Market Conditions: Chicagoland Ranked 3rd in the Nation in Foreclosures in the 3rd Quarter
As foreclosure activity actually slowed in foreclosure hot spots like Orlando and Las Vegas in the third quarter, according to Realty Trac, foreclosures jumped 35% in the Chicago metro area.
It was the second largest jump in the country.
Foreclosure activity in the third quarter:
- Seattle up 71%
- Chicago up 35%
- Houston up 26%
- Detroit up 23%
- Las Vegas down 20%
- Orlando down 16%
Before you get all hot and bothered that the “percentages” don’t mean anything because there could have been 100 foreclosures in Seattle in 2009 that went up to just 171 foreclosures, the Chicagoland area had the 3rd highest actual number of foreclosures in the nation.
Number of foreclosures in the third quarter:
- Phoenix metro area: 14,317
- Miami metro area: 12,963
- Chicagoland: 12,568
1 in 84 properties in the Chicago area received a foreclosure notice in the quarter.
Suddenly, the media picked up on the theme that the foreclosure crisis was “spreading” (from the former hot spots of CA, NV and FL.)
“The epidemic is spreading from the states at the ground zero of the foreclosure problems out into areas that hadn’t been previously affected,” said Rick Sharga, a senior vice-president at RealtyTrac.
The trend is the latest sign that the nation’s foreclosure crisis is worsening as homeowners facing high unemployment, slow job growth and uncertainty about home prices continue to fall behind on their mortgage payments.
From what I saw- a lot of people in the media were “surprised” that Chicago was so high up on these lists as the Midwest was not supposed to be such a bubblicious zone during the boom.
If market psychology is such a big part of real estate sales, what do stories about Chicago’s foreclosures rising so sharply do to buyers (and sellers) strategies?
Chicago foreclosure activity up 35% in third quarter [Crain’s Chicago Business, AP article, October 28, 2010]
There is no doubt that there are a ton of buyers hiding in the grass waiting for the right foreclosure to come along. I’m one of them and I have buyers like that as well.
In addition, sellers need to keep an eye on it because if you’re thinking that the market is going to be better next year but your neighbor is in foreclosure you better think again.
Oh…I’m tracking Chicago’s foreclosure activity and % foreclosure sales by month in the last 2 graphs on this page: http://chicagohousingstats.com I’m using the RealtyTrac data and accumulating it.
“If market psychology is such a big part of real estate sales, what do stories about Chicago’s foreclosures rising so sharply do to buyers (and sellers) strategies?”
As repeatedly stated, for this ELP buyer, nothing (unfortunately).
Gary: “In addition, sellers need to keep an eye on it because if you’re thinking that the market is going to be better next year but your neighbor is in foreclosure you better think again”
Gary, this is just more hype by realtors to get sellers to lower their prices (plus you have a personal motivation since you are also in the market to buy). By trying to scare sellers into lowering their prices because “your neighbor is in foreclosure” is absolute fear mongering. I have repeatedly shown that well over 95% (closer to 99%) of all houses out there are not in foreclosure and not “at risk” of going into foreclosure. In addition, most of the foreclosures are concentrated in certain areas and certain buildings (10 E ontario, 2625 clark, 345 n. lasalle, etc.) – these are NOT the areas/buildings that the majority of buyers are looking at. Therefore while foreclosures/short sales may have psychological impact on the market, their true impact is, in reality, EXTREMELY SMALL (sorry for yelling that last part Dr. F).
“By trying to scare sellers into lowering their prices because “your neighbor is in foreclosure” is absolute fear mongering. ”
You keep trying to pretend that the sellers have most of the leverage or at least much of it. The truth is in this environment the only people trying to sell are likely those that have to. Your claims are ridiculous with regard to who actually has the leverage these days–it is the buyers dictating the terms if deals are ever to close is my guess.
OK – to prove my point, a quick search of the MLS revealed the following number/percentages of short sales (which, as we know are precursors to foreclosure):
60611 40 short sales out of 984 properties (4%) – oh and 25% of those are at 10 e ontario.
Oak Brook: 4/128 (3.125%)
Hinsdale: 14/333 (4.2%)
So you guys are all telling me that these 4% of homes (FOR SALE – the houses NOT for sale are OK) are going to shape the market – that is laughable and absolutely idiotic!!! – you guys would be right is this was a standard commoditiy and everything was the same – but we all know that buyers are picky and not going to move to a certain area/building/house/unit just because it is a good deal. THIS is the reason most buyers keep waiting (including you, Gary and anonny) and are unable to find the “great deals” – it is because they are not out there (and never will be).
sorry – correction – 12.5% of the short sales in 60611 are at 10 e ontario
“this is just more hype by realtors to get sellers to lower their prices (plus you have a personal motivation since you are also in the market to buy). By trying to scare sellers into lowering their prices because “your neighbor is in foreclosure” is absolute fear mongering. I have repeatedly shown that well over 95% (closer to 99%) of all houses out there are not in foreclosure and not “at risk” of going into foreclosure.”
What I’m personally buying is totally different than what I routinely sell. Furthermore, if you are looking to sell your condo and are debating about selling it now or early next year are you trying to tell me that you would not factor in that your upstairs neighbor in the identical floor plan is in foreclosure and that property could come on the market any day? Come on! My sellers don’t even need me to point that out to them. They think about it on their own.
And as I’ve repeatedly pointed out 44% of last month’s sales were either short sales or foreclosures. Foreclosures were about 70% of that. That IS the market.
Clio,
And since you picked 60611 here are the facts for the last month: 13 distressed sales out of 54 total. That’s 24% – in one of the most desirable and healthy neighborhoods. You can have hundreds of properties for sale that don’t sell. That does not define the market.
Gary, no duh that distressed sales make up a healthy percentage of what is selling – that, itself only tells you that these foreclosures/shortsales are being snapped up (likely by investors). However, sales volumes, themselves, are incredibly low – because most buyers are waiting on the sidelines for the bottom to fall out – it ain’t happening and it ain’t going to happen. It is like a grocery store having a sale on spam and saying that the price of meat is going to fall because spam is flying off the shelves. Ridiculous –
“Therefore while foreclosures/short sales may have psychological impact on the market, their true impact is, in reality, EXTREMELY SMALL (sorry for yelling that last part Dr. F).”
sorry clio but…
“everything in this world, including money, operates not on reality – but the perception of reality”
To the point in Clio’s first post, there is a pretty high concentration of foreclosures and short sales in certain buildings. I think comparisons (period to period, or region to region) would be more useful if they excluded high concentration buildings.
“60611 40 short sales out of 984 properties (4%) – oh and 25% of those are at 10 e ontario.
Oak Brook: 4/128 (3.125%)
Hinsdale: 14/333 (4.2%)
So you guys are all telling me that these 4% of homes (FOR SALE – the houses NOT for sale are OK) are going to shape the market – that is laughable and absolutely idiotic!!!”
It’s not accurate to look at short sales as an indicator of what is going into foreclosure. There are many properties that end up bank owned where they never tried a short sale. The short sales, many times, are those who have a particular circumstance- who are getting divorced or have to move to another city for a job transfer or that kind of thing. The banks are only now getting around to trying short sales with those who simply can’t pay.
We all know that the upper bracket has been holding on “better” than the lower bracket- but that is simply because they have more resources to ride it out. But eventually, for many, even those resources run out. It’s just taking longer to work its way through the system. In a year or two there will be even more properties at the upper end in foreclosure.
Clio- you’re missing the most important component of this real estate market.
All the buyers want a deal. The deal are those 4 or 5 foreclosures. Even if it’s in some other building or on some other block. SOME properties are selling for the firesale prices. So why should a buyer pay more one block over? They won’t. They’ll keep looking in order to get a deal themselves.
Meanwhile, sales have shriveled up (except on the “deals”) while the buyers that do qualify, sit and wait.
You have to remember- who are the buyers now? Mainly the renters. And they can wait a long, long time.
Others who already own are underwater and many of them (unless they become landlords and the bank is willing to give them a second loan) cannot sell.
The renters are in charge of the housing market right now.
“It is like a grocery store having a sale on spam and saying that the price of meat is going to fall because spam is flying off the shelves. Ridiculous”
More like no one wants to buy bananas and the grocery store has boxes of bananas in the back of the store that will start to rot. The ones in the display case look like they’re on the edge. The store hasn’t put them on sale yet and the fruit flies are circling. Everyone knows the store has more bananas than they can sell and is waiting for them to go on sale. Meanwhile there is a fruit vendor down the street that just got a new shipment of bananas in. The fruit vendor is trying to make a pricing decision.
New sales have slowed to a trickle just as new listings have done the same. Meltdown in progress.
Anyone else notice that reo new listings have slowed to a trickle since the robosigner scandal? The market is nearly paralyzed.
I have noticed it HD. There are almost no new listings (of reos or otherwise.) No one is listing right now (for obvious reasons.) Those reos will be coming on the market soon enough (since there were 12,000 of them in just the third quarter.)
This is the worst market I’ve seen since the heart of the financial crisis (just from the sales perspective and the listings etc.) It seems to me that we are heading for a sharp downturn here in Chicago in the next few months.
Gary, love the banana example…very appropriate.
“Even if it’s in some other building or on some other block. SOME properties are selling for the firesale prices. So why should a buyer pay more one block over? They won’t. They’ll keep looking in order to get a deal themselves.”
Sabrina – you are absolutely correct – that is the psychology out there right now and what is keeping buyers sidelined. What they don’t realize is that if they want a firesale/deal on a foreclosure, they are going to have to compromise on some of their “must haves”. However, I have seen that buyers are ABSOLUTELY inflexible on their must-haves and the vast majority of foreclosures don’t fit all of their needs. These buyers are in fool’s paradise thinking that the house of their dreams is going to come on the market at a foreclosure price – the chances of that happening are EXTREMELY small.
Here is another example: If you go to the Armani or Nieman Marcus outlet, you are stuck with the inventory they have – you either have to compromise and buy what is there, or go to the real store and pay full price on what you want. The outlet inventory doesn’t affect the real store inventory THAT much because the clothes are different and there are more choices at the regular store.
“Yes, we have no bananas”
Or you can leave without buying anything and come back next month to see what new inventory they have.
I’m guessing a lot of these sidelined buyers are in positions where they can afford to wait (yes I realize they’ll be putting their “life on hold” in the mean time, blah, blah)
“If you go to the Armani or Nieman Marcus outlet, you are stuck with the inventory they have – you either have to compromise and buy what is there, or go to the real store and pay full price on what you want”
I also noted that nothing new has been popping up, at least when I’m trolling through various hoods on Redfin. I figured it was a combo of the time of year and fear.
“I’m guessing a lot of these sidelined buyers are in positions where they can afford to wait (yes I realize they’ll be putting their “life on hold” in the mean time, blah, blah”
Yeah, Dr. F, – it is the same thing as the 50 year old spinster waiting for her “prince charming” – she can wait all she wants, he ain’t comin’.
Clio – no one can say you don’t have an agenda. At this point, it’s not hard to gauge what your reaction to the numbers will be, even before clicking on the comments section. It’s getting a bit repetitious.
4,281,899 – population of phoenix metro
4,919,036 – population of miami metro
9,569,624 – population of chicago metro
when you look at it that way it doesn’t seem so bad 😉 it would certainly suck to live in phoenix now for many reasons, obviously
“It seems to me that we are heading for a sharp downturn here in Chicago in the next few months.”
What do you mean “heading”? It’s here.
Also is there some way to find out how many of these forclosures are 1 bedrooms or studios? I’d bet the percentage is much higher than SFH’s and 2+ bedroom places
unemployment easing, rates low, economy gorwing. Let’s cross our fingers everyone!
clio on October 29th, 2010 at 7:53 am
“Yeah, Dr. F, – it is the same thing as the 50 year old spinster waiting for her “prince charming” – she can wait all she wants, he ain’t comin’.”
___________________________________________________________
clio for the win. The cash that the sidelined buyers are holding is on the brink of depreciating as fast as that 50 yo spinster’s looks after the Fed unleashes its reckless plan – those guys are willing to print, print, print until they create inflation as a back door bailout for the bankers. But clio, unlike the spinsters, at least the sidelined buyers don’t get all up in my business while I’m trying to enjoy a belt of Scotch over at Tavern on Rush. I’m sure you have that problem when you roll up there in the Lambo but probably 10x worse than me.
“The renters are in charge of the housing market right now.”
until inflation hits, which is why the fed is doing everything in their power to create inflation right now. I don’t think we will see any significant inflation for a few years at least but when it happens, since nobody has been building for the last half decade (at that point) it will be yet another bubble just waiting to pop a long with the bond bubble
After adjusting for population differences, does Chicago really rank third? Doubtful.
