Market Conditions: The Deals Are Over in Chicago’s Luxury Apartment Market
We have an update on the first quarter luxury apartment rental market and it’s a doozy.
Defying experts who believed it would take until 2023 for occupancy, and rental prices, to re-take pre-pandemic levels, the Chicago Class A luxury rental market has come storming back in 2021.
Crain’s reports:
In one sign of the market’s stunning recovery, absorption, or the change in the number of occupied apartments downtown, jumped to 2,667 units in the first quarter, according to the Chicago office of Integra Realty Resources, a consulting and appraisal firm. That’s a record for a single quarter and a halfway decent figure for an entire year’s worth of leasing.
“People were probably feeling that they’re going to be going back to work downtown in the near future, and these fire sales aren’t going to last forever, so let’s go get an apartment,” said Integra Senior Managing Director Ron DeVries.
After dropping as low as 86.5 percent at the end of 2020, the downtown occupancy rate rebounded to 91.1 percent in the first quarter, according to Integra. That’s still a few percentage points below 2019 levels, but you won’t hear many landlords complaining.
Class A rents rose to $2.98 per square foot in the first quarter, up 18% from the pandemic bottom in the third quarter of 2020 when rents fell to $2.53 per square foot. These rents include incentives.
It’s still below the all-time high which was in the second quarter of 2019 when Class A rents hit $3.31 per square foot.
But the “V” recovery in the apartment market appears to be in full swing.
Rents tumbled last year as the market shifted in reverse, with absorption totaling minus 238 units, the first year of negative absorption in downtown Chicago since 2005, according to Integra. After such a strong first quarter, Integra now forecasts that downtown absorption will jump to 5,400 units this year, the most absorbed on an annual basis since at least 1999. But tenants won’t be able to find the tantalizing deals that were available just months ago.
“I think rising pricing (rents) is going to slow absorption a little bit, but if you were sitting on the fence, now is the time to move,” DeVries said.
One of the largest downtown apartment projects since the South Loop’s NEMA, One Chicago across from Holy Name Cathedral, is getting ready to finish construction and the developer now sounds bullish.
The market is turning around at the right time for Chicago-based JDL Development, which plans to begin leasing this weekend at One Chicago, a two-tower project with 735 apartments it’s wrapping up in River North. Rents will exceed $4 per square foot, and JDL CEO Jim Letchinger doesn’t initially plan to offer any free rent to tenants, a strategy many developers use to fill up new buildings. The development’s first residents should move in by October.
“The timing worked out well. We’re seeing tremendous demand,” Letchinger said. “By the time every office says, ‘This fall you’ve got to be in the office,’ it will be the perfect time to have all those units available.”
Will the absorption rate of apartment rentals, and lack of new construction in the pipeline, put pressure on the downtown condo market in the next few years as renters look for alternatives?
Good times rolling again for downtown apartment landlords [Crain’s Chicago Business, by Alby Gallun, June 2, 2021]
Amazing you were able to up-shill a shill piece. Congrats it’s a unique talent.
“ One Chicago across from Holy Name Cathedral, is getting ready to finish construction and the developer now sounds bullish.”
Would you expect him to sound like Eeyore? We’ll see how this works for him
The propaganda and “fake news” Sabrina spewed with the headline of “Crains: The deals are over in Chicago’s Luxury Apartment Market” is so inherently dishonest. Crain’s makes no mention of this. You are lucky this blog is so small so they don’t sue you and shut down your site for libel.
You hit a new low today and severely damaged any credibility that you have.
From the actual article:
“the tenants’ market may soon be over, if it isn’t already.” The article makes no mention of “deals being over” as Sabrina claims Crains said in her headline.
Crains is saying as clear as day that (i) apartment recovery is happening quicker than anticipated, (ii) it is still below pre-covid levels, (iii) It appears to still be a tenants market just a less friendly tenants market than the previous quarter and (iv) it could switch to a lessor’s market in the coming quarter or two given the pace of change that occurred from Q4 to Q1.
Further from the article: “Many downtown landlords have filled up their buildings by discounting—offering two, three or even four months of free rent to tenants, Holtzman said. He’s not ready to say a full-fledged recovery has arrived.”
“But the market is bouncing back much faster than many expected. Earlier this year, DeVries predicted that downtown rents wouldn’t return to pre-pandemic levels until spring 2023.
“I think we’re going to get darn close” to that mark this year, he said.”
So again what the article is implying that instead of a full recovery by 2023 as previously predicted a full recovery could occur by the end of 2021 or sometime in 2022.
Meaning, back to your title of: “Crain’s: the market deals are over….” means instead of 2, 3, or 4 months rent free you can probably still find buildings or units offering 1 or 2 months free which could go away in the coming quarter or two IF what we saw in Q1 is the start of a trend for the rest of the year. We don’t know this yet.
Sabrina – I strongly urge you to update the headline or you have no integrity to completely falsify a quote of a respected publication is journalistic malpractice 101.
The sad part of your malpractice and libel is you distracted from a very important question that you asked and I asked myself reading this article when it came out yesterday:
“Will the absorption rate of apartment rentals, and lack of new construction in the pipeline, put pressure on the downtown condo market in the next few years as renters look for alternatives?”
The post Great Recession rent inflation may be rearing its ugly head around again starting as soon as next year for the next few years. Alot of delays, lost financing, and abandoned projects by developers quickly took root when (i) Government forced shut-downs of industries due to Covid, and (ii) the duration of Covid and the Government induced shut-downs, strict regulations, and work-from-home environment last longer than anyone initially anticipated
These events are now compounded by the pre-Covid articles of certain developers imposing developing moratoriums on Chicago due to the political climate and increasing costs/regulations.
If you want to live downtown for the medium – long term and have an “affordable” monthly payment 3 – 5 years from now buying into the Condo market this year or next year seems appears to be a better play then renting given where rents are likely to go over the medium term if the lack of new construction continues augmented by a quicker than expected downtown apartment recovery occurs.
The potential of this reality has my attention.
So, the article has the following:
Charts about Class A apartments.
Integra data covers “more than” 36,000 A units (ie, less than 37,000), and 11,000 B units (less than 12k)
Absorption of 2,667 (ie, +7.2 or more, if only Class A, as shown in chart)
Change in occupancy for Class A from 86.5 to 91.1 (+4.6)
Issue:
2,667 is 4.6% of ~58,000, but the cover units total no more than 49k units.
What gives? Is the reporter wrong, or is Integra providing summary info from different data sets?
If rates are $2.98 per SF, looks like I’m getting a bargain for my Hancock studio, where I have 680 SF for $1,600. Looks like I’d be paying around $2,000 a month at current rates. I wonder if the owner of my unit will try to suggest I leave lease early so they can find someone who’ll pay more. I still have nearly a year left on the lease.
These days it’s unsafe to leave your downtown condo/apartment unless you’re heavily armed.
https://cwbchicago.com/2021/06/robber-shoots-man-near-magnificent-mile-overnight-police-say.html
lol. Twenty-something is out at 2 am in what is (if memory serves) not a very pedestrian heavy area even in the middle of the day, chases the guy who brandished a gun, and gets shot. Hope he recovers quickly and fully, then reassesses his decision-making style.
https://www.chicagocontrarian.com/blog/the-center-cannot-hold-unreported-chicago-crime-data-suggests-the-18th-police-district-michigan-avenue-gold-coast-etc-has-fallen
The Center Cannot Hold: Unreported Chicago Crime Data Suggests the 18th Police District (Michigan Avenue, Gold Coast, etc.) Has Fallen
Gee, Homedelete. I just left my apartment in Streeterville and walked for half an hour and came home unscathed! A miracle!
Forgot to mention I left the AR-15 at home. Still didn’t encounter any marauders out there.
I was in Chicago a couple weeks ago. The streets were strangely empty. Is there a rule that says people can’t leave their apartments? One of our waiters told us that at one point, he hadn’t left his apt for 1 year. Not sure if he was insane or if that is normal in Chicago.
Our taxi driver lamented that it was rush hour but there were no cars. He said most of the other drivers lost their jobs. A lot of the shops on Michigan Ave were closed or boarded up. I saw a huge blm (advert/mural/graffiti) type deal across from water tower. Some of the restaurants I used to go to were closed and the others seemed to be operating at 1/3 capacity – by rule I think. Water tower was almost completely vacant. The food court was boarded up and even starbucks was closed. Flemings seems to have been replaced by a CVS.
I saw three types of bus advertisements in the city
1. blm
2. get help with welfare/stim checks
3. mask up take the vax
No gunshots or other crimes witnessed.
