Market Conditions: February Home Sales at 17-Year High But Will It Slow in March?
February sales remained red hot in Chicago as inventory continued to be at multi-year lows.
Only 2005 was hotter for sales over the last 25 years.
From the Illinois Association of Realtors:
In Chicago, home sales (single-family and condominiums) in February 2022 totaled 1,879 homes sold, up 13.3 percent from February 2021 sales of 1,658 homes.
The median price of a home in the city of Chicago in February 2022 was $320,000, the same as it was in February 2021.
Here is the sales data for February going back to 1997 (courtesy of G):
- 1997: 881 sales
- 1998: 991
- 2000: 1383
- 2001: 1151
- 2002: 1677
- 2003: 1566
- 2004: 1814
- 2005: 2228
- 2006: 1855
- 2007: 1703
- 2008: 1454
- 2009: 870
- 2010: 1257
- 2011: 1092
- 2012: 1250
- 2013: 1411
- 2014: 1361
- 2015: 1497
- 2016: 1567
- 2017: 1529
- 2018: 1535
- 2019: 1449
- 2020: 1496
- 2021: 1658
- 2022: 1879
Here is the Median Price Data also going back to 1997 (thanks G!):
- 1997: $117,000
- 1998: $132,000
- 1999: $143,750
- 2000: $161,500
- 2001: $180,200
- 2002: $212,000
- 2003: $215,000
- 2004: $229,900
- 2005: $268,900
- 2006: $267,500
- 2007: $270,000
- 2008: $290,000
- 2009: $218,125 (with 31% being REO/Short Sales)
- 2010: $176,000 (with 46% being REO/Short Sales)
- 2011: $150,250 (with 50% being REO/Short Sales)
- 2012: $140,300 (with 52% being REO/Short Sales)
- 2013: $158,000
- 2014 $175,000
- 2015: $212,000
- 2016: $236,000
- 2017: $246,000
- 2018: $272,000
- 2019: $272,500
- 2020: $290,000
- 2021: $320,000
- 2022: $320,000
“The strong real estate market continued in February with increasing closed sales and a steady median sales price,” said Antje Gehrken, president of the Chicago Association of REALTORS® and president and designated managing broker of A.R.E. Partners. “Despite rising interest rates, buyers remained dedicated to getting into homes, and well-priced homes continued to move quickly off the market.”
Statewide, housing inventory fell 34.1% year-over-year to 17,650 from 26,791 properties.
In Chicago, inventory fell 30.3% year-over-year to 5,612 properties from 8055.
Days on the market in Chicago only fell 1 day, however, to 49 from 50 days last year.
In Chicago, sales continue to be higher for both single family homes and condos. Single family homes rose 18.2% to 720 while condos were up 10.5% to 1159.
“Prices are continuing to increase while remain low 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. “The number of sales will pick up with the arrival of spring, but the number of listings remains low by historical standards. Inflation continues to be a concern for consumers, and the recent rate increase by the Fed is likely to lead to a rise in interest rates, although rates remain low.”
The average 30-year fixed mortgage rate was 3.76% in February 2022 up from 3.45% in January and up from 2.81% in February of last year.
However, rates have spiked quickly even in just the last week, pushing the 30-year fixed closer to 5%. That would be a 3-year high for rates.
How quickly will 5% mortgage rates cool the red-hot Chicago housing market?
Will February be the last month of decade high sales?
Median prices rise for Illinois homes and sales remain brisk [Illinois Association of Realtors, press release, By Bill Kozar, March 18, 2022]
“The number of sales will pick up with the arrival of spring, but the number of listings remains low by historical standards. Inflation continues to be a concern for consumers, and the recent rate increase by the Fed is likely to lead to a rise in interest rates, although rates remain low.”
LOL No
Demand has been pulled forward by the threat/actual rate hikes
People are/were stretching their housing budget (Going signifigantly over ask) at sub 4%, dont see how that continues as rates rise.
Its still a monthly payment game for the majority of homeowners.
2002: $212,000 + CPI = $339k
2003: $215,000 + CPI = $335k
2004: $229,900 + CPI = $350k
2005: $268,900 + CPI = $400k
2006: $267,500 + CPI = $382k
2007: $270,000 + CPI = $379k
2008: $290,000 + CPI = $390k
05-08 were super bubbly, but 02-03 were more like a ‘normal’ cyclical peak. We ever going to see 02-03 prices–in real dollar terms–again?
If we aren’t getting there in a seller’s market with essentially free mortgage dollars, what would it take to get there?
“Its still a monthly payment game for the majority of homeowners.”
Yup. As actually gets pointed out a ton here–“it’s cheaper to buy than to rent in [One Chicago/wherever]”–that’s just a HMAM argument.
I think sales will slow because even fewer people are going to put their houses on the market. Even if the higher rates force some people out of the market, there is so much demand that we won’t see lower prices. If anything, in the short term, demand might even increase because interest rates are going to go up even more and people feel like they have to buy now or be priced out forever.
We have near full employment. People have massive amounts of equity in their homes. It will take mass unemployment before we start to see lower housing prices.
“If we aren’t getting there in a seller’s market with essentially free mortgage dollars, what would it take to get there?”
a massive cultural, political, and environmental change which will obviously never happen
“ I think sales will slow because even fewer people are going to put their houses on the market. Even if the higher rates force some people out of the market, there is so much demand that we won’t see lower prices. If anything, in the short term, demand might even increase because interest rates are going to go up even more and people feel like they have to buy now or be priced out forever.
We have near full employment. People have massive amounts of equity in their homes. It will take mass unemployment before we start to see lower housing prices.”
So no first time home buyers
Full employment is meaningless in and of itself. The delta between Inflation and wages is more important.
Home owners have “massive” equity but don’t want to put their houses on the market?
FOMO is real but will be over ruled by HMAM
The only thing that can save the market is Boomers increasingly subsidizing their kids housing. Not sure how the wealth transfer plays out long term as boomers were the first ones to view their housing as a retirement vehicle
““If we aren’t getting there in a seller’s market with essentially free mortgage dollars, what would it take to get there?”
a massive cultural, political, and environmental change which will obviously never happen“
You just don’t understand HAWT Market Theory(tm)
Obviously it’s a bullish sign that Chicago RE has a lot more room to run – def some midwit shill
$0 gain in home prices when home prices have surged across the country is embarrassing for Chicago. Add in an 8% inflation rate and everyone lost value in their home. Buy a home anywhere but Chicago if you want to see home price appreciation. Austin, Nashville, Denver, Phoenix, Miami, Tampa, Charlotte, Seattle, Portland, anywhere but this dumpster fire.
“$0 gain in home prices when home prices have surged across the country is embarrassing for Chicago.”
Where do you get 0%?
This is median price. Do I have to remind everyone that median is skewed due to the mix? Yes, apparently, I do.
“The only thing that can save the market is Boomers increasingly subsidizing their kids housing.”
Let me get this straight.
We have the lowest inventory in history. We have the largest generation in US history buying homes now. Rents have risen to record highs. Wages are also at record highs with 3.8% unemployment and record low weekly jobless claims.
And new home buyers need to be “subsidized” by Boomers?
Not in Chicago.
“Even if the higher rates force some people out of the market, there is so much demand that we won’t see lower prices. If anything, in the short term, demand might even increase because interest rates are going to go up even more and people feel like they have to buy now or be priced out forever.”
There will definitely be some urgency for those who have a locked in lower rate. They don’t want to lose it and see a 5% rate, if they don’t have to.
By May, most of the cheaper rate locks will have expired. Maybe we don’t see the slowdown until then, if at all. Rents are also going up sharply. Even at 5%, many may still want to buy in order to lock in their monthly housing costs.
“People are/were stretching their housing budget (Going signifigantly over ask) at sub 4%, dont see how that continues as rates rise.”
Why do you assume this?
Lending standards are still tight. Bank isn’t going to let you “stretch” much, from what I’ve seen. People have record cash on hand. Stock market only a few percent away from all-time highs again.
Some first time buyers will likely get priced out of their preferred neighborhood. May have to move down to a smaller product. Instead of buying a SFH, they buy a cheaper townhouse instead.
Probably still cheaper to buy than to rent.
The housing market usually reflects the job market. Job market is tight. Many people getting raises. When you feel good about your job/income situation, you feel good to buy a home.
Many others still moving around due to the pandemic. Work-from-home is now going to be forever for some people. They want a different space. More bedrooms or office space. With the pandemic receding, perhaps outdoor space not as vital anymore (short term memories).
But will they move with those rates rising? Do they rush out to try and lock in even the 5%, because they are worried about 6%?
Imagine 6% rates on the coasts. Could cause havoc there. Not sure it will do so in the Midwest.
But inventory still at record lows everywhere. Maybe rates won’t matter at all?
“We have the lowest inventory in history.
We have the lowest inventory of 1978 Bob Avellini cards – Prices are about to skyrocket…
We have the largest generation in US history buying homes now
Does it matter if they cant afford it?
“Rents have risen to record highs”
If you say so. Property mix factored into this?
“Wages are also at record highs with 3.8% unemployment and record low weekly jobless claims.”
Yet wages arent keeping up with inflation so?
“3.8% unemployment”
as you say, “Not in Chicago.”
4.9%: https://www.bls.gov/eag/eag.il_chicago_md.htm
“Why do you assume this?”
Not assuming, its true. Unless you want to make the argument that people arent bidding over ask (Might be true in Chicago) and are purposefully looking at properties well under their “ceiling” to account for their need to over bid, you’d be contradicting yourself (nothing new) and wrong
“Lending standards are still tight.”
LOL no.
“Bank isn’t going to let you “stretch” much, from what I’ve seen.”
Maybe true in Chicago but not elsewhere
“People have record cash on hand. Stock market only a few percent away from all-time highs again.”
Disposable income is basically flat since April 2021
Its impossible for someone to have $1MM in retirement savings at 50 but every thirty something is the next Gordon Gecko?
“Some first time buyers will likely get priced out of their preferred neighborhood. May have to move down to a smaller product. Instead of buying a SFH, they buy a cheaper townhouse instead.”
So they’re forced to overpay for something that that a terrible compromise?
“Probably still cheaper to buy than to rent.”
Not apples to apples
“The housing market usually reflects the job market. Job market is tight. Many people getting raises. When you feel good about your job/income situation, you feel good to buy a home.”
Yet wages are lagging inflation. Do you view this as a positive?
“Many others still moving around due to the pandemic. Work-from-home is now going to be forever for some people. They want a different space. More bedrooms or office space. With the pandemic receding, perhaps outdoor space not as vital anymore (short term memories).”
I want a Ford GT. Wants are immaterial if you cant afford them.
Being cooped up during Covid isnt a short term memory.
“But will they move with those rates rising? Do they rush out to try and lock in even the 5%, because they are worried about 6%?”
Must be nice to have a Money tree. Where can I get one?
“Imagine 6% rates on the coasts. Could cause havoc there. Not sure it will do so in the Midwest.”
BS
You must be terrible managing money
“But inventory still at record lows everywhere. Maybe rates won’t matter at all?”
I tip my cap to such a brilliant Shill post
“Yet wages are lagging inflation. Do you view this as a positive?”
Yep. Because owning a home is a hedge against inflation.
““3.8% unemployment”
as you say, “Not in Chicago.”
4.9%: https://www.bls.gov/eag/eag.il_chicago_md.htm”
Its just a number
So another economic indicator that Chicago is lagging.
So Sad
“Being cooped up during Covid isnt a short term memory.”
But it must be, JohnnyU, or else we wouldn’t be seeing condos with NO outdoor space easily selling again. Those units were dead in 2020. But not in 2022. Back to “normal.” Can only mean that buyers aren’t concerned about having outdoor space anymore. They’re getting out and about, eating out in restaurants, going to events, traveling etc. Outdoor space no longer mandatory anymore.
Not having outdoor space is no longer seen as a negative. People have already forgotten about the lockdowns.
“Yep. Because owning a home is a hedge against inflation.”
Except
– Its not owned, at best its a 20% interest. If it was an all cash offer, it could make sense, but thats not the case were talking about
– So with declining real wages, over time where is this additional capital coming from to make up the Delta? And what supports the RE pricing as rates rise and real wages are negative?
Real assets can be an inflation hedge, but like most hedges they need to be purchased intelligently
“Must be nice to have a Money tree. Where can I get one?”
Most qualified buyers in the last 25 years. Stock market near record highs. Job market tightest in 25 years. People have money JohnnyU.
If you’re still working (not retired), this is the best job market in 25 years. I know people getting new jobs and seeing 30% salary increases plus other lucrative benefits. Yeah, they are feeling good. How could you NOT be? You have recruiters contacting you every few weeks. Job offers being thrown at you. New college grads are in demand. It feels a lot like 1998-99 when everything was humming along. And yeah, you wanted to buy in 1998 too.
But, again, imagine the 5% or 6% on the coasts. Yikes. Going to really slow those markets. Middle class already priced out but even more so now. But they’re still not building enough so new entry level price point to get in the game is probably $1 million in California (along the coast) and $500,000 inland. Home builders reporting that demand, even at the $2 million price point, is still too strong and not enough housing to meet it.
Also, remember, cash offers don’t care if rates are at 5%. Many Baby Boomers have all cash to buy in those retirement communities like Arizona and Florida.
The next 6 to 8 weeks are going to be interesting. Rates weren’t supposed to get to 5% until the end of the year. Lol. Whoops. But here we are.
“Most qualified buyers in the last 25 years. Stock market near record highs. Job market tightest in 25 years. People have money JohnnyU.”
Yet “the largest generation in US history” only holds 4.8% of wealth.
How can you say people have money, yet cant fathom how someone at 50 could have $1MM in retirement savings?
“If you’re still working (not retired), this is the best job market in 25 years. I know people getting new jobs and seeing 30% salary increases plus other lucrative benefits. Yeah, they are feeling good. How could you NOT be? You have recruiters contacting you every few weeks. Job offers being thrown at you. New college grads are in demand.
First time in a boom cycle?
“It feels a lot like 1998-99 when everything was humming along. And yeah, you wanted to buy in 1998 too.”
I’m drawing a blank as to what happened 2 years later? Can you remind me?
“Also, remember, cash offers don’t care if rates are at 5%. Many Baby Boomers have all cash to buy in those retirement communities like Arizona and Florida.”
You are so dishonest. Now we’ve migrated from Millennials to Boomers?
“The next 6 to 8 weeks are going to be interesting. Rates weren’t supposed to get to 5% until the end of the year. Lol. Whoops. But here we are.”
Shill Realatard speak
“But it must be, JohnnyU, or else we wouldn’t be seeing condos with NO outdoor space easily selling again. Those units were dead in 2020. But not in 2022. Back to “normal.” Can only mean that buyers aren’t concerned about having outdoor space anymore. They’re getting out and about, eating out in restaurants, going to events, traveling etc. Outdoor space no longer mandatory anymore.”
Easily selling Vs what? What type of appreciation? Are buyers making the mistake in buying sub-optimal properties due to rising rates/HMAM?
Show your work
“Not having outdoor space is no longer seen as a negative. People have already forgotten about the lockdowns”
Yeah the midwits dropped it like it never existed and are all in for trying to start WWIII over Ukraine
“Lending standards are still tight.”
“LOL no.”
Yep. They put the new lending standards in place in 2009 and they’ve been there ever since. It’s why less than 2% of all mortgage holders are 90 days or more behind on their payments despite a recession and pandemic. And why the bears on this blog were completely wrong about a forbearance “crisis” which never came to be. It’s a rare time that government regulation actually worked. And it hasn’t loosened during that time. Still tough to get a mortgage. Still have to have the higher FICO score. Still need a down payment. You can do 5% but you will pay PMI.
These buyers are prepared.
Many bears just simply live in the past and think it’s still 2005 when the strawberry picker making $30,000 was buying the $700,000 house in California. That type of lending is LONG gone.
The bears are just being foolish for trying to argue that the economy somehow sucks right now or that the Millennials aren’t buying in droves. Chicago has seen 15 to 17 year highs in sales for the last year. Lol. But go ahead and gaslight it. Be my guest.
Inflationary pressures, especially on rents, only force MORE into the homebuying pool. If your landlord keeps raising your rent 5% or 10% a year, what do you want to do? Buy. Even with rates at 5%.
Also, most people don’t remember what happened when rates rose sharply in the 1970s. People still bought homes. But if you’re priced out of the $400k house, you buy the $300k house. As the homebuilders have said the last few weeks, their buyers will simply buy something smaller, because it’s cheaper and it keeps the monthly payment affordable.
And yes, if that means downsizing from a single family home, to a townhouse because it’s cheaper, then that’s what buyers will do. Thankfully, in Chicago, you CAN do that and still get into something affordable. Buyers will move neighborhoods or suburbs in order to be able to buy. Not all first time buyers will get their first choice.
We haven’t seen rental price inflation in a long time. It will be a shock to many and will push many into buying instead.
But many were looking for 5% rates by the end of the year, not in March 2022. And 6%? That might be in 2023, if ever. What if we see it this year? By this summer? Will be really shocking for many. Could make inventory go even lower. You will only move if you HAVE to to leave the state, for instance. Because who will want to lose their 2.75% mortgage?
Again, Baby Boomers may not have a mortgage at all. Them, and the Silent Generation, are in the drivers seat. They may have all cash and cash will be king.
“Stock market near record highs”
Forgot
https://tenor.com/biVFT.gif
All asset classes are inflated, Its comical to think that RE is exempt from J-POW and his magic machine
“as you say, “Not in Chicago.””
4.9%? Fantastic. It was terrible just a year ago. It’s still falling.
Surprisingly, NYC is like 5% and yet their apartment vacancy rate is less than 1% now. Go figure.
The job market is STRONG. Thousands of job openings. To say otherwise just indicates you do not live in Chicago. All you need to do is walk down the street and see the “now hiring” signs on nearly every store and restaurant.
Best job market in 25 years.
When the job market is strong, so is the housing market.
“Does it matter if they cant afford it?”
Yet SOMEONE is buying every single month. Go figure. Must be all those 75 year olds buying in Bucktown and Wicker Park for their retirement homes, right?
Lol.
Come on JohnnyU. You just look like a fool gaslighting the actual data. In new home construction, Millennials are now 30% to 50% of all purchases, depending on the market. They are also now taking out 50%+ of all mortgages.
Would you rather rent or buy? Buying is a hedge against inflation.
And it’s now cheaper to buy than to rent, on a monthly basis. Can you buy a condo in River North for less than $4 per square feet that you are renting in One Chicago? Yes. Yes, you can.
From Crain’s:
The net rent at high-end, or Class A, apartment buildings rose 32% last year, while the net rent at less-expensive Class B properties jumped 34%, according to the Chicago office of Integra Realty Resources, a consulting and appraisal firm. After plunging in 2020, rents rebounded from a low base, but they have recovered everything they lost and even hit new highs.
Tenants who could afford a downtown apartment a year ago may have to expand their search to cheaper neighborhoods. A hypothetical 1,000-square-foot Class A apartment in downtown Chicago rented for $3,370 per month at the end of 2021, up from $2,550 a year earlier, when desperate landlords were offering bargain deals.
“A lot of people are absolutely priced out of the market,” said Integra Senior Managing Director Ron DeVries.
Leasing is well ahead of schedule at One Chicago, a recently completed two-building residential development in River North, said Jim Letchinger, the project’s developer. Rents, originally forecast at $3.98 per square foot, are “well above that” today, he said.
“Across the board, it’s the best time to be in business,” said Letchinger, founder and CEO of Chicago-based JDL Development.
https://www.chicagobusiness.com/commercial-real-estate/downtown-chicago-rents-keep-going-rising-another-5-year
No one on this blog is arguing that higher rates won’t slow Chicago’s housing market. They ALWAYS have. I thought it would have to be 4.5% before we saw a slowdown but now here we are already at 5%. It’s going to be shocking to those who were thinking of buying later this spring or summer.
How much will it slow the market? Will it allow inventory to finally build?
The national housing market needs to slow. It’s unhealthy. Pockets of speculation in a lot of places.
“Yep. They put the new lending standards in place in 2009 and they’ve been there ever since. It’s why less than 2% of all mortgage holders are 90 days or more behind on their payments despite a recession and pandemic. And why the bears on this blog were completely wrong about a forbearance “crisis” which never came to be. It’s a rare time that government regulation actually worked. And it hasn’t loosened during that time. Still tough to get a mortgage. Still have to have the higher FICO score. Still need a down payment. You can do 5% but you will pay PMI.”
Why lie? VA is zero and FHA is 3.5%.
You can have up to 18 Mo in forbearance Fannie/Freddie initial request date ended a year ago, still not out of the woods. CFPB doesnt have any data since Sept 21 and note that the rates are suppressed due to C-19
Not tough at all to get a loan, unless you have a sub 550 FICO
“Many bears just simply live in the past and think it’s still 2005 when the strawberry picker making $30,000 was buying the $700,000 house in California. That type of lending is LONG gone.”
Its hilarious that thats what you think any opinion that isnt in line w/ your thoughts boils down to
“Also, most people don’t remember what happened when rates rose sharply in the 1970s. People still bought homes. But if you’re priced out of the $400k house, you buy the $300k house. As the homebuilders have said the last few weeks, their buyers will simply buy something smaller, because it’s cheaper and it keeps the monthly payment affordable.”
As for what happened in the 70’s, I’ll take your first hand experience Boomer
So Homebuilders who are costs are going up inflation & borrowing arent going to be able to provide that home that sold for $400k last year for $400k this year? No way
That $300k house is going to be what was a $225-275k home last year. Be prepared to be disappointed Millennials
“Again, Baby Boomers may not have a mortgage at all. Them, and the Silent Generation, are in the drivers seat. They may have all cash and cash will be king.”
I thought Millennials were kings – driving the market and all that…
“But, again, imagine the 5% or 6% on the coasts. Yikes. Going to really slow those markets.”
So, probably houses selling merely at list price? And the buyer actually sees the place in person? Maybe the listing languishes on the market for – gasp – two whole weekends?
“So, probably houses selling merely at list price? And the buyer actually sees the place in person? Maybe the listing languishes on the market for – gasp – two whole weekends?”
Like I said, first time home buyers priced out. But even those in the $1 to $2 million are usually rate sensitive. Yes, multiple offers and waiving inspection is NOT normal or healthy. It should wipe some of that out of the equation. But they haven’t been building enough housing in California to meet demand, so we will see what happens when rates rise and how many are priced out.
Haven’t seen 5% in 4 years and prices are 20% to 40% higher. Incomes higher too but not at that same rate.
“You can have up to 18 Mo in forbearance Fannie/Freddie initial request date ended a year ago, still not out of the woods. CFPB doesnt have any data since Sept 21 and note that the rates are suppressed due to C-19”
I beg of you. PLEASE READ THE DATA.
Those in trouble actually keeps dropping month over month.
A hot job market tends to do that, though. And these owners all have equity. If you can’t pay your mortgage, you just sell and walk away. Easy peasy.
“So Homebuilders who are costs are going up inflation & borrowing arent going to be able to provide that home that sold for $400k last year for $400k this year? No way”
Homebuilders have different products. They will build smaller so that first time buyers (if that is their market) will be able to buy. It’s what they did in 2018.
The homebuilders have long, experienced management. They’ve been through it all over the last 20 years. They know what the reaction is of buyers. Remember, rates last rose to 5% from 3.60% in 2018. We’ve been here before, just a few years ago.
“I thought Millennials were kings – driving the market and all that…”
Depends on what market, right? 30% of the state of Florida is over age 60 and 10,000 Baby Boomer retiring EVERY DAY. If they have cash, they’re likely to move to the retirement states. They’ll have cash. Will distort those markets.
“The job market is STRONG. Thousands of job openings. To say otherwise just indicates you do not live in Chicago. All you need to do is walk down the street and see the “now hiring” signs on nearly every store and restaurant.”
$20/hr isnt going to get you into One Chicago
“I beg of you. PLEASE READ THE DATA.”
