Market Conditions: December Housing Inventory Plunged 31.4% YoY in Chicago
The Illinois Association of Realtors is out with the December 2021 market update.
As we already know from Gary’s posts on this blog, it was another strong month.
From the IAR:
In the city of Chicago, home sales (single-family and condominiums) in December 2021 totaled 2,392 homes sold, up 5.5 percent from December 2020 sales of 2,267 homes. Year-end 2021 home sales totaled 33,195, up 27.4 percent from 26,063 homes sold in 2020.
The median price of a home in Chicago in December 2021 was $315,000, up 3.3 percent compared to December 2020 when it was $305,000. The year-end 2021 median price reached $335,000, up 6.2 percent from $315,500 in 2020.
In Chicago, it was the strongest December since 2005 when investors were buying hundreds of new construction condos.
- December 2004: 3719 sales and median price of $267,000
- December 2005: 2847 sales and median price of $283,000
- December 2006: 2241 sales and median price of $279,000
- December 2007: 1629 sales and median price of $287,000
- December 2008: 1263 sales and median price of $235,000
- December 2009: 1820 sales and median price of $208,000 (34% short/REO sales)
- December 2010: 1475 sales and median price of $166,000 (43% short/REO sales)
- December 2011: 1536 sales and median price of $156,000 (44% short/REO sales)
- December 2012: 1806 sales and median price of $185,000 (39.7% short/REO sales- according to Gary Lucido’s data)
- December 2013: 2137 sales and median price of $210,000
- December 2014: 2020 sales and median price of $228,000
- December 2015: 2077 sales and median price of $242,000
- December 2016: 1974 sales and median price of $260,000
- December 2017: 2058 sales and median price of $265,500
- December 2018: 1708 sales and median price of $251,500
- December 2019: 1892 sales and median price of $276,000
- December 2020: 2267 sales and median price of $305,000
- December 2021: 2392 sales and median price of $315,000
“Despite a continued decline in inventory in December, caused by market seasonality and inventory shortages, we still saw positive momentum in the Chicago market,” Antje Gehrken, president of the Chicago Association of REALTORS® and president and designated managing broker of A.R.E. Partners, said. “Condo sales continue to shine throughout the city, which is a great indicator for the market moving into the new year.”
Condo sales were up 7% year-over-year to 1332 sales, while single family homes rose 3.7% to 1060.
As you know, condo sales have been driving the monthly sales surge all fall but are now coming up against tougher year-over-year comps which will be hard to top in 2022.
Chicago inventory plunged 31.4% to 5,662 homes from 8254 homes last December.
Statewide, inventory also plunged 34.4% to 20,546 from 31,326 homes last year.
Days on the market remained at 38 days in Chicago but statewide it fell to 33 days from 42 a year ago.
For the full year, in Chicago days on the market fell 7.7% to 36 from 39 days in 2020.
“Prices increased again while sales have continued to decline throughout Illinois,” said Dr. Daniel McMillen, head of the Stuart Handler Department of Real Estate (SHDRE) at the University of Illinois at Chicago College of Business Administration. “However, the SHDRE forecast now indicates an increase in the number of sales over the next three months. Foreclosures are down significantly since the same time last year. Inflation continues to be a concern for consumers, particularly among higher-income households.”
Average 30-year fixed mortgage rates rose to 3.1% from 3.07% in November. They were just 2.68% in December 2020.
The mortgage rates are expected to continue to rise in 2022.
Which will slow the Chicago housing market this year: record low inventory or higher mortgage rates?
Annual Illinois home sales and median prices increased in 2021 [Illinois Association of Realtors, Press Release, by Bill Kozar, January 20, 2022]
“Which will slow the Chicago housing market this year: record low inventory or higher mortgage rates?”
Mortgage rates
Buyers salaries not keeping up with inflation
Crime
CTU
Property Tax increases
Throw in the cities Covid response going forward
“Which will slow the Chicago housing market this year: record low inventory or higher mortgage rates?”
The “record low inventory” has not slowed sales as the article points out. Mortgage rates and market selloff are likely to slow the housing market as seen countless times.
The rising rates slowing down the housing market by the second half at a time when residents first property tax bill for the year comes due with based on last years re-assessment values isn’t going to be pretty.
Oh, and indexing recurring property tax increases to annual CPI during covid means a 5% increase is baked in next year on top of the reassessed values.
lets see how that plays out….
Rising rates and higher property taxes may not be much of a factor – people have to live somewhere. If they don’t buy, they will rent and higher rates/taxes will just be a passthrough cost. These factors are also true all of the US, not just Chicago.
What will affect is crime, poor business climate and poor political climate. That’s why people are moving to TX and FL.
“What will affect is crime, poor business climate and poor political climate. That’s why people are moving to TX and FL.”
However, someone ISN’T moving as we saw more homes sell in Illinois, and Chicago, last year, then we did the year before. Sales were the strongest in years.
If everyone were fleeing, there would be more inventory, right? And the downtown apartments wouldn’t be renting.
Sabrina, I understand you are very passionate about the topic, but please try to stand objective and don’t misrepresent what people say:
“if everyone is fleeing” – I did not say that. I said people are moving to TX and FL.
Please read before commenting: https://wirepoints.org/more-data-and-opinion-on-the-exodus-from-chicago-and-other-big-cities-wirepoints/
“on top of the reassessed values”
You know that just acts as a reallocation of the tax burden, right?
It’s a question of what your AV change is compared to the change in AAV.
“I said people are moving to TX and FL.”
Aleks, it is TIRING. We KNOW people are moving to TX and FL. But honestly, the Tribune looked at this a few years ago and most people who leave the state go to the sister states nearby. They are Johnny U, who now lives in Indiana. They go to Wisconsin, Michigan, Iowa, Missouri.
It’s actually a small percentage that leaves for TX, FL or AZ.
But we had the pandemic and many Baby Boomers who were doing 6 months here and 6 months in a warmer state, decided to simply move altogether. And with WFH, some others decided to move as well.
But many GenX and Millennials with kids in school, didn’t uproot and run away.
The last 2 years saw the greatest migration, from EVERYWHERE, within the United States since the end of WWII. Will rising rates and a return to the office, even hybrid, slow this movement? Baby Boomers are still retiring at a rate of 10,000+ a day. An extra million have also retired “early.”
Movement to other states is not going to slow Chicago’s housing market. The record low inventory indicates that.
“The last 2 years saw the greatest migration, from EVERYWHERE, within the United States since the end of WWII. Will rising rates and a return to the office, even hybrid, slow this movement? Baby Boomers are still retiring at a rate of 10,000+ a day. An extra million have also retired “early.”
You mean the generation that on average has $152k in retirement savings and about 1/2 with no retirement savings?
“Movement to other states is not going to slow Chicago’s housing market. The record low inventory indicates that.”
Thats not the driver of the low inventory. The 2/2 buyer in RN 5 years ago hasnt seen any appreciation and is stuck either staying in the 2/2 or moving to Bronzeville or the Suburbs to upgrade
Neither is a preferred scenario
“But many GenX and Millennials with kids in school, didn’t uproot and run away” – your personal and subjective opinion. I personally know at least 20 individuals with families who did uproot and moved away from IL to FL. Is that many? Do you know more than 20? I can ask around 🙂
“Will rising rates and a return to the office, even hybrid, slow this movement” – please understand that office prior to 2020 is dead. Most companies are accepting that fully remote/hybrid opportunities are a new norm and will not go away with COVID. So living close(r) to work in a shoebox condo as not a driving force any longer. Having more space and living in better conditions is.
“Movement to other states is not going to slow Chicago’s housing market. The record low inventory indicates that.” – you are absolutely right with one caveat: low supply is driving the prices up, not high demand.
“However, someone ISN’T moving as we saw more homes sell in Illinois, and Chicago, last year, then we did the year before. Sales were the strongest in years.”
Sales were strongest in years everywhere and were STRONGER in all major cities compared to Chicago if you look at Case Shiller and other market data.
Who has a longer runway for continued sustained strong sales the 18 cities higher on the case shiller index than Chicago or Chicago? The sales were “strong” in Chicago due to Covid (obviously). How much more room does that have given we don’t have net inbound migration occurring to sustain unlike the sunbelt?
Further, where in Chicago will sales continue to be strong at? Likely Lincoln Park/Lakeview and a few other of the usual neighborhoods but will recently hot neighborhoods like “Bronzeville” (define the boundaries as you want) sustain their recent trends? Or $500M condos selling west of western or california in Humboldt Park continue? I’m not sure that trend continues at the levels they have occurred at over the past couple years.
Chicago tied for last in YoY home price growth via case Schiller index. Given the option to purchase a home in Chicago or any other US city, choose the other US city.
https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20211228-1448566/1448566_cshomeprice-release-1228.pdf
“Chicago tied for last in YoY home price growth via case Schiller index. Given the option to purchase a home in Chicago or any other US city, choose the other US city.”
Really? We’re the deal.
You’re literally overpaying in every other city. If you all think that Chicago’s housing market is going to slow when rates rise, what’s it going to do everywhere else? Are salaries going up in Las Vegas right now? When rates rise to 4%, who’s buying there?
Same thing in Florida. As home prices have risen 20% to 40% in the last 2 years in some locations, how much more is left in the tank when rates are rising?
“Sales were strongest in years everywhere and were STRONGER in all major cities compared to Chicago if you look at Case Shiller and other market data.”
We don’t care about “everywhere.” And I don’t care if they are “stronger.”
Your arguments make NO sense WP. When the data doesn’t fit your bearish narrative (Chicago is doomed!) then you have to switch the argument to “everywhere.”
Chicago sales were the strongest since the housing bubble year of 2006. But there is NO housing bubble right now. They are not building thousands of condos and townhouses and speculators aren’t buying (because, after all, Chicago is doomed).
What is happening in other cities is irrelevant and has NOTHING to do with the Chicago market. All real estate is local. Down to certain streets and even buildings. No one buying at Tribune Tower cares what is happening in Tampa right now.
