresponsibly.
Sorry, it’s early in the morning.
Meant to say that I hope people remember that when this all ends the way the other frenzy ended, that it was government policy that drove the whole thing.
But people won’t remember.
“Will this level of activity be sustained through the summer months?”
Yes. It’s pretty much a lock at this point given the current backlog of pending home sales and contract activity: http://www.chicagonow.com/getting-real/2013/05/chicago-real-estate-market-update-april-home-sales-123/
The data confirms with my own condo search on how difficult it was to get a 2/2 condo in the River North, Streeterville, Gold Coast, West Loop, Fulton River District area without paying at or near bubble pricing. No inventory, multiple bids, and much, much higher prices than last spring. I wish I had the downpayment last year and I would have saved 20%.
Downtown might be a bubble but elsewhere not so much. This is not a housing rampage. There are no $500k bungalows in Albany park, or $250,000 2/1’s in west ridge. This is a heated market with pockets of heightened activity, today, but in most places its still 2001 or better. Just yesterday someone said that their old town condo sold at the 2003 price. The GZ is not the entire housing market.
Buyers today are competing with a lack of inventory, not some degenerate with a no doc loan and a monthly payment that he’ll pay for 2 months then default. You know that most of bids today are coming from qualified buyers. Sure sme are bidding too much but in most cases they can afford to pay it. Yes the market is hot, and we probably bounced off the bottom, which in 2007-2008 I predicted would happen this year or next. And I put my money where my mouth is and bought last year at the bottom. And I got a great deal. Granted it was a moving target and I said that 2014 would be the start of the recovery and 2016 would be ‘normal’ and this still more or less holds true. The recovery started 2013 and its not ‘normal’ because its too heated and there is no inventory. Things will slow down next year as more inventory comes online. I expect my studio in uptown to appreciate nonstop for the next 10 years.
“Buy now or be priced out forever”
Sold my moms house late last summer on the NW side. It was technically under contract even before it hit the market. We knew things were getting hot back then but did not expect to see the jump it took over the last year. A smaller but similar home on her block sold for a 15% premium to her sale. Perhaps we should have held and rented.
Oh, and did I mention the home was not even close to the GZ. There are warm to hot pockets all over the city. This recovery is not just in the GZ.
Break out the Dom Peringnon, Cristal, or my favorite the L.P. Cuvée Rose as the party has officially started!
BUY NOW OR BE PRICED OUT FOREVER! Please.
The hot market is definitely not contained to the GZ. Every single home in my neighborhood that is for sale is under contract within a week now. Mostly estate sales, homes needing work. Prices have definitely risen from a year ago.
“Break out the Dom Peringnon, Cristal, or my favorite the L.P. Cuvée Rose as the party has officially started!”
It may be time for Krug, or better yet, a good grower Champagne like Selosse!
Well at least I have a place already at a super low 30 year fixed rate if I can’t find anything that I want to move to in 3-4 years from now.
There is not bubble pricing in my building, probably because its not FHA and you need 20% down, but even still places are going under K in less than 2 weeks.
With rapid increases in mortgage rates of 0.25% or more in a day, this could slow activity in June. Lots of volatility yesterday due to Bernanke…
“The data confirms with my own condo search on how difficult it was to get a 2/2 condo in the River North, Streeterville, Gold Coast, West Loop, Fulton River District area without paying at or near bubble pricing. No inventory, multiple bids, and much, much higher prices than last spring. I wish I had the downpayment last year and I would have saved 20%.”
Is Lakeview out of your search area? http://www.redfin.com/IL/Chicago/3753-N-Pine-Grove-Ave-60613/unit-3/home/13379936
vj what ‘hood do you live in that all homes go under contract in a week?
I need to update an analysis that I did a few weeks back. Something like half of all listings in the entire city were going under contract in under 2 weeks and 37% of all listings were closing at or above list.
“and 37% of all listings were closing at or above list.”
Where be that ornery fellow named G?
Is there any way to break these numbers down for the GZ or even ‘hood specific? I’m curious to see what the GZ sale prices in 2013 compare to 2008. What are the median prices before ’07? I would be curious to see where median prices are in comparison with Chicago and the GZ as well.
Crazy times for sure! I have been saying that rent vs own economics meant either rents had to drop or prices had to rise. What actually happened is rents continued to rise and prices spiked. I guess some people got sick of paying insane rents. What baffles me is that prices are back to bubble levels for 2/2s in RN! Those are transitional apartments that should be rentals. I can only explain this in 2 ways – 1. continued migration from suburbs to the city so more demand 2. people waiting longer to have kids (and having fewer) so they can stay in those 2/2s longer and amortize the brokerage fee over a longer period.
Your place and the listing look good, T.S. Bummer that you’re listing so far below your purchase price, but perhaps that will get it sold quickly and you guys can just move on. I like the brick in the hallway. Good luck.
” I can only explain this in 2 ways ”
You ignoring #3?
3. People are dumb, and shortsighted.
@yoss, the census just released the 2012 population estimates and Chicago grew by 10,000 people from 2011.
There are plenty of people with 2/2’s who are still underwater. Just met one a few weeks ago who had to bring money to the table to sell; and bought a home on the north shore instead.
“Your place and the listing look good, T.S. ”
Yeah, pix look nice.
Did you make/have made the radiator covers? If you had them made, by whom?
“homedelete (May 23, 2013, 10:02 am)
There are plenty of people with 2/2?s who are still underwater. Just met one a few weeks ago who had to bring money to the table to sell”
Was it in RN? That is where 2/2s are pretty much back to 06/07 prices.
“anon (tfo) (May 23, 2013, 9:54 am)
You ignoring #3?
3. People are dumb, and shortsighted.”
Could be. It is a well documented behavioral finance phenomenon / trap that people overweight the recently observed data in their decisions (called recency). So they look at rents rising for last 3-4 years and assume they will continue to rise so they should buy now to avoid the future rising rents. It is also what caused many to “miss the bottom” – thinking that prices were declining so they should continue to decline.
Some people in single family homes are still close to underwater. My friends want to sell their 2-2 single family home (with basement and yard), but wouldn’t have enough left over after closing for a 20% down payment on a larger house, so they are waiting it out. They’ve lived in the house for 7 years, but bought at the bubble pricing. They won’t have to bring money to the table, but they won’t have enough for a down payment.
“Was it in RN? That is where 2/2s are pretty much back to 06/07 prices.”
LP. This person told me they had to cut a hefty check, and when I said “50k”, the person said, “something like that”. I’m just saying, sure there are a handful of RN at 06/07 pricing but you know that’s going to be just a temporary thing.
Gary, if this “I need to update an analysis that I did a few weeks back. Something like half of all listings in the entire city were going under contract in under 2 weeks and 37% of all listings were closing at or above list.” is true, that is amazing.
anon (tfo): Radiator covers are by Central Radiator Cabinet Co. 3715 N. Elston 77-539-1700. They were here when we moved in but the info is stamped inside.
” Bummer that you’re listing so far below your purchase price, but perhaps that will get it sold quickly and you guys can just move on.”
YES it is a bummer! But we have enough equity (we actually PAID our mortgage and then some, imagine that!) that we can get a nice downpayment on a single family, the thing I’m worried about now is that something good won’t come on the market (we’re looking at Irving, specifically Independence Park area), and if it does it will be priced too high, seeing as everything has been selling in no time at all. Then we’ll be forced to rent when we really don’t NEED to leave this place that we love but are just outgrowing.
“homedelete (May 23, 2013, 11:10 am)
I’m just saying, sure there are a handful of RN at 06/07 pricing but you know that’s going to be just a temporary thing.”
Sure – they could be higher too. And as for examples – there are more than a handful:
550-N-Kingsbury-St-60654/unit-509 – $388k in 05 to $395k 5/13
550-N-Kingsbury-St-60654/unit-607 – $456k in 04 to $480k 5/13
550-N-Kingsbury-St-60654/unit-209 – $359k in 05 to $397.5k 3/13
550-N-Kingsbury-St-60654/unit-220 – $458k in 08 to $440k 2/13
411-W-Ontario-St-60654/unit-619 – $356k in 04 to $392.5k 5/13
411-W-Ontario-St-60654/unit-612 – $354k in 04 to $370k 2/13
600-N-Kingsbury-St-60654/unit-1612 – $375k in 06 to $357k 4/13
435-W-Erie-St-60654/unit-2108 – $439k in 04 to $477k 12/12
360-W-Illinois-St-60654/unit-511 – $490k in 08 to $495k 1/13
360-W-Illinois-St-60654/unit-311 – $460k in 04 to $495k 4/13
360-W-Illinois-St-60654/unit-1D – $380k in 04 to $415k 5/13
I got bored finding examples – but there are more. The top was 06/07.
T.S.: Thanks!
Jenny, so your friends have not saved any money what so ever in 7 years? You can get conventional financing with 5% down.