Yes, read the friggin “About the Data” section. Its always helpful to understand what’s being reported and what the limitations/issues are.
Unless you dont care about being accurate and shilling is more important
From the CFPB – As a result, the delinquency rate may appear lower than expected during a public emergency. If a public emergency has an effect on a large number of mortgages, this effect will be particularly pronounced.
They’re explicitly telling anyone with an above room temperature IQ that the data is fucked due to C-19 forbearance programs
“Homebuilders have different products. They will build smaller so that first time buyers (if that is their market) will be able to buy. It’s what they did in 2018.
The homebuilders have long, experienced management. They’ve been through it all over the last 20 years. They know what the reaction is of buyers. Remember, rates last rose to 5% from 3.60% in 2018. We’ve been here before, just a few years ago.”
All developers are playing a leverage game, especially home builders. I would expect that increasing rates will negatively affect their returns (along with inflation and manpower shortages), unless you want to argue that the rate increase wont have any effect on the sales cycle
I havent been paying close attention but have any developments changed from say SFH to TH?
The one positive thing will be the death of waterfall edges
“Depends on what market, right? 30% of the state of Florida is over age 60 and 10,000 Baby Boomer retiring EVERY DAY. If they have cash, they’re likely to move to the retirement states. They’ll have cash. Will distort those markets.”
JFC – you were crowing on and on about how the market is all about the Millennials – driving every decision. Now were talking about old Boomers like yourself being the market makers?
WTF does cash offers from boomers in Florida have to do with the Chicago market.
I guess the seal on E&J’s finest has been cracked
“The bears are just being foolish for trying to argue that the economy somehow sucks right now or that the Millennials aren’t buying in droves.”
Re-read the original questions you asked…. “How quickly will 5% mortgage rates cool the red-hot Chicago housing market?
Will February be the last month of decade high sales?”
Your question isn’t asking have millennials bought. It’s asking will they (among others) continue to buy at the same pace going forward now that the market dynamics have shifted.
record prices, highest rates in ~15 years, and student loan payments are supposed to turn back on May 1.
You are fighting the FED (until they pivot again…) if you think what’s happened over the past two years is immune to changes in overall market conditions. The FED is openly stating they want to slow the economy down in order to fight inflation via rate hikes and selling off bonds (including mortgage bonds) but are saying this won’t have an effect on the housing market…. millennials have unlimited money or something…. good lord.
“ The FED is openly stating they want to slow the economy down in order to fight inflation via rate hikes and selling off bonds (including mortgage bonds) but are saying this won’t have an effect on the housing market…. millennials have unlimited money or something…. good lord.”
The FED is no match for all powerful Millennials. They’ll just show JPow all their participation trophy’s and he’ll have to bend the knee
Still waiting to find out there I can get one of these Money Trees…
Phoenix, Tampa and Miami saw the biggest annual gains at 32.6%, 30.8% and 28.1%, respectively. Sixteen of the 20 cities reported higher price increases in the year ending January 2022 versus the year ending December 2021.
Washington, D.C., Minneapolis and Chicago saw the smallest annual gain, although they were all still up double digits from a year ago.
Sigh
“The housing market usually reflects the job market. Job market is tight. Many people getting raises. When you feel good about your job/income situation, you feel good to buy a home.”
I think Willie Wilson might know some people who aren’t feeling good about their income currently.
Also, if so many people feel good about their income why are so many Governors and mayors proposing and enacting temporary gas tax freezes?
“Also, if so many people feel good about their income why are so many Governors and mayors proposing and enacting temporary gas tax freezes”
because its an election year and they think that they need to be seen as “doing something about a problem”
California is basically attempting to buy votes by sending out $400 gas cards for every car owner to every household with up to 2 cars
“Washington, D.C., Minneapolis and Chicago saw the smallest annual gain, although they were all still up double digits from a year ago.”
Why are you “sighing” AnonIDGAF.
Oh no, double digit price increases in Chicago. That’s so HORRIBLE.
NOT.
From Crain’s:
It’s the ninth consecutive month with home prices up more than 10%.
In Case-Shiller data that stretches back to 1988, there has never been a run of double-digit price increases as long as this in Chicago. In late 2013 and early 2014, when the housing market was rising from the depths of a long crash, prices rose by double digits for seven consecutive months.
During the housing boom of the early 2000s, prices were up in the 9% range for 13 months, reaching above 10% just once, in April 2005.
https://www.chicagobusiness.com/residential-real-estate/biggest-housing-boom-21st-century
“Your question isn’t asking have millennials bought. It’s asking will they (among others) continue to buy at the same pace going forward now that the market dynamics have shifted.”
We don’t know. March will likely remain elevated because people have locked in lower rates. But April and May will be the real key. Higher rates have always slowed sales. They’ve never had any impact on pricing, by the way.
Housing market is usually dictated by job market strength. Chicago home prices are up, but not as much as other cities. Still affordable here even with 5% rates. Will buyers change neighborhoods and go smaller in order to buy?
Rapidly rising rents are a strong incentive for many to lock in their housing costs. FOMO and mortgage rates rising to 6% could push some to jump in too.
The demographics aren’t going to change just because we’re at 5%. Millennials still marrying, having families and want to buy homes. This has been true the last 2 years. 2020 to 2024 is the largest group of the Millennials at marrying age. It was ALWAYS going to be this hot in the housing market but the pandemic and work-from-home also came into the mix at the same time. Huge catalysts.
Cities have bounced back from the pandemic/protest gloom. Stronger than ever. Demand for housing stronger than ever.
It’s going to be interesting over the next few months. I would expect to see Chicago’s year-over-year housing numbers to start to decline compared to last year’s red hot sales. But probably still be the second hottest year since 2005 or 2006 even with the “slowdown.” The economy is just too strong right now to see a dramatic slowdown. Unemployment expected to drop again in the next BLS report.
“The FED is openly stating they want to slow the economy down in order to fight inflation via rate hikes and selling off bonds (including mortgage bonds) but are saying this won’t have an effect on the housing market…. millennials have unlimited money or something…. good lord.”
I never said it won’t have any impact on the housing market. Never, ever.
In fact, I’ve been very consistent on what I believe will happen with rate increases. I said it would take getting to 4.5% until we saw a slowdown in Chicago. Now we are suddenly at 5%. Unclear how this quick of a rate increase will impact the market. This is the quickest rate increase since 1979-1980. No one has any clue what it’s going to do.
5% mortgage rates will slow it once those who had their rate locks see those expire and they have to buy at the higher rates. New mortgage applications already on the decline. Many buyers may “wait” and see if rates come back not realizing that with the Fed raising, the odds of that, this year, are slim.
Or, they are just going to buy at 5% rates because they fear they will rise further. I know someone who was locked in in December at 3.8%. Couldn’t find anything to buy this spring and lost the rate lock. Has now found a property they want to buy but new mortgage rate is 4.95%. They have qualified at that level, and with this property. They are buying anyway.
Will be interesting to see what develops over the next few months.
Inventory remains incredibly low. Just 342 properties available right now in Lakeview (that aren’t under contract.)
And it is spring buying season.
Wicker Park has just 50 properties available, total. Includes those that are over $1 million. Just 34 properties under $1 million.
One of those is this 1-bedroom loft we chattered about. Been on the market the month of March. Just lowered the price by $25,000 to $552,000.
https://www.redfin.com/IL/Chicago/1259-N-Wood-St-60622/unit-208/home/12814906
In River North, just 260 properties on the market under $1 million.
That is not even one of the One Chicago towers. And those are 50% leased already. If many of the renters decide they’d rather buy, what will they buy? What is available? Relatively little.
We are approaching the point in this housing bull market where developers start turning their attention from apartment rentals to condo towers. First, we will see an apartment tower get built but then the developer will announce they are selling it instead (think of The Sterling on LaSalle in River North, which was supposed to be apartments but was sold as condos instead.)
The Fordham in River North was also built as a luxury apartment building.
Not quite at this point yet. But it’s coming soon, even with higher mortgage rates.
How hot is it?
3 days on the market for this in River North. Buyers have to move fast.
Listed at $584,900
Sold in 2016 for $369,900.
https://www.redfin.com/IL/Chicago/757-N-Orleans-St-60654/unit-1907/home/52637258
“We don’t know. March will likely remain elevated because people have locked in lower rates. But April and May will be the real key. Higher rates have always slowed sales. They’ve never had any impact on pricing, by the way”
Would be interested in hearing from Russ on how long lenders were willing to lock in a rising interest rate environment. rates were at 4% at the beginning of March, were almost at the end of 30 days.
“Rapidly rising rents are a strong incentive for many to lock in their housing costs. FOMO and mortgage rates rising to 6% could push some to jump in too.”
Yeah because every Millennial has an extra $500/mo
“The demographics aren’t going to change just because we’re at 5%. Millennials still marrying, having families and want to buy homes. This has been true the last 2 years. 2020 to 2024 is the largest group of the Millennials at marrying age. It was ALWAYS going to be this hot in the housing market but the pandemic and work-from-home also came into the mix at the same time. Huge catalysts.”
Plus they all have a magic money tree
Now rates dont matter
OK Sybil
“How hot is it?
3 days on the market for this in River North. Buyers have to move fast.
Listed at $584,900
Sold in 2016 for $369,900.”
You lying shill
That unit has been for sale since 10/1/20 well over a year – https://www.zillow.com/homedetails/757-N-Orleans-St-APT-1907-Chicago-IL-60654/121076627_zpid/
I’m not saying theres anything shady about the sale, but it looks pretty shady
You’d also be remiss to add they look to have completed some fairly substantial renovations. A pretty complete kitchen remodel and added at least 1 shower
“You’d also be remiss to add they look to have completed some fairly substantial renovations. A pretty complete kitchen remodel and added at least 1 shower”
I can find dozens of these. Every single day.
The market has changed since 2020. Maybe they did the renovations because they couldn’t get the sale. Good for them.
GIVE THE BUYERS WHAT THEY WANT.
“Cities have bounced back from the pandemic/protest gloom.”
Was chatting with a youngish couple (nearly 30?) in a hot tub this past weekend in the mountains. They said they lived in the loop (not sure where). When I asked how things were in the city, they said things were “starting to come back,” but it seemed like they were putting the emphasis more on things recovering from the unrest, rather than from Covid. I felt like an out of touch moron for having forgotten about the summer of 2020 (though when visiting in summer 2021, things seemed fine to me). Anyways, they said they were hoping to have their first kid in the next year or two, but were already looking for a place to buy in the suburbs, which is a little odd.
Also, you’re the one “lying” JohnnyU. That listing in 757 N Orleans was on the market in 2020 and 2021 when the downtown market sucked. They did the smart thing and withdrew it last summer.
Came back on this March with the next kitchen and under contract within 3 days. Lol.
Yes, nice trendy upgrades including the gold fixtures. YES. I hope they used Renovation Sells to do this. This is what ALL downtown buyers need to do.
Give the buyers what they will rent just down the street for $6,000 a month. That is what this seller has done.
Kudos.
Paying off in the price too.
“Yeah because every Millennial has an extra $500/mo”
Bank lending is still solid. Yeah, many of of them do actually. As long as they are still qualifying at the 5% rate, it’s not going to slow the market.
The people I know who lost their rate from last December and got 4.95% saw their monthly payment rise $241 a month on the same priced property. Still qualified for the loan and are still buying it.
And if you think “Millennials” in big cities don’t earn very nice incomes that are up big over the last 2 years, then you aren’t paying any attention to the apartment market. It’s not having ANY trouble leasing out at 4$ a square foot now in Chicago.
“I can find dozens of these. Every single day.”
Upgraded units you can lie about?
Its amazing that you cannot ever admit when you are grossly in error.
1907 + $14k or https://www.zillow.com/homedetails/757-N-Orleans-St-APT-1906-Chicago-IL-60654/121072539_zpid/
The either sound the biggest sucker in Chicago or this aint selling for anything close to $584k.
“The market has changed since 2020. Maybe they did the renovations because they couldn’t get the sale. Good for them.”
Then why use the past sales as an attempt to show appreciation, especially when we’re not looking at the same product?
But it might be that I just dont understand not having a magic money tree, I guess extensive renovations are free…
“Anyways, they said they were hoping to have their first kid in the next year or two, but were already looking for a place to buy in the suburbs, which is a little odd.”
The Loop is not where I’d want to have a child. Not even any parks and you have to walk far from some parts to get to Maggie Daley. Yuck.
Many people can rent in the city but are priced out of buying. Where can you buy a house on the north side for under $500k with decent schools? Maybe they want a house and not a townhouse.
Suburbs are the place to go, especially if you’re working from home and have a middle class budget. Great schools in those suburbs. Affordable homes.
Anonny, I also wonder if they were looking to buy now, ahead of having kids, because of the rising rates?
Might make sense.
“Then why use the past sales as an attempt to show appreciation, especially when we’re not looking at the same product?”
Because it IS appreciation.
This kitchen cost $35,000. Oh no! Investment in the property. They will get it, and more, when they sell it. They have only owned 6 years.
Lol.
“But it might be that I just dont understand not having a magic money tree, I guess extensive renovations are free…”
You can get home remodeling loans where you don’t have to start paying the payment for 6 months. You just pay it off when you sell the property.
Having a new kitchen and/or baths are key for condos. Again, you have to give them what they can rent just down the street (or even next door.) Prices have risen enough downtown now, and inventory is low enough, that it makes sense to renovate and then sell because you will make the money back.
New kitchens sell properties.
“Also, you’re the one “lying” JohnnyU. That listing in 757 N Orleans was on the market in 2020 and 2021 when the downtown market sucked. They did the smart thing and withdrew it last summer.”
So its been on the market since September 2020, but its only been on the market 3 day?
Its 5 0’clock somewhere
“This kitchen cost $35,000. Oh no! Investment in the property. They will get it, and more, when they sell it. They have only owned 6 years.”
Yet a Pergola costs a minimum of $125k…
“The people I know who lost their rate from last December and got 4.95% saw their monthly payment rise $241 a month on the same priced property. Still qualified for the loan and are still buying it.”
Last year I went to Chicago. Before interest rates went up, it was a happy place. It had flowering meadows and rainbow skies, and rivers made of chocolate, where the children danced and laughed and played with gumdrop smiles and magical money trees inside every crappy 2/2
“Where can you buy a house on the north side for under $500k with decent schools?”
I thought that ALL the CPS schools were decent.
I keep hearing about how city schools are absolutely not an issue.
Should I figure out who was saying that, and tell them that Sabrina thinks they are wrong??
“You can get home remodeling loans where you don’t have to start paying the payment for 6 months. You just pay it off when you sell the property.”
So you’re not deferring 6 months of interest and there’s zero penalty for early payment and no origination fees? – AKA Free Money
Where does one get these types of loans
““Where can you buy a house on the north side for under $500k with decent schools?”
I thought that ALL the CPS schools were decent.
I keep hearing about how city schools are absolutely not an issue.
Should I figure out who was saying that, and tell them that Sabrina thinks they are wrong??”
Its always great to see Sabrina argue against herself
https://media.giphy.com/media/LObjDkMUNFU2oRnXve/giphy.gif
“This kitchen cost $35,000.”
Who is your contractor?
“I’m not saying theres anything shady about the sale, but it looks pretty shady”
The pix of the prior listings on RF are NOT of the same unit–check out the door next to the kitchen, and the shape of the balcony.
Something is weird…[gthooi]…
looks like RF has the wrong prior sales. #1907 prior was Sep-17 for $455k; and Oct-11 for $405k (from the developer).
So, that’s pretty different.
“Yeah because every Millennial has an extra $500/mo”
Bank lending is still solid. Yeah, many of of them do actually. As long as they are still qualifying at the 5% rate, it’s not going to slow the market.”
So that $500/mo was just being stuffed in their mattress? Wasnt going to an investment/retirement account, fund a vacation, kids college education, payoff student loans, etc?
Damn I really need to get me one of those magic money trees
btw, the “Sold in 2016 for $369,900.” unit pictured as the prior on RF is an -08 unit, which is a 1+den.
Not the same one, but here’s a recent sale of a -08 unit:
https://www.redfin.com/IL/Chicago/757-N-Orleans-St-60654/unit-708/home/52637355
“This kitchen cost $35,000.”
Who is your contractor?”
Its just a number
So on the subject property – $4300/mo + $115k DP or rent an un updated 2/2 (1711) for $3600/Mo
“So on the subject property – $4300/mo + $115k DP or rent an un updated 2/2 (1711) for $3600/Mo”
Renting for another year or two to see how the market shakes out with higher rates sounds smarter.
“This kitchen cost $35,000.
Who is your contractor?”
it doesn’t appear to be a very expensive kitchen.
“The Loop is not where I’d want to have a child.”
Me neither, but (and this may be a bit of confirmation bias here, but it’s all I have to work with) pesonally I think being in city is optimal with little ones (i.e., around 5 and under). Not every city, and not in every part of a city, but a nice part of a nice city. Once kids are a little older, it’s certainly great to have the good-sized fenced backyards one can get in a suburb. And then once they’re in 3rd grade or so, it’s great to be able to let them walk or bike to school and around the neighborhood unsupervised. But during the stroller years, we loved having easy access (in Chicago and Denver) to parks, busy playgrounds and to museums and other indoor activities. Being in a burb during those years would have been so isolated and boring and less stimulating for the kids (not to mention the fact that a lot of people with little ones are still at a place in their careers where being 10 or 15 minutes from the office is very helpful, and couples at that point often still value being able to get a sitter so they can go out somewhere trendy). Our kids were everday locals first at Sunshine (North Pond) playground and then at the zoo playground, plus lots of time at Oz and Astor playgrounds, and put our memberships at the kids’, nature and science musuems to good use (and then pretty much tried to replicate that lifestyle in Denver for a couple years). When we settled down in what is in many ways a suburban area, whether on the local playground or other places with lots of kids, we could see that our kids were really in their element, and most of the kids we enountered who had spent their early years on their own playset in their suburban backyard just seemed a little less adventurous and social.
“it doesn’t appear to be a very expensive kitchen.”
That was before I had fully grasped that the ‘prior listing’ pix belonged to another unit–was thinking it involved blowing out a wall, too.
Looking at 707: https://www.redfin.com/IL/Chicago/757-N-Orleans-St-60654/unit-707/home/52637354
looks like it’s all original cabinets and appliances. New counter, backsplash, painted the cabinets and updated hardware, and the microhood was replaced at some point. Probably quite a bit less than $35k, really.
Why are you “sighing” AnonIDGAF.
Well, we’re still underperforming. I’m not bearish as you think. The markets clearly hot. But it’s Chicago hot.
Interesting to see that when my wife and I bought our first Lincoln Park 2-bedroom condo in 1997 for $205,000 and thought we’d paid too much, the median was just $117,000. So that’s why it seemed expensive!
“Where does one get these types of loans”
Home remodel companies are doing them.
“Me neither, but (and this may be a bit of confirmation bias here, but it’s all I have to work with) pesonally I think being in city is optimal with little ones (i.e., around 5 and under).”
I think it depends on the neighborhood, right?
Just like I wouldn’t want a dog in the loop either. There just aren’t enough parks and places to go with small kids in the loop. Other neighborhoods would be fine.
“ Home remodel companies are doing them.”
In this market?
They either are terrible or someone’s found a way to circumvent usury laws
Looking a little frothy
https://www.dallasfed.org/research/economics/2022/0329
“Looking a little frothy”
Beat me to the punch on that post. What I didn’t see in the research though was what markets they have “growing concern that U.S. house prices are again becoming unhinged from fundamentals”. I hope there is a follow-on report in the coming months indicating where they think the froth is the worst and where it hasn’t yet occurred.
It’s lazy to think because Phoenix is up 30%+ and Chicago is up 10% – 11% that Phoenix must be in a bubble and Chicago must not be especially when you consider the mass population changes over the last few years.
The other interesting point in the research report was “The delay in elevation of this exuberance statistic is partly the consequence of a surge in real disposable income during the pandemic that led to slower growth rates in the price-to-income ratio. The surge in disposable income is mostly associated with pandemic-related fiscal and monetary stimulus efforts and reduced household consumption arising from mobility restrictions and lockdowns.”
The Biden administration and left leaning media outlets have kept saying Government stimulus is not the cause of inflation. earlier in the year they cited some Fed paper saying it only contributed 0.2% i believe to inflation.
Yet the San Fran Fed released a report last week asking why US inflation is so much higher than other countries. OECD countries are running almost 3% lower than the US with the decoupling beginning at the beginning of 2021 and increasing through the year. Their conclusion: “Estimates suggest that fiscal support measures designed to counteract the severity of the pandemic’s economic effect may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021.”
Since the start of 2021 I’ve also wondered why the FED wasn’t reacting to housing market data and stopping MBS purchases a year ago. They just stopped being net buyers at the end of March 2022. Completely bizarre.
https://www.frbsf.org/economic-research/publications/economic-letter/2022/march/why-is-us-inflation-higher-than-in-other-countries/
Not The Onion on how crazy and reckless the FED has been with the mortgage market since the start of Covid. This is a quote from the Washington DC’s FED Governor’s speech on housing last week….
“As we all know, a singular feature of the U.S. expansion since the COVID-19 recession has been the red-hot housing market. Trust me, I know it is red hot because I am trying to buy a house here in Washington and the market is crazy.”
Gee i wonder why the FED Governor is having trouble buying….
https://www.federalreserve.gov/newsevents/speech/waller20220324a.htm
“Looking a little frothy”
There’s definitely some scarcity built in there (both as to FOMO and smaller denominator), and fear of rising rents/rates/prices (more FOMO), and actual increased costs of construction not fully reflected in inflation.
““Yeah because every Millennial has an extra $500/mo”
Bank lending is still solid. Yeah, many of of them do actually. As long as they are still qualifying at the 5% rate, it’s not going to slow the market.
The people I know who lost their rate from last December and got 4.95% saw their monthly payment rise $241 a month on the same priced property. Still qualified for the loan and are still buying it.
And if you think “Millennials” in big cities don’t earn very nice incomes that are up big over the last 2 years, then you aren’t paying any attention to the apartment market. It’s not having ANY trouble leasing out at 4$ a square foot now in Chicago.”
u-s-households-face-5-200-inflation-tax-this-year-chart
So these people you know are paying an extra $250/mo and inflation is adding another $430/mo and its no big deal? (Yeah I know housing is a part of the basket)
I gotta get me one of the Magic Money Trees
Bad link
https://www.bloomberg.com/news/articles/2022-03-29/u-s-households-face-5-200-inflation-tax-this-year-chart
“The Biden administration and left leaning media outlets have kept saying Government stimulus is not the cause of inflation. earlier in the year they cited some Fed paper saying it only contributed 0.2% i believe to inflation.”
well they are either lying or 6 trillion dollars didn’t go to people in the US
“There’s definitely some scarcity built in there (both as to FOMO and smaller denominator), and fear of rising rents/rates/prices (more FOMO), and actual increased costs of construction not fully reflected in inflation.”
Yeah totally sustainable. Probably just transitory…
https://fred.stlouisfed.org/series/WPUIP2311001
“well they are either lying or 6 trillion dollars didn’t go to people in the US”
CPS received so much money NPR ran an article this week that they don’t know what to do with it.
“You can’t buy $122 billion worth of stuff — there just isn’t that much stuff,” she said. “How many tests and Lysol wipes and laptops are we gonna buy?”
“Where [in the past] budgetarily, we may only be able to have a bouncy house or two, we laid out all the stops: bouncy houses galore, food, prizes, giveaways, because we wanted to create a buzz and some excitement,” she said.”
“We had scooters in the hallway, we had balloons, we had snacks,” she said. “It was really like, yes, it’s a snow day, but we’re gonna make the best of it. We used the funds for that … to make the school a happy place.”
https://www.wbez.org/stories/chicago-public-schools-is-flush-with-federal-covid-19-relief-cash-but-is-spending-little-of-it/5709a19a-911e-4f74-a188-44a1274ac0a7
“well they are either lying or 6 trillion dollars didn’t go to people in the US”
Also plenty was stolen at least $250 billion is the estimate so far and possibly in excess of $500 billion….
