Market Conditions: November Sales Jump 15.9% to New 15 Year Record
The Illinois Association of Realtors is out with the November sales data.
It was another red hot month for the city which actually outshone the Chicago Metro area for the first time since the pandemic began.
In the city of Chicago, home sales (single-family and condominiums) in November 2021 totaled 2,338 homes sold, up 15.9 percent from November 2020 sales of 2,018 homes.
The median price of a home in Chicago in November 2021 was $327,000, up 10.8 percent compared to November 2020 when it was $295,000.
Here is the November sales data for the last 15 years (thanks to G for some of the data):
- 2007: 1859 sales and median price of $290,000
- 2008: 1093 sales and median price of $222,500 (16% short/REO sales)
- 2009: 1905 sales and median price of $215,000 (29% short/REO sales)
- 2010: 1144 sales and median price of $182,500 (39% short/REO sales)
- 2011: 1429 sales and median price of $157,000 (43% short/REO sales)
- 2012: 1750 sales and median price of $180,000
- 2013: 1844 sales and median price of $200,000
- 2014: 1638 sales and median price of $230,000
- 2015: 1661 sales and median price of $233,500
- 2016: 1937 sales and median price of $260,000
- 2017: 1959 sales and median price of $256,000
- 2018: 1852 sales and median price of $261.745
- 2019: 1671 sales and median price of $270,000
- 2020: 2018 sales and median price of $295,000
- 2021: 2338 sales and median price of $327,000
The Chicago 9-county metro area, which had been red hot during the pandemic as buyers fled the dense city to get more breathing space, sales were up just 1.2% to 10,321 from 10,201 last year.
Condo and townhouse sales have been driving the Chicago market for several months and continue to do so.
Condo/townhouse sales were up 30.8% year-over-year to 1388 while single family homes were down 0.7% to 950 but inventory of single family homes has been tight for months.
Median condo price rose 6.2% to $345,000 but I caution people about the median price statistics, especially as there were numerous high priced condo closings in the Vista and the Tribune Tower as closings continued in those two buildings.
Days on the market in Chicago rose 2.9% to 35 days from 34 a year ago.
But inventory has now plunged, falling 28.2% to 7,146 from 9,956 a year ago. It’s also dramatically under November 2019, when inventory was 9,046.
Statewide, inventory also plunged to 25,400, down 31.3% from 36,991 a year ago. That’s down more than 50% from 2019’s November inventory of 54,604.
“Condo sales, in particular, reflect the resiliency of Chicago’s market and the momentum we continue to see,” said Antje Gehrken, president of the Chicago Association of REALTORS® and president and designated managing broker of A.R.E. Partners. “Inventory is a point of concern, although it could reflect seasonality coming into play with a holiday season slowdown in listings. Overall, the data demonstrates that Chicago remains a great place to live, work and play.”
The average 30-year fixed rate mortgage was 3.07% in the month, the same as in October, but up from 2.77% a year ago.
“Although prices and the number of sales has declined since their summer peak, they are still up since the same time last year,” said Dr. Daniel McMillen, head of the Stuart Handler Department of Real Estate at the University of Illinois at Chicago College of Business Administration. “Median prices are up more than 7.7 percent since November 2020 and sales are up about 1 percent. Surveys suggest that the pandemic and concerns about inflation are causing consumers to become pessimistic about the economy.”
With inventory this tight going into the spring housing market, will prices continue to rise in 2022?
And when do these near historic lows in inventory begin to impact sales growth?
Illinois home sales and median price increase in November [IAR press release, by Bill Kozar, December 22, 2021]
Even though Gary always posts the monthly numbers ahead of the IAR, so we already know what is going on, this report still surprised me.
It looks like the suburbs have entered into a more seasonal pattern of slowing in November, which is “normal.”
But what will happen in Chicago in January?
There is almost NOTHING on the market out there, even downtown has lower inventory now. Buyers are going to have slim pickings unless a lot of inventory comes on the market.
We’ve been waiting for more inventory for about 5 years now, but it has not come. They are only building rental towers. Few new construction single family homes, townhouses or condos.
Low inventory will mean higher prices next year.
Just got an appraisal done on my home and its up 39% from when I bought it two and a half years ago… my equity has TRIPLED.
feels good man
“Just got an appraisal done on my home and its up 39% from when I bought it two and a half years ago… my equity has TRIPLED.”
That’s great sonies. Congrats.
I wonder if home sales are now slowing there due to affordability issues?
It’s not like average income is high in that region. And home prices up 39% have to price out a big chunk of first time buyers and middle class. Those moving in from California will still find it affordable, though, if they have home equity from California. That would include a lot of retirees.
Today’s data on existing home sales does show a slowdown nationwide, especially in first time buyers.
Affordability is going to be an issue in many parts of the country.
“Affordability is going to be an issue in many parts of the country.”
———————————————-
Not in Chicago! As Gary has shown time and again, HAWT or not, Chicago’s prices are going nowhere compared to the rest of the country.
Companies aren’t moving in and drawing people to Chicago, which would bid up prices. You would think that companies would come here and use Chicago’s cheap housing as a draw for potential employees.
But they’re not. Why? Wacko Lib Dems (not just lib dems, but wacko ones) and their incompetence and corruption are killing this city.
“Companies aren’t moving in and drawing people to Chicago, which would bid up prices. You would think that companies would come here and use Chicago’s cheap housing as a draw for potential employees.”
No, no companies are coming to Chicago and there aren’t any jobs.
All 6000 downtown apartments were rented to no one this year. They are sitting empty.
Yet somehow there is 60+ story high rise going up on the River with the Salesforce name on the side of it.
Oh, and there’s another new 54 story high rise that has now opened on the River in the Loop. But no new companies are coming to Chicago.
Wait a minute: Amazon is adding another 450 corporate jobs in Chicago and just took out a bigger lease to accommodate them. Imagine that.
For those of you who live outside of Chicago (and Illinois), you really don’t know what is going on here just because you come in to go to a Cubs game once a year.
https://www.fox32chicago.com/news/amazon-to-create-hundreds-of-corporate-and-tech-jobs-in-chicago
But you are right, johnc, that affordability isn’t as big of an issue in Chicago.
It’s STILL an issue in some neighborhoods, however. But we don’t have an overall median price of $500,000 for single family homes in every neighborhood like some cities right now. Thank god.
The Midwest, in general, is really well situated. Prices have gone up sharply in St. Louis and Cincinnati in the last year but they are still really affordable compared to the coasts. And even Florida is now “expensive.”
I really recommend people consider San Antonio though. It’s growing fast and you can still buy a new house for around $300,000. Would be just 1800 square feet, but that’s cheaper than renting. Retirees should really look at San Antonio.
“ For those of you who live outside of Chicago (and Illinois), you really don’t know what is going on here just because you come in to go to a Cubs game once a year.”
Would agree. Going into Wrigley drops ones IQ 60 pts
Did everyone see the migration data that the census bureau just put out?
It’s from July to July. Illinois lost among the highest percentage of people during that year, or 114,000 people left Illinois. More left NY and California, but only because they are bigger. But as a percentage, Illinois was huge.
Also interesting that Hawaii ranked in the top “loser” states and the District of Columbia.
But what I find so fascinating is that even though 114,000 left Illinois, the state housing inventory still managed to get cut in half and is at multi-year lows.
Everyone who is staying is still buying??? Those who left were renters????
Fascinating.
Another luxury home sold this week, adding to the record sales for properties priced over $4 million this year. Sellers bought it in 2018 for $11.9 million.
From Crain’s:
A mansion in Lincoln Park sold today for $12.55 million, the highest local sale price so far in 2021.
Andrew and Sandy Killion sold the six-bedroom, 8,000-square-foot villa-style mansion on Burling Street seven months after they put it on the market at $15 million.
https://www.chicagobusiness.com/residential-real-estate/lincoln-park-mansion-sells-126-million
“Did everyone see the migration data that the census bureau just put out?”
Yes. Wasn’t much of a surprise. A trend that will likely continue for at least a few more years if not longer.
“Everyone who is staying is still buying??? Those who left were renters????”
I think its a couple of factors. High School graduates in Illinois are going to non-Illinois schools for college at a higher rate than 10 years ago (and 10 years ago that rate was higher than the previous ten). It also looks like its not necessarily that more are going to IU or Iowa but more are traveling longer distance (schools in the south and west in particular) compared to 10 years ago. Once they graduate they stay out west or south.
Higher percentage of recent College graduates that attended a college in Illinois are also moving out of State.
Boomers have been retiring at 10,000 per day nationally for a couple of years and the pandemic accelerated the trend. The same trend has proved true in Illinois and we know plenty of Illinoisans leave (partially or fully) when they retire in normal times.
People on the South and West sides have been moving mainly to the south burbs or Indiana for a number of years. I imagine Covid may have accelerated more moves to Indiana.
Immigration has been down for a couple of years now as well and Chicago has a large undocumented community (who are counted in Census figures) who mainly work in the service sector. When everything was shut-down I imagine alot of people left for places that remained or quickly opened as they don’t qualify for UI or Federal Stimulus.
ChalkBeat has an article (link below) that Hammond Elementary in Little Village has lost 30% of its enrollment since the beginning of the pandemic. Ruiz Elementary and Orozco Elementary in Pilsen lost 25% and 40% of its students since Covid started.
“Pilsen and Little Village, which grappled with overcrowded schools less than a decade ago, had some of the city’s steepest enrollment losses during the COVID outbreak — both down almost a fifth of their elementary students, compared with an almost 10% decrease districtwide.”
“But what’s striking about these more recent losses in predominantly Latino schools is that they haven’t spared larger schools, such as Gary Elementary, another Little Village school that lost a fifth of its students in two years and now serves about 800 students. And although the district has been hit hardest in the earliest grades, older grades also saw losses: Madero Middle School in Little Village, for example, shrunk by almost a fifth.”
“Astrid Suarez, the education director of the Little Village-based nonprofit Enlace Chicago, says the organization estimates that up to a quarter of residents are undocumented. They bore the brunt of job loss and other economic fallout but were not eligible for government financial relief.”
Not immigration related but Bronzeville high school lost almost 50% of enrollment and Austin College & Career Academy lost over 33% since the pandemic started.
Obviously downstate has been losing population over the past decade. I imagine this has continued to accelerate as well during Covid.
https://chicago.chalkbeat.org/2021/11/22/22796673/chicago-public-schools-latino-student-enrollment-shrinking-pandemic
Thanks for the info WP.
The surge in the last year was much higher than anything we’ve seen in a decade though. The Baby Boomers have been retiring for years already but perhaps the pandemic really lit a flame under them as we’ve seen with all the Gold Coast condo sales, and they all decided that life was too short and they just want to be in Florida full time now.
I would not be surprised by that. Boomers have been leaving for warmer weather for years.
But those who left from Pilsen or Bronzeville is more intriguing. Were they renters and that’s why there is no jump in inventory? What has happened to rental inventory then? That should have soared- and maybe last year it did in those neighborhoods as Chicago got hit hard.
But someone must be moving in to buy up all the homes that were on the market. Or were locals renting and decided to buy? And it’s not just Chicago. It is statewide.
If you think more of our college graduates are leaving, then those who are coming in, it would have to be a LOT more leaving to really add anything to the total numbers.
It’s very interesting.
I’m also intrigued by the decline in Hawaii. Are prices just too high there now so residents are fleeing?
Also, nationwide, it was the slowest population growth in 200 years.
“If you think more of our college graduates are leaving, then those who are coming in, it would have to be a LOT more leaving to really add anything to the total numbers.”
It’s high school and college graduates. High school graduates in 2017 wouldn’t graduate college until spring 2021 (or spring 2022). Most still came home for the holidays and summers. When they get jobs after graduating is when they update their residency.
From WBEZ/NRP
“Out migration rates were much lower in 2002, when only 29 percent of Illinois high school graduates enrolled in four-year colleges and universities outside the state. Since then, the rate of students leaving the state for college has increased by nearly two-thirds. In 2017, 48.4 percent of students left for four-year schools out of state.”
“Eric Lichtenberger, deputy director of IBHE’s information management and research division, said even though the number of high school graduates declined between 2016 and 2017, the same number are going to college overall — in and out of state.”
https://www.wbez.org/stories/illinois-college-student-out-migration-continues/62f5aa14-f06a-40bc-b728-6ba29a2d06b6
“It’s high school and college graduates. High school graduates in 2017 wouldn’t graduate college until spring 2021 (or spring 2022). Most still came home for the holidays and summers. When they get jobs after graduating is when they update their residency.”