““Movement to other states is not going to slow Chicago’s housing market. The record low inventory indicates that.” – you are absolutely right with one caveat: low supply is driving the prices up, not high demand.”
But you wouldn’t have low supply unless someone wasn’t buying up all the supply. That IS demand. It’s the very definition.
If sales were low, and inventory was low, then your argument might have some merit. But sales were the highest since 2006 in Chicago. When thousands of new condos were selling to investors. THAT is real demand.
You mean the generation that on average has $152k in retirement savings and about 1/2 with no retirement savings?
Baby Boomers own their homes. It’s a big asset. They are selling and moving JohnnyU. Have been for about 10 years now. This is why there was so much inventory in the Chicago suburbs. Baby Boomers trying to leave to Florida but no Millennials wanted their homes in Lake Forest. Then the pandemic happened, and they were saved. Millennials now DID want their houses in Lake Forest. They sold and moved.
Those retiring early are the youngest of the Baby Boomers and the oldest of GenX. They’re retiring early because their stock portfolios were at record highs.
Life is short. The pandemic really opened up a lot of people’s eyes. They’ve ditched bad jobs. They’ve ditched cities they didn’t want to live in. They’re going to live.
“The 2/2 buyer in RN 5 years ago hasnt seen any appreciation and is stuck either staying in the 2/2 or moving to Bronzeville or the Suburbs to upgrade”
Huh?
The 2/2 buyer who bought in River North 5 years ago is likely about 35-40 years old now. No idea where that buyer would be looking, if anywhere. Many people are simply remodeling their current place, like Lauren.
“I personally know at least 20 individuals with families who did uproot and moved away from IL to FL.”
I don’t know anyone who would leave the great Chicago area schools and take their kids down to that nightmare in Florida. But most only figure it out once they get down there, I guess.
Who would send their kids to CPS if they didn’t have to? Constantly closed, constantly on strike, filthy schools because of admin bloat, gang violence, etc. No wonder why CPS has lost students every year for the past 15 years and lost another 10k last year. I’d choose a generic Florida HS over a generic CPS one too and send my kid to UF for 60% of the same tuition you would pay at Northern Illinois or ISU.
“ Baby Boomers own their homes. It’s a big asset. They are selling and moving JohnnyU. Have been for about 10 years now. This is why there was so much inventory in the Chicago suburbs. Baby Boomers trying to leave to Florida but no Millennials wanted their homes in Lake Forest. Then the pandemic happened, and they were saved. Millennials now DID want their houses in Lake Forest. They sold and moved.”
In general, the typical Lake Forrest Boomer didn’t need the proceeds from a home sale to move to Fla
“ Those retiring early are the youngest of the Baby Boomers and the oldest of GenX. They’re retiring early because their stock portfolios were at record highs.”
LOL, you were saying that there was unpossible to have $1MM in a 401k after 25 years, now old GenX are able to retire because of the market? – Sure Sybil. You spew so much BS you can’t keep your lis straight
“I don’t know anyone who would leave the great Chicago area schools and take their kids down to that nightmare in Florida. But most only figure it out once they get down there, I guess.”
Sabrina, sometimes I wonder if you are just saying things because in your head, they are true and pay absolutely no attention to data. Here is data for US High schools. As you will see, in the top 100 high schools in the US, 8 are in FL and 5 are in Chicago. Does not exactly support you statement of “great Chicago area schools and nightmare in Florida.”
Now, do I need to tell you per capita spending in IL vs FL, or do you know that?
https://www.usnews.com/education/best-high-schools/national-rankings
#4 Payton (Chicago)
#5 SAS (FL)
#26 Northside (Chicago)
#57 Jones (Chicago)
#58 Westbshore (FL)
#63 Archimedian (FL)
#65 Design (FL)
#70 Magent (Chicago)
#72 iPrep (FL)
#77 Stanton (FL)
#79 Lane (Chicago)
#85 ICS (FL)
#87 Jose (FL)
“ The 2/2 buyer who bought in River North 5 years ago is likely about 35-40 years old now. No idea where that buyer would be looking, if anywhere. Many people are simply remodeling their current place, like Lauren.”
Well as you’ve stated this cohort got married and is having kids later. If they follow typical trends, they’re looking for more space – AKA SFH or TH. They ain’t getting this in the Northside GZ especially with little or no appreciation in their 2/2. So their options are suburbs or less desirable neighborhoods in the city – Bronzeville
I left Chicago after 20 years to move to Florida. It was a tough decision but I decided to do that because of the crime, weather, taxes, and politics. I didn’t foresee this virus and the gov response to it so I just got lucky to have gotten out before that hit.
Anyway, my FL house is up ~75-100% in three years and the condo I sold, from zillow and comp sales, looks to be down 15-25% from where I sold it.
Stock market is crashing so I imagine some or even most of my housing gains will be lost in the coming year but since everyone wants to WFH now and Chicago city restrictions are so draconian I think people outside the cities and outside the blue states will fare better.
“If you all think that Chicago’s housing market is going to slow when rates rise, what’s it going to do everywhere else? Are salaries going up in Las Vegas right now? When rates rise to 4%, who’s buying there?”
“I don’t know anyone who would leave the great Chicago area schools and take their kids down to that nightmare in Florida.”
Sabrina, I’m a liberal who would rather live in a dumpy home in an awesome area over a fancy home in a lame area. For much of my adult life, I would have only considered living in, and to a large extent, could only conceive of relating to people who would choose to live in, solidly liberal urban settings with high levels of educational attainment. From the moment we had our first kid in pre-school, the quality of our kids’ schools have been a priority. I felt quite at home living in liberal urban bastions such as the EV in Manhattan and ELP in Chicago (and in liberal bubbles within Atlanta and Denver), have voluntarily spent a lot of time over the past few decades or so in and around SF and LA because I really like it there, and I’ve returned to and settled in an almost comically liberal place (populated mostly with Chicago, NYC, LA and SF transplants) to raise our kids. But I think a lot of urban liberals of a certain age range (say, 50 – 80 or so?) have a real disconnect – in terms of assumptions regarding both politics and choices as to where and how to live – when it comes to places like FL, NV, TX, etc. I certainly did.
” in the top 100 high schools in the US, 8 are in FL and 5 are in Chicago”
Total enrollment at the 8 FL schools = 5,183
Total enrollment at the 5 Chicago schools = 10,399
Florida public HS population ~860,000
Chicago public HS population ~105,000
% of FL students at top 100 schools = ~0.6%
% of CPS students at top 100 schools = ~9.9%
1. It’s nowhere close to apples to apples
2. (not agreeing with her but) Sabrina was not talking about CPS alone
3. The top 100 ranking is mainly bullshit
4. CPS is about 50% ok to really-good and 50% terrible, with an overlay of labor strife affecting 100% of the district
Looking at #2, take out the magnet & charter schools, and look at top 500:
Florida: 5 schools, total enrollment = 8,056 (4,797 at #500, Cypress Bay HS)
Chicago: 0 schools (USNews has Phoenix Military there, but that’s wrong)
Chicago burbs: 14 schools, total enrollment = 34,670
That means about 1% of FL HS students can go to a top 500 HS just by attendance area–and 60% of them live in Weston to go to Cypress Bay.
There are about 500k HS students in Illinois outside of Chicago. nearly 7% of (non-CPS) IL HS students can go to a top 500 school just by attendance area, living in over a dozen different burbs.
If you’re using USNews as the basis, there really isn’t a good argument that FL is comparable.
When did it switch back to mattering where ones children went to HS?
“But I think a lot of urban liberals of a certain age range (say, 50 – 80 or so?) have a real disconnect – in terms of assumptions regarding both politics and choices as to where and how to live – when it comes to places like FL, NV, TX, etc. I certainly did.”
+1
These people are the absolute worst
One of my best friends actually taught in the Florida public schools. In the Tampa suburbs.
It was terrible. Nothing even close to the quality of Chicagoland education. She was concerned if her kids stayed in the schools they wouldn’t be able to get in a decent college.
They moved to Georgia, where it was a bit better. Like NY suburbs, Philly suburbs, DC suburbs, San Francisco suburbs, and LA suburbs, the Chicagoland schools (yes, including the suburbs) are really among the best in the nation. Even at the “sub par” schools.
You don’t really know how bad it is in some of these other states until your kid goes there. But they spend far less per pupil and education just isn’t the focus.
“Sabrina, sometimes I wonder if you are just saying things because in your head, they are true and pay absolutely no attention to data. Here is data for US High schools.”
Most people’s kids don’t go to the “top” high schools. As we’ve discussed ad nauseum on this site over and over and over again. They are going to Glenbard South, or the other ilk. Not New Trier.
But Glenbard South is FAR better than the average high school in Florida, which sucks. All the schools just suck there. They don’t spend the money, don’t have the AP classes or the programs like the average Chicagoland high school has. Why? 1 in 5 of the residents of Florida is over 65. They don’t care about the schools and don’t want to spend money on something they get nothing out of.
People don’t figure this out until they’re down there. They are used to Chicagoland’s quality of schools. But not everywhere has that. Same with Texas. Schools stink there too.
“In general, the typical Lake Forrest Boomer didn’t need the proceeds from a home sale to move to Fla”
Never said they did. But if you can’t sell it, can you move?
I had a family friend “trapped” in St Charles for 5 years. He finally had to lower the price enough (didn’t want to “give it away” even though he owned it free and clear.) And then the pandemic created this frenzy for suburban homes with land, which his had. Finally sold it last year.
This was happening all over Lake Forest. Pre-pandemic, inventory was nearly 4 years.
Lol.
“the Chicagoland schools (yes, including the suburbs) are really among the best in the nation.”
I don’t think anyone is disputing that.
“You don’t really know how bad it is in some of these other states until your kid goes there.”
The questions should be, in those “other states,” what are school opportunties like today (public, and privates in places where lower housing costs leave room in the family budget for that), and what is the parent culture like today (i.e., the parents’ level of educational attainment and their involvement in and expectations of their kids’ schools), not what schools and cultures were like when your friend taught there. A considerable portion of the children of boomers who attended those good-to-great Chicago (or New Jersey, or whatever) suburban schools and then graduated from a decent college are in households in those “other states” and have altered the educational cultures those places. This has only been compounded by Covid. I actually know a young Chicago area family that rented a place in FL for much of 2020 (that’s not the sort of thing that we would have done, but they did, and they weren’t alone in their mindset). Demographics are destiny, and we urban-oriented liberals ignore geographic and lifestyle trends at our political peril.