“prosecutors are calling the largest fraud in U.S. history — the theft of hundreds of billions of dollars in taxpayer money intended to help those harmed by the coronavirus pandemic — couldn’t resist purchasing luxury automobiles. Also mansions, private jet flights and swanky vacations.”
“They came into their riches by participating in what experts say is the theft of as much as $80 billion — or about 10 percent — of the $800 billion handed out in a Covid relief plan known as the Paycheck Protection Program, or PPP. That’s on top of the $90 billion to $400 billion believed to have been stolen from the $900 billion Covid unemployment relief program — at least half taken by international fraudsters — as NBC News reported last year. And another $80 billion potentially pilfered from a separate Covid disaster relief program.”
“Even if the highest estimates are inflated, the total fraud in all Covid relief funds amounts to a mind-boggling sum of taxpayer money that could rival the $579 billion in federal funds included in President Joe Biden’s massive 10-year infrastructure spending plan, according to prosecutors, government watchdogs and private experts who are trying to plug the leaks.”
https://www.nbcnews.com/politics/justice-department/biggest-fraud-generation-looting-covid-relief-program-known-ppp-n1279664
“theft of as much as $80 billion — or about 10 percent — of the $800 billion … PPP”
Totally an underestimate.
“the $90 billion to $400 billion believed to have been stolen from the $900 billion Covid unemployment relief program”
Like 10% of the low number in Illinois alone. Rampant fraud.
staggering amounts of money… jeesh
“well they are either lying or 6 trillion dollars didn’t go to people in the US”
And what did GDP do during the time of the stimulus sonies?
It collapsed. That’s where the trillions went to. To fill the hole.
I really despise people who want to have it both ways AFTER the fact. Was the Trump Administration supposed to let the economy collapse? People thrown out on the streets? 50% or more of the businesses to fail? The whole point of the COVID unemployment, the PPP and stimulus checks was to replace the lost wages/jobs. It did it. Beautifully. THAT, unto itself, is NOT inflationary when you have an economic collapse of the magnitude that we saw in the second quarter of 2020.
Could the government have foreseen 5 or 6 waves of the virus disrupting the global economy, even after a workable vaccine, and the world’s second largest economy making crazy policy choices like “zero covid” so to screw up the supply chain? I don’t think so.
The supply chain was supposed to be fixed by now. It’s not going to be until 2023 and maybe even later. And there are weird demand impacts due to the reopening that weren’t foreseen that are also pressuring the global economy like underinvestment in oil and natural gas that is really biting now.
Another factor that is biting is the restrictions put on immigration over the last several years which has created a labor shortage unlike anything we’ve seen in a few decades. No, ending the COVID unemployment didn’t “fix” it. Even more job openings 8 months after the unemployment ended.
But just like inflation in the 1970s, it all begins with energy and spreads to food. There were actually 2 supply shocks in the 1970s.
But let’s say that Powell now has to pull a Voelker in order to crush it down. Housing market is going to look a lot different if rates are at 6% or 7%. No one will move. Ever. Lol.
“So these people you know are paying an extra $250/mo and inflation is adding another $430/mo and its no big deal? (Yeah I know housing is a part of the basket)”
Get into the real world JohnnyU. Leave your suburban house. Go talk to real living humans off the internet.
What are the Millennials rents doing right now? I’m agreeing with you that inflation is adding another $430 a month and it’s to their RENT.
So if you have a choice of buying a house/condo and locking in said rent, of which the monthly payment may even be LOWER than the rent, or renting and seeing your costs continue to rise, which are you going to do????
Millennials are pretty practical, in my experience.
In an inflationary environment, buying a house WINS.
“I gotta get me one of the Magic Money Trees”
Everyone I know is getting a new job. They’re all getting substantial pay increases. 20% or more.
Great resignation is happening for a reason. Use your talents people. This type of job market won’t last forever.
“ Get into the real world JohnnyU. Leave your suburban house. Go talk to real living humans off the internet.”
Good friends closed on Friday in a HAWT Market(tm). Paid over ask, but IMO still got a good deal (house/location/etc).
You keep burying your nose in another box-o-wine
“What are the Millennials rents doing right now? I’m agreeing with you that inflation is adding another $430 a month and it’s to their RENT.”
Eating avocado toast, listening to their idiotic boomer parental units and making bad economic decisions. Buying the shit box 2/2 is going to be an albatross. They’ll be begging for the halcyon days of anemic 1% appreciation. In 5 years they’ll be cursing the fact they listened to boomers like you and made a catastrophic mistake
“So if you have a choice of buying a house/condo and locking in said rent, of which the monthly payment may even be LOWER than the rent, or renting and seeing your costs continue to rise, which are you going to do????“
Ignoring the $100k down payment and screwing themselves out of any flexibility? Why do boomers like yourself get off on screwing everybody over?
“Millennials are pretty practical, in my experience.“
LOL, you are a moron so your judgement is irrelevant. In general, They are sheep that rely on their boomers Helicopter parents approval. The bulk have known nothing but bull markets in their working careers
“In an inflationary environment, buying a house WINS.”
It can be, but not guaranteed. Bad boomer logic
“Ignoring the $100k down payment”
Why don’t we assume a $250k down payment?
That makes HMAM look even better.
“Why don’t we assume a $250k down payment?
That makes HMAM look even better.”
Might as well. its just a number, right?
Besides, Millennial seems to have a magic money tree so money isnt an issue.
And while we’re at it, the appropriate comp for a 20YO shitbox 2/2 is a brand new lux apt with tons of amenities like pools, good gyms, etc.
And Chicago remodelers are giving away free money in a market where theres a severe shortage of labor and material prices are outpacing 7% inflation
I guess if you have more than $500k to spend (So your kids dont get stuck in a bad school), Chicago is the bestest place in the whole wide world
“So your kids dont get stuck in a bad school”
There are no bad schools in the Chicago area; just bad parents and worse kids.
Looks like some NYT writers read this blog.
https://www.nytimes.com/2022/03/31/upshot/home-prices-mortgage-rates.html
Rates and home prices could well continue rising together for a number of reasons tied to high inflation today. Rents are soaring now, too. That means the alternative to buying isn’t particularly appealing, either. And in a time of high inflation, buying a home — and locking in today’s monthly payment for the next 30 years — is a good way to shield yourself from rising rents. In a context of 8 percent annual inflation, a 4.5 percent mortgage interest rate is actually a decent deal.
For would-be home buyers, “the alternative is both the rental option, as well as the option of where do you put your money?” said Arpit Gupta, a professor at N.Y.U.’s Stern School of Business. During past periods of high inflation, real estate has tended to be a better asset than other kinds of investments like stocks (and better than leaving money in a checking or savings account).
It’s cheaper to buy in Chicago, than to rent. Which are you going to choose even with 5% mortgage rates? Downtown rents expected to rise another 5% this year.
https://www.nytimes.com/2022/03/31/upshot/home-prices-mortgage-rates.html
“I don’t see a lot of concern from my buyers,” said Beth Abeita, a Redfin real estate agent in Austin, Texas, where home prices rose an astounding 30 percent in 2021. If anything, she said, she hears people worried about the stock market, not mortgage rates — both because they now believe housing will be a better investment, as Mr. Gupta suggested, and because lower stock prices mean some buyers will have less money for a down payment.
There’s a logic to going all-out in bidding for scarce housing right now before it gets worse, Ms. Abeita said.
“Interest rates are not going to rise any longer for you,” she said of those who have secured a house. “You’re not going to pay even higher prices in three months. What you think you’re overpaying for today will be a deal in a few months because everything is increasing so rapidly.”
Do not underestimate the psychological impact of sharply rising rates.
We’re near 5% right now. If it keeps rising, that will look cheap in just a few months. Baby Boomers remember buying in the late 1970s and getting a 10% rate just before they skyrocketed to 17%. Similar rush will be on to buy now before it’s “too late.”
Even 6% rates will be shocking in many markets. A lot of buyers will be priced out in the Los Angeles area, for instance. That won’t be true in Chicago, however. Chicago buyers can move down to a smaller, cheaper property.
Also, just a reminder, that home prices did NOT decline in the 1970s, despite rising rates. In 2022, unless there is a surge in inventory, prices aren’t going to decline this go-around either. Too much demand, too little supply.
Here in Chicago, we’ve got to get that downtown condo inventory down a bit more. Once it hits rock bottom at 2 months of inventory, then we’ll start seeing some of the apartment developers deciding to build condos instead or covert apartment buildings into condos once they’ve finished construction.
Two places to look for this first:
Moody Bible Institute development in River North/Gold Coast which will have 2100 apartments. JDL Development is building it and they are experienced builders that are wrapping up One Chicago. They will build two apartment buildings on Wells first with both starting construction this year. What happens in 18 to 24 months when they near completion? Will they still be apartments at that time or will they make more money selling them as condos?
Also watch the West Loop/Fulton Market. Crain’s is reporting that over 9,000 apartments have been “proposed” for this neighborhood over the next several years which would make it one of the hottest neighborhoods in the country for residential development. And while apartment demand in Fulton Market is high, as construction of new residential was previously banned, there are almost no condos in that part of the neighborhood. We’ve chattered about the handful of older loft buildings that got converted 20 years ago.
But a 40 or 50 story condo building? It doesn’t exist.
Eventually, one of the developers will realize they can sell those 2/2s for $700,000 and make more money. Or a condo developer will announce a condo building outright.
The views are great and people love that neighborhood. But they will want to OWN there, not just rent.
“It’s cheaper to buy in Chicago, than to rent. Which are you going to choose even with 5% mortgage rates? Downtown rents expected to rise another 5% this year.”
Only if you ignore the DP and compare new lux apartments to 20YO 2/2 shitboxes
From the link “In February, according to the Mortgage Bankers Association, the median monthly payment on a new mortgage application in America jumped more than 8 percent in just one month. That spike, shown above, points to an entirely new and unpredictable phase in what has been a jaw-dropping housing market.”
Its called pulling demand forward into a tight market.
““I don’t see a lot of concern from my buyers,” said Beth Abeita, a Redfin real estate agent in Austin, Texas, where home prices rose an astounding 30 percent in 2021. If anything, she said, she hears people worried about the stock market, not mortgage rates — both because they now believe housing will be a better investment, as Mr. Gupta suggested, and because lower stock prices mean some buyers will have less money for a down payment.”
Austin isnt Chicago Austin is HAWT(tm)
“There’s a logic to going all-out in bidding for scarce housing right now before it gets worse, Ms. Abeita said.”
A realator arguing buy now or be priced out forever? Why I never…
““Interest rates are not going to rise any longer for you,” she said of those who have secured a house. “You’re not going to pay even higher prices in three months. What you think you’re overpaying for today will be a deal in a few months because everything is increasing so rapidly.”
LOL. I guess one can take solace that their going to be locked into negative equity.
As I sit here in Raleigh looking for a house I’m finding this discussion quite interesting. This market is insane compared to Chicago. People buying homes sight unseen with no contingencies whatsoever above list. What’s driving it? People are moving here in droves. Businesses bringing jobs galore. Builders can’t keep up with demand and their costs are skyrocketing per that Fed chart shown above. Hard to see this market going down, though you would think people would have to set their sites on cheaper homes as rates rise. Where that impacts prices should be above the mode of the distribution where demand from higher price points is lower than demand from the existing price point.
“People buying homes sight unseen with no contingencies whatsoever above list.”
This has been the norm in the Bay Area, LA and San Diego for years. But Raleigh was never like this. Neither was Charlotte, Atlanta or Jacksonville. But there’s simply too many people moving to locations that aren’t ready to handle it.
Demand is too strong and the job market is good. People are getting raises. Rates have to move higher and it will slow. Inevitably, people will be priced out and have to trade down so it will slow the market at the higher price points.
We’re still a monthly payment nation.
But it’s going to be interesting to see what happens. People need a place to live, regardless. They’re either going to rent or buy but both are tight right now in many cities.
Are you going to rent and wait for it to slow Gary? I know many people who are doing that.
“ We’re still a monthly payment nation.”
Except for a Millennials?
“Are you going to rent and wait for it to slow Gary? I know many people who are doing that.”
I really am afraid that the underlying demand is not going to go away. People are still going to move here so prices are likely to continue to go up. I need to get in ASAP. The only way I’d rent is if I’m unable to buy something and need to be here full time to pounce on anything that comes up.
“People are still going to move here so prices are likely to continue to go up. I need to get in ASAP.”
FOMO is a real thing in many of the hot sunbelt states. Makes sense you’d want to just lock something in.
My condolences. I’ve heard that market is terrible for buyers. Maybe the 5% rates will cool it a bit for you.
“ As I sit here in Raleigh looking for a house I’m finding this discussion quite interesting. This market is insane compared to Chicago. People buying homes sight unseen with no contingencies whatsoever above list. What’s driving it? People are moving here in droves. Businesses bringing jobs galore.”
That’s because it’s not a blue state s$!& hole like Illinois. It’s amazing what happens when your state legislature is blood red with veto proof majorities and your governor isn’t some billionaire whacko lefty obese slob. If your company has an office located in a red state and your not stuck in Illinois, move there. Your home will actual appreciate in value and your quality of life and freedom from insane lockdowns will make you so much happier. Moving to Florida was the best decision of my life.
So true Mike HG.
We stopped at an open house this afternoon in Florida just out of curiosity. We had no idea what the ask was but after touring the place I was thinking $500K. It turned out they were asking $650K and after being on the market for two days, they already had two offers at or near ask and they said we’d have to submit today if interested. Previous purchase price was under $400k and was recent.
“Previous purchase price was under $400k and was recent.”
Yep. Fed is way behind. Needs to aggressively raise to cool off the speculation. Bubbles forming in many cities. 30% of all buyers in Atlanta and Charlotte are investors now. A record high. People are buying new construction homes with the intent of flipping them 9 months later. Need higher mortgage rates. The Fed needs to remove the punch bowl.
“That’s because it’s not a blue state s$!& hole like Illinois.”
This is laughable. Several of the hottest housing markets in the country are in blue states including the entire state of California and Seattle. Colorado recently went blue (or you can call it purple) and Denver very hot.
Basically, all of the major metro areas are red hot. Doesn’t matter the political persuasion. Record low inventory nationwide. Job market is the best in 25 years.
Oh, and Illinois hasn’t had any “lockdowns” in nearly 2 years now Mike HG.
The anger by people who move to Florida is off the charts. I guess it’s not really “paradise” there or they wouldn’t be hanging out on a Chicago housing blog months/years after they have moved away.
I couldn’t go to a restaurant after 10pm indoors or go to a gym without a mask on last Memorial Day. That’s why I left. I love Chicago, but got fed up with lockdowns, bridges up, and out of control violence. Why are people who bought a house not making anywhere near the money folks are in other cities? Oh, their property tax is eating away all of the value. Compare Case Shillers over the past 5, 10, 15 year period. Chicago is in last place.
“I couldn’t go to a restaurant after 10pm indoors or go to a gym without a mask on last Memorial Day.”
You had to wear a mask. Oh no! The horrors.
Florida covid deaths are double Illinois.
I just ordered some more KN-95s. I love them. They are SO effective. I really recommend them for this next BA2 variant that is coming this spring. I feel pretty bullet proof when wearing one in a crowded indoor location during an outbreak. They get back ordered though so I recommend ordering them now for the late spring/summer outbreak that is sure to come.
“That’s why I left. I love Chicago, but got fed up with lockdowns, bridges up, and out of control violence.”
Sorry, but that was nearly 2 years ago now. A different world really.
Housing increases more than worker salary – WSJ
https://www.youtube.com/watch?v=SkTRLRxWg68
“ I just ordered some more KN-95s. I love them. They are SO effective”
Tell me you’re a Karen without telling me you’re a Karen
“Housing increases more than worker salary – WSJ”
Not a problem if you have a magic money tree
“Florida covid deaths are double Illinois.”
And their populations and risk profiles are the same…
Shills gonna shill
“Yep. Fed is way behind. Needs to aggressively raise to cool off the speculation.”
Not sure they need to raise them as aggressively as people think. A couple 50 bps hikes at the next two meetings and starting to sell assets at the long-end of the curve will help alot. If they are overly aggressive they will put us into a recession. The FED can’t fix supply chain/supply side issues.
“Bubbles forming in many cities. 30% of all buyers in Atlanta and Charlotte are investors now. A record high.”
I wouldn’t call it a bubble in these cities. Investors are able to buy all “cash” because of what the FED had been doing. These investors are able to borrow at 1% – 2% against their committed capital and purchase real estate because of how low returns are for fixed income bonds. These cities are targeted due to demographic/population trends and underbuilding over the last 10 years.
Charlotte and Atlanta have been gaining population for years now.
“The Fed needs to remove the punch bowl.”
They already did at the end of last month. They aren’t buying any more bonds. They will announce that they will start selling these bonds within the next two meetings and start selling shortly after.
Europe and China are already starting to slow. The CCP announced tax cuts last month.
Demand destruction is already starting to occur in certain industries.
“Colorado recently went blue (or you can call it purple) and Denver very hot.”
CO certainly still retains some very red pockets that are representative of the current GOP nationwide (see, e.g., rising star and GOP standard-bearer Boebert), but the noise and spectacle of that contingent are greater than their actual numbers in the state. CO has a gay Jewish governer from Boulder.
“The Fed needs to remove the punch bowl.”
not going to happen, the NAR is the second largest spending lobby in the entire US!
https://www.opensecrets.org/federal-lobbying/top-spenders
“If your company has an office located in a red state and your not stuck in Illinois, move there. Your home will actual appreciate in value and your quality of life and freedom from insane lockdowns will make you so much happier. Moving to Florida was the best decision of my life.”
You’re lucky to be in such a privileged position that you can safely live in Florida. No worry about unintended pregnancy or your physical safety due to your orientation.
I’m stuck in Illinois (or other blue state) because I want adequate healthcare and I don’t want to fear for my LGBTQ friends’ lives. Two of my non-binary friends moved from Florida in the past 2 years and feel much safer here. I suppose that’s the intent of Deathsantis though, get rid of those who scare him and his supporters.
I care more about my life than making money in real estate.
“REAL EARNINGS – FEBRUARY 2022
All employees
Real average hourly earnings for all employees decreased 0.8 percent from January to February,
seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from
essentially no change in average hourly earnings combined with an increase of 0.8 percent in the
Consumer Price Index for All Urban Consumers (CPI-U).
Real average weekly earnings decreased 0.5 percent over the month due to the change in real average
hourly earnings combined with an increase of 0.3 percent in the average workweek.
Real average hourly earnings decreased 2.6 percent, seasonally adjusted, from February 2021 to
February 2022. The change in real average hourly earnings combined with an increase of 0.3 percent in
the average workweek resulted in a 2.3-percent decrease in real average weekly earnings over this
period.”
Waiting for the sabrina spin
“Waiting for the sabrina spin”
This is old. We just got the March data on Friday. Wages continue to rise. Also, any economist knows you can’t take a single month and extrapolate any trends. Over the last year, wages have risen significantly.
Once again, bears are trying to gaslight the incredibly hot economic data. Jobs and the economy are STRONG. It’s why the housing market is so strong. They work in tandem.
And now that the tech stocks have rebounded, the rich buyers will feel better too because they look at their stock portfolios before buying.
“not going to happen, the NAR is the second largest spending lobby in the entire US!”
You’re wrong. Many of the Fed governors are already talking about getting more aggressive. Too many have flashbacks to 2008. There is absolutely no way the Fed allows a housing bubble to develop over the next year. Not with Yellen in Treasury.
I think we’ll see 6% mortgage rates by the end of the year. Will that cool it? All depends on the job and stock market.
weal wages have decreased for 10 months straight
but most of those affected are low paying renters anyway
lol @ jenny “unintended pregnancy”
I have a feeling with the group you hang with these days that won’t be an issue
“Charlotte and Atlanta have been gaining population for years now.”
Charlotte and Atlanta are in a bubble. Investors buying up entire blocks and much of the new construction. Even WAY out in the burbs not close to the city center.
Pre-pandemic, investors made up only about 10% of purchases. Last 2 years, it has surged in both cities (and Phoenix) over 20% and closer to 30%.
There is extensive house flipping going on and prices are rising well above fundamentals.
Demand is not the same thing as a bubble. Bubbles involve speculation and the belief, by investors, that prices will only go up.
The Fed needs to be more aggressive. Rates need to rise more quickly. 5% isn’t going to slow these markets. But 6% or higher might.
“Not a problem if you have a magic money tree”
Professional salaries are rising FAST. If you are a Millennial and you’re in one of those professions desperate for workers (tech, finance, law) then, yeah, there IS a “magic money tree.” It’s called “stock options” and “raises” in tandem with inflation.
Switch jobs and get a $40k to $50k salary increase.
These are the times to do it. It’s not going to last forever, especially as the Fed is intent on slowing it. But demographics are in their favor. Baby Boomers are going to continue to retire. Lots of great jobs will be open, with higher salaries.
““Waiting for the sabrina spin”
This is old. We just got the March data on Friday. Wages continue to rise. Also, any economist knows you can’t take a single month and extrapolate any trends. Over the last year, wages have risen significantly.
Once again, bears are trying to gaslight the incredibly hot economic data. Jobs and the economy are STRONG. It’s why the housing market is so strong. They work in tandem.”
Bulls are day drinking and getting high on their own supply
Wages may be rising but they arent keeping up with inflation. Maybe if you laid off the firewater you’d see this and understand the ramifications.
But I guess in Shill-world as long as wages are up, inflation doesnt matter
“lol @ jenny “unintended pregnancy””
This is what men don’t understand and why the Republicans keep losing elections.
Smart women WILL choose their state based on how aggressively the government is going after women. Will I be moving to Missouri, Texas or Florida any time soon? No. And neither will my daughter. And it doesn’t matter my age because no way in hell do I want my daughter or granddaughters to endure what was happening pre-Roe v Wade.
It is terrifying.
“We just got the March data on Friday. Wages continue to rise.”
Yes, and what was the wage growth number:
Up 5.6%, y-o-y.
Are you forecasting that the y-o-y inflation number will come in well below 8.2% (having been 7.9% in Feb–which ain’t well below 8.2)? If inflation is flat, at 7.9, a drop from 2.6 under to 2.3 under is a positive sign, but isn’t actually “good”.
“Switch jobs and get a $40k to $50k salary increase.”
People are being offered 75%+ raises?
I thought we didn’t focus on the 1% type incomes, bc they are such a tiny part of the market.
“But I guess in Shill-world as long as wages are up, inflation doesnt matter”
Now you are changing the argument JohnnyU?
At least you are admitting that the job market is the best in the last 50 years and wages ARE rising.
I said NOTHING about inflation. Hell yes, there are massive inflationary pressures. But when the Fed crushes it down, you’re not going to suddenly get a salary cut. This is NOT what happened in the 1980s.
But it’s going to painful as the Fed raises. Going to have to raise more dramatically than anyone “gets.” Housing is going to slow dramatically, especially in the overpriced markets. We’re still a monthly payment nation. Soon enough, even DINKs not going to be able to afford that $1 million “starter” home in Los Angeles with 6% or higher mortgage rates.
“People are being offered 75%+ raises?”
Yep. All over the place.
I know someone making $75,000 being offered $116k. Also know someone making $175k who got $250k.
And $75,000 isn’t 1% type incomes. Neither is $175k.
Wake up. Talk to people. Talk to recruiters. Employers are desperate. Professional salaries are SOARING.
“At least you are admitting that the job market is the best in the last 50 years and wages ARE rising.
I said NOTHING about inflation. Hell yes, there are massive inflationary pressures. But when the Fed crushes it down, you’re not going to suddenly get a salary cut. This is NOT what happened in the 1980s.”
Listen you stupid drunk, we were talking about real wages and the ability for people to afford housing when prices were rising faster than wages.