Here’s a more recent report examining trends from 2014 – 2018 for Illinois College Graduates and general outmigration in Illinois.
“Most of the people who left Illinois did not have a college degree, but the total number of people with college degrees leaving the state grew faster between 2009-2013 and 2014-2018.”
“There were bigger changes in the number of higher-income people leaving than low-income people leaving”
So a bigger slice of high school graduates go to college in other states and there has been an acceleration of college graduates leaving the state in general along with people that have higher incomes from 2014 – 2018 compared to 2009 – 2013.
https://www.npr.org/local/309/2020/01/08/794320135/five-charts-that-show-who-s-leaving-illinois-and-why
“ Wait a minute: Amazon is adding another 450 corporate jobs in Chicago and just took out a bigger lease to accommodate them. Imagine that.”
While those jobs on paper are based at their Chicago office, none of them will actually go into the office except for a holiday party, team meeting, or to host customers for a meeting (not happening now still due to Covid hysteria in tech social circle). These jobs are $200k-$500k and will benefit the work from home with an office crowd that dispise commuting now that they have a taste of work from home. So Naperville, Hinsdale, and the north shore will be winners when 30-60 year olds get these jobs, and move to the burbs for better schools for their kids and less crime.
“Did everyone see the migration data that the census bureau just put out?
It’s from July to July. Illinois lost among the highest percentage of people during that year, or 114,000 people left Illinois. More left NY and California, but only because they are bigger. But as a percentage, Illinois was huge.“
Because Illinois and Chicago are a SHITHOLE! Why would I choose to live in a Covid lockdown, violent, carjacking/shooting, shit school location, with high taxes, constant looting, bridges up rioting, high tax, low home appreciation environment? I can work anywhere remote and can live in better climate along with less of all of the things above. Dallas, Austin, Nashville, Atlanta, Denver, Phoenix, St Pete/Tampa are all wildly better weather and have much better housing appreciation over the past 20 years. Moving to FL was the best move I ever made.
“I can work anywhere remote and can live in better climate along with less of all of the things above. Dallas, Austin, Nashville, Atlanta, Denver, Phoenix, St Pete/Tampa are all wildly better weather and have much better housing appreciation over the past 20 years. Moving to FL was the best move I ever made.”
Better weather?
Come on. You can’t honestly be arguing Florida has “good” weather. If you were talking about California, then, yes. But Florida? Phoenix? Dallas? Nashville? Austin have “better weather”?
Yikes.
No.
Denver, however, I think is quite lovely despite all the snow in the winter. It has the most sunshine of any major US city so I’m into that.
I’m glad you love Florida Mike HG. I’ve said for years on this blog that America is a big place and there’s no reason to stay where you are unhappy. Lots of great cities and places to go.
But why is everyone leaving Hawaii? I didn’t see that one coming.
From the WSJ:
“Seventeen states lost population, led by New York (-1.6%), Illinois (-0.9%) and Hawaii (-0.7%). California, which recorded only its second decrease ever after logging its first last year, dropped by 0.7%. The District of Columbia’s population dropped 2.9%.”
I guess this is the second year in a row that Hawaii’s population declined.
Lack of affordable housing the reason? No real job opportunities for the young? People bored?
https://www.wsj.com/articles/covid-19-pandemic-drives-u-s-population-growth-to-record-low-11640098763
Okay- I found this from last year. Looks like the reason people have been leaving Hawaii for the last 10 years is lack of jobs. Most are in tourism. If you have ambition, you have to get out of there.
But I wonder how WFH will impact this? If you can work from anywhere, why not Hawaii? But it still saw a decline through July 2021.
https://www.sfgate.com/hawaii/article/hawaii-exodus-2020-people-leaving-doubles-15832708.php
People leaving Hawaii has been an ongoing issue during the past decade. From 2013 to 2019, Hawaii saw a net migration of 61,700 move to the mainland. California was a top destination for former Hawaii residents, receiving more than 20 percent of domestic migrants, the Department of Labor reported in 2019.
Residents with higher levels of education, such as a master’s degree or beyond, were more likely to move out of the state, while those with education less than a high school diploma were the least mobile.
“While those jobs on paper are based at their Chicago office, none of them will actually go into the office except for a holiday party, team meeting, or to host customers for a meeting (not happening now still due to Covid hysteria in tech social circle).”
Well- Amazon doesn’t agree with you Mike HG because it just signed a bigger lease downtown.
Many businesses have been adding to their leases downtown. Many tech employers don’t want their employees to work from home 100% of the time.
“ Well- Amazon doesn’t agree with you Mike HG because it just signed a bigger lease downtown.
Many businesses have been adding to their leases downtown. Many tech employers don’t want their employees to work from home 100% of the time”
That’s because they had to pretend to create actual corporate jobs if they were going to get all of their new warehouse distribution centers built. Austin, McKinley Park, etc. they absolutely have to have those rapid distribution centers if they are going to meet their prime same day orders guarantees
Enjoying the chatter about real estate in Chicago and market conditions. I have interest in helping my daughter find a good neighborhood with lower end pricing of condos. Printers Row looks like a good area and the old buildings there look interesting. Any recommendations and ‘intell” on the best first time buyer properties would be appreciated.
“Printers Row looks like a good area and the old buildings there look interesting. Any recommendations and ‘intell” on the best first time buyer properties would be appreciated.”
Welcome to the blog Ricardo.
Inventory is low but starting in January, it should start to rise with the spring housing season. It usually begins after the Super Bowl, but in the last few years there has been less and less seasonality. This year, with mortgage rates expected to rise in 2022, many sellers will be listing early in the year and many buyers will already be looking.
Printers row has a lot of cute condos if your daughter likes lofts but there are some other high rises in the area too.
Every neighborhood has “affordable” first time buyer properties (some larger than others) so you really have to pick a neighborhood and go from there. Also, does parking matter? Many buildings in Printers Row don’t have garages but there is a central rental garage.
Personally, I would also only buy a property with in-unit washer/dryer. All the new apartments have them and buyers of condos want them. It actually will hold back a property these days NOT to have it.
I don’t think many us can give you any recommendations on first time buyer buildings as you haven’t gold us the key things:
1. parking?
2. washer/dryer?
3. outdoor space?
4. price point?
“That’s because they had to pretend to create actual corporate jobs if they were going to get all of their new warehouse distribution centers built. Austin, McKinley Park, etc. they absolutely have to have those rapid distribution centers if they are going to meet their prime same day orders guarantees”
Amazon has already had downtown space here MikeHG. They are adding more. And they aren’t the only ones. Dozens of companies have added downtown space in the last 2 years.
Amazon announced they are adding corporate jobs in several cities including Austin, Denver and others.
There simply aren’t enough engineers and other skilled corporate labor in DC, NYC, Seattle and San Francisco. There really is no such thing as Amazon HQ2 anymore. All the big tech companies have been hiring for corporate jobs all over the largest US cities for the last decade.
Facebook, Alphabet, Amazon, Salesforce have all had sizable corporate headcounts in Chicago for 10 years now.
You lose all credibility when you imply that the jobs are “fake” just so they can get distribution facilities built here.
“Facebook, Alphabet, Amazon, Salesforce have all had sizable corporate headcounts in Chicago for 10 years now.“
And none of these employees have been in the office in almost 2 years. They are never going to return either. They’ve all gotten a taste of work from home and will never give it up. Maybe a bi monthly team meeting or a client lunch, but that’s about it.
“And none of these employees have been in the office in almost 2 years.”
This is incorrect. About 50% of downtown and Fulton Market employees are back in the office including at many big employers such as McDonald’s, Morningstar, Citadel. Due to the Omicron outbreak, and the indoor mask mandates returning, some have sent everyone home again with February “return to the office” dates. That’s all subject to change, however.
I’m assuming that by April and May, many offices will be allowing workers back whenever they want to come back. And that we will see a return of summer interns in 2022 (hooray!).
Many companies are giving their employees options to work from home, if they want. They all don’t “want.”
As I’ve stated many times before, my kids do not want to work from home for forever. They cannot wait to get back into the office. They are single, childless and live near their offices.
There is a reason that over 6,000 apartments have leased downtown. Those renters expect to go back into the office a few days a week and want to be close. It also puts them close to restaurants, shopping, sporting events, parks and neighborhood parties.
Gary posted an article yesterday on the Case Shiller data. I found it interesting (though not surprising) the dichotomy between Chicago condo and SFH appreciation and how certain people (Sabrina) think its first time buyers driving the market.
During all of Covid, Condo appreciation hasn’t topped 5% YoY but SFH price growth has been >10% for at least a year now. Condo prices actually fell in October YoY.
Historical data shows Condo and SFH price growth correlation with relatively few exceptions (01, 06, 09, 11, and 14) with 06, 09, and 11 (before this past year) showing SFH appreciating materially faster (or slower depreciation in the aftermath of GFC) than Condo’s.
Will be interesting to see if SFH appreciation drops to where condo appreciation has been over the past 2 years (sub 5%) or if condo appreciation meets SFH appreciation somewhere in the middle in the coming year(s) or if Covid has just changed the housing market for the foreseeable future with materially higher demand relative to supply for SFH compared to Condo’s.
Sabrina keeps thinking more Condos or conversions to Condos from apartments will occur. If you are a builder/developer in the Chicagoland area SFH projects are more lucrative based on current charts.
https://www.chicagonow.com/getting-real/2021/12/case-shiller-3rd-month-of-slower-home-price-growth-in-chicago-area/
“Sabrina keeps thinking more Condos or conversions to Condos from apartments will occur. If you are a builder/developer in the Chicagoland area SFH projects are more lucrative based on current charts.”
Yes, the conversions will eventually occur just due to supply and demand dynamics. Builders don’t need to take out construction loans. Easier and cheaper to just convert an existing building.
Case Shiller is for the entire Chicago metro area. Why do you think that first time home buyers aren’t driving single family home sales in Naperville, Orland Park, and Palatine?
Or in Portage Park, Jefferson Park, Galewood, Woodlawn, McKinley Park or Morgan Park?
We know that Millennials are taking out 50% of all mortgages. They’re buying something, right? First time applications were 67% Millennials in 2021.
I don’t look at Case Shiller because it covers areas I don’t care about and it’s too hard to parse out data from it. Real estate is much too localized for that. Heck, even within the City of Chicago, there are neighborhoods that are struggling, with too much inventory, and others where inventory is at record lows and properties are selling for record high prices.
“Many companies are giving their employees options to work from home, if they want. They all don’t “want.”
Those employees also don’t “want” to work from the office 5 days a week.
“They cannot wait to get back into the office.”
Everyday or 2 – 3 days a week?
“There is a reason that over 6,000 apartments have leased downtown. Those renters expect to go back into the office a few days a week and want to be close.”
Or they don’t want to live with their parents anymore and their friends currently live in these downtown neighborhoods. They were also working in an office for a few years prior to the pandemic and recall how that shaped where they lived. Office culture has fundamentally changed and will take a few years to shake out.
If you were in high school or freshman year of college when the pandemic hit and did two years of zoom school from your parents house will this generation who was socially isolated for so long want to go to an office 3 – 4+ times a week after they graduate and live in a small unit in a building with hundreds of other people in it?
Most if not all of the connections and friends they have generated are from their hometown not the college town anymore. Yeah, they might have a friend or two they generated from zoom school but have they even met them in person or hung out with them? Maybe one or at best two semester so far instead of 2+ years.
I don’t know how all this shakes out but to assume everything goes back to the status quo of the prior 5 – 10 years seems unlikely.
“It also puts them close to restaurants, shopping, sporting events, parks and neighborhood parties.”
shopping = Amazon/online
sporting events: google youth sports declines since the pandemic started. This would be pretty similar for intramurals in college. in 2019 (pre-pandemic) College Football attendance was at a 24 year low. Now factor in two years of zoom school…. College Basketball can’t attend games for two years now. MLB had declining attendance pre-covid and will continue to have alot of issues for the foreseeable future. NBA was doing well pre-covid but is down this year along with NHL. Maybe its just Covid concern and not people re-evaluating what they want to spend money on or general social isolation from Covid where people want to go but don’t have friends to go with.
Restaurants = getting more expensive, more friction created with Covid i.e. had to reserve and plan ahead instead of just showing up and now vaccine mandates. Lots of restaurants are now just moving to take-out only because they don’t have the staffing or desire to do this.
neighborhood parties = See previous statements on zoom school. Don’t need to be downtown for this.