“not a very pedestrian heavy area even in the middle of the day”
Less so than Mich, of course, but not really dead, either.
“The Center Cannot Hold”
Felt like I was reading a deleted scene from Atlas Shrugged.
That area where this shooting took place is well known for crimes. This is nothing new. I have always felt a little uncomfortable walking around that immediate area. The last time I was over there, a crazy lady yelled that she was “going to f— me up.” I ignored her and walked past. I try to avoid that one little pocket. I don’t think it’s fair to judge the entire area by the one spot.
Crime rates seem to have been going up according to news articles I have read. I don’t know if it’s bad enough for people to leave the city in large numbers though. Chicago still has a lot of amenities that you just can’t get in the suburbs.
Siri, show me an example of purple prose.
Just over a hundred years ago, in the poem, The Second Coming, William Butler Yeats tried to make sense of the senseless horror and tragedy of World War I. This apocalyptic vision can serve as a metaphor for the very center of Chicago a century later.
For those unaware of the preserve over which the 18th District is responsible for policing, perhaps an image gestalt can paint a picture.
Someone’s in love with their English degree.
There is a story here, but it’s buried under so much of this nonsense (plus some misunderstanding / creative interpretation of statistics) that it’s lost.
“Crime rates seem to have been going up according to news articles I have read. I don’t know if it’s bad enough for people to leave the city in large numbers though. Chicago still has a lot of amenities that you just can’t get in the suburbs.”
Crime and violence is up in EVERY major city and the suburbs. You aren’t escaping it by moving to the suburbs.
Heck, crime has spiked so much in Atlanta’s rich Buckhead neighborhood, they are thinking of trying to leave the city.
This is an issue that ALL of America has to deal with on the reopen.
“I was in Chicago a couple weeks ago. The streets were strangely empty.”
Thanks for checking in Stacy.
If you were here a couple of weeks ago, Chicago still had COVID restrictions on including lower capacity in restaurants. That has changed.
Yes, many stores have closed on the Mag Mile and remain boarded up. Macy’s has left the Water Tower but the rest of Water Tower is operating. I don’t know how many stores on the inside have thrown in the towel but most are big chains so they had the money to keep operating even during the shutdowns.
Yes, some restaurants have closed.
Yes, Flemings is gone. Has been gone for a while. The neighborhood needed a CVS, to be honest.
Yes, some Starbucks have closed including the 2-story Starbucks on Rush Street in the Gold Coast.
Lots of downtowns have been hit hard by the pandemic. It’s going to take time for business, and life, to come back. But it’s already happening with new restaurant openings. But it’s not going to happen over night.
I walk through that intersection just about every time I go to Trader Joe’s or Whole Foods and generally do not find it nearly as sketchy as the intersection where Bed, Bath, and Beyond was. Wasn’t there an incident there a few weeks ago as well?
Generally, I feel safer, and certainly less harassed, in River North than when I lived in Hyde Park.
“These days it’s unsafe to leave your downtown condo/apartment unless you’re heavily armed.”
Yawn.
Muggings have been happening in Chicago, and every American city, for about 100 years. What’s new?
He chased after the mugger, unfortunately. I hope he recovers.
Pre-pandemic, the thefts, at gunpoint, of iPhones were at record highs. As long as you turned it over, you weren’t shot. Then the pandemic hit and that all went away. Looks like it’s back again.
“I wonder if the owner of my unit will try to suggest I leave lease early so they can find someone who’ll pay more. I still have nearly a year left on the lease.”
Most landlords would rather have a tenant who is paying and not trashing the place, even if it means lower rents.
And the $2.98 per square foot is for Class A luxury units. Hancock wouldn’t fall under this criteria unless the unit was completely renovated and had w/d in the unit. Would likely be Class B rents in that building, which are lower.
Older condos have been renting for less
“The propaganda and “fake news” Sabrina spewed with the headline of “Crains: The deals are over in Chicago’s Luxury Apartment Market” is so inherently dishonest. Crain’s makes no mention of this. You are lucky this blog is so small so they don’t sue you and shut down your site for libel.”
Go away WP.
This isn’t a newspaper. It’s a blog. You are so annoying and childish.
But bears have got to be bears. “propoganda.” Ha ha. It’s the DATA!!!!
Best quarter since 1999.
Can Crain’s put it in any other words?
LMFAO.
It doesn’t say Crain’s said that. The data and the interviews with the experts IN the article tell the tale. You want me to remove “crain’s” from the title? Okay. Doesn’t change the data.
Sizzle.
The market is roaring back. The bottom was in last year.
Duh.
“I walk through that intersection just about every time I go to Trader Joe’s or Whole Foods and generally do not find it nearly as sketchy as the intersection where Bed, Bath, and Beyond was. Wasn’t there an incident there a few weeks ago as well?”
Yes, there was a drive-by shooting near one of the Italian restaurants right by the Jewel at 10 am on a weekend morning. That was more concerning than the incident that HD linked to on Wabash.
“The post Great Recession rent inflation may be rearing its ugly head around again starting as soon as next year for the next few years.”
You only get “rent inflation” if demand exceeds supply.
If that is happening in Chicago, then the city is booming. And condo prices should be moving higher as well.
They aren’t building many new condos and those that are being built are in the over $500,000 price range downtown. Anything cheaper will look very attractive over the next few years if rents are soaring.
“Would you expect him to sound like Eeyore? We’ll see how this works for him”
Agreed that developers are always bullish but most were not in the last year. And this particular developer has recently built one of the hottest luxury condo buildings in the city that sold out immediately when no one thought it would.
“These events are now compounded by the pre-Covid articles of certain developers imposing developing moratoriums on Chicago due to the political climate and increasing costs/regulations.”
Cite to this?
Never heard of this pre-pandemic. Only development that was halted was the Helmut Jahn tower on Michigan Avenue that never made sense as condos anyway. Goldman Sachs withdrew financing on it for that reason but not because of “political climate and increasing costs/regulations.”
Lol.
The building continues. Chicago is one of the hottest residential and commercial real estate markets for apartments.
And with the huge rebound in apartment rentals, it just proves to the banks that betting on Chicago is a sound bet.
If One Chicago rents quickly at those rents, there will be another dozen high rises going up all over the city.
“This is an issue that ALL of America has to deal with on the reopen.”
Did all of America pass Illinois like criminal justice reforms getting rid of the entire bail system starting in 2023?
Get caught carjacking people you win a free ankle monitor; accused of murder during Covid – free ankle monitor. Continuously being arrested for gun crimes violating probation and committing more gun crimes leading to the death of a teenager – free ankle monitor.
Oh and the word “monitor” doesn’t mean someone’s actually “monitoring” as we learned in the McDonalds drive thru shooting.
That’s one way to deal with it.
“Lots of downtowns have been hit hard by the pandemic. It’s going to take time for business, and life, to come back”
What happened to sizzling by Memorial Day that you were pushing for literally months and months. Or last weeks “good luck getting a hotel in Chicago this summer”. Or April’s “lines around the block at every restaurant”.
Good grief.
“I wonder if the owner of my unit will try to suggest I leave lease early so they can find someone who’ll pay more. I still have nearly a year left on the lease.”
The updated RLTO lowered the probability of this happening. The landlord has to pay you to leave plus give you 60 days notice or longer depending on how long you have rented the same unit.
“Cite to this?”
See Crains article:
“After 17 years developing properties in Chicago and the suburbs, Guardian principal Brian Duggan says, “we have moved almost totally out of Chicagoland,”
“Guardian has shifted out of the Chicago area, Duggan says, because of the years-long uncertainty about property taxes and the financial health of both Chicago and Illinois. But the icing on the cake was the “strong push for anti-gentrification measures in Chicago,” he says.”
“At a late-July NBOA board meeting, Sabin says, several members said they plan to stop buying city property. He declines to identify them, saying they worried about reprisals from aldermen in neighborhoods where they own buildings.”
Rodkin had another article on this as well interviewing a few developers that significantly pulled back if not stopped pre-covid for the same reasons.
https://www.chicagobusiness.com/residential-real-estate/anti-gentrification-push-unnerves-developers
“And with the huge rebound in apartment rentals, it just proves to the banks that betting on Chicago is a sound bet.”
Sabrina logic on “rebounds”
2019 – $100K salary – things are going good
2020 – $50K salary – things are going to roar back just wait
2021 – $75K salary – I told you it’s so hot out there look at that i’ve never gotten such a big salary increase before!
Meanwhile inflation is like 4%+. Talk about shill.
Does Sabrina moonlight as a used car salesman?
“Generally, I feel safer, and certainly less harassed, in River North than when I lived in Hyde Park.”