“Never said they did. But if you can’t sell it, can you move?”
This Hypothetical LF Boomer, likely already had a condo in FL
St Charles /= LF
“not what schools and cultures were like when your friend taught there.”
She taught there 5 years ago. Lol.
Nothing has changed. Have the schools suddenly decided to infuse a bunch of cash into the system? Hire better teachers? Be dedicated to having good schools?
No. This is why they left for Georgia. My friend went to one of those “good” high schools anonny. And she was a teacher in the school. Nothing you can do when all those 70 year olds just don’t care. They are on fixed income. Don’t want their taxes to go up.
As I said, Georgia was only marginally better, but she admits it’s not even close to what it’s like in the Chicago area high schools. Even the BAD ones are better and more competitive.
“No. This is why they left for Georgia. My friend went to one of those “good” high schools anonny. And she was a teacher in the school. Nothing you can do when all those 70 year olds just don’t care. They are on fixed income. Don’t want their taxes to go up.”
You send your kids to private school like the rest of the UMC in Florida
“You send your kids to private school like the rest of the UMC in Florida”
Really? So the thousands of people all moving down there, who can’t even find a home to buy, are suddenly getting their kids into the few private schools? And why does everyone assume the privates are really all that better?
Lol.
My friends ARE upper middle class. No good private school near them in that Tampa suburb. They just don’t have the family infrastructure in many places like the older northern cities have. It will get there, as more move in. If the young people stick around.
“They are going to Glenbard South, or the other ilk. Not New Trier.”
New Trier is ranked by USNews behind such rich suburban school as Stevenson, Libertyville and Fremd.
All three of which areas have comparable ‘middle class’ housing options to, eg, Glenbard South.
“I had a family friend “trapped” in St Charles for 5 years. He finally had to lower the price enough (didn’t want to “give it away” even though he owned it free and clear.) And then the pandemic created this frenzy for suburban homes with land, which his had. Finally sold it last year.”
Clio is your family friend??
“Really? So the thousands of people all moving down there, who can’t even find a home to buy, are suddenly getting their kids into the few private schools? And why does everyone assume the privates are really all that better?”
Yes
And maybe ask your “Friend” why this is the case
“My friends ARE upper middle class. No good private school near them in that Tampa suburb.”
Sure they are
You mean they might have to look at a different city? The Horror!
“They just don’t have the family infrastructure in many places like the older northern cities have. It will get there, as more move in. If the young people stick around.””
This is probably the first truthful thing you’ve posted today – Congrats
“This Hypothetical LF Boomer, likely already had a condo in FL”
Nope. Wanted to buy a house on a golf course down there. Had been going for years in the winter. Yes, renting a condo on the gulf.
Had to wait YEARS to finally sell. Could have just dumped the house, but who wants to do that and “give it away”?
This was true in Lake Forest as well.
You are arguing nonsense JohnnyU. The excess inventory on the North Shore before the pandemic because boomers wanted to sell and move but Millennials didn’t want to be out of the city are well documented.
Again, just more gaslighting from bears who can’t tolerate data that goes against their theory that Chicago is doomed.
And they are saying this every single month while Chicago housing sales remain at 16 year highs.
Lol.
“You mean they might have to look at a different city? The Horror!”
This makes my point, right?
In Chicagoland, if you are in the suburbs, any suburb, your schools are pretty good. Even those not the “top” by the US News rankings or whatever other metric you are looking at. Even Aurora and Elgin schools, for example.
But in Tampa suburbs, they’re supposed to move to another suburb or city or something to find a private school?
Lol.
Yeah- they moved to Georgia. It was better but my friend admits it still wasn’t great. Her kids had to take classes at the local university to supplement. Ugh.
We in Chicagoland take our schools for granted. We think every state is like this. They’re not.
“Nope. Wanted to buy a house on a golf course down there. Had been going for years in the winter. Yes, renting a condo on the gulf.
Had to wait YEARS to finally sell. Could have just dumped the house, but who wants to do that and “give it away”?
This was true in Lake Forest as well.”
WTF are you even talking about. You should get a breathalyzer interlocked to your keyboard
St Charles isnt Lake Forrest.
“New Trier is ranked by USNews behind such rich suburban school as Stevenson, Libertyville and Fremd.”
Who cares? Great! They are going to Glenbard South, Bartlett High, St Charles High School, Lemont high schools. And all will prepare your child.
In Florida, they will not. Good luck.
“But in Tampa suburbs, they’re supposed to move to another suburb or city or something to find a private school?”
Why do they need to move to another suburb to put their kids into a private school?
Like most things you post, it makes zero sense
Maybe JoeZ needs to take your keyboard away for a bit
“Why do they need to move to another suburb to put their kids into a private school?”
You said they could just move. Do you honestly think there’s a good private school on every quarter of every suburb with $200,000 homes? Come on.
But in Chicagoland, you’re not moving. You’re not going to Indiana to get better schools, like my friend had to do by going to Georgia.
“St Charles isnt Lake Forrest.”
Yep. Actually. It was.
Big McMansion houses on big lots (some with horses). Boomers who bought in the 1990s or during the housing boom. Want to retire to the south. Record high inventory (pre-pandemic.) Millennials didn’t want to be out there because it was too far from downtown (even though there’s a train). Millennials want to stay in Chicago, not go to the suburbs.
Finally, the pandemic freed him as buyers suddenly wanted that acre lot. WFH so weren’t worried about the commute. Same with Lake Forest.
You could also look to Barrington for the same scenario. Millennials just didn’t want those really big, older homes with all that land pre-pandemic.
“Big McMansion houses on big lots (some with horses). Boomers who bought in the 1990s or during the housing boom. Want to retire to the south. Record high inventory (pre-pandemic.) Millennials didn’t want to be out there because it was too far from downtown (even though there’s a train). Millennials want to stay in Chicago, not go to the suburbs.”
Are you trying to say that the housing stock is the same in LF as StC? LOFL. The housing stock in LF is much older – Go educate yourself
StC is about 15 miles further to the city as well
“Finally, the pandemic freed him as buyers suddenly wanted that acre lot. WFH so weren’t worried about the commute. Same with Lake Forest.”
This has nothing to do with LF and StC being the same. There a 2 separate buying pools.
“You could also look to Barrington for the same scenario. Millennials just didn’t want those really big, older homes with all that land pre-pandemic.”
Barrington is similar to StC, but again not the same
“You said they could just move.”
I didnt and you’re lying once agaib
“Do you honestly think there’s a good private school on every quarter of every suburb with $200,000 homes? Come on.”
I thought these “Friends” were UMC?
Is the guys name George Glass?
“Are you trying to say that the housing stock is the same in LF as StC? LOFL. The housing stock in LF is much older – Go educate yourself”
Nope. Never said it was the same housing stock.
Again, people who live in other states have NO idea what is going on in Chicago’s housing market, but you can at least read Crain’s and the Chicago Tribune to get a clue about the level of single family home inventory, especially in the upper bracket, that’s been available in the outer Chicago suburbs prior to the pandemic. It was 3 to 4 years worth of inventory. Millennials just didn’t want to be out there. They couldn’t sell. Some houses had been on the market for a decade because they weren’t going to “give it away.”
As I said, the family friend was trying to sell for 5 years. Finally, the buyers were there during the pandemic. Still had to cut the price but at least there was someone willing to take it from him so he could finally move.
“Again, people who live in other states have NO idea what is going on in Chicago’s housing market,”
“She taught there 5 years ago. Lol. Nothing has changed.”
So, do people need to actually live in an area to understand it (rather than reading about it or hearing about it from a friend’s perspective), or not? Do things change in an area, or not?
Five years is an eternity in some areas, in terms of real estate and schools and demographics. There are entire communities (1000s of houses, schools, retail, hospitals, etc.) within 20 miles of my house that didn’t exist five years ago.
“Nope. Never said it was the same housing stock”
The WTF would be using them as a comp? Other than a poor attempt to draw a faulty conclusion.
“As I said, the family friend was trying to sell for 5 years. Finally, the buyers were there during the pandemic. Still had to cut the price but at least there was someone willing to take it from him so he could finally move.”
Your “friend” sounds like a complete idiot. Wouldnt adjust to what the market was telling him, Delayed moving to where he wanted, had 5 years of carrying costs and still had to cut his price
Does he post things for sale on line and add “NO LOWBALLS – I KNOW WHAT I’VE GOT”?
“So, do people need to actually live in an area to understand it (rather than reading about it or hearing about it from a friend’s perspective), or not? Do things change in an area, or not?”
Logic & Consistency isnt welcomed here
I was very skeptical when my friends sent their kids to a CPS magnet school, but was surprised to learn the curriculum is very advanced (much more so than my private school many years ago). They have to deal with overcrowding, but the teachers have been good about giving the kids more advanced work when they seem bored with what the rest of the class is learning.
I’ve had a bunch of friends all move during the pandemic and I am soon to move too. Most moved to the nearby suburbs or far north side of Chicago. They seem happy and think I will be too. I have a couple other friends who are a little further behind me and are making their plans to move later this year. None of us can/could stand our condos anymore. I am done with condo living. Being close to amenities is great, but being stacked on stop of each other in a small condo no longer is working for those of us who are working at home. Granted, it’s a small sample but the sentiment of my friend group is that of being done with condo living and moving on.
“Do you honestly think there’s a good private school on every quarter of every suburb with $200,000 homes?”
Who is looking at a $200k house, and thinking “private school!!”???
Don’t you take that $4k/month (for 2 kids, at a mid-price school) and buy a $750k house in a better attendance area?
Looking through these comments and I’d like to clarify a few things.
Sales is not the best metric for telling you how well a market is doing and it says nothing about whether people are moving to an area or not. For every buyer there is a seller so people could just be moving around in the area. New construction would since it represents additional housing stock that can only be absorbed by additional population.