Parks I’ll give you. The Lakefront path and various parks is a big draw for alot of people especially during Covid. Not sure if this + going into the office a couple times a week keeps demand going in the city center for apartments/living.
“Why do you think that first time home buyers aren’t driving single family home sales in Naperville, Orland Park, and Palatine?
Or in Portage Park, Jefferson Park, Galewood, Woodlawn, McKinley Park or Morgan Park?”
Look at the prices of these areas. Unless the Bank of Mom & Dad is financing the DP (and maybe guaranteeing the mortgage) first time homebuyers aren’t able to afford Naperville and Jefferson Park.
I’m not sure most millennials are itching to move to Woodlawn, Galewood, McKinley Park, or Morgan Park either. With the exception of Woodlawn people go to these neighborhoods to visit Grandma and Grandpa not buy their first home.
Woodlawn is getting better and will continue to get younger. I’m not sure how long it stays “affordable” for though.
Orland Park and Palatine are affordable for first time homeowners who are originally from the burbs or done with the city and want good schools.
“Case Shiller is for the entire Chicago metro area.”
Correct but why is home ownership appreciation of SFH’s 3x higher for Condos?
“We know that Millennials are taking out 50% of all mortgages. They’re buying something, right? First time applications were 67% Millennials in 2021.”
Wouldn’t Condos be more affordable than single family homes for first time buyers? Why a 3x difference in price appreciation?
“there are neighborhoods that are struggling, with too much inventory, and others where inventory is at record lows and properties are selling for record high prices.”
The last few months though Condo sales have been sharply higher yet condo appreciation isn’t occurring and significantly lagging SFH. This dichotomy is rare based on the historical data for Chicagoland.
““Case Shiller is for the entire Chicago metro area.”
Correct”
Not entirely correct–does not include Lake County, IL.
“Denver … has the most sunshine of any major US city”
Uh, wrong??
https://www.currentresults.com/Weather-Extremes/US/sunniest-cities.php
Even if you want to argue what constitutes a “major” city, you can’t claim it for Denver, but not Los Angeles–more clear days, higher % sun. Of course, that’s going to vary a lot on where you live in LA, to a much greater degree than metro Denver.
And PHX is of similar major-ness, and it’s way ahead of DEN on all the sunshine measurements.
“Yes, the conversions will eventually occur just due to supply and demand dynamics. Builders don’t need to take out construction loans. Easier and cheaper to just convert an existing building.”
So Supply & Demand matter in this instance, but not wrt lack of appreciation in the chicago market?
As rates rise (per Fed signals) what affect is that going to have on conversions? Selling price will drop on a $/sf metric making conversions less appealing.
Maybe you’ll get lucky and the new Invsco will hit the market
“the new Invsco will hit the market”
Will they offer 3/3/3 to entice “buyers” to support the pyramid?
“They cannot wait to get back into the office.”
I think a portion of 20-somethings sincerely feel that way (i.e., they’re not just saying it to appear eager or because it’s what the boss wants to hear), but it’s a minority, and it’s mainly in NYC and Chicago (though during both of my two one-week Chicago office visits this year, the office was empty). And then there’s a portion of 40 – 70 year-olds, mostly right wingers, who never stopped going to the office. But most people who have any real choice in the matter have zero interest in ever returning to pre-pandemic office attendance. The only people who are saying otherwise are office building landlords and their brokers, and to some extent the leadership of the firms and companies who are tenants with long term, expensive leases on those spaces (i.e., those whose income depends on a return to nearly pre-pandemic office attenance, and those who don’t want to appear to have made bad decisions). And yes, also industries that depend on office attendance, from dry cleaners to restaurants (both the fast food sort, and the places that depend on exspense account lunches and dinners), but those aren’t the folks who are planting all sorts of ginned up commentary into industry media). I’m still in my PJs and I took 2 minutes to go to the kitchen to make a PBJ for lunch…and will hit the 250 hour mark for the month by tomorrow. Had I been getting dressed up and commuting 2 hours a day to go into the office all month, I would’ve have been much less productive and even more miserable.
I have zero desire to go back to the office, I like everyone there but man working from home is frickin sweet and I can see why folks don’t want to go back to commuting or whatever.
“I think a portion of 20-somethings sincerely feel that way (i.e., they’re not just saying it to appear eager or because it’s what the boss wants to hear), but it’s a minority, and it’s mainly in NYC and Chicago (though during both of my two one-week Chicago office visits this year, the office was empty).”
Have you been on a college campus this year?
I’m asking in all seriousness.
If you think THOSE students want to graduate and then go sit in their parents house or in some suburban apartment somewhere, you are NUTS. Literally NUTS.
And it’s nationwide.
The students were just as eager to go back to campus at University of Tennessee as they were at Stanford.
All you old people saying how great it is that you can sit around in your pajamas are just that: old. You are at the end of your careers, not the beginning. You don’t need to learn from peers or bosses. You have nothing new to learn. You don’t want to go to happy hours after work or take the firm’s tickets and go to that Cubs or Sox game.
Young Millennials and GenZ WANT to be in offices. They WANT to be among people. They just suffered a 2 year trauma that has stunted them. Why do they want it to continue?
So Supply & Demand matter in this instance, but not wrt lack of appreciation in the chicago market?
Chicago real estate has appreciated, on average, 1 to 3% a year for the last 100 years.
It has never stopped people from buying real estate in Chicago and it won’t going forward.
People will buy because it will be cheaper than renting. Or because it will be nicer than renting, although, at the moment, it’s not.
Over 6,000 luxury apartments rented in the last 12 months in downtown Chicago. We have the most educated population of young people in the nation. Plenty of them will buy condos/townhomes/houses. They aren’t any different than any other generation, no matter how many times the old people in America try to make it so.
“Correct but why is home ownership appreciation of SFH’s 3x higher for Condos?”
Because no one wants that condo in Naperville, WP?
Because in a pandemic, no one wanted to live next door to someone else in a tight space? Because they wanted their own home with a backyard in a pandemic?
All of this has been talked about ad naseum on this blog and nationally in the media for the last 2 years.
“The last few months though Condo sales have been sharply higher yet condo appreciation isn’t occurring and significantly lagging SFH. This dichotomy is rare based on the historical data for Chicagoland.”
No one wants that condo in Wheaton, apparently.
“Look at the prices of these areas. Unless the Bank of Mom & Dad is financing the DP (and maybe guaranteeing the mortgage) first time homebuyers aren’t able to afford Naperville and Jefferson Park.”
What are you talking about?
You honestly think that Millennials who are renting in Lakeview can’t afford a $450,000 house in Jefferson Park?
You can put down 3% to 5% and it’s probably still cheaper than their rent in Lakeview. You don’t need Mom and Dad to come up with a downpayment if you have dual incomes.
I don’t know why you think “first time buyers” are poor WP. Lol.
Even Toll Brothers has said that 25% of their buyers of their pared down product, which starts at $500,000, are Millennials.
Plenty of people moving to Galewood, which is right next to Oak Park, especially those who work for the city as teachers, librarians, for the park district etc.
You are thinking only of those who live in the GreenZone. Plenty of other people in the world WP. Get out and see the world.
Bronzeville is one of the hottest neighborhoods in the city right now.
Jefferson Park is far more affordable than Woodlawn. Gasp. Imagine that.
“Those employees also don’t “want” to work from the office 5 days a week.”
It won’t matter. Before the pandemic, McDonald’s designed its headquarters in the West Loop so that on any given day 25% of the employees would be working from home.
Does it matter to the neighborhood? To the restaurants nearby? To McDonald’s? (other than they designed the interior office space to accommodate the work-from-home.)
McDonald’s workers, by the way, were back in the office several months ago. Might not be doing 3 days a week anymore though. Maybe 2 days. I don’t know. But they are going back.
So it will be for other companies too.
And just like the “city is doomed” people- those who think no one will go back to the office ever again will be wrong again.
Humans are social. We want to be among our work colleagues. Will we go back to the pre-pandemic ways at many firms? No. And isn’t that good? No one should be commuting 2 hours, each way, every day for some dumb job.
“Or they don’t want to live with their parents anymore and their friends currently live in these downtown neighborhoods.”
What 20-something with a job wants to live with their parents????
My god.
And they certainly don’t want to sit in their apartments, by themselves, or with a bunch of roommates, zooming every day and sitting on their computers when they could be in the office actually socializing, learning, and getting out of their apartments.
They cannot WAIT.
And, yes, they are living NEAR those offices now and it’s not a big deal to walk over to the office a few days of the week to do this.
Hooray!
“If you were in high school or freshman year of college when the pandemic hit and did two years of zoom school from your parents house will this generation who was socially isolated for so long want to go to an office 3 – 4+ times a week after they graduate and live in a small unit in a building with hundreds of other people in it?”
My god. They literally RAN back to campus this year as soon as they could. 100% vaccinated on most campuses and now they will all get the booster in order to stay on campus. Couldn’t wait to move into that dorm or group apartment. Went as soon as they could. Same with the high schools.
Already, they are in serious depression that many colleges are going to go remote for the first few weeks of the winter term.
You think THESE kids (GenZ) will want to graduate and work from home for the rest of their lives after what they’ve just been through?
Get out of town.
And you are actually analyzing how no one will go to sporting events, to shopping malls, to restaurants because of COVID?
LMFAO.
“I have zero desire to go back to the office,”
You’re old sonies. You’ve been doing the grind for decades, right? You don’t care if you meet people, learn things, make friends.
Young people do.
80% of humans are extroverts. That segment will NOT want to stay at home every day for the rest of their lives. No way.
“You honestly think that Millennials who are renting in Lakeview can’t afford a $450,000 house in Jefferson Park?”
According to Domu the average rent for a 1 bedroom in Lakeview ranges from $1300 – $1800 (range based on quality). A $450K house with 5% down at a 3.15% rate for 30 years is $1,934 + Property Taxes, PMI, utilities, and homeowners insurance so the short answer to that would be no…..
“You don’t need Mom and Dad to come up with a downpayment if you have dual incomes.”
Two bedroom in Lakeview rents between $1,800 – $3,100 so call it ~$2,500 or $30K per year. Sure you might not need mom & dad for the 5% downpayment or $22.5K but after you factor in ~$10K – $15K in new furniture and moving expenses along with another ~$10K – $20K to fix up an aging SFH in Jefferson Park we are now talking about ~$45K – $60K that’s needed. Probably will need to buy a car as well.
So after spending $45K+ on a downpayment, touch ups/fixes, and new furniture your monthly expenses are still higher than the 2 bedroom you rented in lakeview after factoring in P&I, taxes, utilities, HOI, PMI, car payment, and car expenses (insurance, gas, maintenance, etc.), also need to build a reserve account for the annual maintenance of an older SFH in Jefferson Park.
Sounds very affordable. What a deal.
How old are these millennials are y’all keep talking about? I’m a millennial and the group your describing seems a lot younger.
“Even Toll Brothers has said that 25% of their buyers of their pared down product, which starts at $500,000, are Millennials.”
As you have previously said the oldest millennials are 40. First time homeowner doesn’t = all millennials. Some are trading up.
Toll Brothers is also selling new homes that will (at least should) require minimal maintenance/upkeep for the first few years and homeowners probably receive some decent warranties unlike the person buying in Jefferson Park.
Further, what are the property taxes in the cities that Toll Brothers is selling these $500K+ homes? Probably a fraction of what it is in Chicago.
“Jefferson Park is far more affordable than Woodlawn. Gasp. Imagine that.”
Please cite. Per Redfin November 2021 statistics median price in Jefferson Park is $359K compared to $318K in Woodlawn.
Maybe East Woodlawn is on par or slightly higher than Jefferson Park but not when you include west Woodlawn as well.
“Please cite. Per Redfin November 2021 statistics median price in Jefferson Park is $359K compared to $318K in Woodlawn.”
They are building new builds in Woodlawn where the city has given them the property for almost nothing and the “cheapest” they will be able to sell them is still over $500,000.
Lol.
“How old are these millennials are y’all keep talking about? I’m a millennial and the group your describing seems a lot younger.”
Millennials who might be first time homebuyers are anywhere from 29 to 33 years old as that’s when they are marrying.
Youngest Millennial is now about 24.
Where are these 5% down mortgages on a $500k home? What is the PMI here? 3 points for that much leverage? Literally do not see any lenders offering anything below 20% down.