“I think comparisons (period to period, or region to region) would be more useful if they excluded high concentration buildings.”
I actually agree. Unfortunately try telling that to some out of state or out of area appraiser that Invsco buildings were basically designed to be financial time bombs and are not valid comps to your high-rise a few blocks away.
Invsco should be sued for criminal and civil liability for really being at the forefront of orchestrating this mess.
What about showing foreclosures as a percentage of total housing units? Or splitting the data between foreclosures of owner-occupied homes versus foreclosures of rental properties (non owner-occupied homes)? I think this data would be more accurate at showing where the “worst” markets are.
“unemployment easing, rates low, economy gorwing. Let’s cross our fingers everyone!”
For what? The continued damage that comes from attempting the impossible feat of reinflating the bubble? Let’s cross our fingers instead that the inevitable correction hastens and is not spread out over too many years.
I have to add “sidelined buyers” to the list of market saviors. Folks seem to forget that the inventory was expanded during the bubble in response to easy credit. Many fewer now qualify and the still very high monthly unemployment churn is eliminating many more per month from the sidelines. The depth chart is thin in qualified buyers at anything near bubble prices. There is reason for optimism since the solution is so simple and will happen eventually, anyhow: lower prices.
The sidelined buyers come up over and over again, but how many are really out there? If as is suggested they are staying out of the market because of all of the negative news right now, why did they not get in the market back in the mid 2000s when everyone was ecstatic about RE?
“There is reason for optimism since the solution is so simple and will happen eventually, anyhow: lower prices”
this is not going to happen and certainly not going to happen to the extent that everyone hopes/expects. prices are going to start going up starting in the spring and defnitely by 2012 – nobody who is truly “in the know” is doubting that…
How much more will they drop before they resume always going up?
“nobody who is truly “in the know” is doubting that…”
Well, then, that settles it. Thanks for the insight. I have to get back to reading films now…
I was at one time a sidelined buyer but now I’m a renter again. Or maybe I’ve just been a renter all along. My pre-qual is rotting in a folder on my desk. Does me no good. Maybe tommorrow ill be a sidelined borrower again. I’m waiting not for the bottom, but for cheap housing for everyone.
“prices are going to start going up starting in the spring and defnitely by 2012”
Prices always go up in the warmer months its called seasonality. The sad part is we have to wait two whole years to prove what a fool you are with regard to the 2012 prediction.
“The sad part is we have to wait two whole years to prove what a fool you are with regard to the 2012 prediction.”
Bob, you aren’t going to go very far in life if you keep up the insults and refuse to listen to people older and more experienced than you. As mentioned before, I have bought and sold dozens of properties over the past 15 years. I have seen price declines, bubbles, and rebounds. This is a little worse than normal (much like the difference in turbulence while flying), but everything will rebound just fine.
“As mentioned before, I have bought and sold dozens of properties over the past 15 years.”
A rising tide raises all boats. This will not be rebound within the next decade with current employment projections.
Normal 5.5-6.0% unemployment isn’t expected to return currently until 2018. And plenty of people have had their incomes cut over the past three years which isn’t coming back but they haven’t shown up in the foreclosure stats yet.
Its going to get worse before it gets better.
G – I agree with the hastening of capitulation. I am just hoping it happens and we can get to a more normal environment. There is a lot of fear that is keeping people from buying and people from listing. That inaction isn’t going to help move anything.
“. . . they are going to have to compromise on some of their “must haves”. However, I have seen that buyers are ABSOLUTELY inflexible on their must-haves and the vast majority of foreclosures don’t fit all of their needs.”
Clio you crack me up. Isn’t it the “must haves” that got us into this mess in the first place? There was a complete disconnect between “need” and “want” during the boom. “Must haves” are merely “wants” peppered with a healthy dose of delusion. The only “need” is shelter (and in Chicago heat), it’s everything else that makes markets and right now, given current sales rates, the “must haves” don’t seem to be that essential.
“Here is another example: If you go to the Armani or Nieman Marcus outlet, you are stuck with the inventory they have – you either have to compromise and buy what is there, or go to the real store and pay full price on what you want. The outlet inventory doesn’t affect the real store inventory THAT much because the clothes are different and there are more choices at the regular store.”
You are so far off base on this one it’s disturbing. As a retail consultant I can tell you that most national retail brands have completely revamped their assortment and pricing strategies to include the cash cow that is the outlet. You’d be fooling yourself if you think that the entire creative and business team at Armani don’t take the entire retail chain into account when they release new seasonal lines. In fact “high end” brands have seen significant drops in quality and manufacturing costs across the board while at the same time increasing overall sales dramatically. Why? There’s always a buyer — even if that buyer is downstream. There’s this apocryphal idea that all the merchandise in outlet or clearance stores is specifically manufactured for that channel. Not the case, particularly related to the retailers you cite. Do they “fill in” with some lower end items, you bet because it’s important to have a full product range.
That said, your retail analogy is a good indicator of how much you understand about market making & positioning. This whole real estate landscape is incredibly nuanced & complex yet very simple at the same time: price it to clear the market and it will — short sales and foreclosures WILL impact what it takes to clear . . . it’s apparent given the glut of inventory and low sales numbers over the past few months that there are many people like yourself out there that don’t really understand this.
“After adjusting for population differences, does Chicago really rank third? Doubtful.”
More like impossible. . . those cities are less than half– practically 1/3– the size.
Unfortunately that’s still one heckuva a lotta foreclosures.
Wasn’t this the period during which the main banks suspended new lis pendens? For me, the fact that they were up 35% during that time would be disturbing thing about all this. . .
“There is a lot of fear that is keeping people from buying and people from listing.”
What fear works on both?
Hopefully, as economic growth continues and unemployment eases we will see a fall off in foreclosures. This will not happen soon as there is such a backlog but that may be the first step to moving towards stability, or at least the perception of stability.
Fear for buyers: “I could lost my job, the prices could fall and I lose equity”
Fear for sellers: “I’ll have to write a huge check to get out of this place, I’ll never get a price I want for this place, I don’t necessarily need to sell so won’t…”
Not the same fears but they seem to be common sentiments.
okay, i’ll come off the sideline and buy a house if someone buys my 2/1 condo at no cost to me. Do-oh!
“The sidelined buyers come up over and over again, but how many are really out there? If as is suggested they are staying out of the market because of all of the negative news right now, why did they not get in the market back in the mid 2000s when everyone was ecstatic about RE?”
I’m a sidelined buyer. I have relocated 3 times in the past 6 years for job opportunities. I bought a property in Cincinnati in 2007 and got out in the nick of time. I *think* I’m staying in Chi for a while, but I am still in “follow the opportunity” mode. I am scanning the market, but will only buy if I can find a desirable property at true rental parity or below.
I’m perfectly happy renting if that never comes along and so is my wife. This business of renting = putting one’s life on hold is utter nonsense.
What if it never gets better? Aka japan.
Btw 81 years ago today was the great Oct 29, 1929 stock market crash.
“okay, i’ll come off the sideline and buy a house if someone buys my 2/1 condo at no cost to me. Do-oh!”
i’ll double the ante and put my 2/2 up for sale at no cost to me! 😉
rv – Those aren’t seller fears, but facts.
It is the buyer fears you listed that also apply to sellers. They just work in opposite ways.
“Unfortunately that’s still one heckuva a lotta foreclosures”
Instead of basing your fear on fantasy, why doesn’t anyone look at the hard numbers. I have stated and repeated and repeated and repeated that foreclosures/shortsales and distressed properties make up far less than 5% of all properties out there. You fear mongerers still claim that this 5% is going to create huge price reductions – that is not going to be the case (but what else can I expect from you guys – if there is a mugging in Lincoln Park all of you will start stating that it is a really dangerous place to live).
53 years ago Dan Castellaneta, Best known as the voice of Homer Simpson was born today too, what’s your point HD?
G, whatever they are it’s causing inaction.
“What if it never gets better? Aka japan. ”
uhhh this is not Japan. Different psychology, different culture, different lifestyles, different economics, different desires/needs and the list goes on…..
Clio, whatever percentage forclosures make of the entire number of housing units it remains that those non-foreclosures/distressed sales are not ON the market and cannot contribute to the market tracking.
The point here is a foreclosure has negative pricing contagion to surrounding units. At the very minimum it is a headwind that non-distressed sellers need to be aware of.
So im one of the buyers right now that is sitting on the sidelines. I have a bit of cash saved up and am hoping to purchase a condo in a building that is financially distressed and is cash only so I can make the most of that im sitting on some cash.
But recently new listings of REOs have pretty much come to a halt and i dont wanna bother with short sales. Does anyone have any idea of when the REOs will start coming to the market?
Wait a minute… is everyone here joking – or do you guys REALLY think that prices are going to come crashing down? Please please please don’t take my word for it – ask any older person who have been through recessions, periods of inflations, housing booms and busts (and yes, there have been MANY times in recent histore – last 50 years- when we have been in a much worse housing situation: LA in the 80s, Boston in the late 80s, early 90s, the 17% mortage interest rates of the 70s). Most people on this site are too young and too spoiled (given the financial/real estate boom in the 90s 2000s when most of you were in your formative years) to realize that this is just another “blip” in the cycle.
homedelete on October 29th, 2010 at 9:17 am
“What if it never gets better? Aka japan.”
__________________________________________________
My wife is Japanese and works in a Japanese bank – I have been worried about Japanese style deflation, too, but my wife insists that American bankers have zero institutional memory once a crisis disappears, average American consumers have no memory of bad times and America’s population is growing, unlike Japan’s. In a nutshell, she thinks population growth and stupidity will fix America’s housing crisis in the long run.
Everyone keeps saying we are not japan but most of the evidence looks like it we are pretty damn close. We’ve had once lost decade, japan just finished its second.
“The point here is a foreclosure has negative pricing contagion to surrounding units. At the very minimum it is a headwind that non-distressed sellers need to be aware of”
Agree – but sellers also have to be aware that these foreclosures are relatively small in number and may not have the amenities that their places have. There is absolutely no need for sellers to panic and sell – they FAR outnumber distressed properties. And, as I stated before, buyers are very picky – most will pass up foreclosures no matter how cheap because they don’t like this or that about them. The potential buyers out there really shouldn’t listen to the advice of the morons on this site that are predicting that there is going to be a significant decrease in ALL housing prices – it hasn’t happened to that extent in the past 2 years and CERTAINLY WON’T HAPPEN NOW THAT THE ECONOMY IS RECOVERING!!!!!
OK, academically that is correct, now what if all of the non-distressed properties suddenly came onto the market and diluted the concentration of forclosures? A rally?
Stop yelling at us.
On the Japan thang:
http://chicagobreakingbusiness.com/2010/10/roubini-u-s-on-track-for-fiscal-train-wreck.html
I’m still not buying it, though. Like PermaBear’s wife, I have a lot of faith in the stupidity of Americans.
“Everyone keeps saying we are not japan but most of the evidence looks like it we are pretty damn close. We’ve had once lost decade, japan just finished its second”
Culturally we are so far from Japan, it is ridiculous. Why does culture matter? – because it is what shapes the housing industry. Japanese people, in general, predominantly live with extended families and do not demand much of the luxuries that Americans must have. This is not going to change anytime soon…. Americans will NOT sacrifice the way Japanese have done – it just won’t happen.
“Stop yelling at us”
sorry, didn’t know if you guys could “hear” me with your heads so far up your asses.
Agree with Perma Bear wife’s analysis. Except for the survivors of the Great Depression, Americans have an institutional memory of about six months. Witness their inability to seemingly want to re-elect the same people who got us into these problems in the first place.
“Witness their inability to seemingly want to re-elect the same people who got us into these problems in the first place.”
Your statement made no sense.
It makes a lot of sense, Bob – what about it don’t you understand?
“In a nutshell, she thinks population growth and stupidity will fix America’s housing crisis in the long run.”
“Japanese people, in general, predominantly live with extended families and do not demand much of the luxuries that Americans must have. This is not going to change anytime soon…. Americans will NOT sacrifice the way Japanese have done – it just won’t happen.”
LOL! Guess where the population growth in America is coming from? I’ll give you a hint–they’re known for living with extended families and having a lot of people per housing unit. The demographic trend is not your friend, clio.
” I’ll give you a hint–they’re known for living with extended families and having a lot of people per housing unit. The demographic trend is not your friend, clio”
You think the new trend in the US is going to be people living with extended families?!!!! OK – this is where education/knowledge/intelligence becomes important. Right now this is happening because of financial reasons. Once people get back on their feet, they will move out. The cultural mindset of Americans is to be very independent. The whole family structure/culture and social upbringing of many generations is that of complete independence (move out when you are 18, go to a nursing home when you are old, etc.). This is deep rooted and is not going to change.