You decide to act the fool and bring up employment as being some magic fix for real wages decreasing all why not being sober/intelligent enough to realize that real wages being negative isnt a good sign for housing appreciation
“But it’s going to painful as the Fed raises. Going to have to raise more dramatically than anyone “gets.” Housing is going to slow dramatically, especially in the overpriced markets. We’re still a monthly payment nation. Soon enough, even DINKs not going to be able to afford that $1 million “starter” home in Los Angeles with 6% or higher mortgage rates.”
Glad you were at least sober enough at one point to copy my argument
Fat drunk & stupid is no way to go thru life
““People are being offered 75%+ raises?”
Yep. All over the place.
I know someone making $75,000 being offered $116k. Also know someone making $175k who got $250k.”
Math isnt your strong suit is it?
If you’re going to make shit up, make sure the numbers match your claims
“If you’re going to make shit up, make sure the numbers match your claims”
Yep. I said they were getting $40k to $50k increases. And they are. Some, even more.
Go get your new job. Your employer will never give you that raise, but a new employer will because they just want to fill the job.
This won’t last forever. As the Fed slows the economy with massive rate hikes, the job market will slow too. Fed may be forced to put us into a recession to crush inflation, ala Voelker 2.0.
“You decide to act the fool and bring up employment as being some magic fix for real wages decreasing all why not being sober/intelligent enough to realize that real wages being negative isnt a good sign for housing appreciation”
The anger JohnnyU. I guess you are agreeing I am right on this topic. No way to argue against my actual facts and data so you have to attack me personally, for whatever reason.
Lol.
I never said that the coastal markets weren’t going to slow when rates rise. But a Chicago buyer doesn’t have to buy a $1 million property to get into a house. They can pay $300k or $400k. The 5% rates aren’t going to do much in the affordable markets BUT buyers may have to trade down as they did in the 1970s. Instead of the $400k house, they buy the $300k house.
It will be really interesting to see how it all plays out. Chicago sales will slow. But prices aren’t going anywhere without inventory. Even in LA.
Heck, on this blog, we’ve talked about what true rising mortgage rates would do to the housing market but no one ever saw a 1970s type environment as there has been NO inflation to ever warrant the Fed raising dramatically. Rates haven’t been at 6% since before the financial crisis.
Buckle up.
““People are being offered 75%+ raises?” – Question
“Yep. All over the place.” – Drunkards response
“The anger JohnnyU. I guess you are agreeing I am right on this topic. No way to argue against my actual facts and data so you have to attack me personally, for whatever reason.”
The Sun is yellow
I WIN! MY ANSWER IS 100% CORRECT AND THANKS FOR AGREEING WITH MY POSTION ON EVERYTHING!
IM NOW GOING TO REWARD MYSELF WITH ANOTHER BOX OF WINE
lol
JohnnyU,
“Glad you were at least sober enough at one point to copy my argument
Fat drunk & stupid is no way to go thru life”
I’m not finding your credibility enhanced by such statements
“a Chicago buyer … can pay $300k or $400k.”
Was this you?
“Where can you buy a house on the north side for under $500k with decent schools?”
Or, if we’re talking about the suburbs now, are we going to actually talk about the suburbs? Like, feature some properties?
Sabrina says
“Professional salaries are rising FAST. If you are a Millennial and you’re in one of those professions desperate for workers (tech, finance, law) then, yeah, there IS a “magic money tree.” It’s called “stock options” and “raises” in tandem with inflation.
Switch jobs and get a $40k to $50k salary increase.”
Stock options are a retention tool that generally vest over a min of three three years usually longer. So when you switch jobs and get that salary increase you lose that stock option money
Here’s an example from finance out of Sabrina’s tech finance law – Bank of America instead of giving out cash bonus – gave even their lower level employees stock options as their bonus.
( I fell Bank of America is a good example with 200k employees)
https://edition.cnn.com/2022/01/25/investing/bank-of-america-stock-bonus/index.html
so let’s say you are making 100k and the bank gives you that 27k bonus and you get the first 25% in 2023. Meaning you don’t get your 2022 bonus of 27% until 2026.
The bank can say say that their total compensation to their employees goes up, but those restricted shares are not going to help with your downpayment today on a house.
Respectfully, rising housing prices continue to outpace wage growth REGARDLESS of what Sabrina says
And cash has a negative 7% real rate of return due to inflation –
hey anon(tfo) maybe I should look at financing opening a laundromat
“Stock options are a retention tool that generally vest over a min of three three years usually longer. So when you switch jobs and get that salary increase you lose that stock option money”
Yep. I worked in Silicon Valley. I understand how it all works.
Really, you all have no clue what is going on out there in professional services. Which, I might add, has now exceeded job levels pre-pandemic. Over 700,000 more jobs added in that category and they still can’t find enough people to hire.
“Or, if we’re talking about the suburbs now, are we going to actually talk about the suburbs? Like, feature some properties?”
The City of Chicago is BIG. I have covered many different neighborhoods. I never added them up but maybe half of all the neighborhoods? Maybe 60%? I don’t know.
You can definitely buy a house for $300,000 or $400,000 in many neighborhoods. Some on the north side. Some on the west. Some on the south side.
Like I said, Chicago is a big city.
“You can definitely buy a house for $300,000 or $400,000 in many neighborhoods.”
But as you said:
“Where can you buy a house on the north side for under $500k with decent schools?”
What are the schools like in those places in the city you can buy a house for $300k?
“maybe I should look at financing opening a laundromat”
cash biz…can launder money, too.
Be sure to accept crypto for washes–offer a free dry for anyone who buys washes with BTC.
“What are the schools like in those places in the city you can buy a house for $300k?”
Plenty of good schools citywide anon(tfo). Again, you’re being a jerk right now. Plenty of people live in Beverly, Morgan Park in $300k and $400k houses. Their kids get educated. Same in McKinley Park. Same in Norwood Park and Jefferson Park and Galewood.
The north side isn’t the entire city. Move on.
Real wage data came out this week and they are down something over 2%.
Florida has a much lower Covid death rate when age adjusted. We also have less suicide and drug overdose death rate. People in Florida are happier. Illinois and Cool county keep losing people. I wonder why?
Thrilled that FL won’t allow sexual groomers to teach kids about sex and gender misidentification either. If I can’t talk about sex or sexual transformation at a company meeting without getting fired by HR, our children shouldn’t be hearing about it from sexual predators and groomers without notifying the parents about it ahead of time.
“Really, you all have no clue what is going on out there in professional services.”
What do you reckon most of the longtime regulars on here do for a living?
“ What do you reckon most of the longtime regulars on here do for a living?”
We’re all functional retards.
No one is a professional, owns their own business, etc
,
“What do you reckon most of the longtime regulars on here do for a living?”
Many, like JohnnyU, are retirees sitting at home in their basements in other states.
A lot of the others are attorneys and some are doctors (like Riz). The site posters reflect the GreenZone neighborhoods so mostly upper middle class professionals.
So mostly cops and teachers
“The site posters reflect the GreenZone neighborhoods so mostly upper middle class professionals.”
So, many, and perhaps mostly, in professional services?
I’m a generic work from home knowledge worker.
Nonny–
I thought for sure you were a high-end bud tender. All of your comments point in that direction.
No? Huh.
Best,
the resident 50-something retired-chemist/pharma-something cat-lady, turned realtor.
“Plenty of people live in Beverly, Morgan Park in $300k and $400k houses. Their kids get educated. Same in McKinley Park. Same in Norwood Park and Jefferson Park and Galewood.”
You were the one who asked–IN THIS THREAD–where on the north side there were decent schools and houses under $500k:
“Sabrina on March 29th, 2022 at 1:58 pm
[…]
Many people can rent in the city but are priced out of buying. Where can you buy a house on the north side for under $500k with decent schools? Maybe they want a house and not a townhouse.
Suburbs are the place to go, especially if you’re working from home and have a middle class budget. Great schools in those suburbs. Affordable homes.”
Lots of Sub $400k homes in Beverly
https://www.zillow.com/homes/Beverly,-Chicago,-IL_rb/
I could pitch my yurt on this one:
https://www.zillow.com/homedetails/8931-S-Western-Ave-Chicago-IL-60643/4122930_zpid/
“the resident 50-something retired-chemist/pharma-something cat-lady, turned realtor.”
I thought you were a sales manager at Abt
your knowledge of appliances is impressive 🙂
“I could pitch my yurt on this one:”
Lot – $200k
Yurt – $50k
Pergola – $125k
Motel 6 Super Duper wall AC w/ Sophisticated chips – $12k
I think you’re onto something
Are the beehives included? Talk about a steal
I’m sure Chicago honey is the best in the world, I’d peg the exchange rate to 1BIT/lb of Chicago honey
I’m hearing Columbus honey = 2BIT and is expected to double once the Intel plant opens
I still see nice homes selling on the far northside and some of the surrounding suburbs for under $500,000, but you have to pounce or deal with bullsh*t agents. My friend tried to get in to see this house, but they were only doing showings during the one open house and my friend couldn’t make it that day. She was ready to see it the moment it came on the market, but had a conflict during the open house: https://www.estately.com/listings/info/5748-n-kerbs-avenue–1
They could have gotten more for that house if they had done showings outside of the open house. My friend would have bid higher than the sale price (assuming nothing was wrong with the house).
“Thrilled that FL won’t allow sexual groomers to teach kids about sex”
Just let them serve in Congress, right? It’s ok if they pay them thru Venmo.
Not that Illinois didn’t have the Denny Hastert experience.
“They could have gotten more for that house if they had done showings outside of the open house. My friend would have bid higher than the sale price (assuming nothing was wrong with the house).”
I’ve been saying this for years. It’s one of my pet peeves. I’ve had buyers who would have paid more than what a property closed for but just couldn’t move fast enough. And it’s because the property is underpriced. Why do people hire these lazy realtors?
Mike HG,
“Florida has a much lower Covid death rate when age adjusted.”
Can you please share the source of that data? It sounds interesting.
“I’ve been saying this for years. It’s one of my pet peeves. I’ve had buyers who would have paid more than what a property closed for but just couldn’t move fast enough. And it’s because the property is underpriced. Why do people hire these lazy realtors?”
For the past 20+ years in the Bay Area, the realtor holds multiple open houses. Sometimes on Thursday night and then on Saturday and Sunday with offers due by 5 pm or 7 pm on Sunday night. That gave buyers multiple days to see the property, and even come back a second time.
In a really hot listing, with 50 people trying to get in to see the property, it doesn’t make any sense to do “showings.” But it does make sense to do multiple open houses.
I don’t know why Chicago realtors haven’t figured out how to conduct a bidding war listing by now.
“Why do people hire these lazy realtors?”
————————————
Nothing like blaming the victim, huh, Gary?
The real question to ask is why are realtors — paid by commission — lazy? The answer is simple: They are overpaid relative to the work they do.
In Scotland agents get one percent. I don’t hear complaints about photographers mailing it in, either.
Trying to expand the boundaries of hot neighborhoods (e.g., lying by saying that Bucktown extends South of Armitage) is another sign of lazy real estate agents.
I am not sure if I would have bought my house if I didn’t have a private showing with my agent there. There’s no privacy in an open house. I went to the open house and then came back with my agent. There are things I wouldn’t have noticed without my agent. He was able to point out things like asbestos tiles or a roof that needed to be replaced.
Chicago wasn’t that hot of a market when I was looking though except for very unique properties. There were a lot of houses with lazy sellers who refused showings because it was inconvenient to them. Those tended to sit on the market long after I was under contract.
I received the offer for my condo on a Sunday night. I wasn’t expecting a showing, but my agent said there was a couple who wanted to see it in an hour, so I got myself and the dogs out of the house and that same couple made an offer later that night. If I had refused that showing because I was exhausted and just wanted to sit and relax, I would have had to wait longer to sell my place.
“Can you please share the source of that data?”
Here is one source:
https://www.bioinformaticscro.com/blog/states-ranked-by-age-adjusted-covid-deaths/
Shows IL as the only state with zero age-adjustment. And #34 in raw death rate, and tied for #33 in age-adjusted rate with…
Florida. Which moves down nine spots with spots with the age-adjustment.
I’d guess that Mike HG is more familiar with whatever is cited in this paywalled piece from last fall:
https://www.wsj.com/articles/florida-covid-death-toll-age-adjusted-desantis-11636407924
“I went to the open house and then came back with my agent. There are things I wouldn’t have noticed without my agent.”
Your agent can go with you to the open house. Pretty common in the Bay Area too.
But I agree, Jenny, that some sellers make it much more difficult to actually see the property. In the Chicago market, that can be problematic. However, in other markets, people were buying without even touring the property. They were buying just based on the pictures on the Internet. Seems pretty scary, to me. This is why the Fed needs to raise those rates. The housing market needs to cool. It’s very unhealthy.
“Can you please share the source of that data?”
You can get it from here – https://data.cdc.gov/NCHS/Provisional-COVID-19-Deaths-by-Sex-and-Age/9bhg-hcku/data
If you count old as 65+, Il is at 0.061% Fl is at 0.083%
You can mathsturbate the stats as you see fit
“The real question to ask is why are realtors — paid by commission — lazy? The answer is simple: They are overpaid relative to the work they do.”
I think it’s more the low barrier to entry. Classroom hours have increased and the tests have gotten a little more difficult, but in general, it’s still possible for pretty much anyone who can scrape together the money to take the course and exam (and be able to read and test at around a teenage level) to get a license and there’s always an office willing to add them to the roster.
I moved to NYC in late 99, a high school grad with a decade of ski bum life behind me, and struggled to find a job. After a couple months, I landed a job at the “Sock Guy” on St. Mark’s Place, and was set to start my sidewalk sock sales career on a frigid Monday. Fate would intervene on the preceding Sunday, when I noticed an entire page in the newspaper with help wanted ads for real estate agents, a job that never occurred to me to look into, I suppose because I had thought of brokers as being grown up business people, having known of friends’ parents in the 80s who were brokers and seemed like big shots. But I called a few of the offices listed, and the gist was “if you get the license, there’s a desk and phone here waiting for you.” So I spent the next week not on St. Mark’s but in a classroom packed with mostly degenerates and also a handful of aspiring models/actors, dog walkers, bored wives, and recent college grads. The office I joined was more or less the same scene.
Eventually the slimeballs and complete morons get sorted out, and the minority of remaining agents with the right mix of competence and luck rise through the ranks of licensing levels and scrape together enough listings and money to start their own group or office, then they continue to hire streams of newly minted agents, and the cycle continues. I don’t think that any broker is worth the full freight that most are charging, but I do think that the good ones add value, and merit something higher than one percent. I left NY right before 9/11, and can recall arguing with a longtime friend when I returned, who had pivoted in his post-ski bum life to being a broker in the rapidly growing areas around Greeley/northern CO. He had built up a team of novice agents, and was killing it. My position was that the internet would soon render traditional brokers obsolete and he’d better enjoy those commissions while he still could. I thought that my position was vindicated a few years later, when Redfin hit the scene. Alas, the traditional broker model stands.
“The real question to ask is why are realtors — paid by commission — lazy? The answer is simple: They are overpaid relative to the work they do.”
Why work hard when your typical customer is dumber than a box of rocks and doesnt understand that the realators financial incentives arent in-line with theirs?
“realators financial incentives arent in-line with theirs”
WHAT??? But they’re “agents”!!
That means they have a fiduciary duty to you, doesn’t it?
“Nothing like blaming the victim, huh, Gary?”
No, I’m not because they are not victims. They reap what the sow.
“The real question to ask is why are realtors — paid by commission — lazy? The answer is simple: They are overpaid relative to the work they do.”
And why are they overpaid? Because the clients are gullible. They willingly overpay them when there are great alternatives out there. For instance, why can I get a 25 – 35% referral fee from an agent without blinking an eye? Because there is plenty of excess profit in the typical commission which a realtor will gladly give up.
Regarding the age adjusted Covid death rates…That’s a step in the right direction. It’s important to recognize that death rates are impacted by more than one variable. So now we just need the analysis that takes some more variables into account – e.g. weather adjustment (heat and humidity), obesity rates, etc…
Water Tower Place’s owner is giving its deed in lieu of foreclosure to its lender MetLife, bringing to mind how its neighbor the Hancock Building got its name many years ago by doing the same.
https://www.chicagotribune.com/business/ct-biz-water-tower-place-brookfield-transaction-20220406-ct7ku3cfbvauhe3d363olb6iza-story.html
“WHAT??? But they’re “agents”!!
That means they have a fiduciary duty to you, doesn’t it?”
In general, if they knew what that word meant, they’d be in CRE
“Water Tower Place’s owner is giving its deed in lieu of foreclosure to its lender MetLife, bringing to mind how its neighbor the Hancock Building got its name many years ago by doing the same.”
Didnt Brookfield walk away from another building on Jackson?
The 2% commission I paid my agent was 100% worth. My place was professionally photographed, listing copy was written by a marketer, and I had a 3d walkthrough. My agent personally did the showings and was able to talk in detail about the building since he’d sold a bunch of properties in the building. My neighbors recognized my agent while he was taking the buyers up to see the unit, so the buyers got to hear from happy residents.
My agent dealt with the negotiations and kept the deal from falling apart at one point.
There are a lot of awful agents, but if you find a good one it can really make a huge difference. I obsessively looked at listings before I put my property on the market and the agent I chose always seemed to get the best prices in the shortest time period.
My agent was probably the exception given some of the bad agents I encountered when I was trying to buy.
“The 2% commission I paid my agent was 100% worth.”
Your agent split the 2%?
“No, I’m not because they are not victims. They reap what they sow.”
—————————–
Gary, just how is a homeowner, or a buyer, supposed to know that a real estate agent is lazy or otherwise bad? Doctors have to re-test every few years. Lawyers stand in contrast to the other side so you can compare, AND they don’t insist on exclusive contracts of six months duration.
And just how does a seller or buyer “sow” with respect to real estate agents? Are you telling us that bad real estate agents exist because of bad karma in the general population?
“Your agent split the 2%?”
I think the buyer’s agent fee should be far lower, maybe 1% at the most. On the other hand, I would not be able to negotiate the way my agent negotiated. My agent was able to get me the closing date I needed to align with my sale. Apparently, the seller’s agent had told them that it would take months to sell the house, so they weren’t planning to get an offer and move in 30 days.
Money isn’t raining down from the trees as Sabrina claims. A $500,000 house purchased with 20% down has a payment of $1,969.75 with rates at 3%.
With rates at 6% that $1,969.75 payment can afford $351,500 of house. The person who bought at the top with low rates has not only completely lost their down payment but is now also $48,500 in the hole, or negative equity.
In Sabrina’s world everything will magically work itself out in an economy of near double digit inflation and surging interest rates. Surging so much as to likely effectively double mortgage rates within a span of two years.
Those who bought the past three years or less knowingly and willingly bought at the top being unable to wait out the vast intergenerational theft being orchestrated by our federal reserve the past fourteen years.
This analysis completely excludes the Federal Reserve engaging in quantitative tightening which is also likely to happen as they try to remove some of the 8 trillion dollars they printed from the economy. This will likely have a further positive affect on mortgage interest rates.
https://www.cnbc.com/2022/04/07/walmart-says-it-is-raising-pay-for-truck-drivers-starting-training-program.html
Truck drivers are UMC.
Sabrina most impacted
““The 2% commission I paid my agent was 100% worth.”
I think I’m not the only one confused. Were you buying or selling? If you were selling then you definitely paid more than 2% in this market. If you were buying your agent got paid by the seller but perhaps you recognize that the co-op commission is essentially paid by you. 2% is actually on the low end in this market. Most co-ops are 2.5%, though we often cut them after discussion with the sellers.
“Gary, just how is a homeowner, or a buyer, supposed to know that a real estate agent is lazy or otherwise bad? Doctors have to re-test every few years. Lawyers stand in contrast to the other side so you can compare, AND they don’t insist on exclusive contracts of six months duration.”
I thought we were talking about the fees. A client can easily shop for lower fees. Shopping for the quality of the agent is a bit tougher but can be done. I often shop for agents in other markets – once for myself, once for my daughter, and many times for clients. Granted, I know a bit more about this than the average consumer but there are common sense rules you can use. I could write a book but let me give you a few clues.
The consumer has it backwards. They are much, much more picky about who sells their place than who helps them buy. The market can compensate for shortfalls in a listing agent – to some extent – but not shortfalls in a buyer’s agent. The consumer is also fixated on the wrong metrics – e.g. sales volume. In other markets I avoid the agent who does a shitload of deals. Good luck getting their attention. Or the agent with very few deals. Also, “knows the neighborhood or knows the building” won’t help you in the least in selling your property. Ask those agents what they do differently because of that knowledge and you’ll get a blank stare.
Selling your place? It’s easy to check on their other listings and to see if they use professional photographers and compelling descriptions and if the information is complete.
Also, just talk to the agent about the market and how they work with their buyers or their sellers. It’s pretty easy to figure out if the person is smart or not or is prone to bluffing. I have a lot of respect for the agent that will say “I don’t know” instead of making up crap – unless it’s something that any agent should know.
And you’d be surprised how many people will hire a friend or relative because they “have to”. A ton. That’s how you get in trouble.
Watch out for the bullshit factor – e.g. a listing agent that says “I have buyers for your house.” Great, bring them and I’ll pay you a 2% coop and I’ll go unrepresented. Or, “My sale/ list ratio is higher than the average” or “I sell homes in half the time” O.K. you price lower.
I’ve seen people just approach this in the dumbest ways, inviting a problem. Like the woman who was going to pick an agent based on who had “success” in selling the 3 units that sold in her building in the last 3 years. Do I need to point out the multitude of problems with that approach?
O.K. I probably just stirred up a shit storm.
“I think I’m not the only one confused. Were you buying or selling? If you were selling then you definitely paid more than 2% in this market. If you were buying your agent got paid by the seller but perhaps you recognize that the co-op commission is essentially paid by you. 2% is actually on the low end in this market. Most co-ops are 2.5%, though we often cut them after discussion with the sellers.”
I sold and bought with the same agent. His commission for the sale of my condo was 2% (normally 2.5%, but it ended up being 2% for me).
There was nothing I could do about the commission for the buyer’s agent that I know I also paid. I didn’t see a way around that fee and thought of it in the same way as a tax I couldn’t avoid.
I was really happy with him as my agent. He was really low key and made the process less stressful. I didn’t have to sign anything. We didn’t have a formal agreement. He was surprised my place sold so quickly. He really pushed me to wait until spring because he thought it would sell for 10% more, but I just wanted out. He got me out of my condo and into a house in a month.
I’m sure his style isn’t right for all sellers. I had specific things I wanted in an agent with the most important being that he showed my condo and didn’t farm it out to another agent.
I am curious what’s wrong with picking an agent based on their track record of selling homes in the same building, especially when I could see other agents selling units for less than I got for mine.
“There was nothing I could do about the commission for the buyer’s agent that I know I also paid. I didn’t see a way around that fee and thought of it in the same way as a tax I couldn’t avoid.”
The coop commission has always been variable but realtors often position it as a fixed number. The DOJ recently got after them for that. You can easily cut it to 2% if the price point is…say $400K+. It’s often 2% in Chinatown. We’ve used 2% on occasion at low price points without pushback and I’ve gotten pushback at $1 MM+. But what is the buyer’s agent going to do? Refuse to let their client see the place?
When I sell my place I’ll probably go with 2.5% only because I don’t want bad blood between me and another agent. That’s not something regular sellers have to worry about.
“I am curious what’s wrong with picking an agent based on their track record of selling homes in the same building, especially when I could see other agents selling units for less than I got for mine.”
There are many, many great agents that have never done any business in your building so you have automatically excluded them. Having done business in your building doesn’t really confer an advantage. What would an agent do differently because they have previously done deals in your building? And there is a lot of randomness in how much a unit sells for. The selling price largely depends on which buyers are in the market at that particular time. And no two units are identical. Granted, an agent can underprice a unit and that is a legitimate issue.