TS: unasked for advice (worth exactly what it cost you): You must know at least one competent ambitious real estate agent or you could try doing what I suggest on your own. Since Independence Park is a relatively small area I recommend you drive it and write down property addresses that appear to fit your needs. Then either you or a r. e. professional researches out who owns it, hopefully learns what their situation is and then contacts the owner and asks (phone or short letter) if they would consider selling. This is most likely to work on properties that previously were listed but it’s always worth a shot. It is amazing how much info is available as you see from postings here describing owner’s situations. And likely just like meeting your wife, this effort is a numbers game – the more owners you contact the luckier you get. Good luck!
ps: On the radiator covers, seems that Central Radiator Cabinet is not currently in operation, or atleast their website isn’t.
” And likely just like meeting your wife”
T.S. is the wife.
“There are plenty of people with 2/2?s who are still underwater. Just met one a few weeks ago who had to bring money to the table to sell; and bought a home on the north shore instead.”
Makes little sense. Where did the 20% downpayment on a NS house (costing (presumably $800K+) come from? What are jumbo loan rates at today?
“Where did the 20% downpayment on a NS house (costing (presumably $800K+) come from? ”
Lawyer, wealthy family, grew up on NS. Bubble purchase on the condo but went under contract in a matter of weeks. Do you think I make this shit up? It’s just an anecdotal story.
“we’re looking at Irving, specifically Independence Park area”
Listing looks nice. Best of luck! Is school an issue/consideration?
“On the radiator covers, seems that Central Radiator Cabinet is not currently in operation, or atleast their website isn’t.”
Is that a shrinking biz? Do new homes use radiators? Seems uncommon, but why (as compared w olden days)?
Southbound- that is a good idea. Is there a way to search off-market properties, i.e. properties that we’re on the market but did not sell and were withdrawn? Because that would be really helpful information. I will definitely ask our agent about that too, when we get to that point. Although I think we will be arriving at that point sooner rather than later, we’ve been on the market a day and already have 5 showings lined up starting today.
“Is school an issue/consideration?”
It could be, we plan on staying private for the 3-6 montessori years but then yes, schools could become an issue… good things my kids are geniuses and will be testing into gifted schools!
“It could be, we plan on staying private for the 3-6 montessori years but then yes, schools could become an issue… good things my kids are geniuses and will be testing into gifted schools!”
As you may well be aware, the main entry points for cps selective elems are K and 1st (more K than 1). Not that you can’t get in other years, but depends mostly on whether students leave (and maybe the classes are expanded slightly in some cases at some schools, not sure exactly).
I meant 3-5, hit 6 by accident. But yes, that still puts us at 1st grade which is not ideal, but montessori is just such a good fit for our guy that we may risk it, or apply to Oscar Meyer or Drummond via lottery. Disney 2 would be another lottery wish. I hate even thinking about this stuff.
“I hate even thinking about this stuff.”
I was going to say I have a hard time buying a place wo having school settled, but, then again, I’m about the only renter-loser left on CC, except for bob, which is a *truly* scary thought (no offense, bob).
” I hate even thinking about this stuff.”
Probably want to try to be in Belding a-a, as compared to any of the other options over there. Best of the bunch, with best potential to ‘turn’ in the near term, I think.
Nice listing T.S.! Good luck with the showings.
TS: Imo it’s never too soon to look no matter what you believe your timeline is. Since the property you inquire about isn’t on the market there is no downside for either you or its owner from you feeling them out. It is very simple for your agent to search any time frame of expired listings within a defined area. I like the hunt and peck approach better – look for properties that attract you and have your agent research them. In any event an MLS taxpayer search indicates if/when a property was last listed, sold, mortgaged, foreclosed etc. Good luck! And your agent should get excited – if you don’t buy from an owner willing to consider selling the agent has found a potential listing.
Just so I make clear I’m not blowing smoke I do this regularly – I’m part of a team doing retail developments. Today on my way in I got off the expressway to look for sites at the edges of a hot neighborhood. I wrote down 10 properties (3 w/for sale signs) which I will research at the end of my day & then I’ll start dialing for dollars! Some owners won’t respond to inquiries but generally people are business like in response to being contacted & a healthy % of what we redevelop is currently owner’s residences.
Yeah TS better start looking now as your place will probably sell over the weekend
My friends want to put 20% down on a $500k house. They aren’t going to sell until they either have enough equity to get $100k from their sale or some combination of savings that would yield $100k. With two kids,that’s not easy. They originally put 20% down on a $400k house. It’s north worth $300k.
Any predictions on this months Case Schiller?
“and 37% of all listings were closing at or above list.”
Did Suzanne research this?
Historical April data:
2013 = 37%
2012 = 25%
2011 = 30%
2010 = 33%
2009 = 30%
2008 = 37%
2007 = 34%
April Chicago SFH/Condo/TH sales
1997 1,629 $128,000
1998 1,982 $140,000
1999 2,048 $155,950
2000 2,149 $168,000
2001 2,135 $200,679
2002 2,700 $219,000
2003 2,648 $230,000
2004 3,117 $247,500
2005 3,329 $269,900
2006 2,933 $279,900
2007 2,727 $290,000
2008 1,931 $299,900
2009 1,429 $217,500
2010 2,040 $225,000
2011 1,492 $169,000
2012 1,776 $182,500
2013 2,365 $223,000
Welcome back G!
The alternative to belding is at viator. Belding in OIPmis north of grace. In IP the school is George iirc and it’s not good. IP is a good community, very tight knit for the upper middle families that live there, although it has an oak park liberal sort of vibe I don’t jive with too well. Nice place though, I spent a lot of time at the park in the center of the community although its overrun with foreigners BBQ and soccer on weekends
I don’t mean to rag on the city but the parks in long grove blow away independence park.
yoss – without going through all of the condos you listed, many of them have been updated in some way or another. there’s still 2/2’s out there listed below bubble pricing. just 1 example…
under contract and listed 30k below ’08 price. plus they actually had to do a price reduction.
http://www.redfin.com/IL/Chicago/101-W-Superior-St-60654/unit-701/home/12627364
We were thiiiiiiis close to buying a home around the block from Belding on Kedvale but they accepted another offer. Then it almost didn’t go through, and we said we would match it, then it ended up happening. Too bad too, it was a really cute house. I would honestly rather be S of Irving Park Rd, I think it’s prettier and I like the proximity to the park, but Belding is for the sure the top choice as far as CPS is concerned up there.
We missed out on my ideal house, http://www.redfin.com/IL/Chicago/3907-N-Lawndale-Ave-60618/home/13456924 at the tippy tippy top of our budget but oh so pretty. I think it’s in Murphy, not Belding though. It went “pending” Friday, and I’m watching like a hawk to see if it comes back to “active”!
“We missed out on my ideal house”
Wouldn’t want to live across the street from Disney II HS unless it were *certain* my kids could go there, and even then…probably not.
Nice looking place tho.
Is that happening for sure? I head that from locals but wasn’t positive. Right now it’s a middle school but pretty sure it got/is getting the axe.
And no I’d rather not live right across from a high school either but do a quick search in the area and show me ANYTHING else. Seriously, pickins are sliiiiiiiim!
Just did a short blog post with the stats on how fast homes are selling and what percent closed at or above list. I’m looking at properties above 150K and what I define as the green zone, which can be seen in the earlier blog post I reference in today’s post: http://www.chicagonow.com/getting-real/2013/05/yes-the-chicago-real-estate-market-is-hot/
“Did Suzanne research this? ”
No. Suzanne doesn’t know how to analyze data, though she looks good in a mink coat driving her Mercedes along Lake Shore Drive.
Glad to see you are back, G. Thought for sure you had disappeared for good given that your predictions of a perpetual decline in home prices was not materializing.
“What baffles me is that prices are back to bubble levels for 2/2s in RN! Those are transitional apartments that should be rentals.”
Sure, it makes little sense to buy a typical 2/2 if you’re planning on kids in the next few years, but there are plenty of households for whom a 2/2 is just fine, mine included. I live in a 23 unit association of 2/2s and only three units have kids. The rest have been long-ish term owners and I can’t imagine any but a tiny minority want kids.
Helmet may rail against gay couples, single people, or childless hetero couples, but I don’t think anyone else here thinks these lifestyles are insane. For every one of these cohorts, a 2/2 is a perfectly viable choice.
Let me add some more to your list Kball:
Empty nesters, divorced parents with a kid or two, folks buying in towns, etc…
MiuMiu, great adds, yes indeed.
In re 3907 N Lawndale
Great looking home. I sometimes feel forlorn that I couldn’t pull the trigger on a $400k house on the NW side of the city, specifically in the OIP, IP or villa neighborhood.
The wife and I were really, really close to pulling the trigger on this house
http://www.redfin.com/IL/Chicago/3632-N-Harding-Ave-60618/home/13457498
We went to the open house, we had a realtor to make an offer but we just couldn’t get the rehab financing lined up in time before some else made an offer, which I thought was way too high for a house that needed *a ton* of work that backed up to an alley with an autobody shop that ran powertools all day long.
the natural wood was all messed up, the kitchen was terrible, there was mold in the basement, the windows although natural lead needed replacing (or repair) and the trim was painted. the wife and I couldn’t justify anything with a $300k because it just needed ‘so’ much work to get it into the 21st century. We were waiting until it got to $330, and we were going to offer 10% off list at $300k. But someone else paid $50k more than I thought it was worth.
a few months after it sold I googled the owners and they work in ‘finance’ which made me feel a little better, because this place sat on the market for 5 months until some finance people came along with their gobs of money and could pay whatever they wanted. It’s tough to compete with that, you know? why feel bad about somethig you couldn’t control.