“the morons on this site”
“your heads so far up your asses.”
Nice, clio.
“OK – this is where education/knowledge/intelligence becomes important.”
Please show some.
It dosen’t look like the policy makers have taken Japan as much of a cautionary tale.
I guess it behooves Clio as someone “heavily invested in real estate” to belittle all the sidelined buyers he is so desperate for.
Clio: your argument basically comes down to, “Trust me, I’m older, more experienced and know a bunch of sidelined buyers.” The problem is, you really haven’t used anything to back your arguments up.
For example: your argument that foreclosures make up a tiny amount of “the market” is seriously lacking in nuance. How do you define “the market” exactly? In traditional thinking, ask and bid prices don’t set the market, sales do. The assumption built into your comments is: the sellers are asking realistic prices and the buyers will come around and hit those prices. What evidence do you have to support that conclusion? I agree that RE prices will eventually go up, but I think we have a fundamental disagreement on when. You have offered very little to explain why you think they will rebound before 2012, except that you see “sidelined buyers.”
And, to be honest, your “sidelined buyers” argument seems entirely suspect to me. I generally don’t like to bring in the personal experiences of people making arguments (I prefer to attack the arguments themselves). But since you haven’t given details beyond being “in the know”, I have to assume that the crowd you talk to is biasing your judgement on this. You realize that the rich folks you’ve alluded to on so many previous threads make up only a certain portion of the market, right? That the personal living choices and investment choices of your small group of wealthy friends doesn’t really say anything about what the average Chicagoan considering the RE market will do?
I will give you that the mood and opinions here can be extremely negative. But answering that by playing an unrealistic, wealthy cheerleader doesn’t give your arguments any more legs.
Problem is, the policy makers did take Japan as a cautionary tale. A tale of too little stimulus. Super-size is the only way for the good ole USA!
So is clio calling “the bottom”?
I suspect there are a few of us older than clio here, and some of us may have had depression-era parents or grandparents, contrary to his claim that he’s one of the older folks around here, whith more historical perspective. I think clio is overlooking the fact that *this* bubble burst is *nothing* like we’ve ever seen before. I don’t see the economy “recovering” at a pace other than sluggish at this point, either. And the shadow inventory… Let’s not forget the shadow inventory.
clio on October 29th, 2010 at 10:06 am
“You think the new trend in the US is going to be people living with extended families?!!!! OK – this is where education/knowledge/intelligence becomes important. Right now this is happening because of financial reasons. Once people get back on their feet, they will move out. The cultural mindset of Americans is to be very independent. The whole family structure/culture and social upbringing of many generations is that of complete independence (move out when you are 18, go to a nursing home when you are old, etc.). This is deep rooted and is not going to change.”
_______________________________________________________________
Clio comes through again. When I married my wife, her parents absolutely insisted we lived with them. They wouldn’t take no for an answer. They renovated their house for us so we would have a giant room upstairs. Grandma lives with them, too. There are no nursing homes there.
No appreciable number of American families are going to willingly live three or four generations under one roof. Plus, when a kid is 23 and wants to go to the bar, he can’t exactly close a deal by saying “Hey, let’s go back to my place – my mom’s asleep and she won’t hear us since my room’s in the basement.” Americans will stretch and stretch to avoid that situation at all costs. It is not necessarily an economically rational decision, but it is the one most American youngsters will eventually make.
“I guess it behooves Clio as someone “heavily invested in real estate” to belittle all the sidelined buyers he is so desperate for”
Actually, no. I personally would LOVE for real estate prices to tank because I really am anxious to buy more property. I don’t need to sell any of the properties I own and can ride out this storm (even if it takes 10-20years). So, in reality, I am with you guys and hoping that the market goes lower – I just don’t see that happening (and, as someone who is completely obsessed with real estate and scour EVERY SINGLE new listing in 60610, 60611, 60614, 60521, 60523, 60527) EVERY DAY for the past 8 years, I can tell you that there haven’t been that mnay GREAT deals out there. Now, with the economy improving, I fear that prices are going to start going up..
The only one suggesting that youngsters will not ever move out of their parents’ basements is clio. If prices are going nowhere but up from here, then they will not be able to buy.
The absence of a private mortgage market means that easy money will not return until those Nowegian dentists and suburban radiologists reacquire an appetite for shit sandwiches (aka “MBS”). Even dumb money has its limits.
“The only one suggesting that youngsters will not ever move out of their parents’ basements is clio”
uhh read perma bear’s post (2 posts prior to yours)
http://money.cnn.com/2010/10/14/pf/boomerang_kids_move_home/
85% of college grads move back home after graduation.
“Plus, when a kid is 23 and wants to go to the bar, he can’t exactly close a deal by saying “Hey, let’s go back to my place – my mom’s asleep and she won’t hear us since my room’s in the basement.” Americans will stretch and stretch to avoid that situation at all costs. It is not necessarily an economically rational decision, but it is the one most American youngsters will eventually make.”
clio, try to pay attention.
“Right now this is happening because of financial reasons.”
Nope its happening because of demographic reasons as well. Whites are/were losing population share at a clip of 0.5%/year which was being replaced with hispanics. Not sure if that is still true in this new economic environment. But there are cultural and behavioral differences including number of persons per household which is much higher for them.
Dwell on it, clio: if one population is losing share to another population with statistically significant differences in the number of persons per household that is going to bring your number of persons per household stat up.
That number has to be BS… 85%? GTFOH
Yeah the economy is doing great, so great in fact that we’re about to get another round of QE from the Fed.
“Central bankers meeting next week are concerned growth is too slow to lower an unemployment rate stuck near 10 percent and are seeking ways to prevent a drop in prices that would hurt the recovery.”
http://www.bloomberg.com/news/2010-10-29/u-s-economy-picked-up-in-third-quarter-on-consumer-spending.html
“Yeah the economy is doing great, so great in fact that we’re about to get another round of QE from the Fed.”
Open-ended, too! With estimates between $600B-2.1T. Yeah that was a “T” for “TRILLION” or $2,100,000,000,000.
The Fed clearly doesn’t know WTF they are doing as they asked the bond dealers themselves to estimate the impact of their purchases on bond prices. LMAO!!
Bob, are you trying to tell me that Hispanic outnumber whites and are the demographic to watch because they are going to shape future housing needs?!!! That is the same as saying foreclosures are going to determine pricing on all of housing. BOTH ARE A MINORITY OF WHAT IS OUT THERE!!!!
clio: really? I was going to type a nuanced response but I think I’ll just fall back on SNL: Really? you’re response to Bob’s argument that a now-minority population is projected to become the majority population in the future is that they are a minority now? Really?
“Bob’s argument that a now-minority population is projected to become the majority population”
Never said they are going to become a majority population in the future. That depends on how many traitorous whites take their side on voting issues related to immigration amnesty and social programs as well as whether our government actually decides to crack down on businesses hiring illegal aliens. But in any case the trend is clearly not clio’s friend.
We are in the market for a 2BR in SL or down town. We want both lake and city views so we are definitely picky so cannot grab just any foreclosure/short sale.
That being said we are bargaining hard. In fact we gave an offer a month or so. Now a similar propoerty has popped up (it is slightly larger and has 2 car garage instead of 1) and we will not increase our offer for it if we decide to make an offer. So Clio buyers are bargaining more and more and the prices have definitely decreased even for the best buildings/views. You can keep telling yourself that distress of market has no impact on prime properties, but denial or the “ostrich method” won’t change the facts.
“That being said we are bargaining hard. In fact we gave an offer a month or so. Now a similar propoerty has popped up (it is slightly larger and has 2 car garage instead of 1) and we will not increase our offer for it if we decide to make an offer. So Clio buyers are bargaining more and more and the prices have definitely decreased even for the best buildings/views”
Yeah, miumiu, but you haven’t gotten an accepted offer yet. I could offer 1 dollar on every property in chicago – it doesn’t mean that I am going to get them.
I wouldn’t offer more than $20 or $30k for a 2/2 on a high floor with sweet view in any building in the south loop building. Yes it cost more than that to build each unit but that’s all they’re intrinsically worth.
“I wouldn’t offer more than $20 or $30k for a 2/2 on a high floor with sweet view in any building in the south loop building. Yes it cost more than that to build each unit but that’s all they’re intrinsically worth.”
OK – great, that statement really qualifies all the other statements you make. Now we realize what we are dealing with…..
The following is why looking at distressed properties as a % of the number of homes for sale is incorrect when trying to judge their impact on housing prices. Assume here are 10k homes for sale and 5% are distressed (500).
1. Econ 101 – If you offer more of something without an offsetting increase in demand prices decrease.
2. Assume demand remains constant unless prices decline significantly or the economy improves.
3. To change the % of distressed homes for sale increase the number of non-distressed homes for sale. Ex. assume another 10k homes came on the market and now distressed properties make up only 2.5% (500 of 20k).
4. If you agree with #1 (literally that is Econ 101) then you must conclude that housing prices would decline even though the % of distressed homes for sale has decreased. This is why you must look at distressed homes as a % of closed sales. In a healthy market both #s will be low. In a bad market only the % of closed homes matters.
I am not saying the economy won’t improve – I’m just saying % of homes for sale is not the correct way to look at the housing market. Clio – if you want to say housing prices will increase because the economy is going to improve that is an opinion. But saying the market is healthy because of the low % of distressed properties for sale is incorrect.
“I wouldn’t offer more than $20 or $30k for a 2/2 on a high floor with sweet view in any building in the south loop building. Yes it cost more than that to build each unit but that’s all they’re intrinsically worth.”
I certainly would as I’m pretty comfortable they can be flipped for profit relative quickly all the way up to 50k below current foreclosure pricing. Which means up to 75k for 1/1s and 150k for 2/2s.*
*This excludes River City, which is an Invsco building, which immediately makes it a financial minefield.
thank you ys
“OK – great, that statement really qualifies all the other statements you make. Now we realize what we are dealing with…..”
Now, now, if we were to use that standard on you we would conclude you are a moron with your head up your ass.
Distressed sales really become more of a problem with condo units. While there are foreclosures all over the city, the reality is that most the foreclosures are in fact concentrated in certain areas – west side of Chicago, south side of Chicago, certain shitty condo developments in the Greenzone.
I do agree with Clio that most buyers are not going to want a foreclosure because most foreclosures have issues with either location or maintenance that a typical buyer is not going to compromise on.
It is VERY rare that you see people get these super super secret foreclosure deals. In fact, I have only seen one come across my desk that even remotely qualified as the buyer getting a steal. My client bought a new construction house in one of the more desirable suburban towns on the Metra for like $500k. The house had previously been listed around $850k I think – developer ran out of money. It appraised at $750k when he bought it I believe. All he had to do was buy the appliances and finish some tile work or something in a guest bathroom.
For most condo owners, the financial health of your neighbors is EXTREMELY important. It only takes one or two to bring an entire development to its knees. From what I have seen, I wouldn’t touch the large high rise condo buildings with a 20 foot pole. Way too many renters, stuck flippers, and marginal owners. The typical 3 and 6 flat walk ups seem to be doing ok from what I am seeing when I look at deals coming across my desk. The ones with problems are almost always in the high rises.
When Black Friday comes
I’ll stand down by the door
And catch the grey men when they
Dive from the fourteenth floor
When Black Friday comes
I’ll collect everything I’m owed
And before my friends find out
I’ll be on the road
When Black Friday falls you know it’s got to be
Don’t let it fall on me
I’m just kidding guys, nobody, not even I, think that 2/2’s with a view should be 20 or 30k.
Actually our last offer did not get accepted because the seller was negotiating with someone else before us and they matched our offer otherwise we would have got it. I am talking about reasonable bargaining. Basically we were offering the preconstruction rate they got which is 200K less than the top of the bubble price.
So basically prices are down, but you cannot get a nice property for 20K either : )
“We’ve had once lost decade, japan just finished its second.”
when was this or did I miss something?
Don’t forget 60654, clio… we’re new 😉
Well the Dow is pretty close to where it was 10 yrs ago, for what it’s worth.
“when was this or did I miss something?”
“Econ 101 – If you offer more of something without an offsetting increase in demand prices decrease.”
Of course – but what you fail to realize is that there IS going to be an increased demand out there once the sidelined buyers get back into the market.
“Well the Dow is pretty close to where it was 10 yrs ago, for what it’s worth.”
*facepalm*
“Well the Dow is pretty close to where it was 10 yrs ago, for what it’s worth.”
Not sure that is a huge concern. 1965 to 1975 was flat too. The country survived, only to unleash the greatest bull run of all time.
“The country survived, only to unleash the greatest bull run of all time.”
What? It’s a coiled spring you say? [Calls Broker]
Where did the nikki close today?