————————-
Could it be that you were younger and cuter then, and the guys around Hyde Park were younger and more immature (e.g., college kids) than those now in River North?
“Dan #2 on June 3rd, 2021 at 2:20 pm
Forgot to mention I left the AR-15 at home. Still didn’t encounter any marauders out there.”
That’s funny you mention the AR-15 because that’s the one and only gun I own.
The one thing about the managed decline that Illinois is currently experiencing is that the residents of our lovely state have gone from lightly armed to heavily armed in the matter of a year.
https://247wallst.com/general/2021/01/16/people-in-these-two-states-bought-over-10-million-guns/
People in These 2 States Bought Over 10 Million Guns
“…Last year, people in just two states taken together bought over 10 million guns. In Illinois, the figure was 7,455,065 for 2020, which put it in first place among all states. In Kentucky, the figure for the same period was 3,330,462.
Notably, the figures show that gun sales and population are not related. Illinois had almost 19% of American gun sales in 2020 but has only about 4% of the nation’s population. Kentucky’s gun sales were over 8% of the national total. Its population is 1.3% of the national figure.”
We have 13,000,00 people, and last year alone, we had over 7,000,000 million gun sold, over 1 in 5 guns sold last year were just in IL
https://www.msn.com/en-us/news/us/state-of-illinois-experiencing-major-ccl-foid-card-backlog/ar-BB1goASX
Just this year, in 2021, “According to the FBI, nearly 4.3 million gun background checks have been completed since January in the state of Illinois.”
Everyone I know in Illinois, across all demographics, all income levels, and political views, and locality of residence (urban, suburban, exurban or rural) is arming up.
It’s real, people are scared as heck, and they’re scared of Chicago.
Call me crazy, heck, call all of us crazy, but these gun sales figures speak for themselves.
https://chicago.cbslocal.com/2021/05/04/illinois-foid-card-backlog/
Waiting For An Illinois Firearms’ Owner’s Card? Get In Line — A Very Long Line
May 4, 2021
“Everyone I know in Illinois, across all demographics, all income levels, and political views, and locality of residence (urban, suburban, exurban or rural) is arming up.”
NO ONE I know in Illinois, across all demographics, all income levels, and political views, and locality of residence (urban, suburban, exurban or rural) is arming up.
Some have/do own guns, but predominantly in the shotgun/hunting rifle range. Certainly know some handgun owners, but not any noticeable change.
“Could it be that you were younger and cuter then, and the guys around Hyde Park were younger and more immature (e.g., college kids) than those now in River North?”
I have thought about that, but it was something I noticed immediately. It was not just the harassment women in general receive, but more like “what are you doing here”. This was something I heard often when in areas of Hyde Park not frequented by students. It happen more than once at Village Foods (since closed) near where I lived. They were in the only place in Hype Park to sell Kool-Aid.
“ Pre-pandemic, the thefts, at gunpoint, of iPhones were at record highs. As long as you turned it over, you weren’t shot. Then the pandemic hit and that all went away. Looks like it’s back again.”
You should write for the cities tourism department
“The streets were strangely empty.”
Maybe that was your experience, Stacy. I was down by the Hancock all day today and there were so many pedestrians it was often hard to find space to walk.
I’ve generally found the area to be buzzing with life ever since it warmed up.
“ NO ONE I know in Illinois, across all demographics, all income levels, and political views, and locality of residence (urban, suburban, exurban or rural) is arming up.
Some have/do own guns, but predominantly in the shotgun/hunting rifle range. Certainly know some handgun owners, but not any noticeable change.”
I have a feeling you and HD run in different circles
While I’m not going to say there aren’t new gun owners, the bulk of the increased background checks are folks that already owned firearms.
“ You only get “rent inflation” if demand exceeds supply.”
This is incorrect
You need to factor in alternatives
I, for one, am not arming up. Never felt the need, even living in the city. Maybe I missed the NRA mailings that scared all those other people into purchasing AR-15’s. Great for the gun manufacturers, obviously. I can see the shilling for their business right here on this thread.
Dan #2,
Are businesses and the city doing better with sidewalk garbage? Last summer and fall, sidewalks looked it was St Patrick’s Day everyday.
I am hoping to get back to Chicago in July. Hope I hate my building less!
Lauren,
I walked all over Streeterville and the Gold Coast today, from Sedgwick and North to Chicago and Wells to Huron and Clark to the Hancock. No sign of extra garbage on the streets that I can remember, though I certainly wasn’t looking for it. Everywhere I went was lively and thriving.
One thing I wish the city would consider is banning motorcycles on Michigan Avenue. Their noise detracts from what should be an elegant street atmosphere. Their riders make it worse by loudly playing their radios, too. That and too many sirens, something the alderman has already been trying to keep quieter.
“NO ONE I know in Illinois, across all demographics, all income levels, and political views, and locality of residence (urban, suburban, exurban or rural) is arming up.
Some have/do own guns, but predominantly in the shotgun/hunting rifle range. Certainly know some handgun owners, but not any noticeable change.”
Of course you don’t. But on my block in the suburbs, every third house now likely has an arsenal in the safe in their basement. My block alone could arm a small battalion (whereas I could only arm myself at this point).
And JohnnyU, it’s not just existing gun owners, look at the new FOID card registrations and the backlog. There’s a ton of new gun owners and there still tens of thousands, if not hundreds of thousands, of new FOID applications backlogged right now. Expired FOID cards were still valid due to covid (but you still had to reapply) so it’s mostly new owners out there. It’s no exaggeration to say that nearly everyone one I know applied for FOID card last year. The data doesn’t lie.
One in every five guns sold in the United States in 2020 went to IL residents. Why is this? Hunting?
The figures speak for themselves. In a heavily, deep deep blue state. We’re #1 in the country, more guns sold here than any other state.
And this doesn’t even count the illegal guns on the streets purchased in other states with straw buyers funneled to IL.
IL became heavily armed after those two rounds of riots, and you’re sticking your head in the ground like an ostrich if you think “Oh golly, why do they need guns? Michigan ave is just fine!”
No one else seems to believe that. In a very very deep blue state where Trump only got 40% of the vote.
Seems like we have some people on this site who want to talk about non-Chicago-related topics. There are plenty of other online forums that address these political issues and I suggest going elsewhere to share your opinion. Thank you.
It’s not the motorcycles or the sirens that drive me crazy, it’s the amplified street musicians. If I can hear them in my condo twenty floors up over the sound of the EL, it is too loud. They cannot be banned due to the first amendment according to a city hall meeting organized by local aldermen. Maybe it’s the same for motorcycles.
I learned from the meeting that aldermen outside my district do not care about and perhaps have disdain for the so-called short term downtown residents. Our (that is downtown and Wrigglyville) problems do not matter apparently.
“Of course you don’t. But on my block in the suburbs, every third house now likely has an arsenal in the safe in their basement.”
Yawn. HD has been fear mongering on this blog for 10 years.
Be scared. Hide in fear. Buy guns.
Gun sales were at record highs during the pandemic nationwide. This is NOT an Illinois nor a Chicago thing. It’s true in Mississippi, Georgia and Alabama too.
“One thing I wish the city would consider is banning motorcycles on Michigan Avenue. Their noise detracts from what should be an elegant street atmosphere. Their riders make it worse by loudly playing their radios, too.”
Dan #2: A friend of mine who lives just off the Mag Mile complains that there’s one guy who specifically drives around the Mag Mile area every Saturday night in the summer at about 11:30 pm with his radio playing full blast.
Lol.
“You should write for the cities tourism department”
They weren’t hiding it.
A woman was robbed, but not at gun point, standing outside the Drake hotel pre-pandemic. They were just pulling up, grabbing the phone, hopping back into their cars and driving away.
“Sabrina logic on “rebounds”
2019 – $100K salary – things are going good
2020 – $50K salary – things are going to roar back just wait
2021 – $75K salary – I told you it’s so hot out there look at that i’ve never gotten such a big salary increase before!
Meanwhile inflation is like 4%+. Talk about shill.”
What are you talking about now WP?
Nothing that makes any sense.
Over 2,000 luxury apartments rented in Q1. The highest quarterly number since 1999. Now, since 2020 saw the worst quarters since 2005, it was natural that there would be a big bounce back.
It’s a “V” recovery, after all.
But the experts in the article seem to think over 5,000 apartments will be rented this year which would make it an extremely strong year.
You’re not renting a Class A apartment on $75,000 salary, you know? Or maybe you’re too clueless to know WP. I don’t know.