This house sold a few months later as a short sale, accross the street, for $320,000, so the house I almost bid on lost nearly 10% in a matter of 3 months
http://www.redfin.com/IL/Chicago/3643-N-Harding-Ave-60618/home/13456436
But I had my rehab financing lined up and I was already making bids on houses in teh ‘burbs, otherwise I may have ended up with this house…and I would have put spacepak in right away.
http://www.redfin.com/IL/Chicago/3647-N-Harding-Ave-60618/home/13456736
a year later prices rebounded in the neighborhood as a 3rd house in the block sold in the four’s instead of the threes. But what do I know about this stuff? nothing I guess
Awwww, HD still misses OIP.
“Awwww, HD still misses OIP.”
I do, and the suburbs are becoming teh bane of my existence. I sure hope the schools are good as they say they are out here.
All 3643 needs is spacepak! I can’t believe that price on a double lot! Geeeeeez
“and 37% of all listings were closing at or above list.”
I’m not really sure I understand why this is such a big deal to anyone. Is this the original list or the list after it has been on the market awhile, they withdraw it, and then they come on at a lower price and it miraculously then sells for the list?
Also- selling at or above list doesn’t tell us anything about at what price. There are plenty of properties in the GZ that aren’t selling anywhere near their 2005-2010 prices even though they are selling at or above their “ask.”
Here’s an example of a property in the GZ that apparently just closed for $45,000 under the 2004 purchase price. Prime location. Top floor. Parking.
http://www.redfin.com/IL/Chicago/3325-N-Lincoln-Ave-60657/unit-304/home/13385532
This is still happening all over the GZ.
Also- in RN- only SOME buildings are “back” to bubble pricing. But it’s not even close to being all of them. The newer “luxury” buildings are holding up pretty well but the more “affordable” condo buildings aren’t.
I do have to wonder- what will the people who are buying right now at the lowest mortgage rates in history going to do when they go to sell in 3 to 5 years and rates are higher? It’s not going to take much for rates to go to 4.5%- 5%. And that’s not even “normal” rates. Heaven forbid rates should be as high as 6%.
Anyone buying that $400,000 starter home is going to be screwed because the buyers won’t be there for anywhere close to that price with higher interest rates.
What a mess this housing market is.
Sabrina, if interest rates are back up to 5-6%, it will be a likely indicator our economy is fully recovered, and those who bought in 2013 will be just fine.
you can just have the buyers assume your FHA mortgage! LOL what
“Sabrina, if interest rates are back up to 5-6%, it will be a likely indicator our economy is fully recovered, and those who bought in 2013 will be just fine.’
How do you figure? That mortgage payment is now much higher. Unless incomes are surging, they’re going to be paying a lot more.
Why don’t people get basic math? The low interest rates are great for someone buying now- but who you gonna sell to? If you’re going to stay in the house for 10 years- then great. But I wouldn’t be buying a condo that you only expect to live in for 3 years (more common that most people realize as we know too well here at CRIB chatter.) You’re going to be screwed.
The Fed’s distortions are really messing up this market. But they’re not done yet. This is going to go on for awhile now. Chicago isn’t that bad though. The bubble is inflating rapidly along the coasts…again.
Hi Sabrina,
If interest rates are back 5 -6% than I would assume the economy is rocking and incomes should be rising. If prices do not follow then any homeowner that would like to move can simply rent. I do not see anything selling today that would not rent for significantly more than the monthly housing expense.
Maybe your math is different than mine but renting today is the most foolish thing you can do. Unless of course you can’t afford to buy or you time horizon is shorter than 5 years. Buying is not for everyone but if you do understand math, then you would realize the benefits of buying. Can all these hedge funds and private equity companies really be missing the math as you continue to point out? Do you ever even think you may be the one with the bad judgement?
“I’m not really sure I understand why this is such a big deal to anyone. Is this the original list or the list after it has been on the market awhile, they withdraw it, and then they come on at a lower price and it miraculously then sells for the list?”
It’s the last list price. I think that’s a huge percentage and I think it indicates underpricing. It doesn’t say anything about whether prices are high or low. I think in a rising market you are going to get more underpricing because realtors and appraisers are looking backward.
“I do have to wonder- what will the people who are buying right now at the lowest mortgage rates in history going to do when they go to sell in 3 to 5 years and rates are higher? It’s not going to take much for rates to go to 4.5%- 5%. And that’s not even “normal” rates. Heaven forbid rates should be as high as 6%.
Anyone buying that $400,000 starter home is going to be screwed because the buyers won’t be there for anywhere close to that price with higher interest rates.”
We’ve had this discussion many times over the years. Shiller’s data suggests that interest rates don’t affect home prices. Why not? Because they could be indicative of inflation that implies rising home prices and salaries or a strong economy which also implies rising salaries.
This house is very nice.
http://www.redfin.com/IL/Chicago/3647-N-Harding-Ave-60618/home/13456736
Screw Schiller… the obvious is the obvious. Not a single variable linearly correlated relationship.
Sorry Bri… gotta agree with Gary and Heitman.. you just can’t make your argument as anything more than a possibility.
Optimism is a good thing Sabrina. Don’t be a everything hater!
“Shiller’s data suggests that interest rates don’t affect home prices.”
Yes- we have had this discussion many times before. Shiller himself has said that interest rates didn’t affect home prices because people traded DOWN. So instead of buying the $400,000 starter home, you buy the $300,000 starter home. Instead of looking in OIP you look in Galewood. But those sellers in OIP have to find a buyer who has traded down from North Center to buy their house and so on and so on (because they WILL be priced out of those other neighborhoods.)
Additionally- everyone points to the 1975-1983 period when they argue “see- interest rates didn’t matter”- because home prices didn’t drop then but the buyers TRADED DOWN.
Will buyers trade down this time? I don’t know. We’re already seeing a slowing in mortgage applications over the last 3 weeks and that’s just from rates rising a little off the lows. No one knows what bonds will do. Everyone thinks this unwinding will be orderly. Everyone thinks that this 30 year bond bull is going to go quietly into the night. What if everyone is wrong?
“I think that’s a huge percentage and I think it indicates underpricing.”
But it’s the same percentage as all the other years. Were we underpricing for the last 6 years?
What if you are wrong?
“Can all these hedge funds and private equity companies really be missing the math as you continue to point out?”
Hm…let me think. Um…YES!
They were right on when they began buying houses about 2 years ago. They got them cheap and in bulk. Now- they are competing against, in some cases, dozens of bidders. The real estate agents in some markets like Florida have been saying the private equity firms are overpaying- by a lot. In some cases they will lose money now by renting out the property. Why does that make good business sense? It doesn’t.
Everyone is in on that game. That’s why nationally about 20% of all purchases right now are investors and in some markets it’s 30%-40%. Because they are ALL correct, right?
Dumb money follows dumb money.
Housing is a money suck. But you have to live somewhere. If you know you’re going to be somewhere for a decade or more, raise your family there etc- then great. Go for it. But for everyone else (ambitious young people who might move to a new city, younger people who are about to get married and have a kid, heck even baby boomers)- why buy? Why get 1-3% appreciation on your money? There are SO MANY better “investments” if that’s what you’re looking for.
“Optimism is a good thing Sabrina. Don’t be a everything hater!”
I can’t be optimistic about a global economy where the Central Banks are pumping massive amounts of money into the system and it’s STILL on life support. If the Central Banks were out of this game and the market was actually working as a market- then I would be much more optimistic.
“EVERYONE thinks this unwinding will be orderly”
Don’t speak in absolutes.. I rarely expect anything to be orderly or predictable.
““Can all these hedge funds and private equity companies really be missing the math as you continue to point out?””
I’ll second the Yes. Most don’t last long for a reason.
“I can’t be optimistic about a global economy where the Central Banks are pumping massive amounts of money into the system and it’s STILL on life support.”
So, you want central banks to get out of monetary policy? Are you a gold bug?
“So, you want central banks to get out of monetary policy?”
Central banks care about asset valuations, not monetary policy, and are engaging in asset price manipulation under the guise of monetary policy. I think they should be out of influencing asset prices as they are rigging the supposedly free market.
” I think they should be out of influencing asset prices as they are rigging the supposedly free market.”
So since it is rigged, and you know which way it is going, you should be making money hand over fist…
“But it’s the same percentage as all the other years. Were we underpricing for the last 6 years?”
It’s not the same. It’s up a bit. And yes, many homes have always been underpriced and many have been overpriced. If you look at the close to list ratio it’s rising. And of course realtors are using this to brag about their prowess but it’s lying with statistics.