At the end of the day prices are what matter and, while Chicago prices are doing well, they are doing much less well than most other areas of the country.
If you want to look at where prices are heading look at the supply/ demand balance and months of supply tells you just that. SFH months of supply is low in Chicago but other areas of the country are much lower. This could correlate with whether or not people are moving to an area. Look at Raleigh/ Durham and you’ll see population growth AND really low months of supply. Like 1/2 month vs 1 1/2 months here. And that’s why their prices are rising faster than here.
“Again, just more gaslighting from bears who can’t tolerate data that goes against their theory that Chicago is doomed.“
I’m not stating Chicago is doomed. I’m just stating people are much better off buying real estate in TX, FL, WA, NV, AZ, CO, TN, etc because they’re home growth will be 2 or 3x what it is here. Rent in Chicago, get work experience for 2-3 years, get that WFH job, and move the hell out ASAP before you get shot, sexually assaulted, or carjacked and have subpar home value growth.
“I had a family friend “trapped” in St Charles for 5 years. He finally had to lower the price enough (didn’t want to “give it away” even though he owned it free and clear.) “
I must say your anecdotes are usually terrible skewed outliers and this one is no exception.
“New construction would since it represents additional housing stock that can only be absorbed by additional population.”
Have to consider rental occupancy–and not just of the ‘downtown’ big buildings tracked by Appraisal Research, but *all* rentals–too.
“We in Chicagoland take our schools for granted. We think every state is like this. They’re not.”
Well, considering our state’s average SAT scores are among the lowest in the country, yes, we are certainly not like every other state. Most are much much better.
It isn’t downstate dragging down the average either – most of the state’s population, most of the students, live in Chicagoland…
https://www.thecentersquare.com/illinois/a-new-study-shows-illinois-struggles-with-sat/article_44f58434-7e14-11ec-b8d7-c70729dc4cb8.html
“In terms of Illinois, it did rank 7th to last in lowest SAT scores,” Kronschnabel told The Center Square……….Illinois currently has an average SAT score that is 10.3% below the national average, yet its college admission rate is 20.6% higher than the national average. Illinois ranks toward the bottom when looking at the other states in the Midwest. Iowa, Indiana, Michigan and Minnesota all had higher test scores than Illinois.”
I think what Sabrina means is that the Chicago suburbs have a decent sized number of schools with mostly UMC students who score well on standardized tests. This is because we in IL pay really high properties taxes and most of that money is sent directly to local school districts. We essentially have microdistricts of income and racially segregated students, roughly a third that perform really well, and two-thirds of which perform really poorly.
https://www.chicagotribune.com/news/breaking/ct-met-illinois-school-report-card-20171030-story.html
“About two-thirds of Illinois public high schools posted below-average to rock-bottom scores on the SAT college entrance exam, given for free for the first time to 11th-graders last spring at school, revealing that thousands of students are still struggling even as the state pushes kids to achieve at higher levels.
Average scores ranged from the low 740s to the high 1300s, reflecting wide disparities in performance at more than 700 high schools statewide, according to data released Tuesday as part of the state’s annual picture of public schools, called the Illinois Report Card.”
Illinois’ microdistricts are tiny compared to Florida’s many large school districts. Florida has five of the ten largest school districts in the country which is how they keep property taxes lower.
https://www.tampabay.com/news/gradebook/2019/11/04/florida-school-districts-remain-among-nations-largest/
FL’s districts are forced to take the good students with the bad students, lowering the overall average for everyone. Unlike Stevenson, of which less than 5% are eligible for a free or subsidized school lunch.
A downside to microdistricts (or upside depending on your POV)is we have extremely ‘inequitable’ school funding – the 2/3rds of schools that score well, mostly in rich districts, have lots of resources, while the remaining 2/3rds of below average performing schools are in poor districts with limited resources:
https://heartlanddailynews.com/2021/08/new-report-ranks-illinois-45th-for-equitable-school-funding/
“More affluent school districts receive better funding for schools than poorer schools,” Gonzalez said. “That leads to worse graduation rates, worse test scores, and lower graduation rates for students in low-income districts.”
Illinois spends on average $16,200 per student on K-12 education. Florida, which places must better on Wallethub’s equity ranking at fifth, spends $9,600 per student and gets better results, according to government spending watchdog Wirepoints.
A report from the Metropolitan Planning Council shows that Illinois’ public school districts spend twice the national average on administrative costs – $544 per student in Illinois compared to $226 nationally.
Illinois also has the nation’s second highest average property taxes in the U.S., with nearly two-thirds of that going to education.
According to a study by the National Assessment of Educational Progress (NAEP), Illinois’ test scores were largely the same or worse than Indiana and Florida between 2007 and 2019, with both states spending far less money on schools.
Illinois also ranks dead last in equity among states in the Midwest, according to Gonzalez.
“Iowa ranked 1st on the list, Indiana ranked 4th overall, Minnesota ranked 8th, and South Dakota 9th,” Gonzalez said. “So students in those states may be on a more level playing field when it comes to schooling compared to Illinois.”
Illinois ranked in the bottom five along with Montana, California, Idaho and New York.”
In 2017, the legislature passed a law to fund schools more equitably, however, funding is still inequitable. I would imagine, our state legislature, in its infinite wisdom, will ‘fix’ this problem, by forcing local school districts to send some, if not all, of their real estate tax receipts to Springfield, for a more equitable redistribution. The wealthy schools districts are just too wealthy, they have a huge target on their backs, everyone wants to get a piece of that action, and too many legislatures see wealthy school districts as an untapped source of revenue. Wealthy districts will have to raise property taxes significantly to make up for the lost revenue that is being sent to Springfield for equitable redistribution, which causes more problems for local districts..
“In 2017, the legislature passed a law to fund schools more equitably, however, funding is still inequitable. I would imagine, our state legislature, in its infinite wisdom, will ‘fix’ this problem, by forcing local school districts to send some, if not all, of their real estate tax receipts to Springfield, for a more equitable redistribution. The wealthy schools districts are just too wealthy, they have a huge target on their backs, everyone wants to get a piece of that action, and too many legislatures see wealthy school districts as an untapped source of revenue. Wealthy districts will have to raise property taxes significantly to make up for the lost revenue that is being sent to Springfield for equitable redistribution, which causes more problems for local districts.”
I can’t recall if it was in con law II, or maybe in an education law class I took 3L, but wasn’t there a case on this, maybe originating in TX? Honestly I can’t remember whether they held that states/local govs could or could not do such a thing, but I believe it’s settled either way.
“Well, considering our state’s average SAT scores are among the lowest in the country”
Illinois also has the highest average SAT score for any state with 75%+ taking the SAT. Easy to get a higher average score if the bottom 1/3 or more aren’t taking it.
” wasn’t there a case on this, maybe originating in TX?”
Maybe thinking of this one?
https://www.maldef.org/2021/01/maldef-landmark-fight-for-education-equality-in-texas/
Based on the Texas Constitution, so limited application.
“Well, considering our state’s average SAT scores are among the lowest in the country”
What are the top five states by average SAT?
MN (1263)
ND (1258)
NE (1246)
IA (1243)
UT (1238)
Highest participation rate among those? 2%. IL participation? 80%.
Best way to increase IL average SAT score? Switch back to being an ACT state.
IL average ACT score? Highest among states with over 10% participation (DC is 25.6 v 25.2 for IL, so #2 overall, both with 19% participation).
Yes, that was the one.
“Florida has five of the ten largest school districts in the country which is how they keep property taxes lower.”
Yes, all done by County. I’m sure you would love that system here in IL, right HD? Cook County USD?
“Yes, all done by County. I’m sure you would love that system here in IL, right HD? Cook County USD?”
You seem triggered by something. You OK?
“You seem triggered by something.”
You must have me confused with someone who listens to InfoWars.
“You must have me confused with someone who listens to InfoWars.”
In the past three or four years, Alex Jones has a better track record than NPR’s Nina Totenberg or CNN’s Jim Acosta…that makes this a crazy upside down clown world we live in.
“Alex Jones has a better track record than NPR’s Nina Totenberg or CNN’s Jim Acosta”
————————-
Track record as to what? He did “deep research” as to pedophilia at the Comet Ping Pong pizzeria with Hillary Clinton in the thick of it, and claimed the 20 dead children in the Sandy Hook shootings were fakes. Never backed down until he was sued and money was on the line, and then claimed diminished responsibility (“psychosis”) under oath.
Totenberg and Acosta never claimed they were crazies, and never tried to avoid responsibility for their actions.
You’re right, Alex Jones is pretty crazy.
Now let’s talk about Nina’s fake news story that she completely made up about the supreme court the other day that all three people involved in the story denied.
“In the past three or four years, Alex Jones has a better track record”
Huh, so you’re a semi-regular listener?
Would be great for Chicago and Illinois if, a la Florida, there were a unit district for all of Cook County. Have a school board that owes fealty to the democratic committeemen who slate them.
Let’s adopt the Florida model right away; HD’s voting for it.
“You’re right, Alex Jones is pretty crazy.”
—————————–
He’s a very consistent liar, too.
Rust Belt is rising from the ashes.
Educated work force, low cost of living, transportation hubs.
https://www.wsj.com/articles/goodbye-to-the-days-of-the-rust-belt-11643302840?mod=life_work_minor_pos4
“Older industrial cities like Chicago and Philadelphia have been quietly pulling in venture capital investment—$7 billion and $8 billion, respectively, in 2021—in numbers bigger than the more-visible rising tech hubs of Miami ($4 billion) and Austin ($4.9 billion).
The region is one of the very few areas of the country where middle-class families can afford to buy a home, while pandemic-induced shifts are causing housing prices to surge in Sunbelt competitors such as Austin, Nashville and Phoenix. Miami was recently named the second least affordable housing market in the country, after New York. Only a third of Midwesterners say that affordable housing is a major problem locally, according to a survey by the Pew Research Center—a far lower proportion than any other U.S. region. In many Rust Belt metros, the affordability goes along with excellent suburban public schools and longstanding amenities like good restaurants, museums, entertainment and sports complexes, and shopping.”