Salaries aren’t going DOWN. They’re going UP. Companies cannot find enough workers. Job openings are at 10 year highs. The job market is tight. That all equals HIGHER pay, not lower.
Please just stop posting on this blog if you’re going to post this nonsense.
Even the law firms are throwing around hiring bonuses for the first time in like 20 years.
Yeah, Chicago is a great city to build in. The Millennials and GenZ want to live here. Who do you think just rented over 2,000 apartments?
“What happened to sizzling by Memorial Day that you were pushing for literally months and months. Or last weeks “good luck getting a hotel in Chicago this summer”. Or April’s “lines around the block at every restaurant”.”
Um…hotels were at 75% occupancy last weekend and many were sold out and 6 million people went through TSA nationwide on Thursday?
LMFAO.
Thanks for agreeing that I was completely right.
Travel is sizzling. Restaurants are booked for weeks. Hotels are sold out. You can’t get any plane tickets this summer. Rental cars are $1,000 a day. Dick’s Sporting Goods continues to be out of products. We just had the best weekend at the box office in a year with over $100 million in tickets.
What MORE do you need WP?
It is sizzling hot out there. And yeah, in Chicago too. Have you TRIED to eat out at any restaurants? Good luck. You can’t get a reservation.
But wait- you are probably one of the posters who doesn’t live in Chicago so you don’t know what’s going on out there.
But it’s going to take time for the Mag Mile and other hard hit areas to come back. My god. Things were shut down for months. Restaurants threw in the towel. Retail stores too.
Lightfoot needs a special commission to work on helping the Mag Mile. It needs a real plan to come back over the next several years. It needed it pre-pandemic as vacancies rose. But now, it needs it even more. And it’s a vital component to Chicago’s economy.
“ Travel is sizzling. Restaurants are booked for weeks. Hotels are sold out. You can’t get any plane tickets this summer. Rental cars are $1,000 a day. Dick’s Sporting Goods continues to be out of products. We just had the best weekend at the box office in a year with over $100 million in tickets.”
Capacity at 50%
Thought it was 75% for one of the biggest travel holidays
Bullshit
Where are rental cars $1000/day? This is bullshit
This is driven By not being able to get stock
3 day weekend and theaters have been pretty well closed for the last year
Just horrible at shilling
Wow, you really can tell by the comments above who ACTUALLY lives in Chicago! Also who lives in Chicago but never leave a 3 block radius.
“You’re not renting a Class A apartment on $75,000 salary, you know? Or maybe you’re too clueless to know WP. I don’t know.
Salaries aren’t going DOWN. They’re going UP. Companies cannot find enough workers. Job openings are at 10 year highs. The job market is tight. That all equals HIGHER pay, not lower.”
this comment shows how clueless you are. Are Class A rents back to pre-pandemic levels? – per the Crains narrator no…. yet you act as if they are. So I put your shill logic into a different context I don’t think people would hoot and holler about a 25% paycut over a 2 year period yet here you are hooting and hollering about a hot rental market when rents are materially down over a 2 year period……
The logic completely flew over your head as it normally does so here I am spelling it out for you per usual.
“Um…hotels were at 75% occupancy last weekend and many were sold out and 6 million people went through TSA nationwide on Thursday?”
Narrator: We are discussing Chicago not nationwide…..
“For the week ending May 15, Chicago hotels had a 35% occupancy rate compared to 87% for the same week in 2019, according to data from the firm STR.”
“We don’t anticipate fully recovering on occupancy rate as well as employment until 2024,” Jacobson said.”
What’s the next lie that you would like to be called out on?
https://news.wttw.com/2021/05/26/chicago-hotels-see-occupancy-upswing-full-recovery-still-ways
” And yeah, in Chicago too. Have you TRIED to eat out at any restaurants? Good luck. You can’t get a reservation.”
Yes. Just booked restaurant reservations on Wednesday for this weekend. Had plenty of availability.
Also, Chicago and Illinois are still limiting capacity for another week. So yeah are there some restaurants that are tough to reserve a table at yes.
But again i’ll use actual data unlike you. Open Table still has Chicago reservations down 40% – 50% most days. Memorial weekend still down 5% – 10%.
Florida, Nashville, Texas, and Arizona booming.
https://www.opentable.com/state-of-industry
“You’re not renting a Class A apartment on $75,000 salary, you know? Or maybe you’re too clueless to know WP.” ”
So this hypothetical person making $75k couldnt rent studio in a class A bldg?
“I don’t know.”
Truer words were never written
“Lightfoot needs a special commission to work on helping the Mag Mile. It needs a real plan to come back over the next several years.”
And again white lady Sabrina can’t read the room. How popular do you think it would be for the Mayor of Chicago who is Black and City Council who is majority minority to spend money and time revitalizing one of the whitest and wealthiest areas of the city that was gutted and looted over racial injustice when there are areas on the South and West sides that still haven’t recovered from race riots from the 60’s.
Feel free to speak on that at the next city council meeting and let me know how it goes. While digging that large hole might as well keep digging and voice your complaint about renaming Lake Shore Drive…..
From the WTTW article –
“But reopening a hotel requires rehiring previously laid-off staff, and Jacobson says hotels need bridge funding to do that. His group wants the city to set aside $75 million in American Rescue Plan stimulus money to help hotel owners hire staff, and is hoping for $250 million in ARP funding from the state before the legislature adjourns next week.”
This is a serious problem for the hotel folks.
Finding folks that want to comeback is difficult, especially as its not likely FT and the enhanced unemployment doesnt make financial sense
On the Hotel side bringing an employee in for say a weekend kills their numbers as you have to pay the full monthly bene nut. They’re flat out getting refusals to work from employees (On the Union side)
“And JohnnyU, it’s not just existing gun owners, look at the new FOID card registrations and the backlog. There’s a ton of new gun owners and there still tens of thousands, if not hundreds of thousands, of new FOID applications backlogged right now. Expired FOID cards were still valid due to covid (but you still had to reapply) so it’s mostly new owners out there. It’s no exaggeration to say that nearly everyone one I know applied for FOID card last year. The data doesn’t lie.”
Not arguing that there’s more FOID applications or more first time gun owners (Saw something that showed minority gun purchases are way up), but in my small sample set N=3, 3 spouses and 2 children of gun owning households have applied during the pandemic/GF riots. Hence I dont believe that everyone is getting ready for civil unrest.
Plus prices are flat out retarded, thats even if you can find ammo
“They cannot be banned due to the first amendment according to a city hall meeting organized by local aldermen.”
That’s the correct response to a bad question–“can we ban them”–Nope.
Can you impose time place and manner restrictions? Like, maximum volume? YES!
“Can you impose time place and manner restrictions? Like, maximum volume? YES!”
According to the meeting, cityhall told us to call 911 and the police will tell musicians to move. Then, it becomes the next block’s problem. Noise regulations are too difficult accurately measure.
NYC only allows licensed musicians below ground. City legal representation thought that was also unconstitutional.
“City legal representation thought that was also unconstitutional.”
Whoever is taking that position is either or moron, or thinks the audience are morons.
So, are peddlers licenses unconstitutional? Limits on Food Truck locations?
Chicago – The city that works
On a side note, Illinois lost $6B in AGI in 2019 (or about $75k/person moving out) – Very Bullish
Gov Fatfuck is doing a great job!
Re-naming Lake Shore Drive is the worst idea to hit Chicago since Mayor Richard J. Daley considered building a third airport on an artificial island out on the lake.
If a street really must be named after DuSable (and he has pleny named after him already), let it be a less important one. For instance, Kinzie is named after another important early settler. I vote we change the name of a street like that. Maybe Illinois. Or Grand.
Imagine the property value hit when people’s lakefront addresses no longer say “Lake Shore Drive.” I imagine residents there will be up in arms (figuratively, that is – not trying to get HD excited).
Balbo should be renamed after DuSable. Balbo was a fascist…an actual fascist.
They can change Balbo, sure. Or Columbus Drive. He was an SOB, too.
Imagine the property value hit when people’s lakefront addresses no longer say “Lake Shore Drive.” I imagine residents there will be up in arms (figuratively, that is – not trying to get HD excited).
Change is only to the outer drive, so the only addresses that would change would be Lake Point Tower and a bunch of park/marina/city buildings. Inner drive will still be LSD.
I think they should name either the Lakefront Trail or the Riverwalk for DuSable.
“Columbus Drive. He was an SOB, too.”
So you’re an anti-Italian bigot too. Go figure.
I was against renaming LSD too but now I’m totally for it. This is the democracy you voted for, now enjoy it!