Anyone who believes that interest rates are going to spike (and I’m one of them) should be short treasuries and have a nice big fat mortgage.
“So since it is rigged, and you know which way it is going, you should be making money hand over fist…”
I know which way it has been going. I’ll fill you in on a lil’ finance 101 that I don’t think trust fundies got the memo on, ze: past performance is not indicative of future returns.
“Anyone who believes that interest rates are going to spike (and I’m one of them) should be short treasuries and have a nice big fat mortgage.”
Gary–the big fat mortgage is more market neutral. Good luck trying to bet interest rates via shorting treasuries–interest rates seem to be notoriously hard to predict (vs. other things like commodities).
Interest rates are not going to spike, the likelyhood is that they will slowly increase over time
Not within the next decade or so
Trust me, this current rise is merely just normal channel filling in an outrageous 30 year downtrend. We will have very low rates for a very long time. Go ahead and short treasuries, you will be pissing away money. 2.15% on the 10 year will be the high here, then down down down again. This is a full on currency war, don’t fight the central banks. Keep your money in dollars (not metals)
” I’ll fill you in on a lil’ finance 101 that I don’t think trust fundies got the memo on, ze: past performance is not indicative of future returns.”
Depends on to what specificity you break down term periods and how you look at variation and standard deviations… I’ll bet on the guy who has been positive month in and month out for years over the guy who has been negative month in and month out for years.. but that’s just me…
Now time for sushi.. ya know SWPL…
“So since it is rigged, and you know which way it is going, you should be making money hand over fist…”
Hows that go? Market can stay irrational longer than you can stay solvent?
“Shiller himself has said that interest rates didn’t affect home prices because people traded DOWN.”
Um, Shiller has *always* tracked *nominal* home prices. If inflation jumps from 2% to 10%, and the paired sales in year X are $200k (with 4% mtg rates), and in year X+Y are *still* $200k (with 12% mtg rates), is that “not affecting home price”?
From Shiller’s persepctive, the home prices were not affected, from the perspective of someone buying in X and selling in X+Y, you bet their home price was ‘affected’.
You can rationalize everything though if you’re a good enough bullshitter
“marco (May 23, 2013, 4:26 pm)
yoss – without going through all of the condos you listed, many of them have been updated in some way or another. there’s still 2/2?s out there listed below bubble pricing. just 1 example…
under contract and listed 30k below ’08 price. plus they actually had to do a price reduction.
http://www.redfin.com/IL/Chicago/101-W-Superior-St-60654/unit-701/home/12627364”
Well – you provided 1 example and provided 10+ and stopped looking. But there certainly are plenty of places offered lower than bubble (some of the examples I provided were lower if you look). But the fact that generally speaking 2/2s in RN are close to bubble pricing is what I was showing. I didn’t say ALL 2/2s are ABOVE bubble pricing. Just 1 year ago it would have been shocking for bubble buyers to get out with a 10% loss let alone break even or make money.
“Sabrina (May 23, 2013, 9:50 pm)
Also- in RN- only SOME buildings are “back” to bubble pricing. But it’s not even close to being all of them. The newer “luxury” buildings are holding up pretty well but the more “affordable” condo buildings aren’t.”
It is close to most of them (50%+). And by “back to bubble” I mean within 5-10%. I provided examples of mostly “affordable” buildings. 411 W Ontario is one of the cheapest (on a ppsf basis) buildings in RN. These are legitimate re-sales. This is real data – hard to argue with it.
“Sabrina (May 23, 2013, 9:57 pm)
I do have to wonder- what will the people who are buying right now at the lowest mortgage rates in history going to do when they go to sell in 3 to 5 years and rates are higher? It’s not going to take much for rates to go to 4.5%- 5%. And that’s not even “normal” rates. Heaven forbid rates should be as high as 6%.”
As many have stated – the relationship between rates and housing prices is difficult to predict. Why are rates up? Because economy improving? (+) for housing. Because inflation picking up? neutral for housing (because housing is an asset and owner equiv rent is one of the biggest components of inflation). Because lack of faith in US govt? (-) for housing. What is undeniable is that right now it is cheaper to buy than rent (even with prices where they are because rents are up so much) which is a reversal of conditions for the last decade or two. So if nothing happens to rates and prices buying now is better than renting. It is now a personal decision of what one thinks future conditions will be and what risks they want to take. Back in 06/07 it was very easy to argue housing was overvalued and buying was a bad idea. It was better to rent than own (no opinion needed – a mathematical fact). Rates were still high (10yr around 5.5% in 2006 vs 10yr 2% now) so the opportunity cost of investing in housing was high. Lending standards were worse across all price points (liar loans and more sub prime). Speculation was rampant and being done by “weak” players (vs private equity funds today).
“Anyone buying that $400,000 starter home is going to be screwed because the buyers won’t be there for anywhere close to that price with higher interest rates.”
See above. That is unknown.
“What a mess this housing market is.”
Very true – but I think that extends to many other markets.
“I’ll bet on the guy who has been positive month in and month out for years over the guy who has been negative month in and month out for years”
Can’t you bet against the guy who is always wrong, aka the costanza do the opposite strategy?
http://www.reuters.com/article/2012/10/17/us-foreclosed-hedgefunds-idUSBRE89G1TE20121017
another viewpoint: Colony Capital is among the private-equity firms that are buying U.S. homes in bulk after prices fell by a third from their July 2006 peak. The Santa Monica, California-based firm has raised $2.2 billion to purchase properties with a plan to rent them out.
Colony doubled the size of its portfolio during the quarter ended Dec. 31, to 5,405 homes, and has increased the number to 7,000, Richard Saltzman, chief executive officer of Colony Financial Inc. (CLNY), Barrack’s real estate investment trust, said on a March 7 earnings call.
http://www.bloomberg.com/news/2013-04-08/colony-capital-s-barrack-sees-bubble-in-u-s-housing-market.html
“Central banks care about asset valuations, not monetary policy, and are engaging in asset price manipulation under the guise of monetary policy.”
Colony Capital guy agrees: Rising prices have helped lift underwater homeowners, or those who owe more than their property was worth, into positive equity, Barrack said today. Those people are now able to refinance mortgages at lower rates, reducing monthly payments and helping to bolster the economy, he said.
“What’s happened in the last year is that real values have accreted up so that they can refinance,” Barrack said. “Then the wife feels good about buying a new refrigerator. Dad goes out to buy a car. Everybody feels better but nothing has happened other than the Fed hitting its keyboard.”
“Good luck trying to bet interest rates via shorting treasuries–interest rates seem to be notoriously hard to predict (vs. other things like commodities).”
Yeah, I’ve given up on that. I was a buyer of “TBT” a few years back. The US Treasury rates have been falling for 30 years, and at any point in time along, there’s been someone who said “rates are going to spike” and has gotten burned.
Ze: There is no orderly exit. The US Government has no ability to end deficit spending, we’ll never have a trade surplus here (thanks to “free traders”), our welfare and warfare state complexes have too much power and momentum to be dismantled. It’s a pipe dream to think the US doesn’t need more money-printing.
“This is a full on currency war, don’t fight the central banks. Keep your money in dollars (not metals)”
It’s amazing, how can there be devaluation and massive central bank printing, and the money retains value? It’s a contradiction, yet it’s happening before our own eyes.
“Then the wife feels good about buying a new refrigerator. Dad goes out to buy a car. Everybody feels better but nothing has happened other than the Fed hitting its keyboard.”
And everyone gets further into debt! horray!
“It’s amazing, how can there be devaluation and massive central bank printing, and the money retains value? It’s a contradiction, yet it’s happening before our own eyes.”
It’s not a contradiction because the money created on credit disappears in default. The money came from nothing ,ti’s all just bits and bytes and there’s where it goes back to. The money printing the fed has done over the last few years is just merely covering the trillions in losses of money that has disappeared through default. It’s more like preventing deflation than creating inflation at this point.
Its not a contradiction because despite our woes, we’re still the world’s reserve currency thats why you aren’t seeing rapid depreciation of our dollar. Its sort of like being the tallest midget. When everyone is printing money and we are too, we’re still the reserve currency, that and sterilizing all the debt out there is making it so there is very little inflation compared to what there should be.
When all hell breaks loose, money pours into dollars because even though dumb academics and die hard libtard socialists love to bash America we are still the greatest country on earth with the best economic/legal contract system.
“I can’t be optimistic about a global economy where the Central Banks are pumping massive amounts of money into the system and it’s STILL on life support. If the Central Banks were out of this game and the market was actually working as a market- then I would be much more optimistic.”
It does always make sense Sabrina but would you agree that whatever the central bank has done did in fact boost both the equity and housing markets? If you agree, then you lost out by not participating. The stock market has doubled and housing is well off its lows and back to normal levels. To simply sit there and hope the markets will crash is a gamble. You certainly have no way to know how this will all shake out and I do not either. What I do know is I bought a bunch of distressed properties in “prime” locations where rents cover the housing costs by over 30%. I also was 100% invested in equities in the past 3 years. I am feeling pretty good about both decisions!