“According to Domu the average rent for a 1 bedroom in Lakeview ranges from $1300 – $1800 (range based on quality). A $450K house with 5% down at a 3.15% rate for 30 years is $1,934 + Property Taxes, PMI, utilities, and homeowners insurance so the short answer to that would be no…..”
Why are you assuming that homebuyer is a singleton WP?
$1300 in Lakeview? Maybe for a studio.
But take that $1500 and multiply it by 2. And now you can see how they can easily afford a $450,000 home (or a condo, for that matter.)
The reason so many Millennials are buying suddenly is because the largest group of them is now marrying. They want more space. They are finally moving out of their apartments and the pandemic pushed them into buying SFH.
This will go on for several years because they are reaching the key age range over that time. And since there are so many of them, they are now dominating the housing market. Although, in many areas, the Baby Boomers are too, especially in retirement cities or in city centers for those who want an urban retirement.
Crain’s has recently talked about how retiring Baby Boomers are again buying condos in downtown Chicago because they can sell their suburban homes to Millennials looking out in the suburbs and there are deals on the downtown condos (although those have mostly slipped away now.)
Much like the apartment deals of 2020, if you haven’t bought the cheap downtown condo, you have missed your chance. There won’t be many deals in 2022 with this tight inventory.
“My god. They literally RAN back to campus this year as soon as they could. 100% vaccinated on most campuses and now they will all get the booster in order to stay on campus.”
Good lord you are banking on every Ivy League, UofC and Northwestern graduate all choosing Chicago after graduation. Oh and they are all remote for at least the first month for the spring semester.
Is there any state school that’s requiring a booster? Heck most of the State schools didn’t require the original shot (unless you attended in person classes). UofI and NIU were the only State school that had >80% of students vaccinated as of November…..
https://www.chicagobusiness.com/education/illinois-universities-enforce-covid-vaccine-mandate
“They are building new builds in Woodlawn where the city has given them the property for almost nothing and the “cheapest” they will be able to sell them is still over $500,000.”
You are comparing new builds in Woodlawn to non-new builds in Jefferson Park. Makes sense….
“Sounds very affordable. What a deal.”
Why does it have to be “affordable” now? We’re simply talking about home sales. Millennials are driving this market in Chicago and nationwide. They HAVE to. They are the largest generation in US history, mortgage rates are at record lows, they are now marrying and starting families.
It’s not rocket science.
“You are comparing new builds in Woodlawn to non-new builds in Jefferson Park. Makes sense….”
No. A new build in Jefferson Park would be $800,000 because they aren’t getting the land for free.
Woodlawn is actually MORE expensive than Jefferson Park now.
But who cares? Every neighborhood is different. But the fact remains that SFHs are red hot city wide and it’s Millennials who are buying them.
“Good lord you are banking on every Ivy League, UofC and Northwestern graduate all choosing Chicago after graduation. Oh and they are all remote for at least the first month for the spring semester.”
Never said any such thing. These college students will choose ALL cities nationwide. They will go to Atlanta, Nashville, Austin, Des Moines, Milwaukee, Chicago, NYC, Washington DC, LA, San Diego, Phoenix and wherever else the jobs take them.
But they will go. They will NOT live in Elgin and work from home.
Lol.
“Is there any state school that’s requiring a booster?”
All of them?
Michigan and Illinois have already said you MUST have it. I lost track of how many others are requiring it.
This is where old people get it so wrong. These young people WANT to go to the office. They WANT to go to class. They WANT to go to that sporting event, on that airplane, to that concert. If it means they are triple vaxxed, then they don’t care. They are triple vaxxed.
They want to LIVE. Thank god. They will save the rest of us.
“Where are these 5% down mortgages on a $500k home? What is the PMI here? 3 points for that much leverage? Literally do not see any lenders offering anything below 20% down.”
Fannie and Freddie offer them. First time buyers most likely aren’t doing the 20% down.
I’ve known some to do 3% with a VA loan, but those have bad terms so it doesn’t make much sense to do it.
Again, 67% of all first time mortgages are being taken by Millennials nationwide. 67%. 36% of repeat mortgages are by Millennials. They are THE most dominant group in the housing market now. As they should be. No different than the Baby Boomers 40 years ago.
“ Crain’s has recently talked about how retiring Baby Boomers are again buying condos in downtown Chicago because they can sell their suburban homes to Millennials looking out in the suburbs and there are deals on the downtown condos (although those have mostly slipped away now.)”
I thought Millennials all wanted to live tEh CitY?
Maybe it’s boomers driving the downtown market
“Have you been on a college campus this year? I’m asking in all seriousness. If you think THOSE students want to graduate and then go sit in their parents house or in some suburban apartment somewhere, you are NUTS. Literally NUTS.”
Sabrina: You are conflating WFH vs pre-pandemic office attendance, and living in a suburb vs living in a city.
Anyways, the closest University of Colorado property (housing) is about a mile from my house, and I’m about two miles from the center of its flagship campus. I run through campus nearly every day, we attend events on campus, and bring in from the burrito, pizza and sushi joints you’d expect to see in a college neighborhood. Every time college kids light a couch on fire (because the Buffs lost, or won) or a party turns into a riot (none of which are new trends here), or there’s a Covid outbreak on campus, it dominates our local “news”. My wife is an adjunct at another college (where we’re pretty sure she contracted the Covid our household had in Oct). My mother in law has an endowed chair at one university and retains an office at her former university. For those reasons and others, I am keenly aware of the vibe on college campuses.
On a warm day in May 2020, after a spring semester of online-only classes had just finished, I was out for a drive with the kids. As in, we were going a little stir crazy after a couple months of not leaving our neighborhood, so we just cruised around town a little, drove up some canyons to take in some views, etc. I decided to get home by cutting through the Hill neighbord that’s adjacent to campus (it’s blocks of little apartments and dumpy old houses with lots of bedrooms crammed into them, beer pong tables on front lawns, etc.; those blocks transition into more of a family hood, where JonBenet Ramsey lived, then it’s a mile or so out to our more suburan hood). As we drove down one street on the Hill, we happened upon a raging mid-day party – about a couple hundred kids on the front porches/yards of a few houses, spilling out into the street, with a couple kiddie pools out, maybe a few dozen in bikinis. After a couple months of being cooped up at home, you can imagine how exciting and crazy the whole spectacle was for us (my daughter said, “well, I guess they must all live together”). Do I think those young people want to move back in with their parents or rent in a suburb after graduation? Obviously not. But Sabrina, do you think that most of them – given the past nearly two years – have a burning desire to play dress-up to go spend their entire day in an office building? They’ll feel fulfilled by rushing over to Eataly with a few office mates for lunch, maybe get some outdoor exercise over the weekend if they can? Please.
“You have nothing new to learn. You don’t want to go to happy hours after work or take the firm’s tickets and go to that Cubs or Sox game.”
Maybe those of us [ahem] who spent a decade in the suburbs have nothing to learn, and no desire to socialize around work [note: not necessarily with current co-workers], but you don’t speak for the typical X’er who lives in the (any) city.
Do I want to be there every day? NFW, especially if there’s only half-staff in every office.
“They literally RAN back to campus this year as soon as they could”
Does campus involve a 45 minute commute, and 8.5 hours in a cube? Is there not *any* discernable difference between being on campus for college, and going into the office for work??
College must have changed more than I know since I was there!
“after you factor in ~$10K – $15K in new furniture”
Do people really do this? As soon as they buy a starter home?
I mean, if you’ve been living with M&D, or moving cross country, sure, what’s the alternative…but the hypo is a couple moving from LV to JP, and stretching some on the closing–are many of those folks really smoking their CCs for 5-figures of furniture, too??
“ They want to LIVE. Thank god. They will save the rest of us”
What does this even mean?
“ This is where old people get it so wrong. These young people WANT to go to the office. They WANT to go to class. They WANT to go to that sporting event, on that airplane, to that concert. If it means they are triple vaxxed, then they don’t care. They are triple vaxxed.”
LOL this is the group that wears masks outside, walks into a public space and proceeds to then take their masks off.
Anecdotal story ahead (N=2 locations) the under 30 crowd has greatly reduced going out to Taprooms/Restaurants/etc. The 30+ crowd is =/greater than pre pandemic.
Also – Tinder/first dates seem to have dropped to near zero
YMMV
“ Do people really do this? As soon as they buy a starter home?“
Yes. Guessing that it’s more prominent if the move is to WL Vs JP.
Still shocked at how many Millennials still have M&D running their lives
“What does this even mean?”
They are not sitting at home scared. They are LIVING. And that means going to work in an office, a hospital, a dental office, at the gym or wherever it may be. They may not go 5 days a week any more, but they will go.
GenZ wants to be engaged with the world. They are the ones who LIKE going to malls and shopping in stores.
They will save us all.
“more prominent if the move is to WL Vs JP”
Change the hypo, then sure. Probably buy an Aston, too, so they can be treated nice by the valets when they drive 3 blocks to dinner.
But I’m sticking with the hypo WP presented (JP, and stretching a little to spend $450k) which is a more ‘typical’ scenario.
I’d have to take a little time, but don’t think I’ve spent $15k on furniture over a *2* year period…ever. Which also may not be ‘typical’ for UMC (which the hypo buyers are NOT, yet).
“They are not sitting at home scared.”
Even at night?
“Does campus involve a 45 minute commute, and 8.5 hours in a cube?”
Millennials living in the West Loop or River North don’t have a 45 minute commute. That’s why 6,000 apartments rented in those areas this year, right?
Follow their behavior. It will give clues on where Chicago’s downtown is heading next.
One Chicago’s shorter building is already 40% leased and it’s been open just 2 months. Why? Because young people WANT to be around other people. They will be going to the office. They will be going to happy hour. They will be having some wine at the City Winery after work with their work colleagues this summer.
Also, businesses are now recognizing that Millennials are “back” and they’re giving them services for those days when they don’t go to their offices. Look for more co-working spaces to open downtown. Also, several restaurant groups are opening all day “cafes” where they will serve food/drink and expect people to linger and work there for several hours during the day. They recognize that most will NOT want to sit at home all day, even though they can.
Why not work for the morning at an all-day cafe?
These amenities will make the downtown even more vibrant, not less.
And more people will want to live in the downtown core as a result.
“Do I want to be there every day? NFW, especially if there’s only half-staff in every office.”
Again, no one is talking about “every day” anon(tfo). Most office businesses will adopt the McDonald’s office.
And, yeah, each day at McDonald’s you don’t really notice that 25% of the office is “missing”. How is that? Because they didn’t give anyone assigned desks. You don’t walk by cubes or offices sitting “empty.”
Many companies are going to adopt the McDonald’s model. It’s going to mean spending on a remodel but earnings are soaring, so who cares?
“Maybe it’s boomers driving the downtown market”
Boomer have driven the downtown market this entire century.
They are also the drivers of the $1 million+ units because they are selling their suburban homes and doing urban retirement.
“no one is talking about “every day””
You were talking about the “olds” wanting to work “every day” at home.
“You were talking about the “olds” wanting to work “every day” at home.”
I’m talking about the young not going to the office every day. No one is talking about that. It will be mostly hybrid at most places. Even those where you get a “choice” will likely see plenty of young people going in and NOT sitting around at home every single day of the week.
“One Chicago’s shorter building is already 40% leased and it’s been open just 2 months. Why? Because young people WANT to be around other people.”
The cheapest one bedroom is $2,700 from what i’m seeing. Even their studios are $2,300+. The cheapest condo is $1.75 million.
Unless BDT, Madison Dearborn, Citadel, and the top law firms have exclusivity agreements for their most recent MBA recruiting classes I don’t think this building is filled with “young people wanting to be around other people” who are eager to go into the office.
https://www.domu.com/chicago/central/river-north/one-chicago
“It’s going to mean spending on a remodel but earnings are soaring, so who cares?”
LOL you sound like a housing expert in 05/06 going who doesn’t pay their mortgage and housing values only go up so “who cares” you can refi into another I/O ARM. It’s literally free money.
“They are also the drivers of the $1 million+ units because they are selling their suburban homes and doing urban retirement.”
The people buying/renting at One Chicago? I thought it was going to be filled with young people wanting to be around other young people singing kumbaya in the office every day?
I’m (begrudgingly) in River North today. Thank goodness I avoided being carjacked. I don’t think I’ve ever seen it so quiet in my life. The ‘it’s the holidays’ excuse doesn’t work anymore. There was plenty of available street parking everywhere. Maybe tomorrow night will be busier?