I wouldn’t characterize Chicago as a rust belt or older industrial city (no more than I’d characterize Philly as a constitution-writing city).
“I wouldn’t characterize Chicago as a rust belt or older industrial city (no more than I’d characterize Philly as a constitution-writing city).”
Huh?
Chicago has been in the Rust Belt for literally 50 years. It stretches from Pennsylvania over to Missouri. Includes the Midwest and the Ohio Valley. Richard Florida includes cities like Memphis as well.
“characterize Philly”
If Philly is an “older industrial city”, so is New York:
“In 1947, New York had more manufacturing jobs than Philadelphia, Detroit, Los Angeles, and Boston put together.”
https://archive.nytimes.com/www.nytimes.com/books/first/f/freeman-newyork.html
Fucking Richard Florida.
Here is my January update. Another 15 – maybe even 16 – year record for home sales. Both condos and SFHs contributed to the gain. Inventory exceptionally low still. https://www.chicagonow.com/getting-real/2022/02/chicago-real-estate-market-update-highest-january-sales-in-15-or-16-years/
“Here is my January update. Another 15 – maybe even 16 – year record for home sales. Both condos and SFHs contributed to the gain. Inventory exceptionally low still.”
It is red hot to start the year. Buyers are definitely trying to get in before those rates rise too much. Inventory is crap. Nothing coming on the market. If you want to be in a certain building, might not have much of a choice. Sadly.
Big difference compared to the last decade in the city when the buyers were in charge.
“Here is my January update. Another 15 – maybe even 16 – year record for home sales. Both condos and SFHs contributed to the gain. Inventory exceptionally low still.”
All the spring inventory is supposed to be coming on the market right now. But it’s not. Super Bowl is this weekend. Should be a dump of new properties but there’s not.
I keep waiting for it to happen. But just 2.4 months of inventory in attached properties is crazy. It’s even lower in some neighborhoods because downtown still has the most inventory. But even downtown is starting to fall dramatically now.
Gary, I feel like the increased days on the market for attached properties could be the downtown luxury condos that are listed. There is still too many luxury condos on the market. They are lingering. Everything else is selling faster.
Also, we likely will see comps falling yoy the next several months, although I’ve said that before. I don’t see how we can keep lapping 2021’s incredible numbers. But to see January sales up 26% on a 2-year basis is incredible.
If you’re thinking about selling, now is the time.
“Big difference compared to the last decade in the city when the buyers were in charge.”
I think you are overestimating this. It’s a sellers market for SFH’s or units in 3 flat condos that are recently updated and move-in ready that are priced correctly.
If your place isn’t updated with newer finishes, not move-in ready, and/or not priced right it’s going to sit. Further, if you are in a high rise I wouldn’t call it a sellers market.
That’s what I saw looking at places in January. You can get decent deals on places where the kitchen or bathroom(s) needs to be updated or the current owner didn’t keep up with general maintenance i.e. refinishing floors, replacing HVAC, updated lighting, and/or not repainting.
I’m curious to see how much or if there ends up being any appreciation on alot of these move-in-ready 2/2 condo’s that were purchased within a week or two of listing when people go to sell them in ~5+ years. Even though they were “updated” the master bedroom wouldn’t fit a king and the second bedroom at best fits a queen or an office (maybe you can do a murphy bed too). These places were selling for $450/$475 meanwhile the 3 bedroom in an updated duplex up or down a block over was selling for ~$500 – $550 where you can easily raise a family in unlike the 2/2.
The move-in-ready today 2/2’s finishes in five years are also going to be 5 – 10 years old.
“If your place isn’t updated with newer finishes, not move-in ready, and/or not priced right it’s going to sit.”
Nothing is sitting unless it’s not renovated or an estate sale. All you have to do is look at Gary’s numbers.
Attached inventory is 2.4 months.
Sellers haven’t seen anything like this in Chicago in about 15 years.
Just had 3 $8 million condos sell without even being put on the market. Pocket listings.
Sizzle.
As I’ve said in the past, lots of downtown buyers want to live in a certain building. Maybe it’s the Hancock? Maybe it’s Water Tower Residences? Maybe it’s the Caravel? Maybe it’s the Union Square Lofts on Hubbard?
Then go and look at how many units are available in each of those. Slim pickings, especially in certain price ranges. Some buyers will wait because they really want to buy in THAT particular building.
I haven’t seen inventory this tight downtown in many years. When it’s this tight, even the old listings that were sitting will eventually sell out of desperation. Inventory will tighten further and prices will rise.
“Nothing is sitting unless it’s not renovated or an estate sale. All you have to do is look at Gary’s numbers.”
Not true. Move-in ready outside of having to repaint the second bedroom assuming you don’t have a young kid or baby.
Place has been on the market for a month and had a price cut yesterday. They overpriced it.
https://www.redfin.com/IL/Chicago/2028-W-Augusta-Blvd-60622/unit-3E/home/26812667
Here’s another one. Within walking distance of the train 3/2.5, with garage parking that’s updated which is finally contingent as of two weeks ago <$500 after being on the market since August. Looks like it had two price cuts.
https://www.redfin.com/IL/Chicago/844-N-Marshfield-Ave-60622/unit-1F/home/12767486
“When it’s this tight, even the old listings that were sitting will eventually sell out of desperation. Inventory will tighten further and prices will rise.”
30 year fixed crossed 4% today. I think you are going to again be proven wrong on this one.
1: “Move-in ready outside of having to repaint the second bedroom”
“no one wants brown cabinets–they’re out”
2: “updated”
“the kitchen granite, slate fp, and drop in bank sinks all say 2005; ‘updated’ means actually up to date, not sort of up to date”
3. “30 year fixed crossed 4% today.”
for the majority of buyer’s it’s mainly about howmuchamonth–the Augusta place (asking $499k), with 20% down, is almost 10% more per month at 4% v 3%. Getting the same monthly at 4% means dropping the price to $456k–10% off.
“30 year fixed crossed 4% today. I think you are going to again be proven wrong on this one.”
Wrong WP?
How many times have I said over the last 3 months that the Chicago market will slow when rates get to 4%?
DOZENS of times.
We won’t see the impact for several months, however, because today’s buyers have already locked in the lower rates. That’s why there is such a rush to buy. The buyers DO want those lower rates. Duh.
When the rate locks end, it will slow. But how much, we don’t know. Incomes have risen. Chicago home prices are the most affordable compared to most major cities. Downtown prices haven’t gone up much, if at all. Neighborhoods have gone up more so there could be more slowing. Upper income neighborhoods may not slow at all depending on the stock market.
What has always been true since the 1970s surge in mortgage rates, is that buyers will trade down to the cheaper property when rates rise, if they exist. On the coasts, the cheaper properties simply don’t exist. In Chicago, they do. Instead of buying the $500,000 2/2, maybe you buy the $450,000 2/2. If it exists. Lower end of the price range should still remain fairly robust. Highest range (luxury) will also remain hot because they don’t care about rising rates. Their buying power is determined by the stock market.
But the middle area is where we will see a slowdown.
We are getting these rising rates with record low inventory in Chicago, statewide, and nationally. Hard to know how much it will slow this go around.
Chicago sales slowed in 2017-2018 when rates went from 3.60% to 5%.
But with apartment rents expected to rise another 5% or more this year, for some buyers, it’s still cheaper to buy than to rent, even with rising rates.
Will be interesting to see how it all plays out over the next few months. Many analysts expect 4.5% to 5% rates by the end of the year. That’s going to have a big impact.
2028 W Augusta –
it’s on Augusta. Not the most high demand street to buy on.
844 N Marshfield –
Split face block on one side and the back. Big deterrent for buyers today.
“When the rate locks end, it will slow. But how much, we don’t know. Incomes have risen. Chicago home prices are the most affordable compared to most major cities.
AKA – Appreciation has been abysmal when compared to peers
You’re getting skilled in you shill game
“AKA – Appreciation has been abysmal when compared to peers”
No one has ever argued that Chicago’s housing appreciation has been like San Francisco’s or LA’s. Thank god.
“No one has ever argued that Chicago’s housing appreciation has been like San Francisco’s or LA’s. Thank god.”
Yeah who likes money?
“Yeah who likes money?”
I’ve lived in those markets. It’s hell. Middle class completely priced out. People with jobs living in their cars and vans.
No thanks.
Chicago is a healthy housing market. You can be middle class and still afford to buy. And that means you can still buy for $150,000 to $250,000. Plenty of options in the city and suburbs. Don’t have to waive inspections.
GenZ will be able to afford to buy.
If I want to make money, I can invest. Stocks have been the best performing asset class for the last 100 years.
“I’ve lived in those markets. It’s hell. Middle class completely priced out. People with jobs living in their cars and vans.”
It’s not hell for people who bought their homes a while ago. It’s great. And nobody should be living in their cars and vans. If it’s that bad they can just move to a cheaper city.
“It’s not hell for people who bought their homes a while ago. It’s great. And nobody should be living in their cars and vans. If it’s that bad they can just move to a cheaper city.”
Excuse me?
Yes, it IS hell. You know why? Because those people who bought a “long time ago” have children. And those children can’t afford to live there now. I have friends who are native Californians. They KNOW it’s irrational and insane. They bought a house 8 years ago in the Bay Area for $1.25 million and it would sell for $3 million now. A 1970s 1 bathroom home. They KNOW it’s wrong. Have told me so.
Nurses and teachers living in their cars in the Bay Area. It’s living hell. So glad I left. And you can see the results now with the massive wealth inequality that has happened there. Same with LA, San Diego, Orange County, Santa Barbara. Basically all the coastal areas of California are hell for the middle class now. Can’t even find rental apartments that are affordable.
And it’s just really elitist to say “just move” Gary. Yeah, we know your daughter is one of the rich people living out there who can “afford” the $2 or $3 million house, but 99% of the rest of the population out there cannot. Again, it’s living hell.
But I escaped to somewhere where I could have a decent housing situation and still save, travel and live a complete life.