“Well – you provided 1 example and provided 10+ and stopped looking”
“I provided examples of mostly “affordable” buildings. 411 W Ontario is one of the cheapest (on a ppsf basis) buildings in RN. These are legitimate re-sales. This is real data – hard to argue with it.”
yoss – i’m not necessarily disagreeing with you but of the examples you provided, you’re ignoring the fact that many have been updated thus justifying a higher price. The listing for 411 W Ontario #619 says “NEWLY RENOVATED” and looks to have a new kitchen and bathrooms. The listing for 411 W Ontario #612 says “HAS TASTEFULLY BEEN REDONE. BEAUTIFUL REMODELED KITCHEN. LOVELY BATHS”
“so there is very little inflation compared to what there should be”
If you’ll note there is very little inflation in markets where credit doesn’t play a contributing factor in pricing. In markets where credit plays a large factor in pricing there is rampant inflation. Most people are stupid when it comes to money/purchases and if you give them credit they’ll buy. Similarly if stupid people were already buying a good/service en masse, removing credit previously available will result in massive deflation in it’s pricing. The Fed knows this and wants chimpanzees to continue to have access to their bananas.
It’s called capitalism and the American way. Imagine if our economy was chased based? We would see GDP decline by 30%. We are a buy now pay later nation. It just happens that the credit terms make buying now more attractive than ever…
If our economy was cash based the middle class would be about twice the size of what it is currently.
Bob you forgot to add the government to the cause of making things more expensive, but they are sort of like credit in that the fed will print money to buy their bonds to fund their wasteful programs
“Wouldn’t want to live across the street from Disney II HS unless it were *certain* my kids could go there, and even then…probably not.”
I’m not getting much crowdsourcing support on the BLACKLIST here, it’s a team effort people, come on, you’re all looking at it: “DISNEY MAGNET SCH” and no one mentioned how this plays out under the most recent version of the OFFICIAL CHICAGO REALTUR BLACKLIST (available at the site)?
There’s Allotta reasons this is a clear blacklisting: Section 8.4.2(a) – Intentional and Obvious Attempts to Deceive and just about all of Section 12 – Schools is focused on this.
ONLY YOU CAN PREVENT FOREST FIRES! BE ALERT!
“Um, Shiller has *always* tracked *nominal* home prices.”
The various C-S home price indices are all based on real, i.e. inflation-adjusted pricing. Would be pretty meaningless otherwise.
“The various C-S home price indices are all based on real, i.e. inflation-adjusted pricing. Would be pretty meaningless otherwise.”
Where in the methodology does it state the inflation adjustment they use?
http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline%3B+filename%3Dmethodology-sp-cs-home-price-indices.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1244264149702&blobheadervalue3=UTF-8
If they are adjusting for inflation, but not disclosing it in the methodology, doesn’t that make it completely meaningless?
“The various C-S home price indices are all based on real, i.e. inflation-adjusted pricing. Would be pretty meaningless otherwise.”
“Where in the methodology does it state the inflation adjustment they use?”
I don’t know exactly how to quantify it, but I’d wager vast majority of price indices are *not* inflation adjusted.
“JJJ (May 24, 2013, 8:52 pm)
The various C-S home price indices are all based on real, i.e. inflation-adjusted pricing. Would be pretty meaningless otherwise.”
These two sentences are equally incorrect. The C-S indices track nominal prices; this does not make them in any way meaningless.
I Think JJJ is quoting Wiki:
“The Standard & Poor’s Case–Shiller Home Price Indices are constant-quality house price indices for the United States. The indices reflect prices in real terms, which means they are corrected for inflation.”
“”These two sentences are equally incorrect. The C-S indices track nominal prices; this does not make them in any way meaningless.”
Indeed. Though I am happy whenever anyone cares about real prices. So there is that.
“Where in the methodology does it state the inflation adjustment they use?”
You’re right, I can’t find it in the methodology. Wikipedia does support me, but I didn’t check it on that point and I generally don’t consider it a credible source unless there is an additional primary source. So, dunno. I do think that tracking nominal home prices without inflation adjustment is not very useful. This question should be pretty easy to answer and I still would be really surprised if it actually tracks nominal prices.
“This question should be pretty easy to answer and I still would be really surprised if it actually tracks nominal prices.”
Then be surprised. The main, reported, CS Index *absolutely* is a tracking of nominal prices.
The inflation-adjusted numbers are also tracked:
http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/
Click on “Table”. Note that the inflation adjusted value for 12/31/1999 (ie, basically when the reported CS Index is set for 100 (technically, Jan-00)) is 135.80 (in Apr-13 $$), and the Sep-12 number is 136.33 (in Apr-13 $$; the nominal national index value for Sep-12 was 135.70).
“So, dunno. I do think that tracking nominal home prices without inflation adjustment is not very useful.”
Technically, wouldn’t adjusting nominal pricing for inflation make that pricing no longer nominal? Thus you could easily make that sentence more clear by just saying “I do think tracking nominal prices is not very useful” . Then I wouldn’t have to think about what is being said before I disagree with the statement. 🙂 CPI has too many faults and showing a 2% increase over X years over CPI kinda forces you to add back in CPI anyway in order to know what the heck you are saying. Personally I prefer nominal and then look at rate of nominal change and then compare it vs CPI.. kinda circular algebra either way if you ask me, so saying one is not very useful you need to explain to me better as to why…
Gringo, agreed, I was just trying to make it clear. Real prices are by definition nominal prices inflation adjusted. However, to your point, if you have to “back in CPI” to make a nominal index useful, isn’t the real price index the useful tool? I don’t think that it’s too strong to say that a nominal price index, other than the ones themselves used to calculate inflation (which is one of the main purposes of most of the rest of the CPIs) is not meaningful until it gets adjusted for inflation. The C-S indices are intended to provide information about the value of real estate, that’s the point. It’s easy to misunderstand but the nominal value of real estate is much less meaningful than the real value.
That said, I do see some references to the “main” C-S being nominal prices (and some one the other side as well), but I’m struggling with why there is an index specifically with “nominal” it its name if the “main” index is nominal as well. It’s also really tough to see which sources out there are reference source and which ones are not suitable as a reference. So, I’ll admit to maybe being wrong on this one, but it’s still unclear to me. The methodology is incomplete if it doesn’t specify if an index is adjusted or not.
It’s easy to forget that this stuff is important when you’re in an essentially zero inflation environment, but it’s extraordinarily important from a historical perspective since zero inflation is a new phenomenon.
“It’s easy to misunderstand but the nominal value of real estate is much less meaningful than the real value.”
It’s a constant phenomenon here–HD and others talking about the bottom being at 1993 (or earlier!) *nominal* values. The reason I coined “Jim Baker Dollars”.
T.S.: a suggestion: have your broker show you REO @ 1808 W Diversey #F- a 17 yr old SF home in Picardy Place, a 58 home gated dev’t just west of Metra tracks (in good school dist). It was auctioned yesterday and high bid was $330K (plus 5% auction/buyer fee) so I believe it’s in limbo for short time until bank decides whether to accept offer. I suggest you look & consider making higher offer thru listing broker while bank considers the $330K/$346.5K auction bid. I looked as potential fix-up/ flip & wasn’t willing to bid more. But if I was going to live there I would have paid more. Plus’s: nice master suite, granite etc kitchen in good shape, all appl’s including w/d, very cool roof deck, attached 2 car gar. Minuses – zero lot line so more like town home w/3 levels (& 3rd br w/ full ba. is on grd fl). Sabrina’s posted Picardy home – this is larger model (2000 sq ft) on W side of private drive (Metra is adj. to E side of sub’n). Identical unit with nicer master bath & better kitchen appliances closed in past 3 months for abt $485K and smaller unit on E side sold short 2 years ago for $325K. Former owner paid $528K in ’06. It looked like just cosmetic work required – carpet, paint & refinish h/wd floor along with partial redo of wood porch/stairs/ maybe deck too; but there’s more risk in as is deals – if interested see if you can get in quick (it’s vac. w/ lock box). I’m guessing you need to mirror terms of auction – noncontingent as is offer with 5% EM and agree to close quick. I can’t believe a bank can close in less than 30 days so I suggest offer a 30 day close knowing you likely will have a little wiggle room to push closing but likely not a lot of room. Good luck & if you (or any CCr) buy it you owe CCr’s a party!
” However, to your point, if you have to “back in CPI” to make a nominal index useful, isn’t the real price index the useful tool? …….The C-S indices are intended to provide information about the value of real estate, that’s the point. It’s easy to misunderstand but the nominal value of real estate is much less meaningful than the real value.”
I’m making a wishy-washy cringing face as I reply. To me it falls into a 6 of 1, half a dozen of the other argument. Overall, yes clearly all that matters is REAL return or in some instances return as a factor to risk taken. Those would be the best ways to determine performance. To me converting to “real return” is something i do all the time, but half ass, and in my subconscious. I personally feel I look at things in life in nominal. I definitely don’t go into the pizza place and get 2 slices and a coke and think to myself “this is still $1 in real terms, just like when I was 8 yrs old” and as far as “The C-S indices are intended to provide information about the value of real estate, that’s the point.” Well the SPX is intended to provide the same for equities but few say that the high in 2000 was only (1527*.X) and the high in 2007 was (1561*.Y), of course someone who needs to fill print always writes that article saying it, but that’s not how the overwhelming majority looks at the market.