“the typical X’er ”
The typical X’er is rushing home after work to spend time with their family. They have little desire to go out 4x a week anymore. However, many unmarried, childless heavy drinkers choose to live in the heart of the city action close to the bars and restaurants so they can live some modern day version of Sex in the City. But in reality it is often much closer to Lush Life than Bright Lights, Big City. I know these people, you know these people, we all do. Not sure if this demographic is going to save hip urban life in face of rising crime, crashing commercial property values and the overall trend to flee Chicago.
“Lush Life” (preferred version: Johnny Hartman singing, Johnny Coltrane Sax)
I used to visit all the very gay places
Those come-what-may places
Where one relaxes on the axis of the wheel of life
To get the feel of life
from jazz and cocktails
The girls there all had sad and sullen gray faces
With distant gay traces
That used to be there; you could see where they’d been washed away
By too many through the day
Twelve o’ clock ‘tails
Then you came along with your siren song
To tempt me to madness
I thought for awhile that your poignant smile
Was tinged with the sadness
Of a great love for me
But, oh I was wrong
Again I was wrong
Life is lonely again
And only last year everything seemed so sure
Now life is awful again
A trough full of hearts would only be a bore
A week in Paris would ease the bite of it
All I care is to smile in spite of it.
I’ll forget you I will
While yet you are still
burning inside my brain
Romance is mush
stifling those who strive
I’ll live a lush life in some small dive
And there I’ll be
While I rot with the rest
of those whose lifes are lonely too.
“ GenZ wants to be engaged with the world. They are the ones who LIKE going to malls and shopping in stores.
They will save us all.”
So GenZ is going to save us from what? Millennials making poor life decisions? Boomers buying $1MM condos? GenX hating everyone?
“closer to Lush Life than Bright Lights, Big City”
So, more heroin, less cocaine? If not, not sure I’m seeing the contrast.
Bright Lights, Big City, an American novel by Jay McInerney:
“The story’s narrator is a 24-year-old writer who works as a fact checker for a highbrow magazine for which he had once hoped to write. By night, he is a cocaine-using party-goer seeking to lose himself in the hedonism of the 1980s yuppie party scene, often going to a nightclub called Heartbreak.
“His wife, Amanda, recently left him, and he copes with this by pretending nothing happened and telling no one that she is gone.”
Very subtle club name there.
“The typical X’er is rushing home after work to spend time with their family.”
The typical X’er *who has lived in the (a) city (nearly) continuously*. Which is not the overall “typical X’er”, of course.
I’m not talking about those who boogied to the ‘burbs so their kids could have grass, or go to the HS with under 20% low-income kids, or whatever.
“So, more heroin, less cocaine? If not, not sure I’m seeing the contrast.”
The analogy doesn’t need to make sense, it just needs to be convincing and sound high brow when read, like I’m familiar with novels about the 1980’s party scene.
“…I know these people, you know these people, we all do….”
Kudo for posting lyrics of the perfect theme song for hd buddies Bobbo & HH. jmo
“You’re old sonies. You’ve been doing the grind for decades, right? You don’t care if you meet people, learn things, make friends.
Young people do.”
1) I’m a later Gen Xer, I’m far from old
2) people that only make friends at work are fucking losers and I don’t want to associate with those people because all you do when socializing with them is yap about work… no thanks
3) work is for work, I am much more refreshed from not dressing up and commuting to the office so going out and doing things seems like more of an event and I look forward to it more.
When I lived in Chicago I was probably drinking 3-4 nights as week for decades… it gets old, especially since everyone is doing cocaine too (literally everyone in the green zone does it, its fucking insane)
I am glad there are more healthy and productive things to do where I am at now.
PS anon, I sold the Aston, got a Porsche now 🙂
“Kudo for posting lyrics of the perfect theme song for hd buddies Bobbo & HH. jmo”
I’m a teetotaler.
“The typical X’er *who has lived in the (a) city (nearly) continuously*. Which is not the overall “typical X’er”, of course.”
GenX got “stuck” in their condos and houses in the city when the housing bust hit. This is why the schools have dramatically improved. Everyone was trapped and had to make do. So the parents all went out and got involved in the schools.
GenXers are the reasons cities have boomed.
“I’m (begrudgingly) in River North today. Thank goodness I avoided being carjacked. I don’t think I’ve ever seen it so quiet in my life.”
Liar.
River North has come back and is close to being “normal.” There are still less tourists right now than in 2019 as many “events” aren’t happening for New Years, Blackhawk games cancelled etc.
You obviously have NOT been in the city of Chicago at all during the pandemic. For real. New restaurants going in everywhere. Leases being taken. Most hotels have reopened but there are a handful that have not. But most have.
I would say residents are staying home due to Omicron. In that way, it’s “quiet.”
But, again, the doom and gloom by the bears on this site is so funny. They are SO wrong and continue to lie and gaslight on this site to make themselves feel better.
So sad.
“The typical X’er is rushing home after work to spend time with their family.”
Oldest GenXer is 55-56. Their kids are old. They are NOT rushing home to be with their family. Lol. Married couples want to move downtown/West Loop to live near restaurants, their jobs etc.
Millennials are the ones rushing home to be with their family. They are the ones who have kids that are 5-12 years old. GenX has late teens to early to mid-20s children.
“The people buying/renting at One Chicago?”
We aren’t talking about renting WP. I said they were the drivers of the $1 million+ units. Those are buyers, WP.
Millennials aren’t yet at peak earnings. Also haven’t built up as much equity. GenX and Baby Boomers are retiring to the city. Has been happening for a decade now (for Baby Boomers.) Nothing new there.
OneChicago may get some younger sports stars to buy, like No 9 Walton did.
“LOL you sound like a housing expert in 05/06 going who doesn’t pay their mortgage and housing values only go up so “who cares” you can refi into another I/O ARM. It’s literally free money.”
Go listen to what Steelcase is saying about its business. Yes, big business is remodeling its spaces to reflect the new trends of work from home and working a hybrid schedule. The “office” is going to change after the pandemic. And businesses have record earnings and are willing to spend to make their employees happy in this tight job market.
“The cheapest one bedroom is $2,700 from what i’m seeing. Even their studios are $2,300+. The cheapest condo is $1.75 million.”
There are no condos in the shorter building WP. You are likely looking at the taller building.
But both buildings are at the top of the Class A apartment rental rates. The shorter building is 40% leased in just 2 months. That’s incredible.
And, yes, it’s young people. Plenty of people going to work for Salesforce, KPMG, Amazon, Google, law firms, CME Group and on and on.
Many have two incomes as well. Yes, it’s Millennials renting these apartments WP. It’s 2022. Get with the program about what is going on out there.
Millennials, and soon GenZ, are the drivers for downtown apartments and the overall housing market. It’s the circle of life.
“Go listen to what Steelcase is saying about its business.”
I assume you didn’t listen or read the Q/A section. They state the back-to-office trend is slowest in the US (“Americas”) compared to EMEA and APAC.
“It’s the Americas, frankly, where return to office — while it’s continuing to get better week after week, we look at the capital index like you do and look at office occupancy in major city. And it does continue to get better week after week, but not quite at the pace that we’re seeing in other parts of the world”
Also, the stock is down 27% from March 2021…… still down 45% from pre-covid. Doesn’t sound like business is booming….
https://seekingalpha.com/article/4475784-steelcase-inc-scs-ceo-sara-armbruster-on-q3-2022-results-earnings-call-transcript
“ Plenty of people going to work for Salesforce, KPMG, Amazon, Google, law firms, CME Group and on and on.”
Put the alcohol down and stick to real estate Sabrina. You have no idea what you are talking about with regards to financials and technology. Not one corporate person for tech is going into work right now. The offices are barren. I work in Fintech and know as I just visited our cloud vendors office. There wasn’t a soul to be found.
“Not one corporate person for tech is going into work right now.”
Well, that’s wrong as all the back end people have been in the office the ENTIRE TIME.
Also many in accounting and HR.
But, once again Mike HG, living in Florida isn’t serving you very well. Downtown Chicago offices were back to about 45% capacity before Omicron hit. That includes Morningstar, McDonald’s, law firms, banks, Citadel.
Salesforce is allowing its workers to work from home forever, but they’ve said that there will still be 30% or more who will want to go back to the office. I don’t know if they were allowing them in November and December.
Right now, only essentials are back to the office. Best to just keep most at home, right now, until Omicron peaks and this wave subsides. Probably by February.
I should hope most employers aren’t requiring people to be in the office during a big COVID outbreak where the variant is highly transmissible. You can get it even in elevators while wearing a mask.
“They state the back-to-office trend is slowest in the US (“Americas”) compared to EMEA and APAC.”
It’s all relative, right?
Europe is red hot right now and they are buying office furniture by the droves. Same with Asia. North America probably one of its largest markets. Has been fits and starts but now it’s really humming.
Record demand and backorder for the office furniture guys.
And office furniture companies are dealing with spiking steel prices, labor prices, supply chain issues. Business IS booming, but they have other things to worry about at the same time. They’ve been pushing through price increases, however. Should alleviate some of it.
The stock market is NOT the economy WP.
By your standards, I guess Uber’s business sucks too, as that stock is down big the last several months. But wait, they just had their busiest week EVER in December.
“This is why the schools have dramatically improved. Everyone was trapped and had to make do. So the parents all went out and got involved in the schools.”
How’s three strikes in 27 months working to improve the schools? What a failure.
“sold the Aston, got a Porsche now”
Makes sense.
“everyone is doing cocaine too (literally everyone in the green zone does it, its fucking insane)”
I guess there’s something wrong with me–never see it, never hear anyone referring to it.
“GenX has late teens to early to mid-20s children.”
42 year olds don’t have younger kids? What’s your objection to the professional class?
“Record demand and backorder for the office furniture guys.”
Maybe to reconfigure an office for remote work but not for office expansion….
” North America probably one of its largest markets. Has been fits and starts but now it’s really humming.”
Correct Steelcase’s largest market is North America where they are saying the back to office trend is the slowest in the world yet you keep saying that everyone is going back….
“They’ve been pushing through price increases, however. Should alleviate some of it.”
Yet even with price increases sales are still down on an unadjusted inflated basis compared to pre-covid days….
“The stock market is NOT the economy WP.”
yet you told me to listen to the Steelcase earnings because everyone’s going or about to come back to the office. They said the opposite when it comes to the US. You say that business is booming for them yet it is not reflected anywhere in their earnings, guidance, and thus their stock price.
“By your standards, I guess Uber’s business sucks too, as that stock is down big the last several months.”
No. Uber’s stock price is down due to increased inflation. Tech/growth stock multiples contract in inflationary environments. Further, due to labor shortages operating costs have increased for the company to retain existing and get new drivers decreasing margins. One week of record revenue doesn’t mean margin expansion if operating expenditures are increasing at the same or a higher pace…
“Well, that’s wrong as all the back end people have been in the office the ENTIRE TIME.”
Do those folks tend to drive the market in the hottest green zone areas and new luxury buildings?
“Also many in accounting and HR.”
Same question.
“Right now, only essentials are back to the office.”
Maybe in a medical office, the “essentials” are. But for the most part, the secretaries, assistants, receptionists, project managers, paras, etc. who are required to be in the office are there either because some grumpy, older right leaning guy insists that they be there, because he can’t enter his own time, etc., or to make professional services firms and companies feel better about the rent they are paying.
Sabrina, I think the frustration for some of the regulars here is the ongoing conflation of city living and office attendance that’s even remotely close to pre-pandemic levels. Yes, tons of people – if they have the ability to do so – still want to live, socialize, dine, etc. in cool urban areas. But it is only a miniscule amount of people – if they have the ability to opt to WFH instead – who want to set foot in the office more than once or twice a year for the remainder of their careers. This is an unprecedented situation, the realities of which need to be addressed honestly and practically. Office building owners, the professionals who service them, and ancillary businesses, might welcome the equal cheerleading of both the urban residential market AND office market, but nobody else is. The conversation needs to evolve towards converting a significant portion of office towers (and office campuses outside of downtowns) into housing, dining, retail, cultural and entertainment spaces, schools (pre-K through 12, college, etc.), and other uses for which there will be true demand going forward.
“When I lived in Chicago I was probably drinking 3-4 nights as week for decades… it gets old, especially since everyone is doing cocaine too (literally everyone in the green zone does it, its fucking insane)”
Most people are worried about getting too drunk and being recorded. Further, this is a generation that was prescribed Adderall en mass during their teens and college years. Your choices are put the drinks down and smoke reefer in your apartment or throw a few back and have some uppers to maintain sobriety but still be “fun” while not waking up the next day with a hangover and being unproductive.