In the example I referred to above the units in that building are like night and day to one another and it’s a co-op with huge monthly assessments and it has taken 1 year+ for units to sell. Total crap shoot in terms of what they sell for and how long it takes. Not a lot of buyers looking for that kind of place. I don’t even know what “success” looks like in that building.
So half my business involves interaction with listing agents. There are indeed a lot of clowns out there (maybe 80% of agents?) but if you can avoid them there isn’t a noticeable difference between the rest in terms of selling a place. People talk about negotiations but there is absolutely no way to prove that one agent can out-negotiate another one. I’ve never seen any evidence of it except that some of the clowns will leak information that helps the other side. Often the “negotiation” comes down to the absolute bottom for the seller and the absolute top for the buyer.
A mortgage lender news site is using the bubble word:
https://nationalmortgageprofessional.com/news/housing-bubble-pop-likely-if-mortgage-rates-hit-575
“I sold and bought with the same agent.”
Upsides/downsides of using the same agent to sell and buy a home at the same time? Is it standard in these instances to get a “discount” on the sale commission to 2% instead of 2.5%?
“Upsides/downsides of using the same agent to sell and buy a home at the same time?”
If you are trying to move directly from one to the other, then you cut out the coordination friction, by having one person understand when the closing date needs to be.
“A mortgage lender news site is using the bubble word:”
Correction a mortgage news site pushes clickbait by burring the quote to the last sentence of the last paragraph from one Banker who works for the American Division of a European Bank who says
“The rise in mortgage rates is unlikely to affect homeowners as much this time around. In 2005, 40% of mortgages were adjustable rate – today that figure is about 1%.”
This “news site” tried to create fear porn.
“I thought we were talking about the fees.”
———————————–
Well, Gary, YOU said that people reap what they “sow” and you couldn’t understand why people engaged “lazy” real estate agents. Those statements are much broader than fees, and in the case of being lazy, irrelevant to the question of fees (for a buyer, and only tangentially for a seller).
If someone paid on commission is lazy, then the commissions are too high. The average Joe on the street has no way of knowing that the r.e. agent is lazy.
“A mortgage lender news site is using the bubble word
Unpossible!
“She also notes, though, this may not be an explosive housing bubble burst like that experienced in 2008. The primary reasons are better underwriting conditions, more responsible buyer behavior, and a substantial homeowner equity base.”
Granted there isnt a proliferation of NINJA, 80/20’s etc but to say that better underwriting/borrower behavior is in direct contradiction to the data in the article. DTI for first time buyers is 41%
A big LOL on “substantial equity” when they’re calling for a bubble.
Last data point I saw as the average DP was around 12%. With first timers being >50% of the home loan market that doesnt bode well for first timers having much equity and that equity is going to be vaporware in a bubble. Its especially bad in a place like Chicago that has been an also ran in housing price gains
But bUY NoW oR Be pRiCEd OuT ForEvER
“Well, Gary, YOU said that people reap what they “sow” and you couldn’t understand why people engaged “lazy” real estate agents. Those statements are much broader than fees, and in the case of being lazy, irrelevant to the question of fees (for a buyer, and only tangentially for a seller).”
True.
“If someone paid on commission is lazy, then the commissions are too high.”
Also true but the commissions are often too high even for agents that are not lazy.
“The average Joe on the street has no way of knowing that the r.e. agent is lazy.”
Yes they do. I outlined it above. Cell phone photos = lazy agent. Bragging about quick sales and high sale/ list ratios = red flag. Answering the phone quickly and returning phone calls quickly =/= lazy agent.
Just posted my March update. Sales fell only slightly below last year, which is pretty darn good considering that last March blew 15 years of history out of the water.
And inventory keeps falling. So do market times.
https://www.chicagonow.com/getting-real/2022/04/chicago-real-estate-market-update-march-sales-almost-a-16-year-record/
I don’t think the prices will decline until we have high unemployment. I still remember in 2009 when the company I worked for laid off 20% of employees. Those laid off had a very difficult time finding new jobs because it seemed like most companies were laying people off at the same time.
If people can afford to stay in their homes, they aren’t going to be willing to sell during a downturn. We’d need a situation where people are forced to sell before we see price declines.
The biggest immediate unknown is whether people will continue to want single family homes in areas with a long commute once more companies start forcing people back to the office. I could see a situation where home type preferences shift in the coming months. I tried to hedge with my home purchase and found something with easy expressway access and walkable to public transit.
In 2019, houses in my new neighborhood were languishing on the market. I was even seeing things in east Wilmette that were in my budget. Now, I wouldn’t even be able to afford to buy a move-in ready house in the neighborhood where I moved. There just aren’t enough single family homes in “safe” neighborhoods to meet the shifting demand in Chicagoland.
“Last data point I saw as the average DP was around 12%. With first timers being >50% of the home loan market that doesnt bode well for first timers having much equity and that equity is going to be vaporware in a bubble. Its especially bad in a place like Chicago that has been an also ran in housing price gains”
Keep dreaming bears.
Demographics baby. You can’t fight it.
This is NOTHING like 2005-2008. We are not in a bubble. Some markets have bubblicious conditions developing but it seems that the 5% mortgage rates are already popping that danger. The higher mortgage rates will cool the worst of the speculation. And quickly, according to all the experts I’ve read. Heck, the Millennials are still living in their parents basements. How will they afford anything at 5%? (sarcasm)
Chicago is well situated for a rising rate environment. In fact, we are probably the best situated large metro area in the country. We still have homes available at all price points.
No one is being “priced out” of Chicago or Chicagoland.
“Truck drivers are UMC.”
Have been for many years. Oil truck drivers getting paid $150k and up before the pandemic.
“The person who bought at the top with low rates has not only completely lost their down payment but is now also $48,500 in the hole, or negative equity.”
You don’t “lose” anything if you bought “at the top.” That is stock market thinking. Surprisingly, going into the pandemic, the average number of years in a property actually rose past recent historic levels to 10 years (up from 7.) The housing bust persuaded a LOT of people that owning for 2 or 3 years was not the norm and wasn’t going to work. That you would lose money that way. Many more people buying with the intention of staying a longer period of time.
That is healthy and good. That is also why home owners currently have RECORD amount of home equity.
Chicago home buyers are not stupid about our market. I have featured many downtown properties that are still selling for less than their bubble prices. The downtown market took a beating since the start of the pandemic. Many who sold lost money. Those who are buying are not under any illusions. I can’t speak to what buyers are thinking in other markets that are showing bubble-like behavior like Charlotte and Atlanta, where more than 20% of properties are being bought by investors.
But I don’t feel like Chicago buyers are rushing to buy because of some fear. Our market is hot, but it’s not the sunbelt cities.
Bob the Bear has been completely wrong about the housing market for 15 years now. If you had listened to him at any time during the span of reading this blog, you would not have created a home for your family, nor would you have built equity. Both things are valuable for most people.
Bob the Bear is old enough to remember what happened in the 1970s. I’m assuming he lived through it being a homeowner. Perhaps he’ll tell us about the “collapse” in the housing market (which never happened.) What did happen was that the housing market ground to a halt.
1. Those with 10% mortgage rates weren’t willing to give them up, so no one moved in the late 1970s unless they HAD to.
2. Those who were trying to buy at 15%+ DID have to lower expectations. Yes, they didn’t buy a $500,000 house. They went down to a $350,000 house.
It’s going to price some out of the market altogether, specifically on the coasts. But until inventory rises dramatically, prices aren’t going to decline. Still too many buyers. And everyone else will renovate versus moving. Home Depot and Lowe’s should do quite well over the next year.
The only reason you would “lose” your down payment if buying right now would be if you HAD to sell for some reason. In 2009, people sold because they lost their jobs. Job market isn’t going to slow for some time in the United States. Probably won’t slow until late this year.
Also, the Fed was losing control of the housing market. The rates MUST rise to cool it off. I’ve never seen a housing market this hot before. Not even during the bubble. The bubble was marred by speculation and overbuilding. No overbuilding going on right now. Simply too much demand.
The Fed has to cool it.
“Sales fell only slightly below last year, which is pretty darn good considering that last March blew 15 years of history out of the water.”
Thanks for your update Gary.
1.4 months for detached and 1.7 months for attached? All time record low in inventory. I don’t know how anyone is finding anything to buy. Properties come on the market and sell withing the first month, basically.
For Chicago, that is incredibly quick.
I’m sure there is some fear of missing out on the low mortgage rate buyers among those March closings but also certainly among the pendings. By May, many of the lower mortgage locks will have expired. I’m expecting to see an abrupt slowdown.
Although, as the rates continue to rise, some buyers might be scared that they could see 6% if they wait even a few more months so maybe there will still be a surge the next few months as some buyers rush in.
It’s going to get very interesting in the housing market over the next few months.
“Bob the Bear is old enough to remember what happened in the 1970s. I’m assuming he lived through it being a homeowner.”
I’ve assumed Bob is about 40 max, probably more like 35?
“I’ve assumed Bob is about 40 max, probably more like 35?”
The way he talks about inflation and his comments about the properties over the years? You think he was 21 when he started commenting on this blog?
I assume his comments about inflation, debt, the Fed etc means he’s much older. 50s or 60s. He has owned a house for decades. Already has equity.
“Those who bought the past three years or less knowingly and willingly bought at the top being unable to wait out the vast intergenerational theft being orchestrated by our federal reserve the past fourteen years.”
Actually, in Chicago, 2016 was the top in the downtown neighborhoods. But neither here nor there.
Everything is doom and gloom with Bob the Bear. Just a reminder, the number of distressed properties dropped to a new 15 year low of 1.9% in March in Chicago according to Gary’s data. Where’s the forbearance “crisis” Bob? What happened to your theory that everyone would walk away from their properties during the pandemic?
What happened to Bob’s theory that Chicago’s real estate was doomed? How could he get it so wrong?
And he wasn’t the only one. Plenty of “experts” called for the death of the cities. It didn’t happen. But why should any of us believe the experts that rising mortgage rates are going to bring about housing doom either?
Gary is out there in Raleigh on the front lines. Gary, is Raleigh real estate doomed with 5% mortgages? Will buyers be walking away from their new home contracts in the Raleigh suburbs? Will you be able to walk into something more cheaply in 6 months? Or will you be “stuck” in Chicago, unable to sell, as the housing market implodes nationwide?
“I’ve assumed Bob is about 40 max, probably more like 35?”
Bobbo appeared to be either in, or fairly recently out, of Kellogg or Booth MBA when he started commenting here. Felt like a 2-3 year corporate job (not consulting) before B-school. 12+ years later, makes him right around 40. Maybe as young as 37, perhaps as old as 43, but unlikely to be either tail.
Is current Bob our same old Bobbo who enjoyed nickel beer nights on Weed Street? Unclear.
“Gary, is Raleigh real estate doomed with 5% mortgages? Will buyers be walking away from their new home contracts in the Raleigh suburbs?”
Not at the price point I’m shopping in. You’ve got strong fundamental demand from all the job growth there. Homes below 400K I’m not so sure though. I’ve heard that 25% of their market is investors but I assume that’s concentrated at the lower price points.
“Will you be able to walk into something more cheaply in 6 months?”
It’s possible that with higher mortgage rates people will have to look at lower price points and since my price point is above the mode that could impact demand and hence prices. But I’m not betting on it.
“Or will you be “stuck” in Chicago, unable to sell, as the housing market implodes nationwide?”
I’m hoping that Chicago is better insulated since prices didn’t go up so much to begin with. And supply is so low that it could increase without too much impact on prices.
“The way he talks about inflation and his comments about the properties over the years? You think he was 21 when he started commenting on this blog?
I assume his comments about inflation, debt, the Fed etc means he’s much older. 50s or 60s. He has owned a house for decades. Already has equity.”
People don’t need to have lived through things or during a particular time period in order to hold viewpoints about those things or time periods.
“Demographics baby. You can’t fight it.
This is NOTHING like 2005-2008. We are not in a bubble. Some markets have bubblicious conditions developing but it seems that the 5% mortgage rates are already popping that danger. The higher mortgage rates will cool the worst of the speculation. And quickly, according to all the experts I’ve read. Heck, the Millennials are still living in their parents basements. How will they afford anything at 5%? (sarcasm)”
Very Bullish – https://fred.stlouisfed.org/series/LES1252881600Q
You misspelled shill
“But I don’t feel like Chicago buyers are rushing to buy because of some fear. Our market is hot, but it’s not the sunbelt cities.”
Vs
“I’m sure there is some fear of missing out on the low mortgage rate buyers among those March closings but also certainly among the pendings”
LOL
“Where’s the forbearance “crisis””
Is this intentional dishonesty or just a lack of understanding of Freddie/Fannie’s policies?
Either way its embarrassing
“People don’t need to have lived through things or during a particular time period in order to hold viewpoints about those things or time periods.”
Agreed.
I’ve never met an early 20 something who is as bearish as Bob. Ever. Let’s say he was an unfortunate Millennial who graduated directly into the Great Recession in 2009. Was living in his parents basement and his first job sucked in 2009 or 2010. Really took a hit.
Do you think, after all of this time, that person has remained a super bear about Chicago, America and life in general?
Never. That’s the beauty of being in your 20s. You are optimistic, even if life gets you down. You see the possibilities. You are striving, achieving.
Only old people who have been through the ringer are pessimists like Bob. Who wants to “make America great again”? Not a 20 year old. Not even a 30 year old. No. The MAGAs are overwhelmingly 50s, 60s, 70s and 80 year olds.
No, Bob is older. His pessimism and bitterness guarantees that. The Millennial who was screwed in 2009 is feeling pretty good about his situation in 2022 as they have money in their 401k, maybe they bought cryptocurrencies a few years ago, they might have bought real estate 5 or 6 years ago and just refinanced. They are getting pay raises.
Nothing going to change in the Chicago real estate story for the next several years due to demographics except we will likely see the turn from apartments to condos as the next phase of this housing bull, much like we saw in the last cycle.
Millennials will want to own. It turns out they won’t rent forever. But in Chicago no one is building for them. Also, GenX will want to live in some of the hot neighborhoods like Fulton Market. And they won’t want to rent. Nor will they want to spend $2 million like the new West Loop condos. Developers will be building the $700,000 to $800,000 2/2s soon enough. We are already seeing some of it in Lakeshore East and along the River near Printers Row.
You all honestly think Bob the Bear is 40?
Wow. Imagine being GenZ and having someone that pessimistic and gloomy as your boss. Imagine someone like that leading a division at a Fortune 500 company. Someone who thinks all cities are doomed and who has thought for 15 years that another financial crisis was coming.
He would be actively working against the very company he works for.
Yikes.
“It’s possible that with higher mortgage rates people will have to look at lower price points and since my price point is above the mode that could impact demand and hence prices. But I’m not betting on it.”
Raleigh has been one of the hottest markets for the home builders.
I just took a look and see that Toll Brothers has 6 communities around Raleigh. The cheapest is a 55+ active adult community with all ranch houses. Smallest/cheapest is 1400 square foot 2/2 starting at $492,000.
But in all of Raleigh, Redfin says there are just 411 homes available at all price points (Raleigh proper and not the suburbs). Many are “coming soon.” It’s going to take a LOT of inventory to cause a slowdown in a market like that. It’s just too hot.
“The MAGAs are overwhelmingly 50s, 60s, 70s and 80 year olds.”
I would submit that your assessment of the political situation in this country is not accurate. Yes, I’ve seen the reporting on the perspectives of “young people” and how things are trending towards a more progressive electorate. I think that such reporting has tended to seek out confirmations of the reporters’ or media outlets’ own bias and/or focuses too much on large metro areas. First, it is still a minority of the population that attains a college degree, so the very assumption that the typical 30-something has a 401k, owns their home, and maybe bought crypto, is problematic – to put it gently. For the majority of 20-30 somethings, who did not graduate from college, what do you think their political and economic attitudes are? Do you think they grew up with college-educated parents and are mostly moderate Democrat voters who feel great about their living conditions and are super optimistic about the future? I think not. Second, as for the portion who did go to college, nationwide, do they strike you as a particularly progressive lot? Did you not watch any college football games this past fall? Stadiums full of kids chanting the chant that signals their support for the fascist upending of this republic, among other things? Lastly, speaking of football stadiums, after all the embarrassment, shame, grift, and literal carnage of Trump’s term, despite all of it, you could fill maybe four stadiums with the number of voters who actually decided the 2020 election in Biden’s favor. This Nov is not going to be pretty for Democrats and in 24, DeSantis or whoever is going to crush Harris.
“First, it is still a minority of the population that attains a college degree, so the very assumption that the typical 30-something has a 401k, owns their home, and maybe bought crypto, is problematic – to put it gently.”
Hello anonny. We’re talking about Chicago here. That Millennial who went to Booth in 2009 has 2 college degrees. Unless you assume Bob the Bear is from Peoria, never went to college, which is possible, I suppose. But college doesn’t mean you do, or don’t, have a 401k as Starbucks has offered 401ks for over a decade and many, many jobs that don’t require a college degrees also have 401k programs.
Chicago has among the highest percentage of Millennials with college degrees actually.
We know the demographics of the MAGA voters. I am NOT talking about Republican voters. MAGAs. They’re old. That’s why the whole “going back” to the “old” America is so appealing to them.
“Do you think they grew up with college-educated parents and are mostly moderate Democrat voters who feel great about their living conditions and are super optimistic about the future? I think not.”
For the last 15 years they have lived with an intense gloom where you were never optimistic about the future, America, the cities, Chicago?
Come on.
My GenZ kids are gloomy about climate change. NOT about the economy, their outlook for jobs/careers, America or the cities. But they grew up in a city so that probably impacts them.
Go to smaller town Midwest. Go to Springfield, Champaign, Peoria, Bloomington, Rockford. They are booming. Building all over the place. Can’t find enough workers to hire. Housing is hot with home prices rising. Their old downtowns being renovated. New apartments everywhere.
No reason to feel pessimistic even outside of the largest cities. The economy is THAT good.
“Lastly, speaking of football stadiums, after all the embarrassment, shame, grift, and literal carnage of Trump’s term, despite all of it, you could fill maybe four stadiums with the number of voters who actually decided the 2020 election in Biden’s favor. This Nov is not going to be pretty for Democrats and in 24, DeSantis or whoever is going to crush Harris.”
Huh?
Biden won by 7 million votes with record number of votes. That’s a LOT of football stadiums. This “myth” that Biden barely won is just that. A myth. It was an overwhelming victory in the popular vote. And no, I’m not talking about the electoral college.
won with fake mail in ballots you mean?
Sabrina:
With respect to voting, there is no difference between MAGA voters and Republican voters. They both voted for Trump in 20, and will vote the same in the midterms and in 24.
You were not talking about Chicago here. You brought up MAGA, which is a national movement with local and state political impact. Practically every school board race in this country has a MAGA aspect.
Your GenZ kids – living and voting in Chicago – have zero impact politically and have little in common with their peers throughout much of the country. IL will retain Dem U.S. Senators, the Chicago Rep will remain Dem, and IL will go for the Dem candidate in the 24 presidential race. If your kids heed your advice and move to awesome OH, that could be politically impactful, otherwise not so much.
The much ballyhooed 7 million vote figure can be accounted for in states Biden would have won no matter what. It is a completely meaningless statistic (and I would argue, harmful – it can lead to the sort of entitled, lazy attitude that the Clinton campaign had in 16). Look at at WI, MI and PA, as well as AZ and GA. Very narrow margins (i.e., barely enough to fill a handful of stadiums), and that’s what clinched it.
You do understand that the electoral college is all that matters for U.S. presidential elections, no? I don’t think it should exist, but that doesn’t change the fact that it does and that it’s all that matters.
Haven’t you read Jenny’s commentary re: how she feels that she needs to remain living in a blue-dominated area for purposes of little things equality, dignity, personal safety, and healthcare? Hers is a pretty dire (and arguably accurate) assessment of things. And she’s probably not too much older or younger than Bob.
“Your GenZ kids – living and voting in Chicago – have zero impact politically and have little in common with their peers throughout much of the country.”
Every single big city in America is blue. Every. Single. One (okay- maybe not Salt Lake City). Oklahoma City. Birmingham. Charlotte. Atlanta. Nashville. Memphis. Little Rock. Phoenix. San Antonio. El Paso. Miami.
Yeah- I think my kids are voting exactly how their peers are voting across nearly every single city except one.
And with redistricting, you’d better believe their vote counts. Lauren Underwood was re-elected by less than 5,000 votes in 2020. So, yes, I encourage them to vote in every election, including primaries.
The upcoming Illinois primaries are a big deal for the mid-terms, actually.
“won with fake mail in ballots you mean?”
I’ve said before, that if Joe Biden, who apparently has dementia according to all of you Magas, and his staff could pull off voter fraud in 6 or 7 states across the country, then you should be beyond yourself that he is president. Because if they can do THAT, they can do anything. Hooray for the country for having that kind of competency in the White House.
Because they committed the largest fraud in US history in 7 states with, likely, thousands of people involved, and no evidence of it has ever been uncovered. Even with recounts in numerous states. STILL, all those people involved remain silent.
Amazing.
THAT is leadership. Biden and his team MUST be re-elected in 2024 just based on that competency alone.
“You don’t “lose” anything if you bought “at the top.” That is stock market thinking.”
Yeah if your stock portfolio takes a dump it’s not a loss if you don’t sell also, right, Sabrina? Just like you are claiming with real estate?
“What happened to Bob’s theory that Chicago’s real estate was doomed? How could he get it so wrong?
And he wasn’t the only one. Plenty of “experts” called for the death of the cities. It didn’t happen. But why should any of us believe the experts that rising mortgage rates are going to bring about housing doom either?
Gary is out there in Raleigh on the front lines.”
Covidbucks funny money was dropped from helicopters to any and everyone. To this day people still don’t have to make payments on their federal student loans and won’t until at least August, possibly as long as Biden remains in office?
We’ve had fifteen years of artificially low interest rates and eight trillion printed to keep them lower than they otherwise would have been. As this is money created at one point in time and money destroyed at another (possibly?) it’s just a transfer between time periods: intergenerational theft.
Raleigh, NC is a completely different market than Chicago and didn’t start from a high-cost spot and is filling up with people fleeing the northeast coast so not even comparable.
And no, Sabrna, your anecdote about your supposed average millennial owning crypto is laughable at best.
I believe the legacy high-cost cities truly are fucked and this will finally be borne out this year as our government can no longer keep throwing money at keep the unsustainable status quo in place. We’ve got $30 trillion of debt and rates are going up.
Just because you don’t sell your house when your house equity has evaporated due to rising rates does not mean you did not incur a loss: you are not going to be able to borrow against it when underwater so the HELOC industry is toast and if you need to move for your work your company will have to pick up the tab for your under-water amount or you will.
I am increasingly pessimistic as the years went by as our central bank just kept doubling down on the intergenerational theft and lie that asset prices could never go down until they are now forced to due to surging inflation. It should have never gotten to this point. Asset prices should not have a Fed put and never should have.
People have to pay for being real estate nesting hens. It’s mostly women that have this inclination but as we know the guy will go along with them as its not a battle worth fighting for most. So it’s extend as much as possible, get however much house you qualify for at the max DTI ratio and that sort of behavior has been largely rewarded the past dozen years or so.
Well there has to be risk for engaging in such imprudence. People cannot be rewarded for loading up on debt/leverage and using other people’s money to enhance returns in perpetuity. There has to be pain for those who bought at the top and if that means a segment being financially ruined then so be it. Nobody put a gun to anyone’s head and made them buy assets at inflated values.
For you to say real estate is different because the losses aren’t real so long as you don’t sell is completely laughable as its somehow different from the stock market. It IS different from the stock market in one key metric: your ability to leverage up to 5X debt/equity with conventional loans and up to 28.5 with FHA.