So I don’t see it as a right and wrong argument, just for me it’s more comfortable to say, “well that’s 10% higher than I bought it in 1997” and then have someone say.. “Yeah, but that sucks because prices are up 32% since then…”
Now if someone puts out an index and doesn’t clearly detail how it is being calculated.. well then that is simply worthless..
“if you have to “back in CPI” to make a nominal index useful, isn’t the real price index the useful tool?”
I guess my point, more simply stated, is.. If we went into that pizza place and you asked how much was it.. and i say “in real prices, the same as when we were 8”, you would have no idea what to pay.
“But if I was going to live there I would have paid more.”
Ohh c’mon now overly-emotional Southboundie. I know for a fact you couldn’t live there, for reasons other than you’d even want to.
But at the end of the day it’s a blessing on you–you’re too metrosexual/effeminate to be a bowler and the main draw of living here is Diversey Bowl. Other than that it’s no-mans land with terrible traffic.
This blog has featured townhomes in communities nearby for 400k during the “depths” of the RE bottom, nearby enough but away from Diversey.
“The latest monthly sales numbers are out from the Illinois Association of Realtors. They confirm what we’ve been talking about for months: the market is hot.”
Yeah we know how accurate their data is after an anonymous poster on here was saying over a year ahead of time they were using fraudulent data and he was also found to be correct (thanks, G).
More telling is in the Case-Shiller index showing 80% of the other cities seem to be rising in value month over month but Chicago remains level month over month.
For those heavily invested in RE in Chicagoland look at the first chart on this page:
http://www.chicagomag.com/Radar/Deal-Estate/May-2013/This-Months-Real-Estate-Data-Dump-Shows-Recovery-is-Steady/
Not saying interest rates will even rise much over the next year but how much can the Fed’s balance sheet grow to until they have to stop keep interest rates artificially low?
1st shoe to drop will be June 3rd when 30yr FHA loans make PMI permanent. Ohhh no idiots can’t influence RE prices anymore without paying sky-high fees.
2nd shoe to drop will be Dec 31st if FHA temporary loan limits aren’t renewed. Seriously in Chicago why is the Federal Government subsidizing 400,000 real estate loans? And why in California are they (we) subsidizing 730,000 real estate loans?
Not as specific to Chicago, but:
3rd shoe to drop will be metro-specific to DC area if new blood comes in to cut 200k bureaucrats from the fat. DC house prices have been on a tear since this whole notion of stimulus money was set into play.
I’m Joe six-pack in California. I have 25,500 liquid/gifted & a non-wrecked FICO and I want to buy that Malibu house for 756k.
Greenzone Chicago equivalent: I’m masters of arts degree Southbound. I have 14k liquid/gifted and I want t buy a house that GZ property for 425k.
RE valuations will decline if the federal government ever cuts back on financing availability on these garbage RE loans. Whether they do it or not who’s to say if anything the past 5yrs have taught me the governments proclivity to throw good money after bad is greater than I expected.
Sounds like they are slowly trying to back away from the easy-credit precipice they have got themselves into but it’s tough to get back safely from this point.
They never seemed to learn you can’t/shouldn’t try to build consumer confidence off real estate or equity asset valuations.
“Not saying interest rates will even rise much over the next year but how much can the Fed’s balance sheet grow to until they have to stop keep interest rates artificially low?”
Ze searching Google for how to enter infinity symbol. As an fyi.. Yesterday rates down here were raised for first time in years, from 7.5 to 8%. Interestingly and counter intuitive to this, the currency got crushed in the days before as the trade minister stated his desire to weaken the currency… Ze always finds economist peoples to be funny…
“I’m Joe six-pack in California”
Shouldn’t that be “Joe Binge-Drinker”?
” If we went into that pizza place and you asked how much was it.. and i say “in real prices, the same as when we were 8?, you would have no idea what to pay.”
Don’t you just pull out your William Simon dollar bill and ask for change? Isn’t that how it works?
Are you trying to tell me that my stash of Douglas Dillon c-notes (up to 150 of ’em!) won’t buy me a new Ferrari? WTF?
“Are you trying to tell me that my stash of Douglas Dillon c-notes (up to 150 of ‘em!) won’t buy me a new Ferrari? WTF?”
Even if it could.. you are white trash and could never afford the 5,000 mile service charge.
“Even if it could..”
I’d just turn around and sell that F12 for $300,000+ Jack Lew dollars.
But maybe I should just keep collecting them til I can buy Andy Warhol’s townhouse for 60,000 Doug Dillon dollars.
“But maybe I should just keep collecting them til I can buy Andy Warhol’s townhouse for 60,000 Doug Dillon dollars.”
On a more serious note, but related to NY real estate (although I hate comparing NY to Chicago… but after not posting for 2 years I will go ahead and return and make my first post an inordinately lengthy post comparing NY to Chicago) .. How about the return (real or nominal) on Martin Zweigs place… damn Jew!!
“The data confirms with my own condo search on how difficult it was to get a 2/2 condo in the River North, Streeterville, Gold Coast, West Loop, Fulton River District area without paying at or near bubble pricing. No inventory, multiple bids, and much, much higher prices than last spring. I wish I had the downpayment last year and I would have saved 20%.”
I’ve said this a couple times on here, but it’s worth repeating. Signed the contract on my West Loop unit last March and paid post bubble pricing. They’re now building the next phase (but haven’t started construction)… nearly identical to my unit… and the starting prices are 20% higher than the starting prices when I purchased. And they’re already sold out!
I’m not sure how long this is going to last, but there are definitly some hot areas right now.
Bob if you are such an investing genius why do you only have 25k liquid?
“Bob if you are such an investing genius why do you only have 25k liquid?”
Bc those dollar beers add up?
“Bob if you are such an investing genius why do you only have 25k liquid?”
Where Bob is from in Ohio, that’s a heck of a nut to have accumulated. It’s all relative.
“Joe six-pack”
Aren’t Joe six-packs extinct? The millennial offspring of the middle class six-packers would rather fudge-pack and c*m-guzzle. Today, Joe six-pack has been replaced by José twelve-pack who discards his bottles on the street curb, and then drives off and eliminates a family in a DUI accident.
lol wowwwwww
Based on unscientific perusal of my daily redfin blasts, I’m calling a top today in RE. I see some price reductions happening now and with rates rising, the stock market potentially topping out too…the top is in.
Blitzed BubBobbo posted drunken meaningless drivel at 1:30+ am. You love scrounging off the rest of us but those unemployment checks will stop. Go find a job or do something with your life. Even as small as your contribution to society can be it will give you a better self worth so you don’t feel the need to over compensate here by repetitious posting of lies & drivel. Just saying BobboBinger.
It’s not “drunken drivel”, you just can’t follow advanced thought. Bob spelled and typed “precipice” right, and there aren’t any typos etc. You are full of hate, Southbound.
Car executives are worried and for good reason. Homeowners who overpaid haven’t gotten the memo yet and are riding a high of low inventory and cheap credit.
http://finance.yahoo.com/blogs/the-exchange/real-reason-millennials-don-t-buy-cars-homes-153340750.html
Were there any toddlers around for your binge drinking last night bobbo? If so, did you call out their white trash parents?
“Were there any toddlers around for your binge drinking last night bobbo? ”
Toddlers aren’t allowed where I go–parents understand that a bar/beer garden is no place for a child. I tend to associate with people a little more grounded morally than the lost souls that overpaid for RE and post on here and take their toddlers to a beer garden.
“Toddlers aren’t allowed where I go”
oh so you were hanging out at Side Tracks again
Sonies: Heh.
But seriously, Bob, still spending your time at Joe’s?
http://joesbar.com/event_full.php?id=3303&l=1&dt=05/30/2013
$1 beer Thursdays! AND $1 well drinks and $1 pizza slices!! Yee haw! Bob heaven!!
So, Bobbo, is 5 drinks in 2 hours (and then stopping) “binge drinking”?
“oh so you were hanging out at Side Tracks again”
I thought Bobbo and HH were friends… this must be troublesome for HH…
“The millennial offspring of the middle class six-packers would rather fudge-pack and c*m-guzzle.”
Joe’s is too ghetto. I only goto Joe’s to bet the horsies and to collect winnings, its in & out as fast as possible–it IS funny that SoNo tower is trying to sell 400k 1-bedroom condos whereas nearby car prostitution seems to be taking place with those that hang out at Trackside constantly.
I wonder if the owners at SoNo consider that an amenity? Getting a telescope and all to watch seedy unattractive people have “car dates”. Its almost a rhetorical question which crowd is generally uglier–the crack whores or the customers.