Austin is in serious danger of being like California. Heck, the WSJ just had an article about middle class being priced out of buying in Des Moines because prices have surged there. But they were trying to buy $175,000 to $250,000. And have now raised their price expectations.
All the hot markets are hell right now. Even “cheap” Florida. Imagine paying $600,000 for a trac home in some marshy suburb there? Yikes. Incomes just don’t match the prices in most cities. Middle class is in true danger. But they aren’t in the Chicagoland area. Nor Milwaukee. Nor St Louis. Nor Cincinnati. Nor Grand Rapids. Nor Columbus.
It’s not surprising that Grand Rapids and Columbus are two of the hottest cities for Millennials.
So why are nurses and teachers working there and living in their cars? Why don’t they go somewhere else?
It will become a problem for me at some point when I would maybe like to live close to my grandchildren (none yet) but I have absolutely no sense of entitlement that I SHOULD be able to live close to my grandkids. So if it’s that big of a deal I’ll go live in Nevada on the border. Why do people think that their children should be entitled to live close to them? I moved away from my parents when I was 18 and never looked back. My kids moved away in their early 20s.
And how can it be “wrong” for small houses to be worth millions when that’s the price people are willing to pay? There is no right or wrong price – except when government interference screws up prices – like makes free water available in the desert or cheaply insures coastal properties.
Even Riverside is hell now. Look at the rents. Ugh.
“A Redfin report analyzing more than 20,000 apartment listings found rent nationwide has increased by 14%. According to Redfin, in Los Angeles and Anaheim, rent has jumped 9% to $3,300. Meanwhile, in Riverside, Redfin’s report found the average rent is $2,700.”
https://spectrumnews1.com/ca/orange-county/housing/2022/01/27/apartment-rent-continues-to-rise-across-southern-california
“So why are nurses and teachers working there and living in their cars? Why don’t they go somewhere else?”
Because that’s where their jobs are?
Because they’ve lived their whole lives in California and don’t want to leave?
The old “why don’t they go somewhere else” is a losing argument. Why did New Orleanians live in the 9th ward for 50 years? Why do people live inside Detroit’s 8 Mile?
It’s not so easy to simply “move” to a new area without any support and certainly when you have limited money.
It’s living hell in the Bay Area now.
I’ve always wondered, even pre-pandemic, who was working at the Starbucks or the Trader Joes. But now, more than ever. How are they finding ANY workers? Who is working at the Macy’s in Union Square? Even at $20 an hour, can’t afford rent.
Of course, most live in “group homes” with a half dozen of other adults. Rent out a bedroom. Share the kitchen.
Like I said, it’s living hell.
It helped that many people fled during the pandemic. But those were the rich people who could afford to move to Raleigh or Boise. Those apartments weren’t filled by the school teachers.
My middle class friends from the Bay Area have left. Thank goodness. Best thing they ever did.
“Of course, most live in “group homes” with a half dozen of other adults. Rent out a bedroom. Share the kitchen.
“Like I said, it’s living hell.”
While that’s not how I want to live, that’s not terribly different from EsEff in decades prior, either. There’s a long history of The City being both an expensive place to live, and yet desirable enough for many employers to underpay relative to (eg) LA. That’s flipped somewhat more recently, as The City has lost a good deal of it’s relative desirability (and younger people have changed preferences, too), so living the student/artist/boho life for a longer term isn’t as appealing. The City isn’t what it was in the 80s, nevermind the 50s.
“Because that’s where their jobs are?”
Jobs are readily available elsewhere – especially now
“Because they’ve lived their whole lives in California and don’t want to leave?”
That’s a problem not an excuse. People need to leave bad situations. It’s interesting how it took a pandemic for people to break the inertia of staying in “bad” jobs.
“The old “why don’t they go somewhere else” is a losing argument. Why did New Orleanians live in the 9th ward for 50 years? Why do people live inside Detroit’s 8 Mile?”
No it’s not. It’s a totally valid question and one that needs to be explored. Often government interference is to blame. Affordable housing and affordable transportation initiatives discourage people from finding more economic alternatives and creates a dependency that’s hard to break.
You bring up an interesting comparison with New Orleans’ 9th ward. Why all the effort to rebuild a community in a flood prone area? The money could have been used to relocate people to a better place. Sooner or later it will flood again and then what?
“No it’s not. It’s a totally valid question and one that needs to be explored. Often government interference is to blame. Affordable housing and affordable transportation initiatives discourage people from finding more economic alternatives and creates a dependency that’s hard to break.”
While there’s a fair amount of truth to the above, I’d recommend checking out Dignity by Chris Arnade for another view
“Jobs are readily available elsewhere – especially now”
Not if you need certifications. But I agree on the nurses as many are now traveling nurses and can go anywhere. Stanford used to have to beg doctors and nurses to do residencies there. There was always a shortage on the peninsula of internal medicine doctors as well because that has the lowest pay and doctors couldn’t afford to live on the peninsula. And that was when I was living out there. It’s only gotten WORSE since then.
Ugh.
“You bring up an interesting comparison with New Orleans’ 9th ward. Why all the effort to rebuild a community in a flood prone area?”
There isn’t any Gary. They haven’t made a push to rebuild the 9th ward. It’s the worst location in the city. Many of those who lived there evacuated to Houston or Atlanta and never came back.
There was some rebuilding out in lakeview and in midtown. But no, not that much in the 9th ward.
But this same question can be asked about the Bay Area right? Only it’s about earthquakes and fires. Why do they keep rebuilding there? The money could be better used to relocate all of those in Paradise, for instance, to somewhere else out of the state. Why rebuild San Francisco after 1906? It’s only going to happen again. Long overdue for a big quake there.
And, in fact, some of those in Paradise are still debating whether to rebuild. The fires keep coming year after year.
“There’s a long history of The City being both an expensive place to live, and yet desirable enough for many employers to underpay relative to (eg) LA.”
Nope. Try again anon(tfo). Pretty cheap in the 1980s and even in the 1990s until the dot-com boom. What were the jobs in the 1980s? Finance. Banks. San Francisco was the financial capital of California. By the late 1990s, people were living in group homes/apartments down in Silicon Valley (never in “The City” as you call it even though no one else does. Lol.)
Situation improved for a decade after the dot-com bust. Several hundred thousand moved away from Silicon Valley and San Francisco. Only after Facebook and social media companies came about did it get terrible again. It’s been hell again for about a decade now.
And now it’s migrated all the way out past the tunnel or up to Napa because if you never have to go to the office, why not live in wine country? But those towns were never built to handle people making $500,000 a year moving in.
Home prices, and rents, at all time highs throughout the state. Something has to give. $800,000 median price in LA is absurd. But so is $500,000 in Riverside County. The jobs just aren’t there to support those prices.
They also simply aren’t building enough. This is why I love Chicago. We’re literally building 70+ story apartment buildings without even batting an eye. And originally there was an “anti-density” push in the West Loop and Fulton Market, but that has now eased as there are 40 story high rises going up in that neighborhood now.
There’s still some pushback in some neighborhoods in Chicago, but not nearly the same as what you see in San Francisco or LA. LA is building a big subway system. It should have high rises near every single one of those subway stops. Or at least a decent 10 to 20 story mid-rise. But they get pushback on even building that. It’s terrible. I also don’t understand why they aren’t building a dozen new apartment high rises in the downtown. There are empty parking lots there and a lot of cool buildings and restaurants. They should have a vibrant, and dense, downtown even if the office workers never return.
Glad I don’t have to live out there.
“There was always a shortage on the peninsula of internal medicine doctors as well because that has the lowest pay and doctors couldn’t afford to live on the peninsula. And that was when I was living out there. It’s only gotten WORSE since then.”
There’s really a simple solution to that problem eventually. You pay more. When all else fails. But as long as people make irrational decisions to live in squalor then they don’t need to do that.
Regarding NOLA’s 9th ward. I know people who went there to rebuild. Good intentions but…Here is a typical article. https://www.cbs42.com/news/rebuilding-new-orleans-15-year-progress-report-of-habitat-for-humanity/ Sure, it has not been rebuilt to its former self but a lot has been done and there is plenty of handwringing over the fact that it hasn’t been completely rebuilt.
As for disaster prone areas of CA…it would be fine if the government doesn’t subsidize the insurance. Let people pay for the risks they take. When my daughter was looking for a house any disaster prone area was off limits.
“Why rebuild San Francisco after 1906?”
Because it was beautiful, relatively temperate, and on a coast?
“$800,000 median price in LA is absurd”
Why? It’s a major city between a coast and mountains. Mine is a small city (or large town) between the plains and mountains, and the median is roughly the same. I’m surprised LA is so low. People have lemon trees in their yards there.
“Try again anon(tfo). Pretty cheap in the 1980s and even in the 1990s”
No, it really wasn’t.
When did you live there again? For 2 years, this century?
What is everyone’s opinion of buying a single family home on the outskirts of the city or inner suburb right now? My parents and several friends are looking and not seeing anything. My parents got an offer on their place without even having it listed, but there’s no where for them to move unless they want a condo or are willing to live in a place with a major flaw (on a busy street, across from a school/church).
Another friend is getting ready to list, but having major reservations because there’s not a single house on the marker under $600,000 that is nice. There was a place she wanted to see, but the agent for the house she wanted to see said that they were only accepting offers with no contingencies. There was a house my parents wanted to see, but the agent said that they were only doing showings on one day and that all offers would be due by the next day at noon. This is in the outskirts of Chicago/inner suburbs. I hadn’t realized things had gotten so bad here.
Should my friends/family wait a few months? Do you think more houses will come on the market?
“That’s a problem not an excuse. People need to leave bad situations. It’s interesting how it took a pandemic for people to break the inertia of staying in “bad” jobs.”
False equivalency. A home and community regardless of it being “good” or “bad” (quite subjective) is emotional attachment that most people aren’t going to just leave or give up on. It’s where family, friends, support systems, nostalgia, and what feels “safe” oftentimes reins regardless of it being healthy or not.