The stock market you can only leverage up to 2 to 1 and if you ever exceed 4 to 1 your position is closed out immediately by your broker. These rules were put in after the 1929 crash to keep the clowns out. Real estate never had similar rules to keep the clowns out so it’s where clowns with no earnest money gravitate to to gain the maximum leverage possible using other people’s money to juice returns. And these clowns have been consistently rewarded by our central bank debasing our currency the past fourteen years. The party is over the jig is up.
“Haven’t you read Jenny’s commentary re: how she feels that she needs to remain living in a blue-dominated area for purposes of little things equality, dignity, personal safety, and healthcare? Hers is a pretty dire (and arguably accurate) assessment of things. And she’s probably not too much older or younger than Bob.”
People like Jenny are tuned into their own media microcosm that reinforces her worldview and she can believe it is “safe” here all she wants until one time it is not. The criminal element here doesn’t give a F if she’s a white apologist and MSDNC tells her she’s one of the “good whites” and it must be quite the shock to those who find out the hard way. The criminal element exists here because of false narratives that certain people are owed something and an over-emphasis on social work over lengthy prison for dealing with the criminal element.
Virginia can be considered considerably redder than Chicago as least as it pertains to crime because you don’t get two time serial rapists assaulting women they’ve never seen before after seeing them out in public and only getting a dozen years with six to serve. People that wind up victims of these crimes moves to states like Virginia where the criminal element is not tolerated and they vote conservative.
“ THAT is leadership. Biden and his team MUST be re-elected in 2024 just based on that competency alone.”
Biden 2024 – Crooked & Senile
When did we become a banna republic?
“THAT is leadership. Biden and his team MUST be re-elected in 2024 just based on that competency alone.”
Sabrina, I (like any rational voter who cared about the continuation of the American experiment as a constitutional republic and the furtherance of liberal democracy) of course voted for Biden. Given the hand he was dealt, I’d give his administration a solid B+, maybe an A-. I’d be fine if Harris were to take over during this term (same people would continue to actually run things). But there is NO WAY that Biden can physically and intellectually endure a re-election campaign, and Harris is not going to be the first woman to win a presidential election, certainly not in the current political environment. And there is no national Dem figure waiting in the wings to swoop in, build a half billion dollar funding network and supreme ground game in every swing state, and take on the likes of DeSantis or whoever Trump annoints. I would love to be wrong here, believe me.
“Given the hand he was dealt, I’d give his administration a solid B+, maybe an A-.”
https://media.giphy.com/media/WRQBXSCnEFJIuxktnw/giphy.gif
“I’d be fine if Harris were to take over during this term (same people would continue to actually run things).”
She makes Dan Quale look like a Rhodes Scholar. She’s the biggest reason I dont want to see Biden committed
“And there is no national Dem figure waiting in the wings to swoop in, build a half billion dollar funding network and supreme ground game in every swing state, and take on the likes of DeSantis or whoever Trump annoints. I would love to be wrong here, believe me.”
Tough to win an election when your base is tech, Karens, Old Neo-Cons & Government managerial class
Just another nail in the coffin of higher Chicago home prices: https://blockclubchicago.org/2022/03/25/city-should-boost-spending-on-homeless-services-by-raising-taxes-on-the-priciest-property-sales-bring-chicago-home-organizers-say/
Also, another reason for me to move to Raleigh. How many more ways can we think of to get 5% of the population to pay for things that the other 95% want at no cost to themselves?
“Also, another reason for me to move to Raleigh. How many more ways can we think of to get 5% of the population to pay for things that the other 95% want at no cost to themselves?”
Dont worry – Demographics will save us
you voted for it Gary
If what I am seeing in Oak Park is any indication, there is going to be bloodbath in Nov. A lot of the diehard left are pissed about how the schools were handled during c19.
Typical voter cares about their wallets, kids, and safety. Democrats are failing on all three of those fronts imho.
“you voted for it Gary”
Not really. It’s a proposal from some socialist organization. Don’t know where the Mayor or the city council will come out on the issue. But it’s been floated before.
“Also, another reason for me to move to Raleigh. How many more ways can we think of to get 5% of the population to pay for things that the other 95% want at no cost to themselves?”
Hoping from afar that Ray Lopez wins the mayor race. He’s been ruthless on the gangs in his ward since he won office.
“Also, another reason for me to move to Raleigh. How many more ways can we think of to get 5% of the population to pay for things that the other 95% want at no cost to themselves?”
Crain’s actually reporting that the rich WANT the tax Gary. You are in the minority, apparently.
“But there is NO WAY that Biden can physically and intellectually endure a re-election campaign, and Harris is not going to be the first woman to win a presidential election, certainly not in the current political environment.”
There are plenty of Democrats waiting to run. Personally, I don’t believe Harris will win the nomination even if Biden decides not to run. Things that plagued her in her last run will still plague her including staffing chaos. She simply doesn’t have a “team” and you have to have one to win the nomination.
Seems to me the Bidens don’t actually like being in the White House. They go to Delaware nearly every weekend (at least before the Ukraine War started). They just want to be retired and enjoy their beach house.
However, if it IS Trump at the top of the ticket, I do think Biden will stay in there as long as his health, and Jill’s, is okay. But if it’s not Trump, I think they will move to the sidelines.
It’s time for both parties to move to the next generation of politicians, but will they?
“Biden 2024 – Crooked & Senile”
If he’s “senile” I have a bridge in Brooklyn to sell you.
“People like Jenny are tuned into their own media microcosm that reinforces her worldview and she can believe it is “safe” here all she wants until one time it is not.”
She’s NOT talking about the crime, Bob. Wake-up. Women are in danger from Republican lawmakers in many states.
And you knew that but are pivoting towards “crime.”
“So it’s extend as much as possible, get however much house you qualify for at the max DTI ratio and that sort of behavior has been largely rewarded the past dozen years or so.”
Wait- the hot housing market is “women’s fault” now? Women are the reason that everyone is overextended and buying the maximum they can?
Lol.
Housing IS different. You live there. You raise your family there. There’s a reason HGTV stars get paid millions of dollars to create and sell the fantasy, right? There’s a reason millions of people watch their programming.
There is no reason to sell. This is what happened in the 1970s. If you ARE too young to “remember” what happened then, I’ll fill you in. You just LIVED. Mortgage rates went to 18% and you didn’t move if you couldn’t afford the new payment. People lived in their homes 20 or 30 years. They built equity.
Currently, Americans have record equity in their homes. They will just stay and renovate, if needed. And since many can now “work from home” no need to relocate for a job and have to sell.
We really are in a new reality post-pandemic. It’s going to be interesting in the housing markets, especially on the coasts. Chicago is still affordable so we aren’t going to be impacted by the rising rates the same way as other cities. But our sales will slow.
“Covidbucks funny money was dropped from helicopters to any and everyone. To this day people still don’t have to make payments on their federal student loans and won’t until at least August, possibly as long as Biden remains in office?”
So now the cities are still doomed because of student loans? And if only Biden would require payments, everyone wouldn’t be moving back to Chicago, LA, SF and NYC?
And the housing market would never have exploded even though it was already strong before the pandemic?
Your arguments don’t make any sense. The whole “the central bank doom” has been wrong for 15 years now. We’ve literally been arguing it for that entire time on this blog.
Go back and look at the 1970s. Home owners weren’t doomed nor did they “sell for a loss.”
But Bob will be wrong again a year from now and 2 years from now and 3 years from now as he’s basically been wrong about every thing on this blog for the last 15 years. Eventually, he may get it right. But when?
Like I said, if you listened to Bob’s advice on this blog, you’d never have bought a house, built equity or bet on America and your future.
“Typical voter cares about their wallets, kids, and safety. Democrats are failing on all three of those fronts imho.”
Good. Elections are about throwing the bums out. If they aren’t meeting expectations, try someone new.
I would be really surprised if many mayors successfully get re-elected after COVID. Just too difficult. Too many challenges. Many have simply said they are not running for re-election. I also knew several on school boards who decided not to run for re-election for the same reason. Just too toxic now. Lightfoot is one of the few big city mayors running again, isn’t she?
“Crain’s actually reporting that the rich WANT the tax Gary. You are in the minority, apparently.”
If you are talking about today’s Dennis Rodkin article in Crain’s it does not say that. If you are talking about another article please provide a link.
“” If you are talking about today’s Dennis Rodkin article in Crain’s it does not say that. If you are talking about another article please provide a lin”
Rodkin is the Artie Fufkin of real estate reporting
“ Currently, Americans have record equity in their homes”
Until the asset bubble pops/corrects
Boomers like yourself will generally be fine. Millennials & GenZ will get f’ed
“ She’s NOT talking about the crime, Bob. Wake-up. Women are in danger from Republican lawmakers in many states.”
How can you define a Woman?
Besides the GOP is taking care of the groomers
“ If he’s “senile” I have a bridge in Brooklyn to sell you.”
I”m not senile, besides I’d only want a Chicago bridge. They’re the bestest
“Millennials & GenZ will get f’ed”
Millennials are 40. Why will they be in trouble? They have owned for a decade. Others have bought in the last few years. They have mortgages at 2.5%. 20% of all mortgages are under 2.6% now. I think those people are sitting pretty with their low mortgages.
And GenZ doesn’t own anything. They make up less than 5% of all mortgages. Most are renting.
Ba ha ha.
The rich really ARE different. Who cares about $25,000?
https://www.chicagobusiness.com/residential-real-estate/new-mansion-tax-proposal-chicago-meets-less-resistance-time-around
“I think they’ll grumble,” Struthers said, but because they feel flush with stock wealth and higher salaries in a reviving economy, “they won’t flinch.”
That’s a 180-degree turn from 2018, when Struthers told Crain’s that the proposal “would be a significant deterrent for people who are stretching to afford a house.”
The difference between then and now, Struthers said, is “there’s a lot more money out there now” and the housing market is far healthier than it was in 2018.
“ Millennials are 40. Why will they be in trouble? They have owned for a decade. Others have bought in the last few years. They have mortgages at 2.5%. 20% of all mortgages are under 2.6% now. I think those people are sitting pretty with their low mortgages.
And GenZ doesn’t own anything. They make up less than 5% of all mortgages. Most are renting.”
Oldest is 40
Homeownership rate U35 is about 38% – they in general haven’t owned for a decade
So go they have mortgages at 2.5%, when (allegedly) 20% of all mortgages are under 2.6%? Is this in imagination land?
“ “I think they’ll grumble,” Struthers said, but because they feel flush with stock wealth and higher salaries in a reviving economy, “they won’t flinch.”
That’s a 180-degree turn from 2018, when Struthers told Crain’s that the proposal “would be a significant deterrent for people who are stretching to afford a house.”
The difference between then and now, Struthers said, is “there’s a lot more money out there now” and the housing market is far healthier than it was in 2018.”
Leslie’s getting high off her own supply
By what metric is the market healthier than 2018?
If you can’t trust a loan officer (Russ excluded), who can you trust?
“The rich really ARE different. Who cares about $25,000?”
That’s the article that I was talking about. Nowhere does it say that the rich WANT the tax, which is what you claimed.
The people claiming the rich don’t care all have a vested interest in the market moving forward. The fact of the matter is that this will depress prices and no homeowner wants that.
And someone with a $1 MM home is not what I would consider rich necessarily, though others might.
And I object to the premise of the proposal – that anything that a small percentage of the population pays for is OK. How long do you think the list is of free shit that people want which will be paid for by someone else? That’s not a rhetorical question.
“There are plenty of Democrats waiting to run.”
Can you please name some? One? One single Dem who would stand a real chance? Tulsi Gabbard? lol. Bloomberg? He’s older than Biden, and the primary fight between him and Harris would hurt both in ways that would carrry over into the general. Bernie? Please.
“It’s time for both parties to move to the next generation of politicians, but will they?”
There are a bunch of Republicans with a national brand in their 40s-60s who would run (and would likely beat the mystery Dem I’m waiting to hear about) if neither Trump nor DeSantis do. Pretty much everybody who Trump beat in the Rep primary ahead of the 16 election would beat the mystery Dem.
Kasich’s or Kinzinger’s positions on abortion preclude their conversion to Dem.
Personally the only Dem I see as a viable option is Jason Crow. But whether it’s him or someone else, it’s (understandably) going to take the fulltime efforts of both Barack and Michelle to convince black voters that it was okay for Crow to be the nominee and not Harris.
I don’t support the tax as I don’t see how it would actually combat homelessness. Taxes and other charges to buy and sell are already ridiculous. Adding more to it isn’t going to help anyone.
I don’t think the tax will deter anyone in that price range though.
“So now the cities are still doomed because of student loans? And if only Biden would require payments, everyone wouldn’t be moving back to Chicago, LA, SF and NYC?”
Not just student loans. The commercial real estate bubble is just now starting to pop. Legacy cities will be most impacted.
Few corporations in the increasingly work from anywhere future are going to voluntarily just pay the higher taxes and costs associated with legacy cities whose cost structures are inflated due to being beholden to public sector unions. It’s increasingly just not going to happen.
It appears that the old blue legacy cities have finally run out of ideas other than cutting their costs and reforming their cost structures. But I’ve never seen this happen before outside of Detroit and it took beyond ruination of that city for reform so am not sure that is even possible absent total ruination for capitulation.
https://www.wsj.com/articles/record-high-office-lease-expirations-pose-new-threat-to-landlords-and-banks-11649764801
“The rich really ARE different. Who cares about $25,000?”
Did anyone even read the article? The goal of all this currently is to “generate support for putting the transfer tax question out to city voters as a ballot referendum…. which would be advisory only, has nine Alderman as co-sponsors”
Wow shaking in my Lincoln Park SFH or Gold Coast Mansion that a bunch of housing groups are trying to flex some political muscle by launching a campaign going into an election year to ask city voters a non-binding question that currently has support of only 18% of the city council…..
Also, didn’t the city/county/state just receive tens of billions from the Federal Government in which billions were just spent on services like what they are advocating for. So why is this non-binding resolution needed?
The only takeaway which I’ve been saying now for about a year is that housing policy will be a state/local election year issue. This specific policy is unlikely to actually make it into a serious candidates campaign.
Further, I would guess this would be unconstitutional as it would be viewed as a graduated tax. For this to be legal the tax would likely need to be converted into a percentage and applied to all property sales.
“How long do you think the list is of free shit that people want which will be paid for by someone else? That’s not a rhetorical question.”
The major housing legislation to watch for after the election is where “lift the ban” legislation goes which ended up making it out of committee last year but I would assume will be tabled until after the election.
If you haven’t been paying attention the amount of cities/states either “lifting the ban” or implementing all out rent control over the past two years you haven’t been paying attention.
– Boston’s new mayor campaigned on bringing rent control to Boston
– St. Paul – passed rent control with their 2021 local election
– State of Oregon passed rent control in 2019
– Santa Anna, California – passed more stringent rent control in the past year capping rent increases to 3%
– Boulder, Baltimore, Denver, Seattle, Louisville, Minneapolis, Toledo, and the States of Washington, Connecticut, and Maryland have passed legislation guaranteeing the rights of tenants to legal representation in the event of an eviction.
Rental inflation numbers are going to keep increasing this year and into early next year. This ain’t going away.
“Legacy cities will be most impacted.”
Every city is a “legacy” city. They are all 100 years old or older. Look at San Antonio. Nothing more “legacy” than that. Or New Orleans. Even West Coast is over 100 years old now.
You mention Detroit, so are you really talking about rust belt cities?
There’s a lot of office space in Atlanta, Phoenix and Charlotte. Also in Dallas/Ft Worth and Houston. Why are you supposing that it is just Boston, Philly or Chicago with core business districts?
And yet, Fulton Market is booming. Companies still taking space there. McDonald’s back to what it was doing pre-pandemic which is hybrid. Will they need as much space? No. What will you do with the extra space?
There are already loop towers that are apartments and condos when those businesses moved out in previous decades. Many people live in old industrial warehouses that were refashioned. I’m sure in the 1970s there was a lot of handwringing about what to do with all the empty printing buildings in Printers Row. We now take it for granted that those are people’s homes.
Cities will adapt. They always have.
But the bears continue to bet against America. Heck, look at Detroit. It’s a big turnaround story and the pandemic hasn’t slowed it. Same with St Louis and Cleveland. In fact, the rust belt cities have some of the biggest opportunities. I would assume these are all “legacy” cities, under your definition Bob.
Bigger issue facing many big cities is what to do with public transportation. Federal money has kept them afloat. But it’s unlikely that the number of riders is going to rebound back to pre-pandemic levels any time soon, if ever. How will they operate these large systems without riders? Can they?
“Can you please name some? One? One single Dem who would stand a real chance? Tulsi Gabbard? lol. Bloomberg? He’s older than Biden, and the primary fight between him and Harris would hurt both in ways that would carrry over into the general. Bernie? Please.”
There are 23 Democratic governors. 50 Democratic senators. There are several that might be in the mix who can raise millions including Beto and Stacie Abrams.
What’s a “real chance”? What does that even mean? We are FAR from that election. The world can change in an instant. There could be a variant that the vaccines don’t work against and a Republican Congress that refuses to provide funding to fight. The country could be in a recession. Stock market could be in a bear market. Bitcoin could be back at $5,000.
And there could be a war against women by the Republicans, outlawing abortion in a dozen states if Roe v Wade is tossed making the female electorate a big factor.
Who knows?
Who is Jason Crow? Never heard of him.
The nominee will not be Harris in 2024.
“Kasich’s or Kinzinger’s positions on abortion preclude their conversion to Dem.”
Kinzinger is not a Democrat. I would couch him as a moderate Republican. Still conservative. He will take some time off to enjoy his young family before running for governor in a few years.
“Bigger issue facing many big cities is what to do with public transportation. Federal money has kept them afloat. But it’s unlikely that the number of riders is going to rebound back to pre-pandemic levels any time soon, if ever. How will they operate these large systems without riders? Can they?”
Indeed. I started going to the office a couple days a week a few weeks ago, which entails a bus ride. Pre-pandemic, the bus terminal below Denver’s Union Station was a bustling but orderly mix of office commuters, students, tourists on a budget (the Bustang goes out to a bunch of mountain destinations), etc. At the risk of sounding like some sort of suburban right wing moron, I’ll say that things there are currently not quite San Francisco-level post-apocalyptic, but it’s pretty bad, and the city doesn’t seem too concerned about improving the situation.
“By what metric is the market healthier than 2018?”
1. Mortgage rates were at 5% in 2018.
2. S&P 500 has doubled in the interim.
3. Inventory is down 50% and at record lows. Market times under 2 months.
What more do you need to know? It’s a completely different market in 2022.
“Oldest is 40”
Oldest is 41 this year JohnnyU. It keeps going up every year. Imagine that?
Lol.
“So go they have mortgages at 2.5%, when (allegedly) 20% of all mortgages are under 2.6%? Is this in imagination land?”
All of those with mortgages aren’t Millennials JohnnyU. Lots of GenXers refinanced into the cheaper mortgages. But surprisingly, 40% of mortgages are still above 4%. How could that be?
For many, it didn’t make sense to refinance as they are close to paying off their loan.
This is why all the bears who are like, “rising mortgage rates will doom housing” don’t understand that many already have higher mortgage rates and they aren’t doomed. The job market determines the strength of the housing market. And the job market is currently strong. Housing isn’t going to slow until there is a recession. Too much demand. Too many people getting big pay raises and they want to lock in and not deal with greedy landlords.
Sales will slow. There will be few multiple bids. But that’s all.
The housing market is overheating now though. Middle class priced out even in some Texas cities. That’s not healthy.
“At the risk of sounding like some sort of suburban right wing moron, I’ll say that things there are currently not quite San Francisco-level post-apocalyptic, but it’s pretty bad, and the city doesn’t seem too concerned about improving the situation.”
Chicago’s Union Station and Ogilive aren’t as dire. There is a steady stream of people at both, even on the weekends. But some of the subway stops are creepy and I’m still not taking the El anywhere. There just aren’t enough people on it and I don’t want to deal with the people smoking on board and the like.
“There are 23 Democratic governors. 50 Democratic senators. There are several that might be in the mix who can raise millions including Beto and Stacie Abrams.”
I’m fascinated why the left is so in love with Bob. The guys a complete empty suit and loser
“And there could be a war against women by the Republicans, outlawing abortion in a dozen states if Roe v Wade is tossed making the female electorate a big factor.”
I think swing state voters are more concerned with the Democrats war on children, promoting pro groomer policies is not a winning policy position.
Dems already hold the Karen vote, doesnt offset the losses their experiencing with men & Non-Karen females
“1. Mortgage rates were at 5% in 2018.”
Whats the rate today?
“2. S&P 500 has doubled in the interim.”
How much money has the gov injected into the economy and kept rates extremely low, and is that been healthy? Do you think that bill is coming due now?
“3. Inventory is down 50% and at record lows. Market times under 2 months.”
People dont want to sell because they are negative on the future and will get worse as rates rise. Also are you now stating that the current inventory is healthy?
“What more do you need to know? It’s a completely different market in 2022.”
Why lie – I didnt say different, I said healthier
Shills gonna shill
“Chicago’s Union Station and Ogilive aren’t as dire. There is a steady stream of people at both, even on the weekends. But some of the subway stops are creepy and I’m still not taking the El anywhere. There just aren’t enough people on it and I don’t want to deal with the people smoking on board and the like.”
AKA – I hate the Poors and Minorities
I forgot about Beto. If he can win this Nov, he would be formidable. But having him on the presidential ticket would drive sales of AR-15s even more than Obama did. And some scoundrels will make fortunes selling “BETA for Prez” gear to all the fascist mouth breathers.
“Who is Jason Crow? Never heard of him”
While also a proponent of gun regulations (the site of the Aurora moving theater shooting is in his district), Crow has taken less of a “yes, I’m coming for your guns” approach than Beto has, and can lean on his combat tours as a Ranger to blunt the rage of some of the ammosexuals. He was manager for impeachment number 2 (having been trapped in the chamber on 1/6). Speaking of Crow, and to bring things back to real estate: Just a month or so after we sold our house in Denver, I’m in a hotel room and scrolling on my phone, and I must have followed Crow’s campaign page on Facebook, because coverage of a backyard event for him popped up my feed, and wouldn’t you know it, the 30-year old who bought our house was hosting the event in our former yard.
“All of those with mortgages aren’t Millennials JohnnyU. Lots of GenXers refinanced into the cheaper mortgages. But surprisingly, 40% of mortgages are still above 4%. How could that be?”
Show me the 2.5% stats for Millennial mortgages. Or this more made up BS?
“This is why all the bears who are like, “rising mortgage rates will doom housing” don’t understand that many already have higher mortgage rates and they aren’t doomed. The job market determines the strength of the housing market. And the job market is currently strong. Housing isn’t going to slow until there is a recession. Too much demand. Too many people getting big pay raises and they want to lock in and not deal with greedy landlords.”
How many people today have a mortgage rate >5%?
Its not the job market its real wages. If real wages continue to be negative purchasing power is decreased. Add Mortgage rate increases and yeah it will have a big effect on the housing market
You also act like everyones coming in w/ 20% down – the stats dont back that up. They’re going to be upside down quickly
“Sales will slow. There will be few multiple bids. But that’s all.”
Sure Jan
“The housing market is overheating now though. Middle class priced out even in some Texas cities. That’s not healthy.”
The Middle class is oriced out of Bucktown & ELP – the Horror
“I forgot about Beto. If he can win this Nov, he would be formidable. But having him on the presidential ticket would drive sales of AR-15s even more than Obama did. And some scoundrels will make fortunes selling “BETA for Prez” gear to all the fascist mouth breathers.”
He’s running 8 points behind Abbott, riding the coattails of an extremely unpopular president in a Red state, yeah he’s gonna get crushed
“There are several that might be in the mix who can raise millions including Beto and Stacie Abrams”
They are going to run on what exactly? Politically, they have accomplished nothing in their entire lives. Beto and Stacie are media creations. Neither could win during the “blue wave” of 2018 and neither has a chance in 22 unless some scandal occurs with Abott or Kemp.