If you dwell along the Milwaukee Ave corridor within the GZ, you’ll see Leftist parents who smoke one-hitters take their toddlers to beer gardens and bars. Usually dirtier ones with lousy plastic chairs tables that aren’t bussed promptly, etc. On warm days these establishments leave the back door open, so you can see into the tiny kitchen and watch the mexican cooks prepare bar food and burgers or whatever. It’s disgusting. These leftist drug/booze-feebled parents have been doing this for 20+ years, building up and developing all these bad habits and soft addictions, then they have 1-2 kids later on, because being mostly screw-ups they didn’t get their act together early on. Their bad habits still remain, it’s hard to break ones like smoking cannabis and drinking, and they result in less-than-stellar jobs and the parents therefore can’t afford private schools and use CPS school for their growing toddlers, rationalizing the whole way along the process.
Now, the east-of-Clybourn GZ types….these yoga-duped dilettantes they are addicted to Starbucks, they drag their toddlers into those, which is better than a bar or beer garden.
“in & out as fast as possible … seedy unattractive people have “car dates””
Feeling very Arsenio at the moment…
“If you’re not me, you’re doing it wrong” The book will easily be a #1 bestseller.
Germans are leftist white trash according to HH and Bob. Makes sense.
“I wonder if the owners at SoNo consider that an amenity? Getting a telescope and all to watch seedy unattractive people have “car dates”. Its almost a rhetorical question which crowd is generally uglier–the crack whores or the customers”
Bobbo are you speaking for experience? oilc wonders if bobbo is the guy with the telescope or the john that likes to be watched. He’s got to be the john as he can’t afford the rent or purchase price.
I laugh at all of the idiots that bought at SoNo, oilc. I imagine the shock their friends & family get while visiting from Schaumburg or Iowa and parking there car on the streets and what they must witness. For some reason I don’t think the glossy SoNo sales brochure might’ve mentioned this “amenity”.
Pretty sure their opinion of the hosts they are visiting at SoNo changes pretty rapidly from they must’ve made it in the big CITAAAYYYY, to “eww….”.
“I laugh at all of the idiots that bought at SoNo”
Are you laughing while sitting in the front of their building on your car dates? 😉
Isn’t SoNo the place where the built a rental tower that took the views out of panty-dropping quality of the views in the condo tower?
Just in case there’s anyone new here – which appears doubtful – I’ve never posted anywhere under any name other than my own.
Why does Sabrina tolerate lame haters like Bob and helmethofer?
Slinging mud at someone who isn’t even involved in the conversation is pretty low even by current CC standards. And now its happened 2 days in a row in two separate threads.
“Their bad habits still remain, it’s hard to break ones like smoking cannabis and drinking, ”
Assuming of course that one would want to break them, for which I obviously see no reason… Unless of course you are talking about using one hitters.. those things are gross.. getting ash in your mouth is just not the way to go…
Here’s the PRB talking or as Bobbo’s bendee boy calls it ‘advanced thought’ which it is for these two baboons. “.you couldn’t live there, for reasons other than you’d even want to..” “But at the end of the day it’s a blessing on you..” I could add more but why pile on this clearly disturbed unemployed loser? Life is short and unlike BubBobbo I need to focus on making things happen.
If Sabrina had even a shred of decency she’d delete all defamatory references to my appearing here under a different screen name.
Sabrina?
“I laugh at all of the idiots that bought at SoNo”
I laugh at the strip club right across the street from the Whole foods right there… to each their own I suppose
this would make a great cat fight on the corner of halsted and roscoe at 2am on any given summer Saturday night. Bob as the transexual ‘Roberta’ and southbound as the preppy ambercromie dude who can’t admit how he ended up drunk. helmet shows up with assless leather chaps a s whips and shows them all a good time in his condo on Elaine place.
This is a great site Sabrina!
“Recall he’s an expert on McKinley Park taco places, for instance.”
I love Mexican food recommendations and I always think of Southbound when I pass Cocula – (I call it “Count Chocula”) – by Pulaski and Archer 🙂
“This is a great site Sabrina!”
I agree! But JZ, so-called “Mr. Civil Rights” wants to censor it. That’s why his yo’ site is a failure, nobody likes totalitarian and bigoted thinkers stuck in a narrow-mind. Sorry…JZ the shoe fits.
As helmethofer knows, YoChicago continues to experience record high traffic, reaching nearly 60,000 unique visitors a month. Our primary YouTube channel has generated more than 3 million video views and has nearly two thousand active subscribers. Our Flickr photos have been viewed millions of times. We have more than 10 times as many Twitter followers as CribChatter. Etc.
Not long ago, after Sabrina commented that CribChatter’s traffic was waning and s/he was considering shutting the site down, I began linking many CribChatter posts from our popular Chicago Real Estate News page, knowing that would increase CC’s traffic directly and by increasing CC’s search engine visibility.
Sabrina’s way of saying thanks for the added visibility and visitors: allowing demented scum to post lies about me and my site.
“No they do not. That’s false. You could never prove that.” HeilHelmut’s delusional crap illustrating the basis of his hate-filled beliefs: HH believes what he wants to believe and ignores all truthful evidence to contrary. Just like in Lake Wobegon, HH knows with certainty every white person is above average especially when compared to blacks and latinos. HH illustrated why Tea Party will always be a fringe group and the Republican party is doomed – they believe this (and other) delusional bullshit.
And BubBoobo who apparently attended E. Kentucky U or Miami of Ohio thanks to random kindness for a mentally challenged applicant thinks that trumps my admit/graduation from UI/CU – wrong again ignoramus. Writing this convinces me of what a tremendous waste of my time it is to match wits with witless hate-filled assholes – I’m done communicating with these two stupid lying baboonic trolls. So see ya & so glad not to be ya you two ignorant hate-filled LOSERS! (BubBobbo – I know it offends you when I shout at you but you obviously don’t comprehend meaning of small letters). LOSERS!
Southbound you really should talk to your therapist and see whether visiting CC is beneficial for your treatment. You’re becoming derailed and we know you are incapable of not responding.. You aren’t normal Southbound, you’re like the effete brother in Two and a Half Men and likely as monetarily unsuccessful as him as well. You can type in CAPS all day and hurl insults, it just shows your level of mental maturity. I find it entertaining as I know HH and my posts really get to you and adversely impact your life outside of this blog. Was your father around growing up? You have many effete qualities so I suspect not.
“This is what Bob is talking about, the people with bad habits who are too lazy or unwilling to break them”
Bob watches 2 and a half men and you are going to say that my pot smoking is a bad habit.. Relatively benign in comparison if you ask me.
Not to be mean Bob, but at least he has kids. You don’t. So in the most longterm objective view of life his sperms have won and you have lost.
“Not long ago, after Sabrina commented that CribChatter’s traffic was waning and s/he was considering shutting the site down, I began linking many CribChatter posts from our popular Chicago Real Estate News page, knowing that would increase CC’s traffic directly and by increasing CC’s search engine visibility.”
You did? I didn’t notice. The site has the same traffic as always.
Traffic is way, way down because people want to see the car crash. They don’t want to see the market where 825 square foot 1-bedrooms in original 1970s condition (!) sell “before print” in buildings like 3550 N. Lake Shore Drive (as two units apparently just did.) Incredible (and freaky) at the same time.
Traffic and posted comments are also way down on other city real estate sites like Socket Site in San Francisco as well.
I’m glad YoChicago is killing it Joe since that is your only business. Since CribChatter is not mine (and it’s not even a business, per say), I don’t care what it does or if I have to shut it down because real estate has become just too darn boring (as it has.) I don’t even look at new listings anymore. Sad. I have no incentive to run (and others to read it) when real estate is this boring.
Although- if the bubble-like conditions were to build and we were to see Bubble #2 in Chicago again- then I would be interested in documenting that again.
But- the Forum site is coming shortly. I just think it will be better for everyone to post about what they want to talk about (then for me to post about another boring $600,000 3/2 duplex down in Lakeview.)
“If Sabrina had even a shred of decency she’d delete all defamatory references to my appearing here under a different screen name.”
Joe Zekas has never appeared here under any other name- but the same can’t be said of helmethofer (aka Dan) and others who have posted under other names and IP addresses after getting banned.
“Why does Sabrina tolerate lame haters like Bob and helmethofer?”
I’ve banned them and then they come back. I’d just rather know that helmethofer is Dan rather than figuring out, again, that he’s now posting as Nancy. That we all can deal with. Anyone reading this site for a number of years knows what Dan and Bob are all about. They’re big boys (and girls.) Readers can ignore the haters.
Thanks for the response, Sabrina.
Sorry Joe, your censorship and heavy, brutal moderation defeats your site, and because you do that kind of thing, nobody can trust it, or believe it. Your site reflects your personal biases, intolerances, conflicts-of-interest, business promotions, and you’re going to “spin” on behalf of people from whom you want payment of money, etc. and thats why nobody can trust Yo.
You’re a professional crybaby. You’re a draft-dodger. You are the lowest of the low, imho. A real curse to what our nation stands for, or should, baby-boomers can’t retire soon enough, get these society-wreckers in the old farts homes already.
“Not to be mean Bob, but at least he has kids. You don’t. So in the most longterm objective view of life his sperms have won and you have lost.”