“Your choices are put the drinks down and smoke reefer in your apartment or throw a few back and have some uppers to maintain sobriety but still be “fun” while not waking up the next day with a hangover and being unproductive.”
You can’t smoke in most of the new apartments and condo buildings anymore. This is why the gummy bears are so popular. Lol
“Do those folks tend to drive the market in the hottest green zone areas and new luxury buildings?”
Those tech guys? They make enormous amounts of money. Not sure where they live, to be honest.
“But it is only a miniscule amount of people – if they have the ability to opt to WFH instead – who want to set foot in the office more than once or twice a year for the remainder of their careers. This is an unprecedented situation, the realities of which need to be addressed honestly and practically.”
This is wrong, actually.
But I’ve never said things aren’t going to change, and dramatically. But if 45% of office workers are ALREADY back downtown, it’s not just a “miniscule” number who are there.
It’s WAY too early to be saying “we need to convert this space into housing.” WAY too early. Most offices haven’t gone back full time. But I do think by the late spring, we’ll have a better idea in all big cities how many will be going back, what kind of space is going to be needed.
Meantime, companies like Amazon are actually taking MORE space in Chicago. And they’re not the only ones. Boston Consulting is close on a big lease in Fulton Market.
I don’t think anyone would say McDonald’s corporate headquarters is “small.” But it was designed, as I’ve said many times, to have 25% of the workers out of the office at any given time. So they built it to handle that.
Same thing will happen with other companies. They will have different requirements/expectations. Might need less space. But will still want space.
“Maybe to reconfigure an office for remote work but not for office expansion….”
It’s a combination of both. You can listen to their conference calls and see.
If everyone reconfigured their office space for remote work, that is an enormous amount of orders. Lol.
“No. Uber’s stock price is down due to increased inflation.”
So is Steelcase’s.
Lol.
“How’s three strikes in 27 months working to improve the schools? What a failure.”
There were 3 strikes in 2010 when GenXers were trapped in their properties due to the housing bust?
Wow. That’s news.
how about those schools… lol
https://www.nbcchicago.com/news/local/chicago-teachers-union-cps-at-odds-over-whether-to-return-to-remote-learning/2721246/
“how about those schools… lol”
Maybe it would help to know that they’ve gone remote in Elgin and other suburban schools are closed.
“Maybe it would help to know that they’ve gone remote in Elgin and other suburban schools are closed”
Elgin has 5 of 57 schools closed due to staff shortages with no remote option. Not 57 out of 57….. Further, the healthy teachers at the 5 schools that are closed are temporarily reassigned to the 52 that remained open…. This was effectively CPS’ plan.
Further, State Law says you can only do remote learning for 5 school days. CTU was proposing at least 8 days.
CPS said no remote learning as state law says schools can choose to take non attendance days at any time for any reason and make up those attendance days up later in the year.
The CTU has destroyed alot of goodwill with sympathetic parents with this strike. These parents in 2019 marched side-by-side with them down LaSalle to City Hall steps when CTU striked for better pay and working conditions. Most parents were fully supportive of the 2019 strike. I couldn’t walk a block without seeing at least half a dozen signs in the windows of homes and businesses supporting the 2019 strike. In 2020 and the beginning of 2021 they understood why remote learning was occurring.
Last night in 2022, those same parents got an SOL notice at 11 pm for at least two weeks. CTU abandoned those parents when the parents needed them. CPS is over 90% fully vaccinated but for whatever reason vaccination doesn’t mean anything according to the CTU. They still refuse to recognize their candidate lost in 2019 and have been throwing a tantrum for 3 years now.
CTU is fighting literally everyone with this walk-out. They have a couple alderman that support them and that’s it. Even the Biden administration including the Education Secretary, the CDC Director, and Psaki have come out saying that schools are safe even in Chicago and should remain in person. Pritzker is silent and now quarantining (how convenient). The American Federation of Teachers and its President Randi Weingarten isn’t saying anything of support….
http://www.chicagotribune.com/coronavirus/ct-covid-staffing-shortages-close-schools-20220105-rcwbtqpbxfgfdagnaufm64c43i-story.html
“CTU is fighting literally everyone with this walk-out. They have a couple alderman that support them and that’s it. Even the Biden administration including the Education Secretary, the CDC Director, and Psaki have come out saying that schools are safe even in Chicago and should remain in person. Pritzker is silent and now quarantining (how convenient). The American Federation of Teachers and its President Randi Weingarten isn’t saying anything of support….”
Gov Fatfuck & LL saw the polling numbers.
CTU just broke it off in their asses
“CTU is fighting literally everyone with this walk-out.”
If it has really been about kids and safety, they would have interrupted their break to get at least the delegate vote. Having everyone back for 2 days and *then* voting is the worst approach.
“If it has really been about kids and safety, they would have interrupted their break to get at least the delegate vote. Having everyone back for 2 days and *then* voting is the worst approach”
Exactly. They are more concerned about “trying” to score political points then they are in advocating for teachers and safe working conditions. They could have limited some of the fallout/damage if this vote was held Sunday or the week of NYE’s.
These tactics are mutual destruction. If Stacy Davis Gates was going to run for Mayor I think she lost any opportunity to win with this strike. The only goal seems to be take out lightfoot no matter the consequences and CTU’s political operations will begin to rebuild and regroup post-2023 mayoral election. They are playing some weird long game with this one.
“If it has really been about kids and safety, they would have interrupted their break to get at least the delegate vote. Having everyone back for 2 days and *then* voting is the worst approach.”
Is that not fOLoWinG ThE sCieNCe?
Good thing schools arent an issue…
“You can’t smoke in most of the new apartments and condo buildings anymore. This is why the gummy bears are so popular. Lol”
Its funny seeing old stiffs talk about weed like they’re Cheech & Chong
Just posted my December update: https://www.chicagonow.com/getting-real/2022/01/chicago-real-estate-market-update-another-16-year-record/
Another 16 year record for sales despite really low inventories. SFHs are selling really fast but oddly enough condos are taking longer.
Condos and SFHs are contributing equally to the increased sales this month.
“Another 16 year record for sales despite really low inventories. SFHs are selling really fast but oddly enough condos are taking longer.”
Thanks for posting the update Gary.
I’m actually not surprised about the record for December because we had high pendings in October and November. As you note, the pendings have fallen back to more “normal” levels this time of year. That means January and February closings could slow to more seasonal levels.
And honestly, if market times are going up for condos it’s because the inventory is pretty picked over and not much is being listed. Properties that are still available to start the year mostly have some issues, whether its pricing, lack of updates or something else.
Right now, buyers are willing to “wait” for some new properties to come on for the spring selling season, unless they can get a fire sale somewhere.
Interesting that you said attached inventory fell to 3.6 months from 6.2 months. You can see this in every dense neighborhood. There is very little on the market anywhere. Record lows in Lakeview, LP, Bucktown for instance. And downtown inventory is also shrinking fast as most of the “deals” are gone.
The new year has brought a mini-surge in new listings, and re-lists of properties that didn’t sell last year and were taken off the market ahead of the holidays.
But it’s not enough to meet demand.
Market should remain tight and prices should continue to rise in 2022. There’s not even many in distress because most can sell and get out of the property. There always some exceptions (someone who bought in some of the co-ops, for instance). If you own a SFH anywhere in the city, you should be able to sell it quickly and for a premium.
Want to know how low inventory is right now?
There are only 7 active properties on the market in River West.
There are only 47 active properties in Wicker Park, and 12 of those are new construction in a single development.
Good luck out there buyers.
I was going to crib on this house.
It’s been under contract a few times already. It’s new construction. But I wasn’t fast enough. It’s under contract again.
Seems like this might be the new “type” of luxury home that is being built right now (we always go through phases.)
White brick and black finishes.
https://www.redfin.com/IL/Chicago/1512-N-North-Park-Ave-60610/home/14116897
It’s been under contract a few times already. It’s new construction.
* cough cough *
how are you defining new construction?
For me this is a rehab – an extensive rehab, but in my view I’m not sure one would call this new construction?
“how are you defining new construction?”
Even the realtor calls it “impeccably renovated” and only claims that it “has the feel of a new construction”.
Is that poor-people siding? Looks like Hardie on the roof, but hard to tell on the north side.
Huuuge over-improvement for the location–who is paying $2m+ for a 1990s rowhouse backing up to the El?
“Broker interest**PRE-QUALIFICATION/VERIFICATION OF FUNDS REQUIRED FOR OFFER CONSIDERATION**”
Appraisal coming in >20% ask?
Hate the painted brick – would really want to know how/what was applied.
not sure what the gas line is for on the patio, really not enough room for a grill
“Want to know how low inventory is right now?”
I think you are per usual not putting your thinking cap on. Generally people want to spend time with family and not sell their home over the holidays which was compounded by Omicron. If the place wasn’t sold by the first/second week in December probably took it off the market and will relist.
There was an article the other day (can’t find it now) where multiple Chicago brokers/realtors were quoted as saying we are getting ready to list a lot of properties beginning after MLK weekend i.e. next week.
Arwady stated yesterday Omicron cases may have peaked over the past week in Chicago but she won’t know for another week if that is the case.
If these two data points end up being true significantly more inventory will be listed or re-listed over the next several weeks.
Further, rising interest rates might also tempt sellers to list now if they are thinking about selling this year instead of waiting a few extra months or another year.
https://www.bls.gov/regions/midwest/news-release/ConsumerPriceIndex_Chicago.htm#:~:text=Components%20contributing%20to%20the%20increase%20included%20shelter%20%283.3,medical%20care%20%28-1.5%20percent%29%20and%20recreation%20%28-0.5%20percent%29.
Chicago metro housing prices are up 5.3% for the year.
Is all the appreciation in the suburbs?
might be behind paywall
https://www.chicagobusiness.com/residential-real-estate/2022-chicago-housing-market-starts-out-hot
“If these two data points end up being true significantly more inventory will be listed or re-listed over the next several weeks.
Further, rising interest rates might also tempt sellers to list now if they are thinking about selling this year instead of waiting a few extra months or another year.”
I dont disagree, but I think the question is what type of properties will come on the market.
I think there will be a severe shortage of SFH/TH for the 2/2 starter condos buyers to move up from. Anecdotally, I see more folks looking to remodel (Assuming material prices dont jump) Vs upgrade via purchase.
The 2/2 sellers are going to take a bath to unload (Too many units, raising rates and competition from apartments) and will need to decide if living in Bronzeville or Portage Park is an acceptable tradeoff.
“I think there will be a severe shortage of SFH/TH for the 2/2 starter condos buyers to move up from. Anecdotally, I see more folks looking to remodel (Assuming material prices dont jump) Vs upgrade via purchase.”
This is for SFH/TH owners
This is the LincolnView development we just chattered about on Southport in Lakeview which is featured in the Crains article that Marco linked to:
When John Grafft scheduled a one-hour open house at a new 11-unit condo building on Southport Avenue in Lakeview for this past weekend, he didn’t count on having to use the garage as a waiting room.
He needed it not because of the icy weather descending that day, but because about 100 people showed up to tour the condos.
For a typical Saturday open house, Grafft said, “I’d expect to see 10 percent of that.”
“Generally people want to spend time with family and not sell their home over the holidays which was compounded by Omicron.”
This would be true EVERY year. But it’s the lowest compared to EVERY other year at this time of the year- even last year which was during the worst outbreak of the pandemic until Omicron.
Seasonality doesn’t have anything to do with it. We can compare it to every other early January.
Crain’s article talks about how last year over 5,000 properties came on the market the first week of January but this year it was just over 4,000.
The low inventory is likely going to continue. Is really going to pressure home prices.
“The 2/2 sellers are going to take a bath to unload (Too many units, raising rates and competition from apartments) and will need to decide if living in Bronzeville or Portage Park is an acceptable tradeoff.”
You really have to understand the market that you are in, right?
If you have a 2/2 in Lakeview, there are currently just 76 units on the market. More than half are located in the high rises along the lake front.
If you have a 2/2 to sell away from the lake, you have virtually NO competition.
There are literally hundreds of buyers for 2/2s in Lakeview. Millennials want to buy, just like GenX. They are looking to stay in Lakeview, where they have been renting.
You could repeat this same story in Bucktown, Wicker Park, Andersonville, Lincoln Park, Old Town, West Town, West Loop.
Where are there “too many units”?