“Don’t forget 60654, clio… we’re new”
Wait a minute – what is 60654? I don’t get it – I actually own a 3 condos at 33 W. Ontario but the zip code is 60610 – when I looked up “60654” there were condos from my same building in this zip code! What gives?
Read an article estimating that the national shadow inventory is about 7 million units. How would you go about determining how many months that would take to clear? Anybody know where to find the current annualized sales rate?
Here’s the article: http://www.ritholtz.com/blog/2010/10/shadow-inventory-an-avalanche-thats-coming-soon/
“but what you fail to realize is that there IS going to be an increased demand out there once the sidelined buyers get back into the market.”
I had to run out so I got left out of this conversation. Clio, what you fail to realize is that there IS going to be an increased supply out there once the sidelined sellers get back into the market.
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
– R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
“this is not going to happen and certainly not going to happen to the extent that everyone hopes/expects. prices are going to start going up starting in the spring and defnitely by 2012 – nobody who is truly “in the know” is doubting that…””
– Clio, cribchatter resident bull, October 27, 2010
HD- HUGE HUGE differences btw the stock market and real estate market:
1. everyone needs a place to live – not everyone needs a stock: therefore there will always be a demand for real estate. In the desireable areas of chicago, this demand will ALWAYS be there.
2. americans LOVE their living spaces and, unlike most other countries in the world, use their homes to define to the world who they are. if you go to europe, you will find extremely rich people living in what we would call “pauper apartments”. in the u.s., you just don’t see that happening often.
3. Americans LOVE luxury – high end homes won’t do so bad
4. Americans are inpatient, in general and won’t tolerate much pain. Therefore, those that are living at home, those that are living in cramped quarters, those that are living in “bad” neighborhoods and want to upgrade will NOT wait – they will scrape every penny they have together to be able to live more comfortably.
However, it is obvious that I am not going to convince the “bears” out there and you guys certainly are not going to convince me otherwise – we will just have to wait and see.
I don’t get it, if so many of you on this site/thread are so “down” on real estate and believe that prices will continue to drop in the near future and only demonstrate modest increases in the next 10 years, why the hell are you wasting your time looking at real estate? Why not just rent and use the time you spend discussing real estate on something else? Gary, you are one of the biggest “negative ned” with regard to real estate prices, why are YOU in the market to buy something?
Obviously these are rhetorical questions – you really have to look at someone’s actions and not their words to get their true opinions on the matter. The fact that permaBEAR, and Gary as well as miumiu and others who are so negative about the market are actually ACTIVELY looking for properties to buy right now should tell you that deep down they know I am right and that prices ARE going to rebound. Seriously, why else would they be in the market?!!!
I think nominal prices will rebound eventually, but my wife saw a place she loved and the building doesn’t turn units over very often, so she wanted to buy ASAP. It’s much nicer than rentals and cheaper on a monthly basis, but I am walking into my transaction with the expectation that between transaction costs, upkeep and a little more depreciation in the market, I will be lucky to walk away flush (ie at the same place I would be if I rented a comparable place, which would mean I would lose part of my down payment) in 5 years. I’m not buying with an expectation of appreciation, I’m buying for an inflation hedge and because I have too much cash and I don’t trust the stock market or bond market at all right now. Not a ringing endorsement of RE, but the elasticity of demand for housing is certainly steeper than stocks or bonds – everyone needs a place to live.
I know that market psychology dictates you want to buy when no one else is buying. All the open houses we went to had other people looking and the place we bid on had another offer. But we looked at places in good neighborhoods, I think those are probably within 10 percent of a bottom, but marginal neighborhoods and CMK/Invesco type buildings are still looking at another 25% haircut at least, which will probably pull CS down some more.
“I don’t get it”
No kidding.
“Americans LOVE luxury – high end homes won’t do so bad”
With tighter credit, not many people are truly rich enough to afford the “high end homes” so the prices will come down sharply to match the actual demand (i.e. wealth) of most Americans. This is what happened in the 1930s/40s/50s after real estate collapsed during the great depression.
If you look around Chicago (not including the suburbs) it is truly shocking how many properties are priced above $1 million.
“I had to run out so I got left out of this conversation. Clio, what you fail to realize is that there IS going to be an increased supply out there once the sidelined sellers get back into the market.”
I can’t even tell you how many people have already told me that they are listing in the spring. Because it will be “better” then. Inventory is going to spike (not to mention additional REOs etc.)
When I said earlier that it’s going to get really bad in a few months, what I meant was pricing wise. In 6 months even more sellers will have to face reality and throw in the towel. Right now, many are sitting on their prices with no buyers in sight.
clio, if you believe prices have bottomed and will rebound next year, why aren’t you buying everything on the market? You have the cash and it will certainly get you more attention and put bigger smiles on faces than the lambo ever could. Actions speak louder than words, so deep down you must agree that prices are still falling. Seriously, why else wouldn’t you be buying everything?!!!
I’ve always been a fan of catchy RE phrases. “Buy land, they ain’t making more of it,” “buy to wait, don’t wait to buy,” and the latest “the difference with housing and hosing is U.”
As I have stated many times before:
1) Banks aren’t going to sell the REO’s at drastic discounts unless the places are crap. They also are in no hurry to sell them. Most people will wait for them to hit the MLS when in reality, if the buyer wants a really good deal, they should contact the banks directly and start baggering them.
2) Buyers are looking for deals. Period.
G – it was a rhetorical question – but I am not surprised that you can’t read into that. The downfall of most “number” peole is that they can collect and present data, but don’t know how to properly analyze it. Although I didn’t see those types when I was at Harvard or Stanford, U. of C. was full of them – no common sense. Parents, save your money – don’t send your kids there.
“clio, if you believe prices have bottomed and will rebound next year, why aren’t you buying everything on the market?”
G – I AM looking for places to buy – just can’t find anything that interests me …. YET. I am no longer interested in making money in real estate (it is too easy and boring) – my motivation has changed and currently I am looking for unique properties to restore. If you know of any, let me know.
You’ve quite perfectly stated the reason for the real estate market paralysis and the continued real estate depression.
However, the banks cannot hold on to the inventory forever. The trickle out game plan quite obviously failing – which is leading to additional prices declines – which is exactly what the banks were trying to avoid by employing the trickle out game plan in the first place.
When one bank blinks first all the rest will too. The proverbial damn will break, the market will be flush with cheap properties and there will be a feeding frenzy among first time home buyers and renters and investors and that will be the first step towards recovery.
“#a-fed on October 30th, 2010 at 10:17 am
As I have stated many times before:
1) Banks aren’t going to sell the REO’s at drastic discounts unless the places are crap. They also are in no hurry to sell them. Most people will wait for them to hit the MLS when in reality, if the buyer wants a really good deal, they should contact the banks directly and start baggering them.
2) Buyers are looking for deals. Period.”
“However, the banks cannot hold on to the inventory forever. The trickle out game plan quite obviously failing”
HD – I complete agree for the forever part but they can hold them for 5-10 years as long as the end sell result outweighs the carrying costs. It not failing though by any means. When a REO sells, it essentially re-establishes the bottom value for that type of property. Typically the sales on healthy REO’s are only 10% below “market value” which, to many including myself, is about what the market is still overpriced by in some cases. In others, such as SFHs that are listed hundreds of thousands below last sell price, are good deals.
Buyers that are holding out for fire sale prices are going to be waiting a long time or are going to end up with a good deal on a place that isn’t anything special.
“When one bank blinks first all the rest will too.”
Absolutely not true. Unless forces of the gov intervien or all REO’s are starting major bidding wars – selling above ask – the bank will do what’s best for the bank. Of course if two banks have properties next to each other and one sells, the other will attempt to replicate but in most cases, the bank will see what’s going on and combine semi-toxic assets in packages and sell them to the bank that is constantly selling properities or to smaller banks. This in turn, gets several properities of the banks books at once.
The first step to recovery starts with lending. If you cant get money, you cant spend money. The banks need to loosen the neck-noose.
“However, the banks cannot hold on to the inventory forever. The trickle out game plan quite obviously failing”
HD – I complete agree for the forever part but they can hold them for 5-10 years as long as the end sell result outweighs the carrying costs. It not failing though by any means. When a REO sells, it essentially re-establishes the bottom value for that type of property. Typically the sales on healthy REO’s are only 10% below “market value” which, to many including myself, is about what the market is still overpriced by in some cases. In others, such as SFHs that are listed hundreds of thousands below last sell price, are good deals.
Buyers that are holding out for fire sale prices are going to be waiting a long time or are going to end up with a good deal on a place that isn’t anything special.
“When one bank blinks first all the rest will too.”
Absolutely not true. Unless forces of the gov intervien or all REO’s are starting major bidding wars – selling above ask – the bank will do what’s best for the bank. Of course if two banks have properties next to each other and one sells, the other will attempt to replicate but in most cases, the bank will see what’s going on and combine semi-toxic assets in packages and sell them to the bank that is constantly selling properities or to smaller banks. This in turn, gets several properities of the banks books at once.
The first step to recovery starts with lending. If you cant get money, you cant spend money. The banks need to loosen the neck-noose
“Buyers that are holding out for fire sale prices are going to be waiting a long time or are going to end up with a good deal on a place that isn’t anything special.”
I absolutely completely agree with you, A-fed. When you think about it, it is obvious that banks are in a much better position of holding on to these properties than individual sellers. They have much much much more money. They are also in no rush to sell these properties at a great loss (not only because they will lose money, but also because right now, the value of the mortgage is already “on the books” and reflects the strength of the bank. If they sell, that loss is immediately recorded and the banks appear much weaker – I know I am not explaining it well but I am at work and have 60 billion things/people screaming at me.
“When you think about it, it is obvious that banks are in a much better position of holding on to these properties than individual sellers.”
Bullseye…There is no risk associated with the bank keeping the property. In fact – attorneys/bankers feel free to chime in here – because the REO’s are considered *tangible appreciating assets*, the banks recieve certain tax breaks making the carrying costs next to nothing besides condo associations (which by Chicago law the association can only charge up to 6 months back assesments to the new buyer if in defualt) and upkeep.
Should the bank sell that property, its still classified as an *account recievable* in the books until the debt is satisfied (30 years) though in an earnings report, they can classify it as *risk associated gain.* I can only imagine from there they break it down into risk-to-gain %’s and categorize, package and re-sale, foreclose…ya know, do tha bank thang.
Banks have to pay taxes on the properties which in some cases is substantial. The property will deteriorate throughout this 5-10 year game plan which will lose them even more money when they finally put the property on the market.
It’s inevitable that the banks will flood the marketplace with foreclosures. There are too many for the banks to carry indefinitely. It’s just a matter of time. The extend and pretend plan has failed, the carry and hold plan is failing; and the only real solution is to sell and move on.
Anyone’s belief that the banks will be able to stem the tide of hundreds of billions of dollars of foreclosure is little more than Heidegger’s leap of faith, a ridiculous absurd metaphysical belief not based in any reality or ledger book.
The carry and hold has frozen and paralyzed the marketplace. little is selling, every buyer has time and wants a deal; they’re losing even more money by failing to originate mortgages; because they’re carrying and holding the very same houses that their mortgage customers prefer to buy. It’s failing, miserably. There’s no arguing around that. They will have to change course and release more properties. you just wait aned see.
Kierkegaard??
cribchatter needs a way to tag and ignore particular posters. basically a “clio filter”. I’m tired of having to scroll past the shrill shill and his related posts…. any suggestions?
I’m with homedelete here. No way the banks can hold for 5-10 years. Who’s going to take care of and manage all these properties? The banks are not in the landlording business. Will they let them sit vacant for a decade? I don’t think so. What are you suggesting they do with them a-fed? have management companies manage them all as rentals?
It may be very poor long-term planning, but that doesn’t mean that current bureaucratic, legal, operational, and financial incentives don’t enable it in the short term.
“cribchatter needs a way to tag and ignore particular posters. basically a “clio filter”.”
It’s quite easy – when you see “clio” on the header, just don’t read it. The fact that you couldn’t figure that out on your own shows that you must have “ignored” quite a bit in your education…..
YOu’re right kierkegaard, it’s been a while since I’ve used my philosophy minor. that may have been the first in a couple of years and I got it all wrong. hahahahah!
“roma on October 30th, 2010 at 6:19 pm
Kierkegaard??”
“Gary, you are one of the biggest “negative ned” with regard to real estate prices, why are YOU in the market to buy something?”