Chicago has a murder clearance rate of something like 20%, a shooting clearance rate of less than 10%, and with crime and violence at 90’s crack war levels….and Karen is complaining about a loud motorcycle radio? Do you think a $100 administrative fine at 400 W Superior is deter this guy from playing his radio too loud on a weekend night? Call that complaint in to 911 and you’ll find your call recorded as #Karen on #chicagoscanner.
Yes, I’m anti-Italian because I said Columbus was an SOB. By saying that about Columbus I just insulted all of the millions of Italian people who ever lived.
I also think Alan Dershowitz is an SOB. So by your estimation that makes me an anti-semite, right? Funny, me being Jewish and all.
Stop baiting people, HD. It’s ugly and stupid. You don’t look smart by doing it.
Alright so my previous comment was a little harsh with the #karen; but in all seriousness, the motorcycle with a loud radio on weekend nights is a quality of life issue that the Chicago PD is in no position to even address with all the other issues. This type of anti-social behavior would not be tolerated in 99% of Chicago suburbs but with a CPD in the fetal position and doing as little as possible, its just something a couple of hundred thousand residents will have to live with.
No Dan #2, I’m just calling out your bigotry.
Here’s a ‘reliable’ source for you:
https://www.npr.org/2019/10/12/769688161/columbus-days-meaning-for-italian-americans
It’s all of Columbus, just not Columbus day for us Italians.
So this means I can’t say Mussolini was an SOB without insulting you? Come on! I thought liberals were supposed to be the snowflakes.
“So this means I can’t say Mussolini was an SOB without insulting you?”
It’s OK to insult Mussolini.
But we are getting off topic here and to come back to Chicago…
#chicagoscanner on twitter, click latest and every few minutes you’ll get a new tweet about the crazy stuff reported on the police scanner.
I wonder if tonight will have groups of hundreds of teenagers vandalizing downtown again.
Have a good weekend!
“#chicagoscanner on twitter, click latest and every few minutes you’ll get a new tweet about the crazy stuff reported on the police scanner.”
There is something very sad about someone in the suburbs sitting there watching the chicago scanner tweets for fun on the weekends.
Teens vandalizing downtown?
Yawn.
The “wildings”, as they’ve been called, have been happening during the summer months for, what, 4 or 5 years now? I’ve lost track. Definitely started in the Rahm administration. They closed Water Tower Place to teens a few years ago because of it. Remember the Red Line not being stopped at the Chicago station in order to keep teens away from the area?
That all mostly ended in the pandemic but I wouldn’t be surprised to see it back again this year.
It will be good to get the kids back to school this fall.
“It’s all of Columbus, just not Columbus day for us Italians.”
You Italians can celebrate Columbus all you want, Homedelete. Doesn’t mean the rest of the country needs to or needs a national holiday to do so.
How hot is it?
Here’s a Ukrainian Village “cottage” that just came on the market.
It went under contract in 7 days. 3 bedrooms, 2 baths, no square footage listed.
“Updated” the kitchen and looks like redid one of the baths.
No garage but parking pad for 3 cars.
Listed at $819,000.
Last sold in June 2019 for $680,000.
Sizzle.
https://www.redfin.com/IL/Chicago/2028-W-Rice-St-60622/home/14107427
We’ve chattered about this Ranquist building in the past.
This duplex went under contract in 16 days after trying to sell it in 2018 and 2019.
https://www.redfin.com/IL/Chicago/2016-W-Rice-St-60622/unit-101/home/146443118
“It went under contract in 7 days.”
What happened to 1, 2, or 3? Now a week.
“Listed at $819,000.
Last sold in June 2019 for $680,000.
Sizzle.”
I don’t know why you say “sizzle” when the owner put some serious money into this when it was bought in 2019.
“HUGE updated kitchen……new quartz counters, custom backsplash, black hardware & Stainless Steel appliances. New 3 season sunroom is unlike any other with beadboard ceilings, gorgeous flooring & floor to ceiling windows (they open!) overlooking your lush backyard…..BRAND NEW stylish white and black bathroom with honed quartz, classic subway tile & custom flooring.”
They literally did an addition on the house and updated everything to brand new. Yeah, I would hope the value increased. $140K more but what’s the actual return after factoring in all of the upgrades and realtor fees? My guess it’s not much of a return given all of the work that was put in.
Beautiful house though.
“This duplex went under contract in 16 days after trying to sell it in 2018 and 2019.”
It probably didn’t sell those years because the exterior is hideous. And again, 16 days not “final offers are due three days after listing” which is what was happening in April.
Looks like the “sizzle” is a little less “sizzle” than a few months ago.
Also, remember the upper end of the market is the hottest. The two you cite fit that mold. Neither over ask as well? Again, I thought it was hot hot hot?
“They literally did an addition on the house”
Don’t think they did. Just updated the interior of the space.
Kitchen reno looks modest. Not a full gut.
Funny how HD and Sonies, both who don’t even live in chicago (one not even in the state) are the only ones complaining about the “crime”.
The internet is a wonderful place.
“Don’t think they did. Just updated the interior of the space.”
I might be interpreting it wrong then but the description of the sunroom sounds like an addition? From the listing:
“New 3 season sunroom is unlike any other with beadboard ceilings, gorgeous flooring & floor to ceiling windows (they open!”
“I might be interpreting it wrong then but the description of the sunroom sounds like an addition? ”
If you have a Redfin account you can see the pictures from the previous listing. It was an enclosed porch that they finished out a little nicer.
“Don’t think they did. Just updated the interior of the space.”
Agreed–no addition, but new windows both up and down, and re-sided the exterior (can see the old siding in streetview).
“Kitchen reno looks modest. Not a full gut.”
Cabinets are just painted, right? New floor, new island, new counters, full size fridge, but same range and microhood, and looks like same dishwasher.
“It probably didn’t sell those years because the exterior is hideous. And again, 16 days not “final offers are due three days after listing” which is what was happening in April.”
16 days is quicker than when the average condo was selling in May 2019, per Gary’s data. In May 2021 and 2019, 50% of condos were selling at an average of 24 days.
The upper end of the market is NOT the hottest WP. Don’t know where you got that info. The hottest area of the market is the lowest end. That’s why the 809 W. Wellington condo that was listed at $350,000 went under contract in less than a week.
Affordable properties are selling almost instantly, many with multiple offers. The first time home buyer market is really strong.
Upper bracket continues to lag in condos but single family homes seem to be selling alright. Still too much upper bracket condo inventory for prices to rise. It doesn’t help that several big new high rises, like the St Regis, which has 200+ condos still to sell, are all trying to sell at the same time.
“It went under contract in 7 days.”
“What happened to 1, 2, or 3? Now a week.”
WP: You look like a fool trying to be bearish during what is the best housing market in the city of Chicago in 15 years. The data doesn’t lie. The sizzle is on and has been for months.
You need to ask yourself why you are wishing doom during a time when Chicago home owners are finally getting appreciation and enjoying what other cities have seen for several years: a hot housing market.
Chicago home prices should have been rising for YEARS. I know many home buyers are shocked that they can no longer get a 2/2 for $400,000 and that it’s now $500,000. But no one is shocked in other cities when it happens there.
If you want to live in one of Chicago’s popular neighborhoods, you will have to pay up. A LOT of other people want to live there too. Inventory is at record lows everywhere except downtown. But the economy is strong and the reopen will lead to more jobs and more people moving to town.
The inventory tells the tale. It’s simple supply and demand analysis.
The downtown market is even seeing plenty of sales now. But prices remain depressed there and these are buyers looking for deals. Good to see (but sucks for those sellers.)
“They literally did an addition on the house and updated everything to brand new. Yeah, I would hope the value increased. $140K more but what’s the actual return after factoring in all of the upgrades and realtor fees? My guess it’s not much of a return given all of the work that was put in.”
As others have already pointed out, you are completely wrong WP.
Again, you are embarrassing yourself trying to say these sellers won’t see big appreciation, when they will. And this is happening all over the city.
Chicago’s housing prices are UP. Thank goodness.
Tax Revenue Chicago Mag Mile
https://www.bloomberg.com/news/articles/2021-06-08/chicago-s-magnificent-mile-needs-crowds-to-come-back
“The upper end of the market is NOT the hottest WP. Don’t know where you got that info. The hottest area of the market is the lowest end.”
I get my information from actual sources not spouting opinions as truth. I’ve posted many articles from Redfin about this. Further, from a new Redfin report dated yesterday:
“High-end home sales jumped 26% compared to a 14.8% increase in mid-priced home purchases and a 17.8% gain in affordable home purchases. An abundance of high-end homes hitting the market is helping this segment flourish, according to the report”
“This means a lot of the demand for homes is coming from folks who are well-off, while many lower-income Americans sit on the sidelines because they’ve been priced out of the housing market due to surging prices.”