I have no clue what Beto does for a living outside of driving around the state and posting videos of him getting a haircut to twitter. Really speaks to the common person….
Stacey Abrams had a negative net worth when she ran for Governor in 2018; she was behind on her taxes with the IRS coming after her, and I kid you not $96K in student loan debt and $83K in credit card debt. 4 years later she somehow has a net worth of over $3 million and just bought a million dollar home outside of Atlanta. Hmmm…. that seems slightly odd….
Beto or Stacey are just as likely to become Governor (let alone President) as Jaime Harrison and Amy McGrath were going to beat Lyndsey Graham and Mitch McConnell in the 2020 senatorial campaigns. Oh wait Amy McGrath didn’t even with the Democratic primary….
Remember though they were such great fundraisers….. They raised so much money from New York and California liberals even though they were running in South Carolina and Kentucky and lost the fundraising game based on in-state donations.
“and I kid you not $96K in student loan debt and $83K in credit card debt. 4 years later she somehow has a net worth of over $3 million and just bought a million dollar”
I wouldn’t have mentioned her as a viable presidential contender (though I’d say her impact on the senate races was a political accomplishment), but are you familiar with a certain irascible lush-turned-Supreme-Court-Justice who had worse debt problems than that, which mysteriously went away (when he replaced the father of the previous president’s banker)?
“Stacey Abrams had a negative net worth when she ran for Governor in 2018; she was behind on her taxes with the IRS coming after her, and I kid you not $96K in student loan debt and $83K in credit card debt. 4 years later she somehow has a net worth of over $3 million and just bought a million dollar home outside of Atlanta. ”
Why do you think she wrote that children’s book? Hint: it wasn’t for the children.
She can be the Catherine Pugh of Georgia, with a warehouse stocked with her books somewhere.
She, like Catherine Pugh, were the right complexion and gender. They evoked the emotional response & reaction from those on the left. The emotional narrative, identity politics & forward looking is paramount to the leftist narrative. Accountability, competence, experience not so much. Because when those things are considered the fraudsters like Catherine Pugh & Stacie Abrams don’t have a shot.
Bobbo’s back?
“…She, like Catherine Pugh, were the right complexion and gender….”
Oh yeah, that’s the Bob I remember. While I recall Bob pursuing cheap beer opportunities I don’t believe he pursued higher ed (& certainly not @ Booth or Kellogg) after partying his way thru Miami U/OH (iirc). He was proud back then that he didn’t own any RE.
I googled Stacey Abrams as author – her recent fiction release “While Justice Sleeps’ hit Amazon’s top 20 list starting abt 11 months ago. It then had 11,000 reviews (4.5 stars), behind John Grisham’s ‘Sooley’, which was then on the list for 17 weeks and had 33k reviews.
Apparently Abrams isn’t headed to bk court or jail just b/c Bob and his ilk refuse to buy any book she or anyone like her writes.
“Stacey Abrams had a negative net worth when she ran for Governor in 2018; she was behind on her taxes with the IRS coming after her, and I kid you not $96K in student loan debt and $83K in credit card debt. 4 years later she somehow has a net worth of over $3 million and just bought a million dollar home outside of Atlanta. Hmmm…. that seems slightly odd….”
Not odd at all. Barack Obama also had a negative net worth when he was a community organizer and starting his political life. And that’s even with his wife working full time. The Obamas had a lot of student loans as well. Stacey has loans from her time at Yale Law School and she has admitted she has been bad with money management and didn’t take high paying legal jobs to pay it off quicker. The Obamas didn’t have any “real” money until Barack’s best selling book. He literally made several million dollars off of it.
Stacey Abrams is an accomplished novelist. Has been for over a decade. She’s extremely talented. I don’t know where she finds the time. She wrote a bunch of novels under a different pen names years ago but now that she’s better known, she is writing under her own name. She had a best selling political thriller out last year. She also wrote the typical “inspiration” memoir book that most politicians write. If Mike Pence got $2 million for a 2-book deal, I’m sure Stacey also got a nice deal for hers.
The political thriller probably came with a big advance too.
Hooray!
If an Instagram influencer can make over a million a year from sponsorships/endorsements, Stacey Abrams can clearly generate similar income. She is a brand. And for the last 4 years she has not been in public office so she was free to monetize herself and her writing talent.
And WP, if you really think Stacey cannot become Governor when she came so close the last time and this time she has registered hundreds of thousands of more people, then you really need to read more about what his happening in Georgia. Heck, how many blue state people have moved to Georgia just during the pandemic alone? I think she will win easily in Georgia.
“He’s running 8 points behind Abbott, riding the coattails of an extremely unpopular president in a Red state, yeah he’s gonna get crushed”
Texas isn’t red. It’s purple and about to go blue, probably by 2024 in the national election.
“How many people today have a mortgage rate >5%?”
O%?
Unless you got your mortgage in 2009 and never refinanced, you locked in weeks ago. Could still get 4.75% just last week, by the way. People seriously looking this spring are locked. It will be the buyers in late May, into June, who will be exposed to the higher rates because they are only locking in right now. And they are probably so terrified of paying 5.5% or 6% in just a month that they certainly are locking as fast as they can.
Lol.
It’s really going to take weeks before we really see the impact of the higher rates. New home builders will see slowdowns on their websites and in foot traffic earlier, however. They should be seeing that right now.
Very few home buyers do what car buyers do, and simply walk into an auto dealership and announced, “I wasn’t thinking of buying a car today but was driving by and decided to stop in” and then buy it. Way too much to do to get mortgage approval etc with home buyers. They are getting pre-approved before they go out to look.
“The Middle class is oriced out of Bucktown & ELP – the Horror”
Median home price in Austin is now over $550,000 and still rising. That’s not middle class in Texas. It’s not healthy for the economy to have no middle class housing in the entire city.
“Its not the job market its real wages. If real wages continue to be negative purchasing power is decreased. Add Mortgage rate increases and yeah it will have a big effect on the housing market”
It’s ALWAYS about the job market. If you have a job, you can make the payment. Plain and simple. That homeowner doesn’t care if rates rise to 20% for a mortgage. They have a job and 3% mortgage rate.
Right now, everyone has a job. Hence, the housing market is also booming.
Imagine that.
“AKA – I hate the Poors and Minorities”
Yawn. So boring. Get a new routine JohnnyU. It’s getting old now.
Yeah- I guess riding the bus attracts a more upscale crowd than the subway? Lol. But no one has been smoking on the buses in the last 2 years, so there’s that. They’re running pretty similarly to pre-pandemic and have gotten a lot more crowded in the last few weeks as many have gone back to their offices downtown as of Apr 1.
“Whats the rate today?”
Up until a few days ago, rates weren’t 5%. For over 3 months in 2022, they haven’t been at 5%. So yeah, you asked what was different between this market and the one in 2018 and mortgage rates near historic lows to start the year was the difference.
Duh.
“And WP, if you really think Stacey cannot become Governor when she came so close the last time and this time she has registered hundreds of thousands of more people, then you really need to read more about what his happening in Georgia.”
Checks polling… Atlanta Constitutional Journal has Kemp beating Abrams by 7 points and Purdue beating Abrams by 4 points.
Kemp has ~10 point lead on Purdue in the primary polling as well so not looking good…
What’s Bidens approval rating in Georgia? 34% and that was in January….
Absolute disaster.
https://www.realclearpolitics.com/epolls/2022/governor/Georgia.html
“If an Instagram influencer can make over a million a year from sponsorships/endorsements, Stacey Abrams can clearly generate similar income. She is a brand.”
This speaks alot about you that the purpose of public office is solely for individual monetization regardless of if you succeed or fail.
She is not a brand. A bunch of corporations throwing money at her to hedge their future bets in the event she hangs around the party for a number of years given that she is under the age of 50. She has been bought off.
“Texas isn’t red. It’s purple and about to go blue, probably by 2024 in the national election.”
LOL um no. Its still red maybe not bright red like it used to be but still red. Maybe it goes purple a decade from now. To actually be considered “purple” the other party has to be able to win a state wide race which has not happened and does not look promising over the next few cycles.
Saying Texas is purple and about to go blue is like saying Maryland, Massachusetts, and Virginia have gone red because they have republican governors. Virginia leans blue and Maryland/Massachusetts are blue.
Here’s how bad the Lefts strategy is this cycle they are spending $1MM in PAC money in primary that was gerrymandered to be a democratic district…..
“The political action committee linked to House Speaker Nancy Pelosi is being criticized for pouring nearly $1 million into a TV ad campaign for a little-known, first-time candidate in a nine-way Democratic House primary still forming.”
“Numerous Democrats were prompted to run after Oregon’s redistricting process created a new district viewed as a sure win for the Democratic Party.”
“Battle lines: The political campaign arm for the Congressional Hispanic Caucus (CHC BOLD PAC) condemned the House Majority PAC’s move.”
“Sen. Jeff Merkley (D-Ore.) tweeted Tuesday: “I haven’t endorsed in this race, but it’s flat-out wrong for House Majority PAC to be weighing in when we have multiple strong candidates vying for the nomination.”
https://www.axios.com/pelosi-pac-blasted-for-meddling-in-oregon-primary-c8688241-7220-48b8-9f4f-498266ea055c.html
“I haven’t endorsed in this race, but it’s flat-out wrong for House Majority PAC to be weighing in when we have multiple strong candidates vying for the nomination.”
Oregonians upset with Californian impact on OR? Stop the presses!
“Lauren Underwood was re-elected by less than 5,000 votes in 2020. So, yes, I encourage them to vote in every election, including primaries.”
I thought your kids lived in the city not the burbs…
“Can you please name some? One? One single Dem who would stand a real chance?”
There’s two currently – Pete Buttigieg and AOC. Not a big fan of either personally but Buttigieg actually goes on Fox, doesn’t get caught up in dumb culture wars, from the Midwest, and worked at McKinsey. He works for corporate donors and could probably pick off some republican voters in key states. Also, there’s not a bunch of dirt on him, checks a diversity box, under 50.
I say AOC in the sense of someone that looks like AOC and has an actual brand/following like AOC (unlike Stacey Abrams….) and can run a campaign like Bernie Sanders. Nevada is a state that leaned Blue for the past 10 – 15+ years these last two cycles it’s getting closer to toss-up. Maestro and Sisolak are likely toast this fall and the way they redistricted looks very favorable for the right in red wave year. However, an AOC-like candidate can win as demonstrated by Bernie winning the Nevada caucus and the DSA taking over the State Party last year.
My darkhorse Dem candidate that I would more than likely vote for would be Joe Manchin if he were to run. His term is up in 2024. His path to the nomination would be similar to what Joe’s was in 2020. Have a bunch of people running to your left who campaign like they are running for mayor of LA/SF/Seattle and forget they have to win States like New Hampshire, Nevada, Arizona, South Carolina, Iowa, Wisconsin, Georgia, etc. to win the nomination.
Oh I would throw in Eric Adams as well. Probably too soon for 2024 but potentially 2028. Long, long time until then but it’s someone I would watch on the Democratic side.
Here’s the mortgage breakdown.
40% of homeowners have NO mortgage
21% are under 3%
38.8% are 3% to 4%
23.4% is 4% to 5%
Over 5% is tiny and those loans go back to before 2009. There’s always a few who don’t bother to refi.
This is why the argument that suddenly the real estate market is going to collapse because we have 5% rates is wrong. All of these people are paying their mortgage right now, even if they had a 4.5% rate. This is what happens in a strong job market. If you lose your job, you get another. Life goes on.
Forbearance rate is less than 3%. And most of those are still from the older loans, believe it or not. The housing bubble loans. Not the recent loans.
Here’s delinquency rates on SFH: https://fred.stlouisfed.org/series/DRSFRMACBS
“ Over 5% is tiny and those loans go back to before 2009. There’s always a few who don’t bother to refi.”
17% is tiny?
“ Forbearance rate is less than 3%. And most of those are still from the older loans, believe it or not. The housing bubble loans. Not the recent loans.
Here’s delinquency rates on SFH: https://fred.stlouisfed.org/series/DRSFRMACBS”
Why you wont acknowledge the fact that Fannie & Freddie have forbearance plans in place?
If someone is in a forbearance plan aren’t they still counted as delinquent? That would seem logical.
“ If someone is in a forbearance plan aren’t they still counted as delinquent? That would seem logical.”
I don’t believe they are included
If they are included that would make the non-Covid 1% which would be the lowest delinquency rate by a significant %
Also the FRED data doesn’t jive with this – https://www.blackknightinc.com/wp-content/uploads/2022/04/Apr07_Forbearance_Tracker_Chart02.pdf
There’s about a 10 fold difference in the BK data and not double in the FRED
https://www.atlantafed.org/blogs/macroblog/2021/02/22/in-depth-look-at-mortgage-forbearance-data
“ In July, the Atlanta Fed blogged about the details of mortgage forbearance policies, remarking that the latest reports at that point showed about 8.5 percent of borrowers were in forbearance programs, either as a result of the CARES Act or from servicers of mortgages not backed by the government electing to follow suit with the CARES Act. ”
That doesn’t match FRED chart. Which would show that they aren’t included
I’ll be damned! https://www.fool.com/the-ascent/mortgages/articles/plunging-mortgage-delinquency-rate-shows-forbearance-is-doing-its-job/
I’ll be damned! https://www.fool.com/the-ascent/mortgages/articles/plunging-mortgage-delinquency-rate-shows-forbearance-is-doing-its-job/
https://www.blackknightinc.com/black-knights-first-look-at-february-2022-mortgage-data/?&
Nearly 2MM homes in foreclosure or >30 late, Healthy or No?
If mortgages in forbearance aren’t included in delinquency statistics than this is just juking the stats.
This is similar to how the Federal Reserve is no longer maintaining many of their historical data series on the FRED (St. Louis Fed) website. If they data are not comporting to the prescribed narrative simply change the criteria.
Even the Fed themselves have admitted that some of these data series they are still maintaining that they have changed their methodology but have not gone back and re-stated historical data under the methodology so as to make such series useless.
These aren’t esoteric series buried deep in the labyrinth of Federal Reserve Data series these are things as basic as their definition of M1 which they changed in May 2020.
Just take a look at all of the discontinued series at the Federal Reserve and then note when they were discontinued.
https://fred.stlouisfed.org/categories/25
Series->Discontinued Date
M1-> 2-1-2021
Total Checkable Deposits-> 2-1-2021
Other Checkable Deposits: Total -> 1-1-2021
Currency Component of M1 -> 2-1-2021
Other Checkable Deposits at Commercial Banks -> 1-1-2021
Other Liquid Deposits (Total) -> 2-1-2021
When Fed policy results in Clown World best not to keep reporting facts and figures about it.
“Nearly 2MM homes in foreclosure or >30 late, Healthy or No?”
Federal data shows that homes in foreclosure are less than 2%. It’s a decade low.
There’s always going to be some in foreclosure somewhere. We are in a pandemic with huge upheaval. And 2 million is NOTHING for a country that is as big as America.
That’s why the bears keep getting it all wrong. You have to pay attention to the data. FICO scores are the highest in 15 years. Homeowners have the highest equity in 15 years as well.
The homeowner is really healthy right now. This isn’t the 2000s.
We’re lucky the homeowners are in this position. One less thing to worry about right now. The Fed can raise rates and slow the housing market and the economy without having to worry about the homeowners.
Completely anecdotal at this point, but I am seeing appraisals starting to come in lower than expectations. Seeing a lot of agents still trying to comp prices off last summer. Definitely seeing some buyers readjusting their price points based on rates – they were ok with rates in 3s, not so much in 5s.
“Federal data shows that homes in foreclosure are less than 2%. It’s a decade low.”
What do you not get? The Federal forbearance has pushed foreclosures out 18 Mo+
Its like you think 2+2=Banana
The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 13 basis points from 1.18% of servicers’ portfolio volume in the prior month to 1.05% as of March 31, 2022. According to MBA’s estimate, 525,000 homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 7 basis points to 0.49%. Ginnie Mae loans in forbearance decreased 12 basis points to 1.38%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 28 basis points to 2.44%.
“March was another month of lower forbearance rates, and a higher share of overall loans and forbearance-related workout loans that are current,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The share of loans in forbearance continues to dwindle and is just 5 basis points shy of hitting 1 percent – or 500,000 homeowners – after peaking at 4.3 million borrowers in June 2020. It has been a remarkable recovery for many homeowners in less than two years.”
https://www.mba.org/news-and-research/newsroom
“Definitely seeing some buyers readjusting their price points based on rates – they were ok with rates in 3s, not so much in 5s.”
As you should be seeing Russ. It’s a big jump in the monthly payment. Most won’t qualify for the higher payment so they will have to go down in price. It’s going to be several months of “adjustments” to the new reality.
But I also think buyers are scared it’s going to go to 6% and then they’ll have to move down in price even more. Already, rates are at 5.15% up to 5.25%.
This is probably lighting a fire under some buyers.
https://www.redfin.com/IL/Chicago/419-W-Roslyn-Pl-60614/home/13365020
I was going to crib on this lovely vintage rowhouse but it’s already under contract. And it doesn’t have parking.
On the market less than a month.
“ The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 13 basis points from 1.18% of servicers’ portfolio volume in the prior month to 1.05% as of March 31, 2022. According to MBA’s estimate, 525,000 homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 7 basis points to 0.49%. Ginnie Mae loans in forbearance decreased 12 basis points to 1.38%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 28 basis points to 2.44%.”
You’re 1/2 way there
Now add in the foreclosures and then comment…
Are you like this in real life?
Here are some forbearance graphhs that put the problem in perspective: https://dsnews.com/daily-dose/04-18-2022/forbearance-approaches-1-mark
“I was going to crib on this lovely vintage rowhouse but it’s already under contract.”
Oct-17 = $1,427,000
+ CPI to Mar-22 = $1,663,000
So, yeah. 4% behind ’17 price, in real dollars. And still a lot for a 2 bedroom place.
Also: “And it doesn’t have parking.” is not accurate. From the listing:
“Nearby garage parking (2431 N Clark) included in the price, plus a second space may also be sold.”
It doesn’t have parking *on the lot*.
“Nearby garage parking (2431 N Clark) included in the price, plus a second space may also be sold.”
For rich people, this means it doesn’t have parking. You going to walk your 3 year old toddler up to Clark to get them into the car? Or wait for mom to go get the car and drive it to the rowhouse to load everyone in?
It’s nice they have a parking space available. That’s helpful.
The market is just too tight. Nothing on the market so you’ll make sacrifices.
“Now add in the foreclosures and then comment…”
You never get to foreclosure. If you can’t pay, you simply sell. Prices up nearly everywhere. Record equity.
This is why foreclosures are at multi-year lows.
“For rich people, this means it doesn’t have parking. You going to walk your 3 year old toddler up to Clark to get them into the car? Or wait for mom to go get the car and drive it to the rowhouse to load everyone in?”
I thought no one needed a car?
Also, what the bears on this blog just keep forgetting because they don’t turn off Fox News, is that this economy is red hot. Why can’t you pay your mortgage? Because you were laid off. Layoffs are lowest in 50 years.
Many states now reporting record low unemployment. Let me repeat that: RECORD LOW UNEMPLOYMENT.
Those states include Wisconsin and Tennessee, among others. Wisconsin unemployment at 2.8%. Sizzle. Elkhart Indiana is past full employment now. It’s unemployment rate is 0.9%. RV makers can’t find anyone so they’re moving manufacturing to Michigan and Ohio.
The housing market is tied to the job market, for obvious reasons. And the job market is the best in 20 years. You simply cannot see homeowners in distress with the job market this strong and home prices up 20% in the last 2 years (or more if you are Stacy or MikeHG in Florida). There are always people who have medical issues, divorces etc that bring them down. But there are many opportunities to get out of trouble right now because the underlying economy is so strong.
“I thought no one needed a car?”
Maybe they don’t have one? Could be. Plenty going without it now. But it still takes an expensive property longer to sell if it doesn’t have its own garage or parking space than those that do.
“But there are many opportunities to get out of trouble right now because the underlying economy is so strong.”
Yet evictions notices in Chicago are higher than pre-covid even though billions were spent on keeping people in their homes.. that’s sizzle….
https://www.wbez.org/stories/cook-county-evictions-are-back-to-pre-pandemic-levels/d40d42ee-3331-413f-8558-38d2f17a8521
“But there are many opportunities to get out of trouble right now because the underlying economy is so strong.”
28% of Peoples Gas residential customers were late in February with 18% 30+ days behind… sizzle….
https://www.chicagobusiness.com/utilities/peoples-gas-chicago-profits-increase-late-fees
“Yet evictions notices in Chicago are higher than pre-covid even though billions were spent on keeping people in their homes.. that’s sizzle….”
Last I checked, these aren’t homeowners.
There are always going to be evictions even with a 1% unemployment rate. It doesn’t change the fact that this is the strongest economy in decades. Fed must cool it. It’s not healthy.
“You going to walk your 3 year old toddler up to Clark to get them into the car?”
Where does that toddler sleep in this house? Not on the 3d floor, with no door, by herself.
That objection *might* be relevant for another house, but not this one.
Also:
You are the one who wrote “And it doesn’t have parking.”
Which is verifiably inaccurate. It has parking.
“28% of Peoples Gas residential customers were late in February with 18% 30+ days behind… sizzle….”
This seems in line to what has been happening the last several years if you actually google Peoples Gas. Crain’s talked about 29% who were late in September 2020 too. Natural gas prices are at 10 year highs and Peoples Gas has been adding on fees to update the lines etc. Some months people are charged an extra $10. For those living paycheck to paycheck, it’s hard to keep up with a natural gas bill that may double.
They can’t turn it off in February, so it’s likely more decide not to pay during the winter months. You really have to compare these numbers with prior years both pre and during the pandemic to see if they differ at all. I would bet they’re not that different than what has been happening seasonally for years.
“ Last I checked, these aren’t homeowners.
There are always going to be evictions even with a 1% unemployment rate. It doesn’t change the fact that this is the strongest economy in decades. Fed must cool it. It’s not healthy.”
This is contra to your argument Re: the economy strength
“Which is verifiably inaccurate. It has parking.”
No, it doesn’t.
There’s no garage or parking behind this rowhouse. Nor the others on this side of the street. I’ve cribbed on some of these over the years. Usually takes months to sell them because of this. But not this time.
Sizzle.
“This is contra to your argument Re: the economy strength”
We live in a capitalist society where there are winners and losers even in what is the best economy in decades. Bears can always show some stat to say things suck, but that is capitalism.
Could see 3% GDP this year which would be red hot. Millennials aren’t yet at peak earnings so really difficult to get to golden 4% like we did in the late 1990s when the Baby Boomers were at peak earnings.
Will be another 10 years. In 2032 we’ll see 4% GDP.
“This seems in line to what has been happening the last several years if you actually google Peoples Gas.”
Looks like it was more like 1 in 10:
https://www.chicagobusiness.com/utilities/1-10-chicago-households-threatened-gas-cutoffs-year
“You really have to compare these numbers with prior years both pre and during the pandemic to see if they differ at all.”
Right, so why did you cite to the number who were late in September 2020?
“There’s no garage or parking behind this rowhouse.”
That’s not what you wrote:
“And it doesn’t have parking.”
“We live in a capitalist society where there are winners and losers even in what is the best economy in decades. Bears can always show some stat to say things suck, but that is capitalism.”
This is flat out incorrect
“Could see 3% GDP this year which would be red hot. Millennials aren’t yet at peak earnings so really difficult to get to golden 4% like we did in the late 1990s when the Baby Boomers were at peak earnings.
Will be another 10 years. In 2032 we’ll see 4% GDP.”
WITAF?
You must not believe that inflation is still transitory
So Millennials will hit peak earnings this year?
Whats this event in 2032 that propels GDP into the 4’s?
LMAO
“Could see 3% GDP this year”
We’d better see nominal GDP up by more than 3%.
Oh, wait, you mean *real* gdp?
So the concept of real dollars means something?
But not in housing, I guess.