I do believe that in the long run real estate prices will rebound at a rate above the historical average because they are now 11.5% below trend line. I believe that they will recover that 11.5% + 3.7% per year within the next 5 years let’s say. However, in the next 6 months I can see prices going down from here because of the current economic environment and supply/demand imbalance. I also realize that a) I can’t time the bottom exactly. I can only see it after it’s been hit and b) given my wife’s very particular requirements (she’s my toughest buyer) and the fact that my buyers keep wanting to buy stuff that I’m interested in it may take a while for the right thing to come along so I have to be looking now and c) it’s not just about buying at the bottom but buying something at a decent value that satisfies a housing need. For the first time in 10 years I’ve seen properties that I can buy cheaper than what my rent costs me and d) it’s not just about home prices but you have to also factor in mortgage rates. A lot of my comments here are based upon my sell side perspective.
“they can hold them for 5-10 years as long as the end sell result outweighs the carrying costs.”
Have you ever seen what happens to a house when it is empty for even a year? (even by a “normal” owner?) The property deterioration happens quite quickly (especially in the midwest climate with all the seasonal changes.)
The banks are NOT going to hire property managers to oversee these properties. Don’t forget- in the city of Chicago- bank owned houses have to be boarded up, the water and power shut off, and made “safe” within a specific amount of time (maybe someone knows what it is here.) The banks HAVE been doing this in some cases- but it makes it incredibly difficult to sell a year or two later.
Believe me- they don’t (and won’t) hold a foreclosure for 5 years. They would be insane to do that (with the deterioration of the property.)
And moreover Sabrina, I don’t think you’ve ever featured a foreclosure property held by the banks for any longer than a year or two. The holdup comes during the foreclosure process and that can take up to three years, maybe a little longer, but I’ve never seen an REO property from ’06 be put on the market today.
In fact, a good friend of mine moved out of a rental condo that went into foreclosure shortly after he moved out in May. The landlord must have done a deed in lieu because on Wednesday my friend sent me a link to the MLS listing for the very same unit.
Saying that banks are going to hold onto units for 5-10 years hasn’t happened yet, isn’t happening now, and is unlikely to happen in the future.
That’s right HD. I’ve seen some that are 2009 properties and it’s taking the bank like a year to put it back on the market (after everything is said and done.) But that is on the long side (so that would be like 3 years after lis pendens, foreclosure, bank owned and then back to market.)
Once the bank gets it- I’ve also seen properties that come on the market within like 2 or 3 weeks. The banks clearly just want to get rid of certain properties.
There is NO WAY they will hold a property for 5 years.
Most of the shadow inventory is tied up in homeowners who are currently in foreclosure or are more than 30+ days late or currently in the foreclosure or loan modification process. The homes are still occupied and although they may have deferred maintenance, they are mostly occupied and not deteriorating. I’ve heard rumblings that there only between 500k and a million vacant REO properties being held and not on the market. My opinion is that a lot of these properties are in bad and dangerous areas where there are too many properties (englewood, roseland type areas). In fact, interestingly enough, I’ve seen two interesting cases: on the west side the bank literally dropped its foreclosure on an owner-occupied crapshack and gave up. The bank isn’t even bothering trying to foreclose but it still retains a lien if he ever tries to sell; and I saw a case on the south side where the bank released it lien to the house rather than foreclose and pay the taxes/city fines. I saw the recorded release of lien. They gave him the house. But a few weeks later he got a letter from a collection agency for $150,000. So they released the collateral but kept the note.
I have no doubt that most of the distressed properties are owner occupied until the bank takes over and then they try and sell them quickly. (this would be- as you said- in the more desireable areas.) That’s why we don’t see many boarded up houses or condos on the north side (but you DO see them all over the south side- which- under Chicago law the bank must do if not occupied.)
The bank doesn’t WANT to hold onto these properties. So maybe that’s why it’s simply not bothering to foreclose on some people in neighborhoods where they would have to board it up and sit on the property for years and years. They’d rather have someone living in it- even for free.
I want to believe that the banks will release all of these foreclosures because I am getting really anxious to buy something – but I am just not seeing it happen. In fact, there is a most beautiful house in the Tuscan Woods subdivision of OAk Brook that was finished (partially finished) in 2007-2008 and went into foreclosure shortly thereafter. I have called the builder AND bank NUMEROUS times about buying this place and they have never called back or given me any useful information. It got to the point where I was actually telling them I would pay 100% cash for the place, take it “as is”, just to get them to call me back and give me more information – still nothing… I don’t get it.
The problem Clio is that the “bank” that you called does not necessarily hold the final note. The clusterf*ck that is MERS clouds up everything now. There is no logic as to when a foreclosed property gets pushed through the system and appears on MLS.
“It got to the point where I was actually telling them I would pay 100% cash for the place, take it “as is”, just to get them to call me back and give me more information – still nothing… I don’t get it.”
No offense, Clio, but they don’t have time for you or your offer. They are completely understaffed and overwhelmed by the foreclosures and no one knows what they are doing. Don’t you read the foreclosure articles all over the papers every week? Another one in the Washington Post this weekend about how even people who are doing a modification program are being foreclosed on. And these people have been calling the bank every week (no one gets back to them- no one knows what’s going on.)
Imagine living in your house, getting the eviction notice- while you’re paying your “modified” mortgage” and then no one at the bank talking to you? In one case, a woman was actually foreclosed on after the bank said it would stop the foreclosure. She is suing them.
So- your calls about a house that they may (or may not) actually own (who knows these days) is not something they really want to deal with (even if you are willing to pay “all cash.”)
“It got to the point where I was actually telling them I would pay 100% cash for the place, take it “as is”, just to get them to call me back and give me more information – still nothing”
I love it because it provides an advantage to those of us who know how to navigate the system.
“I love it because it provides an advantage to those of us who know how to navigate the system.”
Gary, if you could negotiate the sale – you definitely would be worth the 5% commission!!!!!
It wouldn’t be 5%. If the bank owns the property and has no listing agent involved the maximum you should be paying an agent is 2.5%. And on anything above $1 MM we only charge 1.25%. In the case of an REO property that is not yet listed we tell the bank we will charge them 2.5% and then rebate half of that to the buyer. We tell the bank a few other things as well.
Everybody keeps saying the banks are understaffed, etc. I just don’t get it! This foreclosure crisis has been going on for years now. The banks made great profits last year and we have record high unemployment. The banks could easily go out and find and train great people in a few months and these new staff would pay for themselves in a week or two.
If the bank I bought my short sale from had been more on the ball, they would have sold it for 80k more then I eventually paid 7 months before I bought it.
Sabrina on October 31st, 2010 at 4:25 pm:
“They are completely understaffed and overwhelmed by the foreclosures and no one knows what they are doing. Don’t you read the foreclosure articles all over the papers every week?”
Here is an in-depth look at the actual process employed by the banks for short sales. I did not make this up: http://www.chicagonow.com/blogs/chicago-real-estate-getting-real/2010/10/why-short-sales-take-so-long-real-examples.html
I can only assume that foreclosures are just as messed up. This is why things move at a snail’s pace. This is a process design 101 problem.
My sentiments mirror those of dahliachi. There has to be more to it than being understaffed and incompetence.
Banks are basically insolvent and keeping the foreclosures at a trickle in an attempt to hide their insolvency from the market is the likely scenario.
Its not as if this crisis just started–they’ve had ample time to ramp up their staffing as well as fix their broken processes if they really wanted to dispense with foreclosures in a manner that keeps the distressed inventory at least stable, if not dropping.
Its laughable what they’re able to get away with. And where is the motivation to fix their broken processes if they know they will just get bailed out by the government if they run their business like crap?
That was an interesting (and exhausting) read Gary. Thanks!
The banking industry (especially the mortgage portion) is filled with incompetence, inefficiency, and just plain stupidity. Basically, it is the result a culture that doesn’t value hiring quality employees, short term outlooks, and ultimately, a result of trying to do everything on the cheap since margins are so thin. Banks are so big that they for all purposes of basically government entities and operate as such right down to the service levels.
Responding to: “1. Econ 101 – If you offer more of something without an offsetting increase in demand prices decrease.”
And [unquoted] Clio’s expectancy for increased demand.
The Econ 101 quote is dead on. Clio would need, according to basic Econ principles, a shift in future demand to maintain or increase price. What worries economists is the same thing Clio doesn’t see: the sidelined SELLER.
It seems hard to dispute that current inventory levels are not healthy. That means if buyers come off the sidelines there’s still plenty of stock around. But what happens if sidelined sellers come to the field as well? Inventories would shift upwards. In sum, Clio’s betting that there are so many sidelined buyers that inventories will plummet–so much so that sidelined sellers can jump in and feel no price pressure because inventory cleared.
I think for Clio to be right, he needs to explain how there is going to be either a shift downward in sellers and inventory. I’m not sure where that’s coming from in the near future.
“I’m not sure where that’s coming from in the near future.”
Clio is still living in the paradigm of last decade and it’s quite obvious–the paradigm where the sellers have all the leverage. Such is not the case anymore and it’s quite the opposite.
Gary – thanks for the articles. What can a buyer do? Would it be reasonable to hire an attorney at the outset to coordinate everyone involved – my agent seems to be less knowledgeable.
“I think for Clio to be right, he needs to explain how there is going to be either a shift downward in sellers and inventory. I’m not sure where that’s coming from in the near future.”
1. The population is increasing everyday
2. Old houses, and forecclosed houses are becoming more and more inhabitable and will likely be torn down.
3. No appreciable new construction is taking place.
4. Americans love luxury and convenience and will not stand to suffer much longer in rentals/cohabiting w/ parents/relatives.
These factors will ensure that nice places in desireable areas will be in demand,
Which seems to be driving the rental market. Clio, is it plausible that your thesis makes sense only after rental prices jump and the economics start pointing to howmownership?
http://www.chicagotribune.com/classified/realestate/sc-cons-1028-umberger-20101029,0,1438331.column?obref=obinsite
“The clusterf*ck that is MERS clouds up everything now.”
What’s *really* funny about this is that some (elsewhere on the intertubez) have suggested that MERS is a better model for real estate recording than the existing state by state hodgepodge.
“What can a buyer do? Would it be reasonable to hire an attorney at the outset to coordinate everyone involved – my agent seems to be less knowledgeable.”
Why not hire Gary? He seems to know the process and is likely to cost you less than even the cheapest lawyer.
anon(tfo) – How does it work if you are already working with an agent?
Just got back from a big trip out west, literally every person I know with an underwater mortgage on the west coast has simple stopped paying. They are all taking huge vacations and socking away as mush CASH as they can. The “smart” ones have also stopped paying their student loans. But you guys want to hear the best part? They are also starting to drop their health insurance. If they get sick or hurt, they go to the clinic with no intention of ever paying when they get the bill.
The whole system is coming apart, folks.
I see that Seattle’s foreclosures are up over 70%. Makes sense. Same cost of living as Chicago, maybe *slightly* higher and 1/20th of the jobs.
Here are my questions, if things are this bad now, what happens when the junk bond market crashes? What’s driving the economy right now? It seems to me that it’s mostly higher education and health care that people have no intentions of actually ever paying for.
It’s time to bring back debtor’s prisons and corporal punishment. It’s the only way we’ll ever get the deadbeats to pay up.
“2. Old houses, and forecclosed houses are becoming more and more inhabitable and will likely be torn down”
I agree with this point insofar as the north shore is concerned. Many, many of these homes are owned by silent / late baby boom generation that lived differently than youung families do today.
Open floorplans? Finished basements? Ensuite bathrooms? Nope. Try formal dining rooms, dead space foyers and 2 baths for a 6br home.
This is a prime source of gut or tear down activity.
haha, yeah because your 3 friends out west way overextended themselves and are being d-bags means everyone is going to do that… Aren’t you the guy calling for massive degentrification in Chicago?
you should really change your name to doomsday or something
“The whole system is coming apart, folks.”
Don’t approximately 1/3 of all homeowners own their homes?
I get that young people are deadbeats, but how has this changed in the last 50 years?
“If the bank I bought my short sale from had been more on the ball, they would have sold it for 80k more then I eventually paid 7 months before I bought it.”
Too bad that the CS index (according to those here that “know”) will erase any “great deal” you got and then some. Not my call, just the experts.
“thanks for the articles. What can a buyer do? Would it be reasonable to hire an attorney at the outset to coordinate everyone involved – my agent seems to be less knowledgeable.”
On the buy side you have much less control unfortunately. The first thing I do when representing a buyer is assess the listing agent. If they are inarticulate, lazy, unresponsive, etc…then you know you are in for a long and painful process. It may never close. The other thing you can do is find out if the listing agent is using a third party negotiator. The deal is more likely to get done under those circumstances but you may end up paying an additional 3% to cover the cost of the negotiator – that part is a much longer discussion. In terms of your representation you just need to make sure that whoever you are working with is tenacious as hell.
Sonnies, wish you could have seen ELP last night. Yeah it was Halloween, but there isn’t a single person in this city that could say with a straight face that the neighborhood isn’t going down the drain in front of our eyes.