In some of the older high rises, which aren’t as desirable (lack of parking or washer/dryer in the units).
But even the Loop has only 115 2/2 properties right now. Just a reminder that 6,000 apartments rented in downtown last year. Many of those were 2/2s.
115 properties is NOTHING. It’s not even a single high rise.
The inventory has tightened everywhere. Gary’s data showed condo inventory fell to under 4 months for the first time since the pandemic began. That’s a seller’s market. And in some neighborhoods, it’s even lower.
In the Crain’s article, Rodkin cites 5,350 properties coming on the market in the first week of January last year in the Chicago metro area.
This year, it was 4,100.
Additionally, anecdotally, I’ve heard stories of buyers looking at small 1-bedrooms downtown as soon as they come on the market if they are listed under $300,000.
It’s much cheaper to buy than to rent at the current outrageous prices, as long as you’re going to be there for 5+ years. And rents are going to go up another 5% this year.
There is too big of a disconnect between renting a downtown apartment and buying one now.
“You really have to understand the market that you are in, right?”
You really need to learn how to read. I specifically noted “There will be” , meaning in the future
Do you think that rising rates, additional apt units coming on line (like you are wont to bleat about), and selling a pre 2015 2/2 are going to be a net positive on this segment of the market?
I guess maybe Millennials are special enough that losing money on a previous RE transaction wont effect their ability to move up
“But even the Loop has only 115 2/2 properties right now. Just a reminder that 6,000 apartments rented in downtown last year. Many of those were 2/2s.
115 properties is NOTHING. It’s not even a single high rise.”
Depends on what you’re defining as the Loop
Here’s one:
https://www.zillow.com/homedetails/431-S-Dearborn-St-APT-1005-Chicago-IL-60605/3871316_zpid/
Bought in ’17 for $305k
Selling for $290k
HAWT ™
“Additionally, anecdotally, I’ve heard stories of buyers looking at small 1-bedrooms downtown as soon as they come on the market if they are listed under $300,000.
It’s much cheaper to buy than to rent at the current outrageous prices, as long as you’re going to be there for 5+ years. And rents are going to go up another 5% this year.
There is too big of a disconnect between renting a downtown apartment and buying one now.”
So you’re saying that there a no small 1Br units downtown for rent <$2500/mo? (Equivalent rent)
Sure Jan
The disconnect is between you and reality
“1-bedrooms downtown … listed under $300,000.”
Using Redfin’s Loop (River/River/Roosevelt/LSD), there are 68 active and 22 under contract, with 1+ beds and up to $300k.
ugh sabrina, that white brick/black combo is called urban farmhouse chic and I don’t like it at all
reminds me of this place near me trying to sell for 10 million (they will be fortunate to get half that IMO)
https://www.redfin.com/NV/Reno/132-Greenridge-Dr-89509/home/108523055
“It’s much cheaper to buy than to rent at the current outrageous prices, as long as you’re going to be there for 5+ years. And rents are going to go up another 5% this year.”
This isn’t true if you are looking at 1 bedrooms at ~$300M and below. Here is a unit a block or two north of Tribune Tower – $225K ask @ 3% – 5% down comes to ~$2,300 a month payment. HOA isn’t crazy at $700 per month.
Who would choose to buy this to live in for 5 years? Renting would be a much better option.
https://www.redfin.com/IL/Chicago/535-N-Michigan-Ave-60611/unit-2506/home/14098249
““It’s much cheaper to buy than to rent at the current outrageous prices, as long as you’re going to be there for 5+ years. And rents are going to go up another 5% this year.”
Here’s a one bedroom apartment on Domu 3 blocks west of the condo I posted for $1700. The apartment is so much nicer and advertised at 900 sq feet compared to 755 for the condo.
https://www.domu.com/chicago/central/river-north/grand-plaza/540-n-state-st-2010-chicago-il-60654
Here’s another unit in the same building for just under $2,100. This listing shows the amenities in the building which are much nicer and newer than the condo.
https://www.domu.com/chicago/central/river-north/540-n-state-st-1006-chicago-il-60654-0
Plenty would buy instead of renting. That’s why agents are asking owners if they’re thinking of selling in several buildings in Lakeshore East.
The Gild one bedrooms are renting at $3000 a month for 650 square feet. It’s outrageous out there in the new buildings.
Now sellers have to give them something similar. Quartz counter tops, white subway tile backsplash, white cabinets.
But it’s not too hard to give it to them.
“Using Redfin’s Loop (River/River/Roosevelt/LSD), there are 68 active and 22 under contract, with 1+ beds and up to $300k.”
Wow. 68 units. In an area that rented thousands of apartments in the last year.
Lol.
That inventory is HUGE. Not.
“So you’re saying that there a no small 1Br units downtown for rent <$2500/mo? (Equivalent rent)" Nope- I didn't say that. Class A buildings are renting for much more than that. Class B buildings, sure. You can get a 1-bedroom in a Class B for around $2,000. You can rent a condo in a building for under $2500, depending on the building. But Class A is very expensive. Again, for those who don't live in Chicago and haven't for a long time, you really don't know what is going on out there in this housing market both in for sale and in rentals, it's very very tight in the housing market right now. Go look around at the newer buildings downtown. How many vacancies do they have? Very few. It's why they're still building more but it will take a few years to get there. This year, only another 1800 apartments expected to come on the market. It won't be enough. Rents are going to keep going up because of supply and demand issues. So renters will eventually say, "hey, these rents are outrageous. It's much cheaper for me to buy. I'm just going to do that." Has happened over and over in Chicago in the various real estate cycles. The rental prices on 2-bedrooms are even more outrageous. I get it, if you are just going to be there a few years. But ultimately, it's a waste of money to be paying $6,000 or more a month on those small 2-bedrooms in the luxury buildings.
The loop as determined by Redfin JohnnyU.
I don’t know what showing a cheap condo has to do with anything we’ve been talking about.
The reality is, the inventory isn’t there even in the Loop. There are just 115 properties on the market. And yeah, most don’t want to buy that one you linked to in the Manhattan Building. They’re living in luxury apartment towers. They want luxury condos.
If you have one, it will sell fast.
“You really need to learn how to read. I specifically noted “There will be” , meaning in the future”
So in a couple of years, when rates are a lot higher, there may be tons of 2/2s on the market that crush it down?
What does that have to do with those who are selling to move up and lock in the low rates today? Has NOTHING to do with it.
Even when the Chicago market slows when rates get to 4%, it will take YEARS for inventory to build. It’s not like we’re building a bunch of new condos in Lakeview right now, right?
Those selling 2/2s right now are in the driver’s seat. It’s a seller’s market. There is NO inventory.
I will keep saying it because it’s an important change that no one on this blog has ever experienced in Chicago before.
There is NO inventory. There is NO inventory. There is NO inventory.
Yet there are still thousands of buyers. Millennials are 70 million strong. 115 2-bedrooms in the Loop is laughable. During the housing bubble, Chicago was building, and launching dozens of high rises with that many new condos in each. And now it’s building new apartment buildings every year with that many units.
The tight inventory is great for Chicago sellers. It sucks for buyers, however.
I hope someone who is looking this spring chimes in here to let us know how it is. What are the bidding wars like? How many bids did it take for you to get a property? Did it appraise out? How much were you willing to sacrifice to get into a property?
This is an exciting time to be in Chicago. Lots of development.
Another huge development proposed today, this time for Fulton Market. $600 million to build out. Offices and a 50 story apartment/hotel tower at Fulton and Racine.
Still early in the process.
Moody’s will begin construction this spring. Lincoln Yards is starting as well.
AT Sabrina poster(s)
“””I was going to crib on this house.
It’s been under contract a few times already. It’s new construction. But I wasn’t fast enough. It’s under contract again.
Seems like this might be the new “type” of luxury home that is being built right now (we always go through phases.)
White brick and black finishes.
https://www.redfin.com/IL/Chicago/1512-N-North-Park-Ave-60610/home/14116897“””
so again. Why do you say it’s new construction?
AT WP
“Who would choose to buy this to live in for 5 years? Renting would be a much better option.
https://www.redfin.com/IL/Chicago/535-N-Michigan-Ave-60611/unit-2506/home/14098249”
personal opinion here: I kind of like 535 (maybe it’s fond memories of the old popeye’s that used to be there bias). Anyways 535 is old, 1Bdrms used alot for NW med students and pier de terre but the building for the most part has held up and is well maintained.
I wouldn’t be looking for any appreciation if I bought there but as a I’m town and on Michigan ave – I like it.
At JohnnyU
https://www.zillow.com/homedetails/431-S-Dearborn-St-APT-1005-Chicago-IL-60605/3871316_zpid/
Bought in ’17 for $305k
Selling for $290k
–
I actually rented here ages ago. Solid building. And awesome part of this place as a shared rental? Split bedrooms.
The listing includes a floor plan.
Totally nice as a rental My roomie used to just walk to trading floor for work
“so again. Why do you say it’s new construction?”
It looked like it was when I walked by. There are several others that look like it on the street which is the MO of most developers, to build a similar product in the same neighborhood.
I didn’t look closely at the listing, because it went under contract before I could crib on it.
Perhaps they also renovated the nearby homes as well so that’s why they looked similar.
“ So in a couple of years, when rates are a lot higher, there may be tons of 2/2s on the market that crush it down?”
By the end of they year
“What does that have to do with those who are selling to move up and lock in the low rates today? Has NOTHING to do with it.”
Nothing like buying at the peak, eh?
“Even when the Chicago market slows when rates get to 4%, it will take YEARS for inventory to build. It’s not like we’re building a bunch of new condos in Lakeview right now, right?
Those selling 2/2s right now are in the driver’s seat. It’s a seller’s market. There is NO inventory.“
with no inventory, where is all the appreciation? Heck marginal green zone should be flying off the shelves
“I will keep saying it because it’s an important change that no one on this blog has ever experienced in Chicago before.
There is NO inventory. There is NO inventory. There is NO inventory.“
You keep saying a lot of things that aren’t true.
“I don’t know what showing a cheap condo has to do with anything we’ve been talking about.”
You literally said “Additionally, anecdotally, I’ve heard stories of buyers looking at small 1-bedrooms downtown as soon as they come on the market if they are listed under $300,000.”
But yeah “cheap condo” has nothing to do with what we are talking about….
“I hope someone who is looking this spring chimes in here to let us know how it is. What are the bidding wars like? How many bids did it take for you to get a property? Did it appraise out? How much were you willing to sacrifice to get into a property?”
Will start looking for a 2/2 in the coming weeks so will provide updates.
“Class A buildings are renting for much more than that. Class B buildings, sure. You can get a 1-bedroom in a Class B for around $2,000. You can rent a condo in a building for under $2500, depending on the building. But Class A is very expensive.”
$300k isnt going to get you a Class A 1Br Condo in the loop (Per Redfin) – https://www.redfin.com/neighborhood/35157/IL/Chicago/The-Loop/filter/sort=hi-price,property-type=condo,max-price=300k,min-beds=1,max-beds=1
Show me which of these units you’d consider Class A
Chy you are wont to compare Class A apartments and Class B condo’s is another of your silly takes
“The rental prices on 2-bedrooms are even more outrageous. I get it, if you are just going to be there a few years. But ultimately, it’s a waste of money to be paying $6,000 or more a month on those small 2-bedrooms in the luxury buildings.”
Huh? That’s a pretty niche market of renters willing to spend $6K+ on a two bedroom. Yes, some new luxury developments in River North up through Lakeview now have 2 bedrooms at ~$6K and up but those are pretty big outliers.
Most newish buildings (within the last 10 years) with all the bells and whistles are renting 2 bedrooms in the $3K – $4K maybe up to $4,500 price range.
Also, why are you saying in one post how buying makes more sense than renting and citing anecdotal reports of people looking for one bedrooms priced <$300K and the next post talk about $6K rentals. Fundamentally those are two completely different consumers. If the couple or individual are renting a $6K apartment and decide to buy they aren't looking at $300K condos. They are looking at minimum $600K condos up to $1 million.
I can’t imagine paying 6k a month of after tax dollars to live in a 2/2 anywhere let alone in Chicago… that is bonkers
The 2/2s at One Chicago appear to start at *7* k:
https://liveonechicago.com/buildings/one-chicago-apartments?view=availability&id=cb5
Furnished apartment, maybe. With a corporate housing allowance, maybe. Otherwise? I’m with ponies.