“The prices of high-end homes also grew faster than the prices of affordable and mid-priced homes in that time period. High-end home prices hit a new record, rising 14.3% year over year compared to a record 12.4% increase in the prices of mid-priced homes and a 10.2% increase in the price of affordable homes.”
Do you want to try again Sabrina? More home sales and bigger price increases at the top-end of the market compared to the middle or “affordable” ends.
Let’s use common sense as to why this is…. (i) who owns stocks rich or poor people? (ii) how has the stock market performed over the past 12 months, (iii) who benefits more when interest rates are cut, (iv) who is been saving more money because they have worked from home for 15 months now.
This isn’t hard to comprehend yet for some reason it is for you.
https://chicagoagentmagazine.com/2021/06/07/high-end-home-sales-prices-jump-as-market-flourishes/
“You look like a fool trying to be bearish during what is the best housing market in the city of Chicago in 15 years.”
When was I a bear? What are the actual facts? Houses in Chicago are going for 1% – 2% above ask on average, they are selling quicker than two years ago but Chicago is still 20 out of 20 when it comes to price appreciation.
Sabrina logic – if you are last you are first?
“Chicago’s housing prices are UP. Thank goodness.”
Price increases are relative. As I shared last week, per Crains, housing prices in Chicago are still below their Great Recession Peak.
If you are arguing prices are up since 2013 or 2018 generally yes they are. I believe Chicago is the only major city were prices are still down from 06/07. It’s all relative.
“Tax Revenue Chicago Mag Mile”
I’d argue they are focusing on the wrong tax. Sales tax declines on the mag mile should be mostly offset by online sales taxes which started in what 2019 but was expanded in 2020.
The tax to focus on is property taxes. If these commercial properties are less profitable more of the burden will fall onto residential homeowners given the bi-furcation of commercial rent deflation to residential home appreciation this years re-assessment could be pretty ugly for homeowners.
I’m still seeing a lot of condos and even single family homes that are listed for less than peak. I’m seeing a lot of places selling at about 10% more than the owner paid. They are just breaking even considering it costs about 10% of the sale price to sell a house.
Here are just a few recent sales I’ve noticed:
Sold for $270,000 a few days ago and paid the same price in 2017: https://www.realtor.com/realestateandhomes-detail/1250-W-Van-Buren-St-Apt-513_Chicago_IL_60607_M70696-39964
Sold for $839,000 and paid $975,000 in 2013: https://www.realtor.com/realestateandhomes-detail/551-Brier-St_Kenilworth_IL_60043_M87437-47559
Sold for $575,000 and paid $500,000 in 2016. These people will walk away with maybe $25,000 in appreciation: https://www.realtor.com/realestateandhomes-detail/2724-N-Dayton-St-Apt-C_Chicago_IL_60614_M74660-60570
I’m just not seeing recent buyers making a huge amount of money. Chicago isn’t Seattle. Show me the houses where people bought recently and are walking away after making a killing. I’m just not seeing it as a general rule, at least not in the neighborhoods where I’m looking or where I currently live.
“Chicago isn’t Seattle. Show me the houses where people bought recently and are walking away after making a killing. I’m just not seeing it as a general rule, at least not in the neighborhoods where I’m looking or where I currently live.”
It’s happening all over the city but not downtown.
And it depends on the property, location etc. Some properties can be in the hottest neighborhood but sell for less because they don’t have things buyers are looking for etc.
What’s your definition of a “killing” Jenny?
Are prices up 30% like in Boise?
No.
Jenny: Here’s an example of someone trying to sell for a lot more.
SFH in Logan Square.
Bought for $515,000 in 2017.
Currently listed for $775,000.
Might not get it. Who knows? But they likely WILL see very nice appreciation.
https://www.redfin.com/IL/Chicago/2627-N-Talman-Ave-60647/home/13450668
Jenny: Here’s a closed townhouse in Logan Square.
Bought it in 2014 for $557,000
Just sold it in 2021 for $709,000
https://www.redfin.com/IL/Chicago/2307-N-Albany-Ave-60647/unit-EAST/home/144950200
Jenny: but then you have this seller in Lakeview. We’ve chattered about this building before.
Bought in 2016 for $360,000
Sold in 2021 for $390,000
https://www.redfin.com/IL/Chicago/1111-W-Cornelia-Ave-60657/unit-105/home/13382149
Here’s one in Southport.
Bought in 2016 for $375,000.
Sold in 2021 for $421,500.
https://www.redfin.com/IL/Chicago/1300-W-Eddy-St-60657/unit-2/home/12624509
Is that “killing it” after owning for 5 years?
In California it would have sold for $600,000 after 5 years.
“Bought for $515,000 in 2017.
Currently listed for $775,000.
Might not get it. Who knows? But they likely WILL see very nice appreciation.”
They put a *TON* of money into that place. Hell, they replaced the boiler (probably $15k). Spent $20k on appliances. Redid the kitchen and ALL of the baths. Did a bunch of work on the garage. It’s basically a completely different house.
But the tales of everything being up-up-up in Seattle (and elsewhere) aren’t universal, either. See, eg, https://www.redfin.com/WA/Seattle/75-E-Lynn-St-98102/unit-304/home/70529
“In California it would have sold for $600,000 after 5 years.”
That’s the comparison, and selling at purchase + CPI is going to look terrible, even tho it’s a much better situation for the overall market. What’s going on in CA is a disaster for everyone who isn’t a long term owner, able to remain.
“Jenny: Here’s an example of someone trying to sell for a lot more.
SFH in Logan Square.
Bought for $515,000 in 2017.
Currently listed for $775,000.”
They put a decent amount of money into that place based on the description – new kitchen, new H-Vac, new water heater, new appliances, heated tiles, among others. Not sure this is a good example of price appreciation.
“Bought in 2016 for $360,000
Sold in 2021 for $390,000”
Adding in the realtor fees $0 appreciation in 5 years and after adding inflation you are taking a loss.
“Bought in 2016 for $375,000.
Sold in 2021 for $421,500.”
So at best breakeven after 5 years when considering realtor fees and inflation hot market indeed….
“In California it would have sold for $600,000 after 5 years.”
In China it would have sold for millions is about as relevant as comparing to California.
What a pitch to a prospective buyer. If this house was in California it would be worth so much more…..
@Sabrina – My definitely of “killing it” it would be 25%+ increase total within the past 5 years or so without doing extensive remodeling. Doing well would be closer to 15% without extensive remodeling. My understanding is that it costs about 10% of the property’s value to sell in Chicago, including all taxes and fees. A 10% increase would be just barely breaking even (assuming reasonable inflation).
We are fed the lie from the time we’re kids that the path to a stable future is owning property and I don’t agree with that. I’ve seen too many people lose money. It could be a path to stability if a person lives in the same house for 30 years, but that’s unusual. At this point, with the huge tax increases, you can’t even say that at least your monthly payment is stable. The benefit of avoiding yearly rental increases by buying is gone (if it ever existed).
I own because I like being able to make my own choices. I was extremely lucky in when I bought and have a ton of equity. I think I’d be better off financially long term if I sold my place and invested the proceeds in a relatively safe index fund and rented. I could also add money to that index fund that I would have spent on general home maintenance.
“I think I’d be better off financially long term if I sold my place and invested the proceeds in a relatively safe index fund and rented.”
This is true for some people Jenny. For others, housing is forced savings. There are opportunity costs, of course.
But housing also gives you leverage that stocks do not. This is why the housing bubble was so lucrative for so many. But when you get a bear market, not so much because of transaction costs.
Home ownership isn’t for everyone.
I was going to crib on this cute little house but it has already gone under contract (of course.)
Nice backyard.
Very pleasant condo alternative.
I wonder how much over ask it will sell for? Listed at just $420,000.
https://www.redfin.com/IL/Chicago/5917-N-Drake-Ave-60659/home/13515640
“But housing also gives you leverage that stocks do not.”
Its a popular misunderstanding-you can have as much leverage as you want in stocks. Actually more than RE.
You are right tho that some people need forced savings. I know someone who has finally sold their RN condo and pretty sure it will be gone in a few years.
‘[5917 Drake]’
Nearly perfect comp closed a few weeks ago:
https://www.redfin.com/IL/Chicago/5523-N-Christiana-Ave-60625/home/13494741
trade off is school across the street and an extra bathroom. Tough choice, as I would hate to be across from a school drop-off/pick-up zone.
“you can have as much leverage as you want in stocks.”