I’m from the West Coast, I know more than 3 people out there. I know all kinds of people in every major West Coast city I’m not talking about a few overextended wannabees in the Marina, Cap Hill, or Pac Beach getting their comeuppance, although I do know some of those. I just did the whole West side tour: San Diego, Portland, SF, Seattle, and OC and I’m telling you that people have just stopped paying their debts altogether. It’s just a new trend. I’m talking about ALL my friends, their parents, their extended families, my extended family, etc… Trends start out West, it usually takes two years for the Midwest to finally catch on. I’m just giving you folks a heads up. You don’t believe me? How many of your West coast friends have stated talking about moving to Denver or Austin? When you first heard it, you were wondering why would someone leave So Cal or the Pac NW for a hole like Denver or Austin? It’s cause they’re flush right now from having no expenses for the last 7 months or so and it’s cheap to live in both places. Creepy, huh?
*This* city is getting worse, but I’ll take it for now.
1. The population is increasing everyday – this increase is much less on a percentage basis annually than historical standards from 1945-1999, as there is tougher immigration, and fewer average kids per household. The population growth alone accounted for much of the US’ growth in home prices in the post WWII era. Without this, it will be rough.
2. Old houses, and forecclosed houses are becoming more and more inhabitable and will likely be torn down. – I don’t see how this affects the housing market that much, as it will be very gradual over time.
3. No appreciable new construction is taking place. – it is in spots – ie. I’ve seen 10 tear-downs alone in the Southport area between Ashland and Racine, and Belmont and Cornelia this year alone.
4. Americans love luxury and convenience and will not stand to suffer much longer in rentals/cohabiting w/ parents/relatives. – much of America can’t afford luxury, especially the younger households who are not receiving significant parental financial support. They have lower wages and significant student loan debt. Their long-term job prospects are much grimmer than their parents were, so why buy?
One more thing on population growth – it really drove the economy in the 20th century in the US. Without it, where will the growth come from? Finance, government, and health care? None of these seem sustainable drivers, and will cause the use to have to downshift.
I think a great opportunity for new college grads is to go work abroad for 7-10 years,especially in high-growth economies like Brazil, or portions of the middle east (Abu Dhabi). That experience would pay dividends long-term.
Stopping your student loans is not smart, in fact, it’s one of the dumbest things you can ever do. The internet is full of people who stopped paying their $10,000 direct loan and today they still owe $40,000 and it’s being garnished from their social security disability check even though they’ve already paid tens of thousands of dollars over the years.
Like I tell people, I already have a mortgage but no house – it’s my student loan payments. And they wonder why the market sucks and is so slow and young people aren’t interested in buying homes.
“How many of your West coast friends have stated talking about moving to Denver or Austin? When you first heard it, you were wondering why would someone leave So Cal or the Pac NW for a hole like Denver or Austin?”
When I first heard it? In 1992?
“Trends start out West, it usually takes two years for the Midwest to finally catch on. I’m just giving you folks a heads up.”
Thanks, Chicagobull. Here I stood, trying to get ahead of the trends in this old cattle town, and the whole time all I needed was the acquaintance of some west coasters…aww shucks!
I think a great opportunity for new college grads is to go work abroad for 7-10 years,especially in high-growth economies like Brazil, or portions of the middle east (Abu Dhabi). That experience would pay dividends long-term.
Dave funny you mentioned this. I have quite afew friends that have taken jobs overseas, not for the experience but because the opportunities/pay is better. One friend has lived in Korea for around 15 years, he still has a home in the U.S. that his family occupies in the summer. The question is will there be a brain drain in the US in the coming years? He says that he never coming back, maybe to retire but thats it. The others have said it will be short-term but we will see. Is this where Clios sideline buyers are heading?????
A friend of mine is in Abu Dhabi and he makes double what he did in the states, and has his housing covered for the first 2 years as well. He’s able to bank a lot of money over there, get great experience, and then come back when the time is right.
Dave M: “I think a great opportunity for new college grads is to go work abroad for 7-10 years,especially in high-growth economies like Brazil, or portions of the middle east (Abu Dhabi). That experience would pay dividends long-term.”
Abu Dhabi is its own bubble. I remember reading about the airport parking lot being full of abandoned cars from people (mostly Britons) fleeing the country from their busted real-estate investments. Seems that the Abu Dhabi justice system does not protect debtors from imprisonment. The basic human rights that we enjoy in the U.S. are not necessarily available everywhere else.
danny,
You have Abu dhabi mixed up with Dubai. But you are correct about debtors prison, something much needed in the US. And if you go to Saudi there is a place called chop chop plaza, I think you can figure out what’s goes on there.
Thanks Valasko. I didn’t even realize that the two were different. I learn something every day.
danny,
You were,t completely off. Both Dubai and Abu Dhabi are emmeratea (states) of the UAE.
“How many of your West coast friends have stated talking about moving to Denver or Austin? When you first heard it, you were wondering why would someone leave So Cal or the Pac NW for a hole like Denver or Austin?”
Everyone I knew in the Bay Area in 2000 and 2001 wanted to move to Austin. At least there were jobs there. Denver was always popular too- but everyone knew there weren’t the jobs.
So Chicagobull- no one is paying out west? Where specifically? So many people are underwater- this is – unfortunately the next leg down in lots of areas. If you bought for $600k in Las Vegas and it’s now worth $150k would you want to keep paying the payments on $600k for the next 20 years? It’s going to get interesting out there.
“I’m from the West Coast, I know more than 3 people out there. I know all kinds of people in every major West Coast city I’m not talking about a few overextended wannabees in the Marina, Cap Hill, or Pac Beach getting their comeuppance, although I do know some of those. I just did the whole West side tour: San Diego, Portland, SF, Seattle, and OC and I’m telling you that people have just stopped paying their debts altogether. It’s just a new trend. I’m talking about ALL my friends, their parents, their extended families, my extended family, etc… Trends start out West, it usually takes two years for the Midwest to finally catch on. I’m just giving you folks a heads up. You don’t believe me? How many of your West coast friends have stated talking about moving to Denver or Austin? When you first heard it, you were wondering why would someone leave So Cal or the Pac NW for a hole like Denver or Austin? It’s cause they’re flush right now from having no expenses for the last 7 months or so and it’s cheap to live in both places. Creepy, huh?”
You have to admit the prices just got beyond the beyond in most parts of California- at least. If they’ve all decided to stop paying then it’s not really surprising. It was a fantasy anyway. (one of my friends stopped paying after her house dropped by 50% in West Oakland. She got the bank to agree to a short sale and has now moved into a rental. The house was eating 50% of her income every month!)
It never got quite that bad in the Chicagoland area. We had a bubble but nearly as bad as out there (though we probably had more overbuilding than some areas.) California has had it “easy” for many decades. They’re not used to hardship frankly. Midwest stock is a bit different. We have snow and cold. We deal. They get thunderstorms and huddle in their closets (a true story.)
“If you bought for $600k in Las Vegas and it’s now worth $150k would you want to keep paying the payments on $600k for the next 20 years? It’s going to get interesting out there.”
Sabrina, it’s not a question of whether you want to pay or not – you are obligated to pay. Going through foreclosure is a HUGE process and I believe you have to declare bankruptcy or have your money hidden somewhere because if you have any assets in your name, they can and WILL be taken away. It is not as easy as just walking away. I don’t know why everyone here thinks that. Also, not only can you forget about buying a place, just try renting a place – it is hard to do. Your financial life is probably ruined.
The thing about California is that the bubble was nearly everywhere; in 2006 you could travel from downtown SF, across the bay, into the suburbs, over a mountain pass and into the desert and come across $500,000 tract homes on postage stamp sized lots that sold for $150,000 just a few years earlier.
Chicago didn’t have the bubble everywhere but you’ve featured properties here on cribchatter that have appreciated, 2 or 3 or more times during the bubble. You featured one property in lincoln sq. that increased in price 7-fold since 1994! There have been plenty of lincoln park, lake view, west town, west lake view, etc homes that have appreciated plenty. 832 N. Marshfield, featured a few weeks ago, was $96,000 in 1994; and sold for $450,000 in 2010 with 20% down. Yes, the neighborhood has improved, and the house has been upgraded, but in my opinion, that doesn’t justify a 4.5x price increase in 16 years. Not every gentrified neighborhood had price increases like that. Few suburbs had price increases like that. It’s still a bubble out there despite some price decreases. We’re only at 2002/2003 prices. We’ve still got a ways to go.
“It never got quite that bad in the Chicagoland area. We had a bubble but nearly as bad as out there (though we probably had more overbuilding than some areas.) California has had it “easy” for many decades. They’re not used to hardship frankly. Midwest stock is a bit different. We have snow and cold. We deal. They get thunderstorms and huddle in their closets (a true story.)”
I don’t disagree with you HD. I never said we didn’t have a bubble- but it wasn’t nearly as bad as California or Las Vegas. But all you have to do is look around what is happening now in places like Galewood and Portage Park and you can see how big the bust is.
Should a small 3-bedroom bungalow in those neighborhoods really go for $400,000? It seems crazy now. But they did.
I just saw some comments that MB Financial, a local Chicago bank, said in its recent earnings conference call about the Chicago real estate market. It said it’s seeing prices down 25% to 50% with many more properties trending on the higher end of that scale (i.e. towards 50%.)
“Sabrina, it’s not a question of whether you want to pay or not – you are obligated to pay.”
No you aren’t and that’s a fallacious argument. The decision of whether to pay or not is an economic decision NOT a moral one.
You can’t frame the context as a moral one just because you would like it to be that way. I’d like Chicago to be like Mayberry but reality doesn’t match my ideal. You need to learn to separate the two dude.
“Also, not only can you forget about buying a place, just try renting a place – it is hard to do.”
Show up with a three month+ deposit from all the savings you got from not paying the mortgage and trust me most landlords will be willing to work out a deal. At the end of the day they are motivated by economics as well.
I must say that I’m a bit shaken up by chicagobull’s account of friends giving up making mortgage payments. I read a lot of doom and gloom, but this first hand account really puts a fine point on it.
“You can’t frame the context as a moral one just because you would like it to be that way. I’d like Chicago to be like Mayberry but reality doesn’t match my ideal. You need to learn to separate the two dude.”
I’m not even touching the moral vacuum that most people live in – I AM talking about financial aspects of walking away from a mortgage. It isn’t as easy, stress-free, or “clean” as you may think. Banks are NOT going to let someone with money in the bank walk away from a mortgage. Yes, there are ways to hide money, but just ask the people who have gone through foreclosure – it is not an easy process.
Furthermore, your comment about coming to a landlord with 3 months rent is laughable. Any owner of any nice apartment/house is going to look at credit scores/credit reports, etc. – most owners do NOT want to deal with the headaches of someone who has gone through a foreclosure. It is obvious that they don’t understand their own finances and could just “walk away” from the rental if things go “badly”. Sure there are slumlords and bad apartments that will take you in, but nothing nice…. and that is going to be your life for a long time (at least 10 years). Your bad credit is also going to affect your car loan rate, insurance rate, and affect your ability to get credit. Although some people may think this is not such a big deal, it actually IS.
Sabrina, I believe 50% off, I see figures pretty regularly all the time. Especially with helocs. In 2007 they borrowed 300 and its worth only 150k or 175k today.
“Banks are NOT going to let someone with money in the bank walk away from a mortgage.”
Depends on what state you live in. California, for example, is a nonrecourse state. The banks cannot go after your other assets (at least on the primary loan.) So there is little incentive, even for rich people, to keep paying on an underwater property where there is no hope for 20 years of getting out from under. I was just reading about a financial guru guy in Sacramento who moved to NY and is now selling his million dollar house in short sale in Sacramento after facing foreclosure. You think he doesn’t have any other assets?
Here it is:
Even financial gurus like Tom Sullivan aren’t immune to the foreclosure mess.
The longtime Sacramento investment adviser and commentator, who now works for Fox Business Network, is attempting to unload his former Granite Bay home in a short sale after being threatened with foreclosure.
Sullivan and his wife, Caroline, have listed his five-bedroom, Mediterranean-style house on Wexford Circle for $1.15 million. They paid $2.5 million for the home in 2004 and took out a $1.6 million mortgage, according to Placer County property records and MetroList Services Inc.
Sullivan moved to New York in 2007 to become an anchor on the Fox Business Network.
Read more: http://www.sacbee.com/2010/10/21/3120279/financial-guru-tom-sullivan-seeks.html#ixzz14864LZY1
@Clio:
“Banks are NOT going to let someone with money in the bank walk away from a mortgage.”
—
Yeah It’s complicated. There’s recourse vs non-recourse (anti-deficency) states, one action states, et. al.