Did the InfoWars discord server get shut down with the BK filing?
“Sabrina reason: “Blah, Move goal posts, Blah, unrelated number, Gaslight, blah, Biden is the greatest, blah, non-sequitur, blah, Millennials, blah”
You forgot the part where she rips bottle after bottle of wine everyday. She’s a drunk and makes incoherent rambles.
And why is helmethofer allowed to post here still?
“ We’d better see nominal GDP up by more than 3%.
Oh, wait, you mean *real* gdp?
So the concept of real dollars means something?
But not in housing, I guess.”
Just a number…
8% inflation has no impact
“ This is why foreclosures are at multi-year lows.”
Is there any policy that might have an effect?
“Whats this event in 2032 that propels GDP into the 4’s?”
the year after another debilitating recession……
“the year after another debilitating recession……”
The largest group of Millennials, that are driving the housing market right now to new bullish heights, will be at peak earnings in about 10 years (early 40s). Just like the Baby Boomers drove the great economy in the late 1990s when they were at peak earnings.
Yes, demographics matter.
It’s why Trump’s “pledge” to get the US economy to sustained 3% GDP was never going to work because GenX is simply too small. It’s not even possible, as we’ve seen.
Even with all the trillions in stimulus, US economy may only do 3% sustained this year (last year doesn’t count for GDP because of the pandemic).
4% GDP for a mature economy like the United States is red hot.
“And why is helmethofer allowed to post here still?”
He’s been banned many, many, many times Mike HG. How many times do I have to explain it?
He hasn’t been on this site for 6 months to a year. Maybe he got in trouble with his handlers, I don’t know. But he comes back, like the other bears, if he thinks things are suddenly going to go to hell. Even when they aren’t.
HH has been betting against America his entire life. Maybe because he’s a Russian bot, I don’t know. It must be insanely frustrating. Think about betting against the greatest economy ever created. And doing so for several decades.
And having that much bitterness and anger. But when you miss out on all that economic growth, I guess you’re going to be angry, right? Gotta blame someone.
Same with Bob the Bear. He has been a bear through the entire housing bust (justifiably so) but never conceded that ANY of those properties under foreclosure were EVER deals, when they clearly were. And then he leaves this site for 5 years while things have recovered and only shows up again when there’s a global pandemic and he thinks things are going to hell.
And, if you guys really believe that he’s in his early 40s, he’s actually running some company or a division of some company and, at the same time, STILL betting against America, Chicago, and the power of our cities.
Meanwhile stocks have soared to new all-time highs, including the company he works for, yet he still believes the doom is just around the corner and you shouldn’t buy a home.
It boggles the mind.
“Right, so why did you cite to the number who were late in September 2020?”
Because I have a job and don’t have the time, nor do I care, to try and find every single monthly data point for People’s Gas for the last 10 years or whatever.
Buy you, anon(tfo), when you’re not selling real estate, have PLENTY of time to do all this research. Go at it. Please tell us what it is every February.
Seems to me that 30% is not that abnormal.
It’s like the people who are now freaking out that inventory is up 10% month over month, but when inventory is at record lows, 10% gains are NOTHING. Baseline matters.
But bears are going to be bears. The world is doomed. Run and hide. Be scared.
I had something come up and couldn’t post a new property today. Things have cleared up so we should be fine the next two days.
Hooray.
Inventory remains SO low. It’s a real chore to find anything interesting to post on this site. There’s going to be a lot of condos coming up because the single family home market is just too hot.
“Meanwhile stocks have soared to new all-time highs, including the company he works for”
Think HH works/worked for Netflix, so he’s a little stressed.
[kidding]
“Seems to me that 30% is not that abnormal.”
Seems to me that you make shit up when it suits you.
“The largest group of Millennials, that are driving the housing market right now to new bullish heights, will be at peak earnings in about 10 years (early 40s). Just like the Baby Boomers drove the great economy in the late 1990s when they were at peak earnings.
Yes, demographics matter.”
Didn’t say they didn’t, only there a secondary or tertiary driver
Real Wages & Economic conditions >> Demographics
I just did my monthly update on foreclosures. As part of that I checked with Black Knight and their delinquency numbers do include forbearance AND it’s at historic lows. So doesn’t look like there is major financial distress in the housing market. https://www.chicagonow.com/getting-real/2022/04/chicago-foreclosure-activity-returning-to-pre-pandemic-levels/
“People have record cash on hand. Stock market only a few percent away from all-time highs again.”
You are one hell of a contrarian indicator. It literally like everyone should do a complete 180 from what you write
NASDAQ
March 28 – 14,355
April 27 – 12,449
Interesting data that’s counter to prevailing narrative:
https://www.cnn.com/2022/04/27/investing/retirement-millennials-boomers-saving-more/index.html
Millennials are way ahead of Baby Boomers when it comes to saving for retirement, according to a new study by investment firm Charles Schwab. That younger generation is already stashing away funds in their mid-20s, beating their parents by about a decade.
They also have higher balances in their 401(k)s than Gen Xers did at the same age, according to a report released by Pew last year.
“That younger generation is already stashing away funds in their mid-20s, beating their parents by about a decade.”
Boomers were in their mid 20s as early as 1970.
IRAs first existed in 1975; 401k started in 1979. Neither had broad adoption until the mid-80s, when the older boomers were pushing 40.
How did they count the NPV of pensions benefits earned by Boomers?
“How did they count the NPV of pensions benefits earned by Boomers?”
Its just a number.
I’d also like to know if thats what they’ve contributed or the value of their account (Link to CS is dead). Millennials have had a 13 year bull market – 5X increase in the market (S&P), including Covid.
“Interesting data that’s counter to prevailing narrative:”
No pension for millennials unlike the boomers. Per the article….
“But it’s not all good news. The increased saving could be because Millennials have no expectations of receiving employer-sponsored pension plans when they retire. In 1981, 84% of full-time workers at large companies participated in a pension plan; by 2020 that percentage plummeted to only 28%, according to the Bureau of Labor Statistics.”
No pension for millennials unlike the boomers
They are outpacing GenX, who also do not have pensions.
“They are outpacing GenX”
GenX is the red-headed middle stepchild. No one gives a fig about GenX. May as well call then Silent Generation II.
“They are outpacing GenX, who also do not have pensions.”
Link?
Not seeing that statement in anything I could find from Schwab.
https://pressroom.aboutschwab.com/press-releases/press-release/2022/Retirement-Reimagined-Empowered-by-Early-Savings-Millennials-Are-Reshaping-What-It-Means-to-Retire-With-an-Emphasis-on-Flexibility-and-New-Experiences/default.aspx
https://content.schwab.com/web/retail/public/about-schwab/Retirement_Reimagined_Study_deck_0422-2S73.pdf
“They are outpacing GenX, who also do not have pensions.”
GenX was much more impacted by the Great Recession in 08/09 when it comes to retirement savings….
GDP was -1.4% compared to an expectation of 1.0%. So in addition to 8% plus BIDENflation, we now are heading to a recession. Hello Stagflation. This administration is a joke.
“This administration is a joke.”
If you could snap your fingers and overnight a new president would awake in the White House, what are the top three actions that he or she would take tomorrow to increase GDP and reduce inflation? What would that person have done differently starting 15 months ago?
“If you could snap your fingers and overnight a new president would awake in the White House, what are the top three actions that he or she would take tomorrow to increase GDP and reduce inflation? What would that person have done differently starting 15 months ago?”
+Take College Debt forgiveness off the table
+Start pulling back the covid free money train and any state level monies that weren’t spent.
+Hire Larry Summers
+Revamp O&G policy to not be retarded
“+Take College Debt forgiveness off the table
+Start pulling back the covid free money train and any state level monies that weren’t spent.
+Hire Larry Summers
+Revamp O&G policy to not be retarded”
None of these had any impact or would have any impact on 1Q GDP.
Maybe 16 B in college debt has been forgiven. Doesn’t seem like that much in the grand scheme.
What Covid free money is still being given away?
Oil production continues to climb under Biden from the lows reached under Trump. The impact of his “policies” is way overstated.
“ Oil production continues to climb under Biden from the lows reached under Trump. The impact of his “policies” is way overstated.”
Still under pre Covid output
Why is that if Covid is over and oil is +/- $100/Bbl we’re not near peak output? lmao
“ What Covid free money is still being given away?”
If states haven’t spent/mis allocated send it back – see Gov Fatfuck
Larry was one of the few left economists calling for inflation – could have nudged the Fed to start raising rates sooner
Poor effort
“None of these had any impact or would have any impact on 1Q GDP.”
Broad student loan forgiveness (i.e., not capped, not income-capped, and no matter who currently services it, if it was ever backstopped by the federal government, it’s included) would result in a massive POSITIVE impact on GDP. Nearly all of the money that would have otherwise gone towards loan repayment will be spent by forgiven borrowers, and much of that expenditure would increase sales tax revenues (along with income tax revenues generated by job creation, etc.). It would be a drop in the bucket as far as “taxpayers footing the bill” and any of the folks who “sacrificed and struggled to repay their loans on their own”, if bitter about the forgiveness, can express those feelings come election time. The big issue that doesn’t seem to getting much attention is, what happens going forward? If all student debt up until now gets forgiven, what about current and future students? Forgiving the current debt is one thing, but the government can’t concurrently afford to make all of higher education free.
“ Broad student loan forgiveness (i.e., not capped, not income-capped, and no matter who currently services it, if it was ever backstopped by the federal government, it’s included) would result in a massive POSITIVE impact on GDP. Nearly all of the money that would have otherwise gone towards loan repayment will be spent by forgiven borrowers, and much of that expenditure would increase sales tax revenues (along with income tax revenues generated by job creation, etc.). It would be a drop in the bucket as far as “taxpayers footing the bill” and any of the folks who “sacrificed and struggled to repay their loans on their own”, if bitter about the forgiveness, can express those feelings come election time. The big issue that doesn’t seem to getting much attention is, what happens going forward? If all student debt up until now gets forgiven, what about current and future students? Forgiving the current debt is one thing, but the government can’t concurrently afford to make all of higher education free.”
Why target this group? Maybe after the next election, the GOP can give every gun owner $20k to go buy more guns. It will be a positive impact on GDP after all.
Why not just “give” everyone $5k if you want to gin up GDP? Or better yet target SBA loans – that would have a much larger effect Vs some middle manager clown getting college loan forgiveness
And don’t worry about inflation. It’s not like the Covid loan halt isn’t putting those $ in the market.
Seems like Ubi Est Mea is spreading to the whole country.
Why target this group?
I agree. We should forgive medical debt, too.
And then get rid of college tuition for public colleges and implement universal health care.
“Seems like Ubi Est Mea is spreading to the whole country.”
Is that a song by Me First and the Gimme Gimmes?
“Why is that if Covid is over and oil is +/- $100/Bbl we’re not near peak output? lmao”
There’s a labor shortage. The oil industry has been in a bear market for over a decade. There have been two extremely severe downturns where thousands were laid off. Many of those who worked on the rigs or drove the trucks came back after the first layoffs. But after the second layoff in 2020, not so much. The job market is so hot you don’t need to go back to driving for Exxon when you can drive for Walmart instead. The oil companies have said they are having trouble with labor.
Additionally, there really is no incentive to ramp up drilling much more than they already are. They aren’t that much below pre-pandemic highs which was an all time high for American producers and was higher than even the Saudis. Shale was a gamechanger. But shareholders have been long suffering. The oil companies will reward them. No reason to flood the market, even if they could. That will all come later in the cycle when discipline gets more lax.
“If you could snap your fingers and overnight a new president would awake in the White House, what are the top three actions that he or she would take tomorrow to increase GDP and reduce inflation? What would that person have done differently starting 15 months ago?”
If the President could reduce inflation, there wouldn’t have been Ronald Reagan. It’s Powell who has to buckle down. Will he have the guts to go the whole way?
Biden did what needed to be done in Build Back America. I can’t even begin to think what would be happening if the cities didn’t get the extra money. There literally wouldn’t be subway or train service in numerous cities.
“what are the top three actions that he or she would take tomorrow to increase GDP and reduce inflation?”
Why do we need to increase GDP? The Fed is trying to cool an overheating economy, not make it worse. The Covid outbreak in January and February hit the economy much harder than most people realized. Some manufacturers were completely shut for over 2 weeks due to outbreaks and workers quarantining. But because we didn’t have government mandated shutdowns and everything was “open” many assumed that there were little economic impacts.
But that was wrong.
Companies are reporting that demand bounced back in March once the outbreak wound down and that April business has been strong. Should see 3% GDP in Q2, give or take.
Job market still red hot. Housing market too. 5% mortgage rates aren’t cooling much yet.
“GDP was -1.4% compared to an expectation of 1.0%. So in addition to 8% plus BIDENflation, we now are heading to a recession. Hello Stagflation. This administration is a joke.”
Completely wrong MikeHG. Laughably wrong.
I was in the western suburbs last week and went to a KFC for lunch. I wanted to go in and order inside and not in the drive-thru. I pulled on the door but it was locked. Another customer came up next to me and suggested we try the side door so we walked to the front of the restaurant and tried that. Locked too. This was at 12:30 pm. The lights were on in the restaurant.
As we stood outside wondering what was going on, a worker came up to the door and opened it and told us: “the indoor dining room is closed because we don’t have enough employees today. We’re only running the drive-thru.”
This is what’s going on in the economy right now. 11 million job openings. Not enough people to fill them.
Similarly, airlines can’t add more flights right now and are even cutting some flights despite demand because they don’t have enough pilots or flight attendants. United Airlines just held a job fair at O’Hare where they were hiring for 5,000 job openings.
And that’s just one airline.
“Similarly, airlines can’t add more flights right now and are even cutting some flights despite demand because they don’t have enough pilots or flight attendants. United Airlines just held a job fair at O’Hare where they were hiring for 5,000 job openings.”
Yes. I’ve had a work related trip booked for more than a month now and United has changed the flights (30 minutes on one leg, an hour on the other) twice.
“I was in the western suburbs last week and went to a KFC for lunch. I wanted to go in and order inside and not in the drive-thru.”
We’ve been having major concrete work done this week at our house (driveway, walks, patio), and the dust situation has been unreal (has a bathroom GFCI tripping constantly, presumably because the fan is pulling up too much into that room). Am I in some sort of dust-induced trip back to the 80s?
“The increased saving could be because Millennials have no expectations of receiving employer-sponsored pension plans when they retire. In 1981, 84% of full-time workers at large companies participated in a pension plan; by 2020 that percentage plummeted to only 28%, according to the Bureau of Labor Statistics.”
Why is ANY financial article even talking about pensions today? Few get them. Neither GenX or Millennials know about them, nor do they care, unless they know a teacher or a city or state government worker. Otherwise, everyone has been saving on their own.
GenX is the first generation to save for their retirement with the 401k available. It will be interesting to see how they do. Still have another decade or so to go. Still time to save more.
“That younger generation is already stashing away funds in their mid-20s, beating their parents by about a decade.”
Awesome. Younger Millenial’s parents are GenX or the youngest Baby Boomers. These were the first who had full access to the 401k for retirement.
“That younger generation is already stashing away funds in their mid-20s, beating their parents by about a decade.”
Timing is everything. Depends on if it’s an older Millennial or a younger one. They are all using Robinhood. And no fees. Makes it easy. Lol.
“Am I in some sort of dust-induced trip back to the 80s?”
People still eat at KFC every day anonny.
The airlines are a mess though. I recently saw a stat that there were 117 million visitors last year to Florida. ALL domestic. The airlines can’t handle it. They don’t have enough staff. That’s why there were all those nightmare cancellations with families trying to fly out of Orlando and the like earlier this year.
“There’s a labor shortage. The oil industry has been in a bear market for over a decade. There have been two extremely severe downturns where thousands were laid off. Many of those who worked on the rigs or drove the trucks came back after the first layoffs. But after the second layoff in 2020, not so much. The job market is so hot you don’t need to go back to driving for Exxon when you can drive for Walmart instead. The oil companies have said they are having trouble with labor.
Additionally, there really is no incentive to ramp up drilling much more than they already are. They aren’t that much below pre-pandemic highs which was an all time high for American producers and was higher than even the Saudis. Shale was a gamechanger. But shareholders have been long suffering. The oil companies will reward them. No reason to flood the market, even if they could. That will all come later in the cycle when discipline gets more lax.”
Yeah, no
Shareholders not being rewarded for pulling oil out at $100/Bbl? Are you high or insane? The only way that happens is if there’s collusion.
“Companies are reporting that demand bounced back in March once the outbreak wound down and that April business has been strong. Should see 3% GDP in Q2, give or take.”
How many individuals predicted negative GDP this Q?
Link to anyone predicting 3% this Q (other than you making stuff up)
“GenX is the first generation to save for their retirement with the 401k available. It will be interesting to see how they do. Still have another decade or so to go. Still time to save more.”
But its impossible to have saved $1MM, right?
“Still under pre Covid output
Why is that if Covid is over and oil is +/- $100/Bbl we’re not near peak output? lmao”
So were you complaining about this at the end of the Trump administration? Oil production is ramping up at the same rate it was then. There are a whole host of reasons why it’s taken so long and they’ve been well covered in the financial media. None of the reasons have anything to do with Biden policies.
“Larry was one of the few left economists calling for inflation – could have nudged the Fed to start raising rates sooner”
True. Powell, who was appointed by Trump, was a bit slow on the uptake.
“So were you complaining about this at the end of the Trump administration? Oil production is ramping up at the same rate it was then. There are a whole host of reasons why it’s taken so long and they’ve been well covered in the financial media. None of the reasons have anything to do with Biden policies.”
Remind me what was the price of oil Jan 2020? So if it was ramping up at the Jan 2020 price, why not now? Sabrina’s “explanations” are laughable to anyone thats been to NoDak, Bakersfield (Double whammy with state level shenanigans) & West Tx. One other question to ponder, why cant anyone get financing (Outside of the Majors) when crude’s at $100/Bbl?
“True. Powell, who was appointed by Trump, was a bit slow on the uptake.”
Is that some sort of midwit litmus test? If Trump appointed him he must be great? Clownshoes..
JPow sucks. He’s a puppet who’s masters just wanted the printing press to go Brrrrr
“So if it was ramping up at the Jan 2020 price, why not now?”
But it is ramping up now and has been ever since the bottom in domestic production.
“If Trump appointed him he must be great? Clownshoes..”
I just mentioned that in case you were one of those Biden critics who was a Trump disciple. Most are.
“Neither GenX or Millennials know about [pensions], nor do they care”
Ok, boomer.
Seems like Ubi Est Mea is spreading to the whole country.
There’s a phrase I haven’t heard since I was reading the hard copy Trib in my frunchroom.
“ But it is ramping up now and has been ever since the bottom in domestic production.”
Price, but you knew that
“ I just mentioned that in case you were one of those Biden critics who was a Trump disciple. Most are.”
This is why the Dems will get crushed in 22, completely insufferable,
“Sabrina’s “explanations” are laughable to anyone thats been to NoDak, Bakersfield (Double whammy with state level shenanigans) & West Tx. One other question to ponder, why cant anyone get financing (Outside of the Majors) when crude’s at $100/Bbl?”
In Feb, US shale drillers produced 11.3 million barrels per day. Under their all time highs but up from the 10.5 million last fall. Expected to reach 12 million by next year.
And you are the one who is a complete idiot JohnnyU. It’s almost laughable now.
Maybe this Reuters journalist reads this blog?
LMFAO.
Go pound sand JohnnyU. You really don’t have any clue what is happening in the energy industry, or the economy, in general.
Article dated today, April 29.
https://www.reuters.com/business/energy/n-american-oil-companies-scramble-find-workers-despite-boom-2022-04-29/
When Jeremy Davis was laid off from his oilfield job in Texas in 2020, he did not want to leave the industry after 17 years in oil and gas.
But his next jobs brought one mishap after another. He was hospitalized for almost a week following a shift at a chemical manufacturing facility; another company he worked for never paid him, leaving him short $5,000.
“There comes a point and time where you also get extremely frustrated with the unpredictability and (lack of) stability,” said Davis, 38, who now works in construction closer to his home and family near Austin, Texas.
Davis says he would be open to returning to energy, but for now, he is one of thousands of workers in the United States and Canada who have left oil and gas jobs, put off by arduous conditions, remote locations, and insufficient compensation, or lured to the renewables sector as the world transitions to cleaner energy.
Mark Marmo, CEO of Deep Well Services, an oilfield firm based in Zelienople, Pennsylvania, said fracking work in places like West Texas is currently delayed about two weeks to a month because of a lack of labor.
“We hired 350. If we could hire another 350, we’d put them all to work,” he said.
“Sabrina’s “explanations” are laughable to anyone thats been to NoDak, Bakersfield (Double whammy with state level shenanigans) & West Tx. One other question to ponder, why cant anyone get financing (Outside of the Majors) when crude’s at $100/Bbl?”
Financing?
Why would they need financing when every producer is seeing record free cash flow this year? Billions of dollars. Many of the best producers have little debt and could pay it all off this year. Why would they need any more money? Have plenty to pay for their CAPEX.
As it is, companies are paying 50% to 80% of free cash flows back to shareholders because they have nothing else to do with all that cash.
“But its impossible to have saved $1MM, right?”
On a middle class salary, if you start at age 22 to 25, you have a chance. Few do it, however. Life intervenes. Layoffs. Divorce. Higher expenses than anticipated.
As the data shows, just 10% of those in Fidelity and Vanguard 401ks max out the full amount each year. And they are likely upper middle class with a company match. It’s really not healthy for a middle class person to be saving 20% of their income into their retirement plans.
“Link to anyone predicting 3% this Q (other than you making stuff up)”
https://americanstaffing.net/research/asa-data-dashboard/gdp-quarterly-projections/
“Shareholders not being rewarded for pulling oil out at $100/Bbl? Are you high or insane? The only way that happens is if there’s collusion.”
Shareholders have been suffering through a 13 year bear market JohnnyU. What don’t you understand? All you have to do is look at a chart of the XLE next to the S&P 500 over the last decade. Even the last 18 months haven’t erased that pain.
The companies will reward their shareholders for their loyalty, and patience, now that free cash flow is at record highs. What don’t you get? This is how the energy cycles work. After the bear, the companies remain disciplined. This period will last a few years as it did from 1999 to around 2005. By 2005, companies began spending more on capex and drilling more. Crude topped out in 2008 and the bear began again.
We are years away from companies losing their discipline, especially with crude hanging out between $90 and $110.
The companies will now reward shareholders, as we saw from Exxon’s announcement today of its $30 billion share buyback. It already pays the big dividend so it didn’t want to pay out a special, apparently. Pure play producers will pay out even more. And why shouldn’t they? If Alphabet can do a $70 billion share buyback, the energy companies certainly should be doing it with the huge earnings bonanza they are going to see this year.
Second home sales in Southwest Michigan, Galena and Door County are not slowing. Yet.
But many are also bought with cash, so who cares if mortgage rates rise?
From Crain’s:
Some agents say it reached the frothy levels of Phoenix, Florida and the West Coast. “It’s definitely a bubble that will burst,” said Dan Coffey, an owner of Re/Max Harbor Country.
“It’s all still happening this year, even with prices going up and up,” says Angela Stodden, a Keller Williams Realty Signature agent in Galena, Ill. In 2019, the average price of homes sold in Galena rose by 4.7% from the year before, according to data provided by the Rockford Area Association of Realtors, which covers Galena. In 2020, the first year of the pandemic, prices went up 23%, and the next year they went up 22%, to an average sale price of $290,000. The average sale price in the first quarter of 2022 was $291,000.
Like Chicago and most markets around the country, the second-home locales are struggling now with extremely low inventory after two fast years, which only serves to heighten the feeding frenzy over properties that come on the market. “If it comes on the market and it doesn’t look weird, it sells before you know it,” says Ramsey, the agent in New Buffalo.
https://www.chicagobusiness.com/residential-real-estate/chicago-second-home-market-galena-lake-geneva-door-county