Bob should become a sperm donor. He’s the exact profile everyone wants, including even the most hard core lesbians and feminist women. They WILL NOT choose the “civil rights” demographics when it comes to their sperm donors. PS Since when did pumping out offspring become the sign of intelligence? If that’s the case the Octomom is our ideal and Hillary Clinton is a failure, not to mention her husband cheats on her.
Here you go Sabrina: http://yochicago.com/housing-tragedy-tomorrow-cribchatter-comedy-tonight/30440/comment-page-1/#comment-60351
Sabrina: You deserve a certain level of contempt for even taking the sniveling JZ serious as a human being (in your above posts). He’s low brow. He shows his true hateful colors.
JZ: It’s you who have the Fellini-esque loser life: “…draft-dodger, tax shelter syndicator, money-losing tech gadfly…” Joe Zekas on Joe Zekas.
PS “library clerk, delivery boy, classical scholar wannabe, gas station attendant, tuxedo salesman, psychiatric aide, social worker, civil rights activist, draft-dodger, gun-toting truck driver (Brinks), bartender, temp secretary, Lucey’s Raider”
“Bob should become a sperm donor. He’s the exact profile everyone wants, including even the most hard core lesbians and feminist women”
HH, In that case, next time he finishes off with you, just spit it in a cup and sell it…
“You deserve a certain level of contempt for even taking the sniveling JZ serious as a human being”
Joe I have never said so much as one disparaging word to you on this site, but… I do have to agree here, for a grown man, with a background in law, to be whining to Sabrina about pulling down a post, it does make you kinda a giant p**sy.
“Here you go Sabrina: http://yochicago.com/housing-tragedy-tomorrow-cribchatter-comedy-tonight/30440/comment-page-1/#comment-60351”
Thanks for the link. I don’t read YoChicago so I don’t know what’s going on over there. How many posts has JZ done about CribChatter over the years? A lot.
How many posts have I done about JZ or YoChicago?
Zero.
It’s comical.
For a site that is getting “record traffic” he certainly cares, right?
It’s nice to get the hate though. It means we’re doing something right. And yeah- we have ALL opinions here (obviously.) For good or bad.
And yes, I believe when the Fed withdraws the massive unprecedented emergency stimulus, that housing will bust for a second time. But when will they withdraw it? Probably not this year. They don’t dare disrupt the housing “recovery.” So things will get really distorted in the market place before it all comes crashing down again.
gringo,
And what does hiding behind an anonymous screen name while making light of lying name-calling and indulging in it yourself “kinda” make you?
The only whining in this exchange is on Sabrina’s part. There’s nothing easier than shutting down racist and anti-Semitic comments and defamatory personal attacks. Simply delete them all. When you do that, they stop.
Anyone who thinks that Bob and helmethofer’s comments aren’t a major part of the reason this site’s audience is shrinking doesn’t have much of a grip on what it takes to attract an audience.
“Anyone who thinks that Bob and helmethofer’s comments aren’t a major part of the reason this site’s audience is shrinking doesn’t have much of a grip on what it takes to attract an audience.”
Really?
Bob and Dan have been on this site for 4 or 5 years. Their personalities haven’t changed (and neither have their rants.) Take the post today on 411 W. Briar. That was Bob saying 4 years ago that the unit was overpriced.
The lack of traffic has NOTHING to do with Bob or Dan. Maybe YOU should figure out how to run a web site Joe. I don’t think you get it what makes a site successful. That’s why you’ve always attacked us here. You could never figure out that free speech is interesting. (I will remove posts with hate speech and petty fighting though because this isn’t the forum for it.) But people also want to see the train wreck and, right now, the train wreck isn’t happening. It’s the bullet train instead- running smoothly. But watching the bullet train isn’t interesting.
But otherwise, if someone wants to say the housing market is going to boom for the next 10 years (or bust for the next 10)- more power to them. No one could ever say that on YoChicago. Hell, they still can’t say that the housing market could be in trouble again shortly (hence your May 28 attack on CribChatter.) You’re STILL attacking our right to free speech.
“PS Since when did pumping out offspring become the sign of intelligence?”
haha thats what happens when people become parents, if YOU don’t have kids, you must be a failure or stupid or barren or sterile, something MUST be wrong with you!
and to that, I just ignore their dumb comments as they are likely sleep deprived and acting loony
Joe Zekas is an employee of the Chicago Association of Realtards – Ministry of Truth division.
Caveat Emptor
“The lack of traffic has NOTHING to do with Dan.”
well its the reason i dont come around anymore
“Anyone who thinks that Bob and helmethofer’s comments aren’t a major part of the reason this site’s audience is shrinking”
LOL, there are 192 comments on this thread!! How many on your hate thread? A: 1
“No one could ever say that on YoChicago.”
Exactly. He’s into heavy-handed censorship in order to craft a false narrative or push propaganda. Nothing could be more despicable or dishonest. You’d expect more from a self-professed draft-dodger not wanting to shut down discourse. He’s hypocrite, a left-wing bigot. We all know these knuckle-heads.
Why would anyone trust the real estate information at Yo? It’s full of Infomercials.
“well its the reason i dont come around anymore”
Go to YoChicago, you big baby. I can’t stand you either. But do I let that keep me from contributing? A: No.
I like this self answering question shtick going on, its really funny
“And what does hiding behind an anonymous screen name while making light of lying name-calling and indulging in it yourself “kinda” make you?”
Joe, I have said many times that Ze is a fictional representation, some people here clearly filter through it and see to some extent what is behind it, others clearly do not, but basically Ze is a cartoon of sorts. Now you courageously admit to being yourself but appear inadvertently to also be a cartoon of sorts..
“Ze is a fictional representation”
LOL, I’m a “composite”.
I just posted my May market update: http://www.chicagonow.com/getting-real/2013/06/chicago-real-estate-market-update-may-2013/
Another blowout month with sales up 34.8%, continued strong contract activity, declining distressed sales, and plummeting inventory.
Gary: is it possible to somehow create a report that extracts out info specifically for the GZ and GZ-approved suburbs? I think that the “distressed sales” for instance, are much lower in GZ hoods and GZ-type suburbs like NS, Oak Park, Park Ridge, etc. It would be interesting to see the other stats carved out of the Chicagloand-whole numbers.
We should try and define our own CC-approved urban/suburban submarket, and then see we could extract data specific to it in a custom report. Is that possible? Could G do it?
JZ is not allowed to steal this idea, although he might haven an employee who could do the work.
” is it possible to somehow create a report that extracts out info specifically for the GZ and GZ-approved suburbs? I think that the “distressed sales” for instance, are much lower in GZ hoods and GZ-type suburbs like NS, Oak Park, Park Ridge, etc. It would be interesting to see the other stats carved out of the Chicagloand-whole numbers.”
Yeah, I’ve done that before for certain analyses but I don’t have the historic data on that basis. It could be generated but it would be a bit of work. However, just to be clear…my analysis is specifically for the city of Chicago – not the greater Chicago metro area.
I agree with Groove and Joe, Dan’s constant hate speech is kind of bothersome. But a good part of back and forth on the site is due to him, so I guess Sabrina doesn’t want to ban him.
“However, just to be clear…my analysis is specifically for the city of Chicago”
Right, but 3/4 of Chicago is non-GZ so the statistics are skewed somewhat, when we’re picking up data from zip codes and neighborhoods that have no resemblence to the GZ.
“But a good part of back and forth on the site is due to him, so I guess Sabrina doesn’t want to ban him.”
I’ve banned Dan 5 or 6 times from the site over the years. He goes to various libraries and starts posting under other names on new IP addresses. Then you all figure out it’s him (it’s amazing how with just one single comment, you all can tell it’s Dan) and say, “Marcus is Dan”.
So I decided to just leave helmethofer on here as helmethofer so we don’t have to keep figuring out which of his new “identities” is Dan. Then we can all just ignore him.
Back to real estate:
Anyone else see these comments from the Zillow CEO about how the Fed’s distortions are going to screw the housing market in a few years once rates rise? This is what I’ve been arguing.
If you’re going to stay in your house 10 years or 20 years- there’s no problem for you. But if you’re buying the 2/2 condo and know you’re going to want to sell it in 3 years (it’s amazing how many want to sell after just 3 years)- then you could be stuck there as rates rise (unless you’re willing to lose money.)
http://www.cnbc.com/id/100795579
As much as I find racist comments highly offensive I have to say that I’m opposed to banning such people because free speech is fundamental to this country. I can’t believe that these people’s behavior is driving people away from the site. There are 3 ways of handling their comments:
1) Ignore them
2) Take them on in an intelligent and unemotional way
3) Vote their comments down
Personally I like #2 and 3 because I believe that over time intelligent dialogue improves understanding and I think it’s healthy to understand why people believe the way they do. It’s not sufficient to say “You’re an idiot and I don’t like what you are saying” and running away from the challenge is pretty cowardly. If I had more time I’d take them on but the market is so hot…
banning offensive commenters isn’t an issue of free speech, it’s an issue of staying on topic.