—
From what I recall from my co-worker who moved back from California to Ohio,
California is a non-recourse / anti-deficency state. The bank can go after second mortgages and HELOCs, but if you just have a first mortgage and you are underwater…its not that hard to just walk away even if you have substantial assets.
“I just saw some comments that MB Financial, a local Chicago bank, said in its recent earnings conference call about the Chicago real estate market. It said it’s seeing prices down 25% to 50% with many more properties trending on the higher end of that scale (i.e. towards 50%.)”
That comment was based on peak values. Insightful? Not really.
If you look at the CS index w/o SA, you get more than 25%. Of course Chicago real estate is down between 25% and 50% from peak values.
“So there is little incentive, even for rich people, to keep paying on an underwater property where there is no hope for 20 years of getting out from under. I was just reading about a financial guru guy in Sacramento who moved to NY and is now selling his million dollar house in short sale in Sacramento after facing foreclosure. You think he doesn’t have any other assets?”
OK – now i am really confused – I thought you had to prove financial hardship before they agree to any short sale (ie, if you have assets/money in the bank, I thought mortgage companies will NOT agree to a short sale). Isn’t this true?
JMM I don’t think the comment was supposed to be insightful as opposed to informative….and if this were the reading comprehension section of a standardized test, the important part is as follows: “with many more properties trending on the higher end of that scale (i.e. towards 50%.)””
“most owners do NOT want to deal with the headaches of someone who has gone through a foreclosure.”
Likewise, we were recently briefed us on the possibility of adding this question as part of our employment screening process, particularly for white collar / managerial applicants.
Interesting idea, quite frankly.
“with many more properties trending on the higher end of that scale ”
Many more = what proportion? Versus what compare? Does many more mean more than a year ago, or does it mean most are close to 50% and only a few are at 25%?
I don’t know. It’s ok — you probably don’t know either. It just sounds ominous, so why not post it?
“if this were the reading comprehension section of a standardized test”
Too bad you can’t take those LSATs over right?
What do people think will happen to all these Californians who “walk away” from their mortgages? If the banks hold on to these houses for over a year, these places will likely need work and will be hard to sell (because the only people that will be able to buy them will be investors with cash to fix up the places – also, mortgage companies will be reluctant to give someone a mortgage on a place that needs tons of work). In my opinion, this could cause a huge deman for rentals (b/c you are taking these forclosed housing units out of the mix and flooding the market with renters). Do people think that this is going to happen?
Why would I want to do that? I’ve tested just fine my entire life and high standardized test scores can overcome deficiencies in a lot of other areas including grades, extra circular activities and unpaid internships. Where would you be without grandpa’s money?
“Too bad you can’t take those LSATs over right?”
After reading your rhetorical analysis below, maybe you wish you could retake the LSAT. You know the LSAC averages your two scores unless there is 7 point difference between the two tests….now I know why you’re so down on lawyers – you couldn’t score higher than a 147 on a simple test.
“#JMM on November 2nd, 2010 at 8:06 am
“with many more properties trending on the higher end of that scale ”
Many more = what proportion? Versus what compare? Does many more mean more than a year ago, or does it mean most are close to 50% and only a few are at 25%?
I don’t know. It’s ok — you probably don’t know either. It just sounds ominous, so why not post it?”
“What do people think will happen to all these Californians who “walk away” from their mortgages?”
On this topic – just look at college towns where most people are renters (obviously). From what I have heard, people that own buildings/houses in college towns make money hand-over-fist because of all of the renters. For example, one of my partners has a kid that goes to Miami of Ohio in Oxord, OH. He said that 2 flats (4 bed in each unit) there go for around 200k. Rents are around 700-1000 month PER PERSON (6000-8000/month or 72000-96000/year)!!!! Can you imagine such a thing?!!! Could the same thing happen to the nice/desireable areas in California?
Interesting article today–looks like the big O is changing his tune regarding foreclosures:
Obama administration sings new tune on foreclosures
http://finance.yahoo.com/news/Obama-administration-sings-cnnm-698495587.html?x=0&sec=topStories&pos=5&asset=&ccode=
Too bad for sidelined buyers here that his administration will likely be thoroughly defanged after today.
Sidelined buyers–best not to listen to the clio’s of the world. They aren’t talking about the magic number–107. That happens to be the number of months to clear bank’s housing backlog.
http://blogs.wsj.com/economics/2010/10/30/number-of-the-week-107-months-to-clear-banks-housing-backlog/?KEYWORDS=foreclosure
Sorry to all of those who were hoodwinked by the powers that be and thought our government could actually stem the housing price declines. Now banks are sitting on NINE YEARS worth of backlog and it looks like this puppy is going to crash hard!!
Bob, extend and pretend has failed; carry and hold has failed; so really, there are only two solutions remaining: 1) let foreclosures flood the market or 2) double down on the two failed solutions!
JMM on November 2nd, 2010 at 8:03 am
“Likewise, we were recently briefed us on the possibility of adding this question as part of our employment screening process, particularly for white collar / managerial applicants.
Interesting idea, quite frankly.”
___________________________________________________
Great point. My brother had his identity stolen and credit absolutely destroyed with dozens of cell phones opened, credit cards taken out, bank accounts wiped, etc. He had a personal line of credit at HSBC that he had 5 grand drawn on and his checking account at HSBC got wiped, but HSBC wanted to be a-holes and tried charging him a bunch of bounced check fees and crap like that. He was pretty young and only had maybe $10k in debt that was his, but this clown ran his debt up to ball park $25k and the wiping out of the checking account caused my bro to default on the credit line, making it automatically due and payable. It was like he was talking to a wall dealing with HSBC, so he finally called them and said since his bank account got wiped out (because HSBC gave all of his funds to a thief), he had no assets that would be distributed to his creditors in BK and filed about 2 weeks later, thus stopping their collection calls.
He said it felt great at the time and now he is moving up the food chain at his company, but before his last promotion, he had to talk to a panel of senior execs about the bankruptcy on his credit report. Obviously, he had a pretty compelling reason for filing and the people in his company like that he was smart enough to figure out how to stick it to unreasonable creditors, but he has also seen people passed over for promotions because their tales of bad credit reports have to deal with them being idiots or irresponsible, which doesn’t exactly instill confidence in one’s ability to handle millions of dollars for the company.
“Sidelined buyers–best not to listen to the clio’s of the world. They aren’t talking about the magic number–107. That happens to be the number of months to clear bank’s housing backlog.”
Bob – I, just like you, do not have a crystal ball. I don’t know where things are going – I am just speculating (like everyone else here). You can use data/facts to support both sides. The thing I worry about now is the flood of renters that are going to be out there in the coming years (those who “walked away from their mortgages”, those who have undergone short sales/foreclosure, and sidelined buyers) – Chicago may turn into Manhattan (where rents are out of control). This is not good for the wellbeing of peole who are not used to sacrificing space/money and will lead to a lot of really angry/depressed people.
“Where would you be without grandpa’s money?”
Unfortunately, working for a too big to fail investment bank in New York. So I am grateful.
I have to think anyone who did really well on their LSAT would end up at a better law school than you did, but perhaps you single handedly move John Marshalls LSAT average with your 170+ score.
“Likewise, we were recently briefed us on the possibility of adding this question as part of our employment screening process, particularly for white collar / managerial applicants.
Interesting idea, quite frankly.”
Uhh not in Illinois you’re not–unless you work in banking or insurance.
http://jobs.aol.com/articles/2010/08/11/credit-checks-banned/
“Unfortunately, working for a too big to fail investment bank in New York. So I am grateful.”
They say confidence and competence are highly negatively correlated–makes sense.
Whatever, wrong again. can I ask you a question in all seriousness?
How does it feel to be wrong about nearly everything all the time?
“#JMM on November 2nd, 2010 at 8:37 am
“Where would you be without grandpa’s money?”
Unfortunately, working for a too big to fail investment bank in New York. So I am grateful.
I have to think anyone who did really well on their LSAT would end up at a better law school than you did, but perhaps you single handedly move John Marshalls LSAT average with your 170+ score.”
Bob, if it pertains to their job then its kosher apparently. We’re an investment firm, so…
“Bob, extend and pretend has failed; carry and hold has failed; so really, there are only two solutions remaining: 1) let foreclosures flood the market or 2) double down on the two failed solutions!”
The whole extend and pretend strategy and carry and hold was merely a delay tactic to try to hoodwink as many in our cohort as possible (late 20/early 30-something) to try to milk some more earnest money out of the populace before the entire ponzi scheme house of cards called lofty RE valuations came crashing down.
Good thing I sat on the sidelines and ate popcorn with a smirk. And the crash is going to be all the worse because instead of confronting these problems head on they instead deferred them thus making them worse.
Just as an alcoholic might wake up from a long night of drinking with a bad hangover and hit the bottle again just to relieve the pain. Eventually, however, his liver fails and he requires a transplant or dies.
HD — I have a big word for you:
Demagoguery
You are a poster child.
Clio, Rents in chicago may rise but given the amount of land we have available I don’t see the supply limitations present in manhattan. There is still plenty of space to build new highrises in even the densest nabes. If rents really go high there will be financing through consortium buyers or other private methods.
Unlike manhattan, Chicago’s relatively de-centralized employment landscape does not have a great reverse commute option. Those working in Naperthrill will probably not commute from ELP over the long haul – I know people who do it and hate it and will probably move when its family time. This is just meant to demonstrate that there is a lot of room to spread out. Yes, the trend is dense and urban but in many ways some suburban areas are dense and walkable.
“Going through foreclosure is a HUGE process and I believe you have to declare bankruptcy or have your money hidden somewhere because if you have any assets in your name, they can and WILL be taken away.”
Are you serious? If so, you need a better understanding of these things. This is a *seriously* misinformed impression.
clio, there will be no flood of renters from foreclosures or short sales in Chicago that doesn’t leave behind an equivalent flood of vacated units that will most likely become rentals. Sure, sidelined buyers will “snap up” some of them, but only after vacating another rental unit.
Household formations are the key. Only good jobs or credit so easy it doesn’t require repayment will help with those.
Manhattan is plagued by rent control as well. The 83 year old widow living in the Upper East Side pre war building for $248 a month has to be subsidized by the new renters who move in, thus pushing prices up more.
I’m telling you, there’s demand for the $1,100-$1,300 a month SFH rental in a middle-class and working class areas. Not for me necessarily, but I see people all the time that would love to rent for that price in random suburbs like Villa Park or des plaines or random neighborhoods like jeff park, etc. It’s just move-in homes aren’t quite priced at rental parity yet, and the maintenance on a SFH can be expensive.
“#G on November 2nd, 2010 at 9:11 am
clio, there will be no flood of renters from foreclosures or short sales in Chicago that doesn’t leave behind an equivalent flood of vacated units that will most likely become rentals. Sure, sidelined buyers will “snap up” some of them, but only after vacating another rental unit.
Household formations are the key. Only good jobs or credit so easy it doesn’t require repayment will help with those.”
I’m not sure – after a quick perusal of craigslist the SFH in Jeff pk seem to be coming in btwn 1400-2200. there are a lot of options in the 200-300k range so it is kind of close.
HD: Fun factoid, in 1998-1999 I rented a SFH in Lombard for $1400 a month. I took over the lease from a friend’s family (I grew up with the son) who had rented for the 10 years they lived there.
“Unlike manhattan, Chicago’s relatively de-centralized employment landscape does not have a great reverse commute option. Those working in Naperthrill will probably not commute from ELP over the long haul – I know people who do it and hate it and will probably move when its family time.” Not that they’re thrilled about the commute, but I know at least a few families in ELP in which at least one person reverse commutes to the burbs, and they have no intention of moving.
Yeah but the $200k-$300k options are only available to the households that can buy and given that 1/4 people have a credit scores in the 500’s or whatever that stat was the other day, they’re immediateyl disqualified from homeownership. And they live paycheck to paycheck anyway. so they can’t save money to buy. but they can afford $1,200 a month to rent. Believe me, there are plenty of families out there like this. I have clients with 2 kids in their teens who heloc’d the hell out of their house over the years and the $2,000 amonht mortgage payment was just too much. They need to pay $1,200 or $1,400 and there are limited SFH options in that range so they’ll cram into a condo or a townhome somewhere. With all the vacant foreclosed houses out there i”m telling you I see something here.
“roscoevillager on November 2nd, 2010 at 9:34 am
I’m not sure – after a quick perusal of craigslist the SFH in Jeff pk seem to be coming in btwn 1400-2200. there are a lot of options in the 200-300k range so it is kind of close.”
With all the empty homes out there I don’t think that its unreasonable to believe that $1,200 to $1,400 will eventually be an equilibrium.