The comparison has been for the “normal” person–everyone can get a 80% loan on a house; traditionally, brokerages limited “normal” people to 50% margin loans.
It’s just a matter of how much you can convince a lender to front you.
“For others, housing is forced savings. There are opportunity costs, of course.”
What kind of nonsense is this. A more efficient way to “force savings” is hire a financial advisor or have your paycheck automatically deducted for HSA, IRA/401K, 529, etc.
I never knew until seeing Sabrina’s comments on this site that realtors are cousins of used car salesman. The sliminess and desperation is unbelievable.
“But housing also gives you leverage that stocks do not.”
Have you ever heard of buying on margin? Maybe you should google Archegos Capital Management and learn about prime brokerage. Another nonsense comment by Sabrina. Factoring in liquidity, holding, and closing costs of stocks compared to homes puts this one to bed as well.
But but but buying on margin for retail investors costs 7%+ WP….. Yeah and a 3% mortgage plus 5% closing costs + another 5% when you sell + property taxes, PMI, general maintenance, and asset illiquidity is more than 7%.
“This is why the housing bubble was so lucrative for so many.”
The people that made money on the bubble were the ones that shorted the housing market or sold before it was known as a “bubble”. The people that made money bought after the bubble popped. Again, such nonsense.
“The people that made money on the bubble were the ones that … sold before it was known as a “bubble”.”
Sold before 2003?
https://www.economist.com/special-report/2003/05/31/house-of-cards
It was known as a bubble to some a lot earlier than many remember.
I read S’s reference to be to the people who were getting (borderline) fraudulent mortgages and flipping, flipping, flipping. The facilitators of that churn did better than the buyer-sellers, but for them it was “so lucrative”.
“I read S’s reference to be to the people who were getting (borderline) fraudulent mortgages and flipping, flipping, flipping. The facilitators of that churn did better than the buyer-sellers, but for them it was “so lucrative”.”
Until its not
Who knows what she meant as she moves the goalposts consistently (A kind way of saying lies). I dont see where Jenny was speaking in regards to flippers or mortgage brokers, seems more of the buy & stay crowd. Which is why SabrinaZ’s word salad is meaningless
“The facilitators of that churn did better than the buyer-sellers,”
Most flippers that were successful in the early 2000’s didn’t just stop for 3+ years come 2003 or 2005/2006. Maybe they scaled back, tried not to chase but most of those gains were recycled into the next project until the bust occurred.
“The facilitators of that churn did better than the buyer-sellers, but for them it was “so lucrative”.”
Until its not”
Huh?
Yes, when there are no new NINJA mortgages to be made, the NINJA mortgage brokers stop making money.
Along with the 80/20 and a host of other questionable loans
Yeah the gravy train got derailed
“I never knew until seeing Sabrina’s comments on this site that realtors are cousins of used car salesman. The sliminess and desperation is unbelievable.”
Nope. Not a realtor. I’ve made that pretty clear over the last 14 years.
And yes: home ownership is forced savings. For many Americans it is their ONLY savings. It’s the only way they can retire.
Not everyone is upper middle class or rich and has a “financial advisor” or is even putting money into a 401k or IRA. We all know the statistics on retirement and it’s not good. 30% of Americans have NO retirement savings.
But if you buy a house, at least you have an asset. And for many that has saved their lives.
Thanks for the comp anon(tfo).
The extra full bath is a big deal for many. ha ha.
Like I’ve said, if you haven’t gotten your rental apartment deal, it is already too late.
Chicago is back! And it’s happening faster than anyone thought possible (even me.)
The Bernardin, which is on Chicago and Wabash by Holy Name Cathedral, is at 99% rented. 99%!
That’s higher than pre-pandemic.
Sure, they probably gave away 3 or 4 months free rent to get renters back in. But now they’re basically at full capacity. Impressive.
From Crain’s:
“Downtown Chicago’s apartment market has staged one of the strongest urban market recoveries in the country,” CBRE says in its marketing brochure.
The Bernardin has staged a remarkable comeback, too. Its occupancy rate dropped to 85 percent last year, down from 94 percent in 2019, public filings show. Its net operating income fell to $3.3 million, down 20 percent from $4.1 million in 2019.
The Bernardin’s apartment occupancy rate today? Ninety-nine percent, according to the CBRE flier. Its retail space, about 21,000 square feet, is fully leased, too.
https://www.chicagobusiness.com/commercial-real-estate/after-comeback-covid-river-north-apartment-tower-hits-market
“Sure, they probably gave away 3 or 4 months free rent to get renters back in. But now they’re basically at full capacity.”
Yet you title the article as saying all the deals are gone…..
“Yet you title the article as saying all the deals are gone…..”
Um…yeah. They gave the deals last year to get people in. Those deals are GONE.
And if you’re at 99% occupancy, you certainly don’t need to get new tenants so you’re clearly NOT doing ANY deals.
But this goes to the strength in the market that the One Chicago developer alluded to when he said they didn’t intend to do ANY incentives. We will see as they are at the top of the price range.
I had doubts about Wolf Point when it launched with its super high rents but it filled up quickly with few incentives back in the day.
The apartment market is roaring back.
“ Um…yeah. They gave the deals last year to get people in. Those deals are GONE.
And if you’re at 99% occupancy, you certainly don’t need to get new tenants so you’re clearly NOT doing ANY deals.”
How many are at 99%?
They’ve dialed the incentives back, but Wolf Pt, Aqua are still offering a free Month
That’s not “Done”
Does anyone know what’s going on with Aqua right now? I stayed at the Radisson blue a while back and had a pretty bad experience. Also I saw that they were doing some remodeling in the condo side entrance that was only half done. I spoke to the doorman and he said the renovations have been halted for a year or so. It looked really really bad.
“And if you’re at 99% occupancy, you certainly don’t need to get new tenants so you’re clearly NOT doing ANY deals.”
They got 99% occupancy because of 3 – 4 months free. It was a deal/steal with that many months free. The issue comes at renewal.
Was it pro-rated throughout the 12 month lease? If so there will be some sticker shock when those 3 – 4 months are added back on a renewal. $3K a month apartment pro-rated down to $2K a month with 4 months free. I don’t think the DINK’s in the 2/2’s are going to accept paying an extra $1K.
If they 4 months was upfront and the $3K was paid monthly from month 5 – 12 are they ok paying that another 12 months straight? Maybe but when you look at the amount of savings in the Bank account during months 1 – 4 compared to 5 – 12 they may start looking again.
Incentives will still be around come spring 2022. They may not last for long and will be less but they will still be there.
“But this goes to the strength in the market”
Again the strength was offering 4 months free. Prices came down due to oversupply and demand started to return.
“The apartment market is roaring back.”
One quarter *during springtime* is not a trend. Let’s see if it continues.
“They gave the deals last year to get people in. Those deals are GONE.”
Friends were getting 2 months free signing leases in April/May with May/June move-in dates this year. It’s not accurate to say deals are gone. They are still there just not at 3 – 4 months anymore.
“They gave the deals last year to get people in. Those deals are GONE”
Per Domu article from last week highlighting various apartments providing up to 3 months free still….
looks like those deals aren’t gone…..
https://www.domu.com/blog/why-now-is-the-best-time-to-look-at-apartment-deals-in-chicago
“They gave the deals last year to get people in. Those deals are GONE”
Planned Property Management owns and manages over 3700 units in the city. From their own blog last week they are offering 3 months free on various apartments throughout the city.
https://ppmapartments.com/free-rent-promotions-chicago-apartments/
“Planned Property Management owns and manages over 3700 units in the city. From their own blog last week they are offering 3 months free on various apartments throughout the city.”
How many times do I have to keep repeating myself WP?
You are embarrassing yourself. Just stop.
The building is 99% rented. You aren’t doing deals at 99%. My god.
THE DEALS ARE GONE. THE LUXURY DOWNTOWN BUILDINGS ARE FULL AGAIN. YOU MISSED OUT IF YOU HAVEN’T LEASED.
You also missed out, according to Crain’s, if you didn’t buy downtown in the last 6 to 9 months. Prices on the move higher now- even downtown.
“looks like those deals aren’t gone…..”
Quit embarrassing yourself WP. It’s getting really sad now.
The Chicago housing market is on the rebound. The condo market is sizzling and apartments are back with one of the best quarters for the landlords in YEARS.
Quit trying to gaslight reality. It just looks pathetic.
“They got 99% occupancy because of 3 – 4 months free.”
Yes. This is WHAT I SAID.
Doesn’t matter how they got them. They were only at 94% before COVID and running deals then too. The facts are: people are moving back. You all said they wouldn’t. That the cities were doomed. That the buildings would go under. Blah, blah, blah.