People leave jobs all the time. Yes it can be hard for some to do but plenty of people don’t live more than a few miles from where they grew up especially if they grew up in a big city. If people grew up in the suburbs they are likely going to live within 30 minutes or so of that suburb their entire life with the exceptions of going away for school and/or living in the city for a couple years.
“Often government interference is to blame. Affordable housing and affordable transportation initiatives discourage people from finding more economic alternatives and creates a dependency that’s hard to break.”
There was alot of government interference pre-2000 (post WWII – 90’s mainly) but not much over the last ~20 years especially in Chicago. Look at the wait lists for affordable housing in this city compared to the amount of people that receive “affordable housing”.
The “big” government intervention today on affordable housing is Lori investing $1Bn which only creates 2,400 units in the city which was announced in December. Compare that to the building of Robert Taylor Homes, Cabrini Green, etc.
People want investment, jobs, and opportunity in or near their community most don’t want to have to move or uproot their life for it.
“Should my friends/family wait a few months? Do you think more houses will come on the market?”
What suburbs or neighborhoods on the edge of the city are they looking?
“but there’s no where for them to move unless they want a condo or are willing to live in a place with a major flaw (on a busy street, across from a school/church)”
Jenny, we know how you feel about religious objects in listing pictures, but for what it’s worth, I’ve only owned three homes, and all three have been directly across from a school (two with churches too).
I just can’t relate. I know a lot of people that move around freely from one place to the next depending on where the opportunities are. Admittedly, in my experience, the willingness to move correlates with income and education. But what is the cause and what is the effect? I can assure you that a willingness to move will result in better financial outcomes in the long run. It worked for my parents. It worked for me. It’s working for my kids. Hell, I left my wife and kids in Richmond for a year (went back on many weekends) to do an Internet startup in Chicago. It paid off.
But if you are not willing to move don’t scream that it’s not fair that you can’t afford to live like you want or that it’s “hell” or it’s “wrong” and someone else needs to fix it. The universe throws shit at you but you have choices.
“$1Bn which only creates 2,400 units in the city”
If affordable housing costs $420k per unit, how is it possible that private developers can sell SFHs for less than that?
eg: https://www.redfin.com/IL/Chicago/451-N-Ridgeway-Ave-60624/home/21872594
Since when is affordable housing supposed to be nicer than market-rate housing??
[yes, I realize that it is largely about union labor requirements for publicly funded construction.]
@WP: What suburbs or neighborhoods on the edge of the city are they looking?
—————
All in consideration for friends/family with strong preference being for staying in the city: Skokie, Wilmette, Evanston, Edgebrook, Sauganash, Peterson Park, Forest Glen, Morton Grove, Lincolnwood.
They are considering expanding their search area to include Norwood Park, Mayfair, Niles, or Irving Park. They aren’t very familiar with these areas though, so there is hesitation.
When I was in the market, there was low inventory, but I was able to go to open houses and have private showings with my agent. Now, there are just a couple worth seeing in that huge area. I think my friends should wait a month and see what happens, but they are getting tired of waiting.
Sabrina, I appreciate your insight and this website. I enjoy keeping up with Chicago real estate and some of the discussions that spring up. BUT you can’t possibly know what is happening in detail around the country.
“It’s living hell in the Bay Area now.”
Hahahahahaha Drama!! Yes this amazing weather and natural beauty is truly hellish. As a newer transplant to The Peninsula from Chicago, I guess I’m living in hell? I’ve had ZERO problems getting annual Dr appointments for my family, Stanford Drs. In fact, less of a wait time than when we lived in Chicago and used Northwestern docs — my GP went to school at Northwestern and is happily practicing here. We rent, I’m not into buying a fixer-upper for +2mil, but have not had a problem finding a nice place to rent. After essentially losing money on our house in Chicago (owned for 10+years), green zone, we are in no hurry to get back in the market — stock market FTW. Yes the prices are higher, but so are salaries. People really are not leaving in droves as you seem to think.
“people were living in group homes/apartments down in Silicon Valley (never in “The City” as you call it even though no one else does. Lol.)”
I’ve heard plenty of people call it The City, you can’t generalize about the whole area, nor what people say based on your couple of years in hell. What I can say is that I haven’t heard anyone refer to it as “Silicon Valley”. It’s either the peninsula or South Bay.
“Glad I don’t have to live out there.”
We’re glad you don’t have to live out here too.
Everyone has different experiences. You seem to really have it in for California based on anecdotal stories and then discount what Gary’s family experiences because his daughter doesn’t fit your narrative. I’m sure it’ll be the same with me. But we are living in this hell.
Just ran across this current example of the government encouraging people to live in disaster prone areas: “Homeowners will have access to millions of dollars from state and federal grants to bring their homes up to the new standards, officials said.” https://therealdeal.com/sanfrancisco/2022/02/15/california-sets-wildfire-standards-aiming-to-keep-home-insurance-affordable/
“If affordable housing costs $420k per unit, how is it possible that private developers can sell SFHs for less than that?”
I believe (note entirely sure though) the per unit cost for affordable housing also includes the costs for infrastructure that the city or TIF district would normally pay for for private development. So it’s not an apples to apples comparison.
Further, the city offers certain services and benefits to the people that live in these homes or to the private companies that develop them such as tax breaks. There was some state law that passed last year as well increasing property tax breaks/credits/freezes for developers of affordable housing.
Per the below article the $1Bn is expected to create 2,428 units of affordable housing so $411,861 per unit. This costs I would think includes the first year or multiple years of housing vouchers as well?
“Of the expected 2,428 units, 684 will be family-sized with two-, three- or bedroom–units; and 394 units will be affordable to households earning 30 percent or less of the area median income.”
https://blockclubchicago.org/2021/12/06/city-investing-1-billion-in-24-affordable-housing-developments/
“I believe (note entirely sure though) the per unit cost for affordable housing also includes the costs for infrastructure that the city or TIF district would normally pay for for private development.”
Nah, $420k per is about what I’ve seen in other low-income housing proposals that are asking for TIF money for construction, bc you can’t make money at those numbers.
It’s the basis for the (failed) Skender apartment factory–getting 3-flats “down” to 3 for a million bucks–when a private developer could do 3 basic 2-bed units (which is what the Skender-3-flat was) for probably 40% less.
Even NPR pins the blame on materials and union labor requirements:
“It might seem counterintuitive, but affordable housing can be incredibly expensive to build — as much as $375,000 per unit in Chicago, say nonprofit developers. That’s due to stringent requirements around materials and wages paid to workers. And it’s why public subsidies are necessary to build affordable units.”
https://www.npr.org/local/309/2019/05/27/726811306/factory-built-three-flats-are-chicago-s-newest-affordable-housing
In other words, my question was entirely rhetorical.
OMG!!
This thread is still going.
Sabrina censored the truth: SAT scores are based on race (White/Asian) and CPS will never reach these levels
What are the top five states by average SAT?
MN (1263)
ND (1258)
NE (1246)
IA (1243)
UT (1238)
Let us see if she is a denier and revisionist.
Is anyone hearing/seeing banks “waiving” inspections?
Buddy of mine is selling. Buyer/bank inspector spent about 5 minutes in his place and left. Buyer is bank financing
Particulars (Not Chicago)
SFH, Went on market Thurs, 22 offers, 20% over ask. 5 all cash offers over ask. Price doubled in 7 years (Minimal upgrades)
HAWT ™
“What are the top five states by average SAT?”
“CPS will never reach these levels”
If only the top 2% (or less) of Chicago HS students took the SAT, it would be close.
“Is anyone hearing/seeing banks “waiving” inspections?”
If you are bringing enough cash to the table they will waive (at least 20%). So if the offers you are referencing are all “cash” then yes. I assume they have a LOC and investments at the Bank they will refi with after they remodel which means there will still have ~25% – 30% equity after the cash-out?
I had my own inspection, but I don’t think the bank received a copy. Perhaps they just wanted to see that I did an inspection. The bank didn’t do an appraisal. I guess appraisals are becoming a thing of the past.
The one interesting thing that I don’t remember from last time is that they asked my employer if my job was secure. The bank didn’t look closely at my savings. I had to show them statements from my checking account, but they said not to bother submitting statements from other bank accounts/brokerages. I had an aggressive closing date, so maybe they made an exception.
Offer they accepted was a Non-all cash offer (Supposedly conventional financing – 20% down) at 20% over ask.
Buyers still need to complete the appraisal but thought it was odd that the Bank wouldn’t require a full inspection
“When I was in the market, there was low inventory, but I was able to go to open houses and have private showings with my agent. Now, there are just a couple worth seeing in that huge area.”
I’m not familiar with the housing market in those areas but it does sound the same as most suburbs in the chicagoland area. The SFH suburban market overall have been hotter than the city.
I’m not sure if in general the suburbs are going to get much better this year in regards to inventory given the level of sales and refinancing over the past two years along with homeowners more likely to live in homes longer in the suburbs compared to the city given age and family formation.
With the recent rise in rates and what appears to be continuing rise in rates throughout the year updated homes in good locations might not get multiple offers over ask in a day or two but the spring season officially started Monday thus demand will increase from the prior couple of months through May. Listings in the Chicagoland market were also significantly down in January compared to last January. Maybe more Omicron related but cases were also high last January and everything was closed.
Not sure if your parents or friends have kids in grade or high school which is also of factor of what you are comfortable with but the city (and suburbs bordering the city) is not as hot as the traditional suburbs so they may have better luck finding a SFH in Irving Park, Mayfair, Niles, Norwood granted alot of older homes that may need some updates if they look in Irving Park, Mayfair, and Norwood.
Norwood is pretty nice and alot more SFH’s compared to Mayfair and Irving Park which will have a lot of duplex’s and three flats. Norwood does have alot of old bungalows with good bones but likely not updated/move-in ready (not sure if that’s a positive or negative). Affordability in Norwood is better than Irving Park.
Regarding banks waiving appraisals… if it is a conventional loan and at least 10% down, often times the automated underwriting system (AUS) with Fannie Mae / Freddie Mac will grant an appraisal waiver, so underwriting doesn’t require an appraisal. This is for loans < $647,200 for 2022. I usually get it on maybe 50% or so of purchases in my experience.