WIcker: $1,400 bucks for an SFH in the suburbs. There is demand for that out there.
All those working class baby boomers on the NW side who thought they were going to live large in retirement by selling their bungalow they paid 150k for in the mid-1990s or less earlier are in for a shocker to learn that despite what their property tax bill’s assessed value may tell them, their house is not worth anywhere near 500k or even 300k.
The ponzi scheme only works so long as people buy into it. Very clearly people by now know its a ponzi scheme and that these valuations aren’t actually supported by cash-flow streams of people inhabiting them.
anonny – right, different strokes and all but the anecdotes I hear is that they would rather spend the 4 hours with their kids than in the car.
homedelete – it would be awesome to have the kind of rent for a place in jeff pk and one of the main reasons I haven’t given up the idea of renting a few more years.
“With all the empty homes out there I don’t think that its unreasonable to believe that $1,200 to $1,400 will eventually be an equilibrium.”
Are u crazy?!! What investor is going to rent ANY house for 1200-1400/month? Taxes will be 3-5k on a 200k house and then you have to factor in maint. costs (roof replacement, HVAC etc.). Even if the place is paid off, this is NOT a viable long term investment for any investor.
Yeah obviously at today’s prices it’s tough to make money on a $200k house, which makes me wonder if investors cannot buy rental homes and make a profit, how does the market ever get new homes? During the booms people lost money every month on the rental believing that capital appreciation would cover any monthly loss. That didn’t work out.
The answer today is that the $200k rental SFH isn’t cheap enough.
“#clio on November 2nd, 2010 at 10:30 am
“With all the empty homes out there I don’t think that its unreasonable to believe that $1,200 to $1,400 will eventually be an equilibrium.”
Are u crazy?!! What investor is going to rent ANY house for 1200-1400/month? Taxes will be 3-5k on a 200k house and then you have to factor in maint. costs (roof replacement, HVAC etc.). Even if the place is paid off, this is NOT a viable long term investment for any investor.”
“The answer today is that the $200k rental SFH isn’t cheap enough.”
or that rents aren’t high enough.
Clio,
If the market will only bear rents of 1,200-1,400 then the price is too high. It doesn’t work the other way around………
The rent is already TOO DAMN HIGH!
I’m just saying I think there’s a market for a smallish $1,400 a month rental SFH in safe areas of the city and there are a distinct lack of them available. I’ve seen investors in harvey buy houses for $20,000 cash, put $20k to make them livable and then rent them for $800 or $900 a month. I’d be aiming towards a slightly higher income demographic which is the $1,200 to $1,400, two working parents, two kids, daycare, paycheck to paycheck, limited savings, $65k a year household income who is shut out of the housing market but is cramped in an apartment flat or townhome. There are so many vacant SFH just waiting to fill that market.
alright enough investment opportunities for the day, i got stuff to do.
“#clio on November 2nd, 2010 at 10:42 am
“The answer today is that the $200k rental SFH isn’t cheap enough.”
or that rents aren’t high enough.”
Bob – thank you!
hd – that would be a very good investment strategy. however, i just don’t see prices for a decent SFH in a good area coming down to rental parity. Also, remember that you have to factor in loss of rent (due to normal market time), taxes and maint (which, on a SFH is pretty high). Many investors out there feel the same as you do and are keeping their eyes peeled for that 200k ELP brownstone!!! It just ain’t goin to happen
Where is anonny? I think I found his dream property for 400k no-less. MLS 07648961.
Run, Forrest, Run!
Yes, because as we all know, besides ELP, there are no other “safe areas of the city,” the target for HD’s hypothetical investment.
p.s. Bob, you win this thread.
clio on November 2nd, 2010 at 10:42 am
“The answer today is that the $200k rental SFH isn’t cheap enough.”
or that rents aren’t high enough.
valasko on November 2nd, 2010 at 10:50 am
Clio,
If the market will only bear rents of 1,200-1,400 then the price is too high. It doesn’t work the other way around………
Bob on November 2nd, 2010 at 10:51 am
The rent is already TOO DAMN HIGH!
I never said ELP. I said villa park, jefferson park. ANd it’s sub-200 to make some money on a $1,200 rental.
“Many investors out there feel the same as you do and are keeping their eyes peeled for that 200k ELP brownstone!!! It just ain’t goin to happen”
Roma, I agree bob wins hands down!
Bob, superb work.
“Where is anonny? I think I found his dream property for 400k no-less. MLS 07648961.”
Open kitchen, so, no. He’s looking for a frickin’ unicorn, so there’s no point.
“ANd it’s sub-200 to make some money on a $1,200 rental. ”
For a SFH, it’s **WAY** sub. Like sub-$150k. Unless you can get the taxes way, way down.
“Open kitchen, so, no. He’s looking for a frickin’ unicorn, so there’s no point.”
Krazy glue + cone + pony.
Sold. Galewood. October 1, 2010. $126,000.
http://www.redfin.com/IL/Chicago/6800-W-Armitage-Ave-60707/home/13431850
Fix it up a little, put some durable material to withstand renters, mortgage with $25,000 down at 4% (hypothetically) is $482 a month; plus $300 a month for taxes. Rent for $1,200.00. Figure in some maintenance, etc. Profit margins get greater as the price gets cheaper. Looks like somebody is already ahead of me on this.
“For a SFH, it’s **WAY** sub. Like sub-$150k. Unless you can get the taxes way, way down.”
@Bob
“The rent is already TOO DAMN HIGH!”
Do you wear gloves too?
@Bob
too
“The rent is already TOO DAMN HIGH!”
Do you wear gloves too? And what about the facial hair?
“Fix it up a little, put some durable material to withstand renters, mortgage with $25,000 down at 4% (hypothetically) is $482 a month; plus $300 a month for taxes. Rent for $1,200.00. Figure in some maintenance, etc. Profit margins get greater as the price gets cheaper. Looks like somebody is already ahead of me on this. ”
Which is why it sold for ask + 10%.
HD – on paper, it looks good but remember these hidden costs:
1. closing costs – will add a few thousand
2. rent loss – there may be several months that the unit is not rented (at the beginning as well as between renters)
3. property damage- this is always a problem with low-rent properties – just ask any landlord
4. inability to access equity – this may not be a problem now but you never know what the future holds.
5. middle of the night calls regarding spiders, mice, leaky toilet, etc. – if you don’t want to deal with this then you get a management company and you need to factor in the cost of that management company.
these issues make being a landlord awful.
OK – it looks like “bob” has been declared the “winner” of this thread. Good job – you are now the King of the Idiots!!!
Clio – I agree. I don’t want to be a landlord. I would rather be the guy who owns the properties and pays some guy I know to be my property manager/maintenance man to take care of this stuff. I have no intention of being a landlord and due to such limited number of properties being sold as such, margins are tight and getting tighter. Believe me, I’ve seen every pitfall a landlord can fall into because so many of my clients think they’re mini-land barons. This is all just academic discussion.
I’m with clio.
Actually yesterday I found an obviously cash-flow positive unit on the south side in a nabe/area/building I’m very familiar with and comfortable it could cash flow and would be able to fill it with good renters (I used to live next door and your renter would not be your typical SS renter at all).
The problem is the expected return is not worth all of the extra hassles of doing this and there are no economics of scale to being a landlord of one unit. It would be a whole lotta work for what would essentially be a 6-7% expected return.
This is what idiots with day-jobs purchasing multi-flats during the bubble to rent out to others to help pay their mortgage lost sight of: taking appreciation out of the picture, being an amateur landlord is a whole lot of work and risk for a meager return that can be had elsewhere for less risk and work.
The added bonus, besides the couple of hundred dollars a month you get ‘profit’ (which can be wiped out by two months vacancy) is that you get to depreciate the property and deduct that from your taxes. On a $126,000 property it’s straight line over 27.5 years IIRC (fed tax class was in 2002) so you get to take about 4,600 a year AGI reduction….but you lower your basis on the property but hopefully when it comes time to sell in 20 or 30 years the property will be paid off by year 15 and there will be appreciation. That way after year 15 the rent is mostly gravy b/c there is no mortgage. These calcs used to work in the time before the bubble and it was a reasonable investment to make.
taking appreciation out of the picture, being an amateur landlord is a whole lot of work and risk for a meager return that can be had elsewhere for less risk and work.”
“but you lower your basis on the property but hopefully when it comes time to sell in 20 or 30 years the property will be paid off by year 15 and there will be appreciation. That way after year 15 the rent is mostly gravy b/c there is no mortgage. These calcs used to work in the time before the bubble and it was a reasonable investment to make.
taking appreciation out of the picture, being an amateur landlord is a whole lot of work and risk for a meager return that can be had elsewhere for less risk and work.””
Um, even if there is no appreciation, if you break even every month and get $4600*tax rate in “income” every year, and pay it off in 15 years, you then have an asset worth $126k that you put a $25k DP + some work into which is a pretty healthy annual rate of return (over 10%). Then you do a 1031 so you have no cap gains tax on the $126k and move into bigger/more assets. Then, when you need the cash (presumable a year with minimal or no other taxable income) you cash out, pay your long term cap gains tax and have a big pile of money for your retirement. All paid for by your renters, depreciation and your initial DP. Not easy, but effective.
“Where is anonny? I think I found his dream property for 400k no-less. MLS 07648961.”
Bob, almost! I nearly looked at the Grant place (and note that the new listing pictures are a BIG improvement), but declined because (i) it doesn’t have a garage and (ii) the semi-common outdoor space is right outside the bedroom windows. It was a hard choice, given the location (which is good despite being west of Clark), it’s an upper duplex, it has a third bed, it’s a great price, and is in move-in condition. Honestly, had the broker and sellers been more accomodating in terms of a showing about two and a half months ago, I would have taken a look and, provided that the weird outdoor space weren’t isn’t as weird as it seems, I might be moving in there right now (as opposed to a different place blocks away).
Well the property I was looking at has a list of $46k with expected rent of $800/mo for 8.5 months of the year. Maybe needed some work as no interior pics. Rents definitely realizable too. Problem is after taxes & assessments I couldn’t justify the return $-wise for the amount of time involved.
If we were talking about 2-3x the absolute number of $s for the same amount of work then yeah. In any case I expect it to be “snapped up” by an investor.
Sorry had to use than annoying realtwhore term from the boom, just had to. 😀
“Open kitchen, so, no. He’s looking for a frickin’ unicorn, so there’s no point.” Anon, you’re right about me not wanting an open kitchen; however, I don’t mind a kitchen that’s open to the dining room (as the Grant place mostly looks to be). Kitchens that are open to the living room, on the other hand…
@ Anon (tfo)
‘Um, even if there is no appreciation, if you break even every month and get $4600*tax rate in “income” every year, and pay it off in 15 years, you then have an asset worth $126k that you put a $25k DP + some work into which is a pretty healthy annual rate of return (over 10%). Then you do a 1031 so you have no cap gains tax on the $126k and move into bigger/more assets. Then, when you need the cash (presumable a year with minimal or no other taxable income) you cash out, pay your long term cap gains tax and have a big pile of money for your retirement. All paid for by your renters, depreciation and your initial DP. Not easy, but effective.’
—
My indy accountant is doing just that…he’s been buying one-bedrooms in LP left and right and they are all rented. He’s putting down 20% and taking 15 year mortgages. He’s break even / cash-flow positive and planning on it being 1/2 his nest egg (He’s in his 40’s). His units are all decent and I agree that he’ll be able to continue to rent them. Now if rents truly drop then his yield is going to suck for a bit, but I think =iIts not a bad plan for him since he doesn’t have a big company matching 401k. Its all part of his diversification plan of SEP, market, real estate, etc.
If I knew that I was going to be in Chicago 30 years from now…I’d be buying too.
“Anon, you’re right about me not wanting an open kitchen; however, I don’t mind a kitchen that’s open to the dining room (as the Grant place mostly looks to be). Kitchens that are open to the living room, on the other hand…”
Then we’ll see whether you’re all talk or will actually buy it*
*damn I remember you saying you wanted to rent it. I was looking forward to calling you out on you being overly picky and indecisive.
“Then we’ll see whether you’re all talk or will actually buy it*
*damn I remember you saying you wanted to rent it. I was looking forward to calling you out on you being overly picky and indecisive.”
Bob, first, please see my earlier response (to your comment, not anon’s), in which I explain my reasons for not viewing the Grant unit. Second, please note that, with respect to the various criteria I have specified in other threads, I was looking for rentals at no more than $3,000/mo to determine whether or not it made sense for me to purchase a place that will cost me $3,000/mo (mortgage, fees, taxes) that happens to satisfy all of my desired criteria (and I guess I’m at least a bit more than all talk, as I just bought it).
“I guess I’m at least a bit more than all talk, as I just bought it”
Well done!