NONE OF IT HAPPENED.
In fact, the very opposite is going on.
And yes, they will have to renew all those leases. But you see, they do 3 months free on a 15 month lease. So renewals aren’t their problem until mid-2022. And by then, they hope to have sold the building.
“One quarter *during springtime* is not a trend. Let’s see if it continues.”
Excuse me?
First quarter is WINTER. Not spring.
And Chicago’s big “move-in” dates are later. April through June.
The sizzle is on. It’s hot, hot, hot.
The deals are gone. You’re not getting those 15% lower rental rates anymore. I know some that got them but those have gone bye-bye.
You don’t live in the city WP- but it is humming already and the reopen just happened.
It’s so hot people are snapping up downtown condos again.
Healing.
“They got 99% occupancy because of 3 – 4 months free.”
I’ve heard this before: landlords lose money on every rental but they make up the losses in volume!
“They’ve dialed the incentives back, but Wolf Pt, Aqua are still offering a free Month”
A free month is not a “deal.” They’ve been doing that for 10+ years.
And you claim you live in Lincoln Park JohnnyU? Come on. Laughable Indiana man.
Because you would know exactly how many of the old Children’s Memorial hospital high rise apartments are currently rented. It’s pretty obvious to anyone living in the neighborhood.
“I’ve heard this before: landlords lose money on every rental but they make up the losses in volume!”
But this building isn’t losing money. That’s the thing. It’s doing quite well which is why they’ve chosen now to sell it.
“ A free month is not a “deal.” They’ve been doing that for 10+ years.”
I need to get a Shill translator.
“And you claim you live in Lincoln Park JohnnyU? Come on. Laughable Indiana man.”
You are a terrible liar. Lived does not equal live.
So you keep lying, shilling and making up new definitions in order to try and make yourself feel like you got a W. Hope that makes the Box wine go down a little easier
“And by then, they hope to have sold the building.”
wot?
Where’d you get the fool idea that these buildings are going to be on the market?
I think the shill is referring to – https://www.connectcre.com/stories/ubs-puts-river-north-apartments-on-the-block-after-15-year-hold/
Somehow in her cheap wine addled brain, this one property is a proxy for all of Chicago
Interesting to not that UBS will likely not recover its 2005 purchase price. I’d be leery when in such a HAWT Market ™ intuitional money is looking to sell into a recovery
Also the heavy incentive game to increase occupancy must mean that stupid money/search for yield is entering the building.
Always curious as to the retention rate when giving q 16Mo lease w/ 4Mo free
“It’s so hot people are snapping up downtown condos again.”
and that’s again because Condo prices have fallen especially in and around the loop compared to other neighborhoods and SFH’s have been getting snapped up.
The deals, value, and ability to buy for most is in the Condo market near the loop.
Supply and Demand isn’t that hard to figure out….
“However, it’s not clear whether UBS would garner more from a sale than the purchase price, Crain’s reported. NOI declined 20% in 2020 from the year prior, but even if NOI recovered to 2019 levels, it would still fall below 2005.”
What are the prevailing cap rates compared to ’05 for apartment buildings? Looks like ’05 was near a pre-bubble low, but they’ve been running below that level for 5 years. So it really depends how far below ’05 NOI the pro forma NOI is for ’22.
15+ is a long hold in any case for a UBS-type investor, even with a core asset.
“Interesting to not that UBS will likely not recover its 2005 purchase price.”
Shill logic – someone is selling so it’s a hot market. Nevermind they are taking a bath on the sale.
“intuitional money is looking to sell into a recovery”
Let’s see how Sabrina spins this one…selling into a recovery must mean you get a bigger multiple or better cap rate than selling at the peak according to shills?
You would think if there’s going to be a dearth of new apartment buildings going up compared to the preceding pre-covid years absorption and pricing power should be on the owner for the next couple of years and they would wait another 2 – 3 years to sell if everything was so great.
What are the prevailing cap rates compared to ’05 for apartment buildings? Looks like ’05 was near a pre-bubble low, but they’ve been running below that level for 5 years. So it really depends how far below ’05 NOI the pro forma NOI is for ’22.
Depending on how many 4 mo free leases got signed, 22 is going to be shit. If buying, Id tell UBS/CB – great job leasing up the place, gonna re-amortize those leases and have the difference come out of the price. Its a pretty risky play to artificially goose the occupancy w/o having a buyer in place. Must be hoping they find someone that buys into the HAWT Market ™ theory. Sabrina would be the perfect buyer.
“You would think if there’s going to be a dearth of new apartment buildings going up compared to the preceding pre-covid years absorption and pricing power should be on the owner for the next couple of years and they would wait another 2 – 3 years to sell if everything was so great.”
Just one block away hundreds of apartments will start leasing in October.
There isn’t a “dearth.”
But there was a pause in construction during the pandemic which will really tighten the apartment market in 2022. But afterwards, more will come on the market.
I just wish more of these were condo buildings. That would be the next phase of the bull market in housing- that some new condo buildings will get built at the lower price points. They could certainly be building them in South Loop and other locations. The demand will be there for condos again soon enough.
“Supply and Demand isn’t that hard to figure out….”
Exactly WP. You have finally figured it out!
And as inventory drops downtown, the prices will rise- which Crain’s reports is already happening. Prices bottomed late last year and early 2021.
By next year, the condo market is going to be tight downtown. Deals will be gone.
Anyone who doesn’t need to sell, should hang on.
“Just one block away hundreds of apartments will start leasing in October.”
in which construction started pre-pandemic…
“But there was a pause in construction during the pandemic which will really tighten the apartment market in 2022. But afterwards, more will come on the market.”
i.e. the point of my comment. Waiting to sell the building a couple of years should likely be advantageous as the apartment market tightens in 2022/2023.
“And as inventory drops downtown, the prices will rise- which Crain’s reports is already happening. Prices bottomed late last year and early 2021.”
This is where you are going wrong. Same thing with your rental market take. Prices decreased as demand dried up and supplied increased. The market needed to be re-set to find buyers which it is now doing from a lower price point then before.
Prices have bottomed in the condo market but are still down relative to pre-pandemic. It will take at least a year to get back to pre-pandemic numbers. Mind you, plenty of condos (high rise) were saying zero or negative appreciation pre-pandemic anyway.
So when you say the prices are going “higher” it is relative to the time period you are measuring from.
“By next year, the condo market is going to be tight downtown. Deals will be gone.”
Fall 2020 – Spring 2021 high rise loop condo deals will be gone but deals will still be had relative to SFH’s and units in 3 flat condos in certain neighborhoods.
“Anyone who doesn’t need to sell, should hang on.”
This is likely poor advice. How much of a bounce will the condo see relative to the holding cost? If you can sell for $15K higher a year from now but are paying $15K or more combined in assessments and property taxes what’s the benefit of “holding on”.
The risk is being stuck with two houses when you only want one. That risk was bigger in the fall/spring compared to present if you are listing a condo.
“Prices have bottomed in the condo market but are still down relative to pre-pandemic. It will take at least a year to get back to pre-pandemic numbers.”
No one says otherwise. But you clueless bears were just saying 6 months ago that the city was still going to be doomed. Clearly, it’s not.
And now we’re agreeing that downtown will take at least a year to get back to pre-pandemic. Hooray! That’s fantastic given the drop that happened last year.
It’s all about inventory. If that drops under 6 months downtown, the prices will rise faster than everyone thought. Simple supply and demand metrics, as you’ve said.
And downtown has completely changed on the reopen. Energy is everywhere. The art on the Mart is back. Boats and water taxis are back. The restaurants are back and new ones coming in. Several top chefs are due to open new downtown restaurants this year including Chef Andres and Chef Ramsey. They realize that Chicago is still one of the top food cities in America and they need to be here.
One Chicago will open this fall, with its massive new Whole Foods and two towers of apartments.
Also, the planning commission approved the conversion of the 1000 S Michigan Helmut Jahn building into apartments. Hasn’t been officially approved yet, but is expected to be by the City Council. They are looking at fall, or maybe spring, to resume construction.
Cities are back. And Chicago is booming. Still needs to heal. Lots of comebacks and rebounding still to come.
But buyers know that. That’s why sales are picking up downtown. The deals are going away.
“Just one block away hundreds of apartments will start leasing in October.”
“in which construction started pre-pandemic”
Duh WP. You just need to stop. You keep embarrassing yourself with your bearish outlook every day on this blog.
Who roots against America? Who roots against its cities?
All of you bears on this site do. I don’t get it.
Bitterness? Jealousy? What is it?