The AUS system tells the u/w how much documentation is required on the borrower. So depending on assets, we may only need to include one or two accounts. It just really depends on borrower.
Jumbo always requires an appraisal and will be more thorough in terms of documentation.
“Is anyone hearing/seeing banks “waiving” inspections?”
google tells me mortgage lenders don’t require an inspection.
““Try again anon(tfo). Pretty cheap in the 1980s and even in the 1990s”
No, it really wasn’t. ”
Anecdotally fwiw we looked into relo to SF in ’86 for a job & picked Belmont (adj to Palo Alto), which looked like great place to raise children. RE broker said we couldn’t buy in our price range ($250-300k iirc) in Belmont unless we gave her PoA to submit bids when ‘affordable’ sfrs were listed. When I refused she then showed us a post war 2 bed 1 ba 900 sf sfr built on a slab in adj San Mateo, asking $160k on a street w daytime stoop partiers & cars on blocks in driveways. We concluded SF RE mkt was insane (I’ve tried to find the SFR w/o luck since wow has that area and values exploded). Iirc the Richmond & Albany areas had sfr’s available then between $250-$300k
“Sabrina censored the truth: SAT scores are based on race (White/Asian) and CPS will never reach these levels”
How many times do we have to say it HH? Students in Illinois, and CPS, don’t take the SAT as often. More take the ACT because Midwest schools accept it. But now that so many schools are tossing the testing requirement, many students won’t take either.
The stats you are showing are irrelevant.
Single family homes continue to go under contract almost immediately in Chicago.
This one in the Southport Corridor went under contract within 3 days. Price has doubled since 2010.
https://www.redfin.com/IL/Chicago/3248-N-Southport-Ave-60657/home/13381623
Just 35 properties for sale in Norwood Park. Wow. Sizzle. It is red hot. Over 60 are pending.
Buyers are looking and want to close before rates rise even more.
Look at the prices in Schorsch Village now. Wow.
$500,000 there. We’ll see if they can get it.
https://www.redfin.com/IL/Chicago/3400-N-Newcastle-Ave-60634/home/13469408
I would expect a price cut on that schorsch village dump
“If only the top 2% (or less) of Chicago HS students took the SAT, it would be close.”
No reason for the top at CPS to take the SAT because the schools they are applying to (Ivy League, Stanford, U of Chicago) don’t ask for the test anymore. Looking at SAT scores just tells us, once again, that HH is a really old guy who lives in the past when things like SAT were what mattered.
Get in this century HH.
Sabrina: I didn’t bring it up. I’m not the one who posted the SAT scores. I just pointed out that top ones are mostly white states. So you have to insult me. Plus, everyone knows that Ivies are significantly diminished in standing these days. Woke, anti-white racist, haters of Christianity (even though founded by Christians) and not difficult to graduate from. Intelligent parents and rich families are starting to eschew these institutions because nobody wants their precious child to associate with bigots and scum and ugly feminists, anti-white racists, etc. College life is too short to live like that, and end up with bad friends, etc. Ivies are totally overrated and 21st century parents know this.
“Single family homes continue to go under contract almost immediately in Chicago.
This one in the Southport Corridor went under contract within 3 days. Price has doubled since 2010.
https://www.redfin.com/IL/Chicago/3248-N-Southport-Ave-60657/home/13381623”
The current owner (purchased in ’14) is barely breaking even w/ upgrades and fees
“Regarding banks waiving appraisals… if it is a conventional loan and at least 10% down, often times the automated underwriting system (AUS) with Fannie Mae / Freddie Mac will grant an appraisal waiver, so underwriting doesn’t require an appraisal. This is for loans < $647,200 for 2022. I usually get it on maybe 50% or so of purchases in my experience.
The AUS system tells the u/w how much documentation is required on the borrower. So depending on assets, we may only need to include one or two accounts. It just really depends on borrower.
Jumbo always requires an appraisal and will be more thorough in terms of documentation."
Thanks Russ
Do the standards vary by location/Zip Code?
“Intelligent parents and rich families are starting to eschew these institutions because nobody wants their precious child to associate with bigots and scum and ugly feminists, anti-white racists, etc.”
Do you have a source for any of these beliefs? Surprised you have time for Cribchatter right now. Thought you would be busy distributing flyers in Houston.
“Just 35 properties for sale in Norwood Park. Wow. Sizzle. It is red hot. Over 60 are pending.”
Not a bad market for sellers but let me tell you what hot is. I’m finally ramping up my Raleigh search. Inventory is like 1/3 of what it normally is. Standard contract involves a NON REFUNDABLE deposit which can be 80K on a 1 MM home. Homes that are coming soon cannot be shown yet go under contract in days, sight unseen with these non refundable deposits. Homes that do hit the market sell in 1 – 3 days. Major employers moving to the area. Last I checked prices were up 24% YOY. Afraid to look again but will soon.
“Students in Illinois, and CPS, don’t take the SAT as often. More take the ACT because Midwest schools accept it.”
WOW!!
That’s years out of date. Try to keep up!!
Maybe you should read the comments up thread before showing how out of the loop you are!!
Since you’ll undoubtedly say “no, I know I’m right, unless it just changed”, here’s the citation:
https://www.isbe.net/Pages/sat-psat.aspx
5 years ago the change was made. FIVE!!
“I just pointed out that top ones are mostly white states.”
You didn’t even read the comments in the thread, Hof.
Guessing you got a sub-500 score on the reading comp section, bc you just picked the answer that fit your biases best without bothering to read the text.
@ Johnny, the loan limit cut off is based on county. All of IL is < $647,200. It can go up to $970k in high cost areas like CA or Manhattan.
The appraisal waiver just depends on data in the AUS system and borrower profile. It is kind of a black box but sometimes we can manipulate it. For example, I had a client who did some reno work on house and was refinancing. It was easily worth $1 million when factoring in the reno work. However, if I put home value of $1 million it wouldn't give a waiver. I dropped the loan value to closer to what he paid say 5 years ago before reno work of $600k and it gave a waiver.
For the most part, conventional is always following AUS requirements. Jumbo can vary by bank so part of being a good broker is knowing a ton of bank guidelines and how they fit with each scenario and what is typically allowed / required.
It is constantly changing though based on risk, defaults, and fraud.
Stuff we could do a year ago, you can't… or stuff that was required a year ago is no longer required.
“Anecdotally fwiw”
This is the way.
Yes, it was an order of magnitude less insane than it is now, no argument there.
But prevailing professional salaries sucked (relatively) too, as opposed to now. You’d make ~50% more doing the same job in LA.
And yes, currently, if you aren’t in Tech, salaries haven’t kept up with RE prices at all. And yes, there were in the 80s “bad” parts of EsEff where you could still buy property somewhat reasonably. But they were rundown places on sketchy blocks.
As I’ve mentioned here before, knew people commuting from Modesto to the Peninsula in the late 80s, in order to afford a house. House sort of like this one, which has a *bananas* price history:
https://www.redfin.com/CA/Modesto/3500-Liongate-Cir-95356/home/19916721
They grew up in Fremont/Milpitas/East SJ sort of place, and would have lived there if they could have afforded *anything*.
“This one in the Southport Corridor went under contract within 3 days. Price has doubled since 2010.”
Is that the new math, or did someone go 20% over list?
1,348,000/780,000 = something well less than 2 (1.73).
“Seller has appealed and been successful in keeping the taxes down.”
They are appealing currently an AMV of $880,000. Standard BS.
“The current owner (purchased in ’14) is barely breaking even w/ upgrades”
You think that’s $200k of work? Without a pergola?
““The current owner (purchased in ’14) is barely breaking even w/ upgrades”
You think that’s $200k of work? Without a pergola?”
Tearing the existing pergola out is as expensive as installing a new one
Kitchen/Deck/Basement/Hardwood floors (Assume they could stain the stain out)/Furnace, et al – $125k
“@ Johnny, the loan limit cut off is based on county. All of IL is < $647,200. It can go up to $970k in high cost areas like CA or Manhattan.
The appraisal waiver just depends on data in the AUS system and borrower profile. It is kind of a black box but sometimes we can manipulate it. For example, I had a client who did some reno work on house and was refinancing. It was easily worth $1 million when factoring in the reno work. However, if I put home value of $1 million it wouldn't give a waiver. I dropped the loan value to closer to what he paid say 5 years ago before reno work of $600k and it gave a waiver.
For the most part, conventional is always following AUS requirements. Jumbo can vary by bank so part of being a good broker is knowing a ton of bank guidelines and how they fit with each scenario and what is typically allowed / required.
It is constantly changing though based on risk, defaults, and fraud.
Stuff we could do a year ago, you can't… or stuff that was required a year ago is no longer required."
Thanks again Russ.
“Major employers moving to the area. Last I checked prices were up 24% YOY. Afraid to look again but will soon.”
Raleigh is red hot because Apple is moving several thousand jobs there paying on average $180,000. And then add on the people who are moving because they can now “WFH” and there simply isn’t enough housing for everyone.
The poor middle class in Raleigh. But it’s like this everywhere right now. The housing market is extremely unhealthy. The Fed needs to act quicker. They need to get the rates up high enough to cool it. They have lost control of the narrative.
“Ivies are totally overrated and 21st century parents know this.”
Last year Berkeley got 150,000 applications and UCLA had an acceptance rate of 9.9%.
Plenty of students want to go to the elite colleges, both private and public. Move on HH. Time has passed you by.
“No reason for the top at CPS to take the SAT because the schools they are applying to (Ivy League, Stanford, U of Chicago) don’t ask for the test anymore.”
If you want a merit based academic scholarship, you better have taken a standardized test AFAIK. I only looked at Stanford and its required.
https://admission.stanford.edu/apply/freshman/testing.html
“If you want a merit based academic scholarship, you better have taken a standardized test AFAIK”
“Not required” and “not useful” are “not the same thing”.
Besides, the SAT *IS* required (yeah, some waivers) to graduate from CPS. And this year is the 5th year of the requirement.
Anyone familiar with CPS should know that.