Right before I left Chicago I rented a two bedroom 1300 square-foot apartment at Optima and they were charging me about 5000 a month with one or two free months thrown in. I thought I was overpaying at that price but that was market rate for a new apartment and a lot of the crappy your apartment buildings were charging between three and 4000 a month so it was worth it to me. I couldn’t imagine paying 7000 a month for a two bedroom apartment. Especially with all the restrictions in Chicago.But on the other hand I would rather pay 7000 a month then purchase a new two bedroom condo for million million and a half because I would lose 10% right off the bat in closing costs In the Chicago condo market is pretty weak so you add in the lost opportunity cost and depreciation and renting is still a winner.
“I would rather pay 7000 a month then purchase a new two bedroom condo for million million and a half”
Well, yes, if those are the only 2 options, sure…especially if you aren’t reasonable certain about a 5+ year horizon.
“Well, yes, if those are the only 2 options, sure…especially if you aren’t reasonable certain about a 5+ year horizon.”
Is that a reasonable comp? Wouldn’t the Apartment be putting $3k in you pocket every month as well?
7k a month to live across the street from the Chicago and State McDonalds and the YMCA?
bahahahahahahahahaha holy shit I haven’t laughed that hard in a while
like fucking seriously those are San Francisco prices
https://www.apartments.com/apartments/san-francisco-ca/min-2-bedrooms-2-bathrooms/?bb=mvns7lo-zO34qpt-B
“7k a month to live across the street from the Chicago and State McDonalds and the YMCA?
bahahahahahahahahaha holy shit I haven’t laughed that hard in a while”
A lot changes when you move away from a city. Chicago is building 70 story towers in multiple locations.
One Chicago has completely changed that neighborhood. I’m not saying the McDonald’s is great, by any means, but empty blocks are the bane of urban existence. It was always creepy and dark on that block. But not anymore.
Tons of life, people, things going on and the Whole Foods hasn’t even opened yet. I can’t imagine what it will be like when the condo tower and Whole Foods are open and going full throttle.
Very exciting for that area.
The restauranteurs know this too. Empty spaces have been leasing in the blocks around that development.
The YMCA was sold. They have started a $125 million restoration of the building (it’s historic.) The scaffolding is already up. They are turning it into affordable apartments which is much needed downtown.
They will put in new retail on the bottom floors. They’re moving the entrance over to Dearborn.
Only thing left on that block is that empty lot that stretches behind the YMCA. Very, very valuable piece of land. Hard to believe it’s still sitting there empty now that there are million dollar condos across the street.
The new apartment building down the street on Chicago and Wells has finished construction and has started leasing.
The shorter building at One Chicago, which is leasing, is already 40% leased at high prices. Although, it’s the cheaper of the two buildings so we’ll see how long it takes them to lease the bigger building which also has the condos.
“I would lose 10% right off the bat in closing costs In the Chicago condo market is pretty weak so you add in the lost opportunity cost and depreciation and renting is still a winner.”
Condo market is not weak. That is laughable. Under 4 months of inventory now.
However, I still believe they are overbuilding at the luxury level. One Chicago has another 70 $1 million and up condos. I don’t know how many of them have pre-sold. There are 400 of them at the St Regis, and only about half of those have sold. There are another 165 at the Tribune and that’s about half sold too. Then throw in all the existing inventory such as the Palmolive, the Ritz, Water Tower, One Bennett, No 9 Walton, Trump Tower, and then all the units on East Lake Shore Drive and the units in the West Loop that are now $2 to $3 million range, and there is just a LOT for sale at the luxury level.
If you are selling a 2/2 that is updated and listed under $1 million, there’s hardly anything on the market.
“I can’t imagine paying 6k a month of after tax dollars to live in a 2/2 anywhere let alone in Chicago… that is bonkers”
Now you know why a lot of people will be buying condos sonies.
Chicago’s luxury, Class A rents are at record highs. But even Class B is high these days. You’ll still pay close to $2000 for a Class B apartment downtown. It’s the reality in the Chicago apartment market.
“Most newish buildings (within the last 10 years) with all the bells and whistles are renting 2 bedrooms in the $3K – $4K maybe up to $4,500 price range.”
The 1 bedrooms are at $3,000 now WP.
Here’s pricing at the new building at Chicago and Wells. Not as ritzy as One Chicago but still nice.
They don’t even have any 2/2s that are over 1100 square feet. Some are only 867 square feet. Lol. For $4,000+ a month.
The living room space on some of these 2/2s is just 10×10 when you subtract the kitchen and the island. Lol.
Buying is SUCH a better deal as long as you’re going to live there for 5+ years.
Many renters won’t. But eventually, some of them will realize that they DO want to stay in the neighborhood for the foreseeable future and that renting is dumb.
Sellers have to give them what they want though. You can’t have those old brown/black granite counter tops. You have to put in quartz (or whatever is in style at that time). Put in the white backsplash. Paint your cabinets white. Put in gold finishes/fixtures.
https://www.amli.com/apartments/chicago/river-north-apartments/amli-808/floorplans
“like fucking seriously those are San Francisco prices”
Chicago is the only big city in America where it’s cheaper to buy a condo than it is to rent an apartment, on a monthly basis. Even with the high property taxes. In some cases, by far.
You do have to come up with a down payment. And you have to have a high FICO score to buy.
But if you’re going to live there for 5+ years, it’s cheaper.
“The 1 bedrooms are at $3,000 now WP.”
That’s for brand new top of the line buildings in River North up through Lakeview. Most one bedrooms in buildings that have been built within the past ten years are ~$2,500 give or take $200 – $300 depending on the neighborhood.
AMLI 808 just opened last summer their pricing for one bedrooms starts at $2,400 not $3,000. They have two bedrooms available between $4K – $4500.
Also, it’s website is advertising up to two months free if you sign before the end of the month….
https://www.amli.com/apartments/chicago/river-north-apartments/amli-808
“They don’t even have any 2/2s that are over 1100 square feet. Some are only 867 square feet. Lol. For $4,000+ a month.”
Did you miss or purposely ignore the get 2 months free rent?
Who was it that droned on and on and on about there being no rental incentives?
“The living room space on some of these 2/2s is just 10×10 when you subtract the kitchen and the island. Lol.”
Now you want to look at floor plans? YCMTSU
“Buying is SUCH a better deal as long as you’re going to live there for 5+ years.”
Its a better deal if you like piling up a bunch of money, dousing it with lighter fluid and setting it ablaze.
“Many renters won’t. But eventually, some of them will realize that they DO want to stay in the neighborhood for the foreseeable future and that renting is dumb.”
Which is great. But expecting your lifestyle & preferences not to change as you age is foolish. Think about the 70’s when you were in your late 20’s. Was your lifestyle the same now that your getting ready to collect SS?
“Sellers have to give them what they want though. You can’t have those old brown/black granite counter tops. You have to put in quartz (or whatever is in style at that time). Put in the white backsplash. Paint your cabinets white. Put in gold finishes/fixtures.”
So one gets to invest more money in the hopes of breaking even? Great marketing strategy. I’m sure the White on White/Grey/Black will never go out of style
I really hope you are pushing your “kids” to buy a 2/2. I mean whats the worst that can happen?
“The 1 bedrooms are at $3,000 now WP.”
Tower Two Old Town Park opened last year I believe. One bedrooms start at $2400. There’s one layout at $2,900 the other two layouts are $2500 and $2700.
Two Bedrooms in the $4K – $4500 range.
https://www.oldtownpark.com/building/tower-2
“The 1 bedrooms are at $3,000 now WP.”
Here’s Xavier advertising one month free + $500 two bedroom for under $3K and one bedroom for $2,100.
I believe this was built ~5 years ago?
https://livexavier.com/floor-plans
“The 1 bedrooms are at $3,000 now WP.”
Nema opened in 2019. Advertising one bedrooms at $2,600 and two bedrooms at $3400.
https://www.rentnemachicago.com/availability
The 2/2s at the 23 West tower at One Chicago start at $4,730.
https://liveonechicago.com/floor-plans?bed%5B%5D=2+Bed
The $7K+ units in the taller tower are 1,553 to 1,746 square feet.
For the record, One Chicago is one of my advertisers.
“I believe this was built ~5 years ago?”
5 years ago is not the current crop of buildings.
The new Amli at Chicago and Wells is $2900 for the 1-bedrooms. $2400 for the studios.
The Gild is $2800 to $3200 for the 1-bedrooms at State and Division. Those are in the 600s square foot range.
Every building is different WP. They are building THOUSANDS of apartments every year. Some buildings will be cheaper than others. But you’re going to pay a high price and rents are expected to rise 5% to 7% in 2022 because they are only building another 1800 units this year which won’t be enough to meet demand.
It’s cheaper to buy a condo than it is to rent many of these apartments now. People are doing the math.
The condo market is tightening. It’s already a seller’s market but it will get even better for sellers by the spring.
“Did you miss or purposely ignore the get 2 months free rent?”
No, I didn’t. But that will end quickly and then they’re paying even more. And yeah, if they are like my kids, they DON’T move when it expires. They renew at a MUCH higher rate.
Lol.
Good times.
I can’t believe people on this site are actually acting like the rents aren’t outrageous when they are. Welcome to a Superstar city. You’re going to pay the price to be here.
“Which is great. But expecting your lifestyle & preferences not to change as you age is foolish. Think about the 70’s when you were in your late 20’s. Was your lifestyle the same now that your getting ready to collect SS?”
They are in their 20s. When they marry around age 30, they then will want more space. That’s why many will buy 2/2 or 3/2 condos. Not just downtown but also in LP, Lakeview etc.
They will do the same thing GenX did.
It’s the circle of life JohnnyU. Millennials are just marrying later than GenXers did so buying has been delayed. But now, the largest contingent of Millennials, those age 29-33, are now finally marrying and, yes, buying homes.
Should last for a few years.
Oh, one other thing about the apartment rentals, many of the new buildings do NOT have balconies. The taller One Chicago building, for instance. It does not.
Only some units in the shorter building do.
From what I am hearing, it IS a factor for many renters still. They haven’t gotten over the pandemic that quickly. Lol.
Many condo buildings, however, often have balconies. They were even added to loft buildings because Chicagoans love balconies so much. But it’s cheaper for developers to build without them which is why so many apartment buildings now don’t have them.
Renters will ditch their apartments simply to get a balcony.
“I’m sure the White on White/Grey/Black will never go out of style”
You don’t care if it goes out of style. You have sold and moved on.
Give them what they want sellers. It doesn’t cost much to replace counter tops and backsplash. The market is tightening. Get a premium price.
I keep hearing from older people that what is happening in the market now and what will happen in the future is just a normal business cycle/part of the cycle of life.
No not quite. We had a real estate bubble in the early aughts followed by a financial crash dubbed a “BLACK SWAN” by the pro-bailout folks. The Federal Reserve then socialized the bad debts by creating $3.6 trillion over the next six years. Over the next five years they were only able to retire ~21% of this until the next “BLACK SWAN” event the pandemic where a further $5.0 trillion has been created so far. It’s gotten so bad the Fed doesn’t even report M2 in like numbers anymore: they changed the definition of M2 but won’t go back and adjust historical data to compare apples to apples. They’ve stopped reporting the historical time series the St. Louis Fed used to do.
College tuition has skyrocketed well above CPI as has college debts. Rates were never allowed to normalize to deflate asset prices. Asset prices were never allow to substantially decline/correct. Debt levels soared. Fannie and Freddie were never reformed and just enabled ever more easy financing on larger balances, now to $647,200 in Chicago. Mortgage notes Uncle Sam buys at 100 cents on the dollar just like college loans. The financing aspect has been effectively socialized with the taxpayer being the mark at the poker table.
Now the Federal Reserve is forced, kicking and screaming, to cease debasing the currency within the next 75 days or so and to raise rates against a backdrop of doing everything within it’s power to further enable speculation in various asset classes.
What you are going to see this year is that the period 2008-2021 was the largest inter-generational hoodwink on record with those who already owned assets benefiting enormously while those without them struggled to try to get on the wealth creation ladder. Especially as it pertains to real estate purchases that haven’t been allowed to adjust to be anywhere near close to median incomes in most of the populated parts of the country.
Just like with the Obamacare coverage pricing limits, forcing the young to subsidize the old by artificially capping the young to a set limit of the old, housing has been another, and likely far larger, inter-generational theft of the younger generations. If the Fed was hoping they could inflate their way out of this it appears they cannot as they cannot control the rate of inflation with any degree of precision.
It’s over folks. If you bought asset prices at high valuations, especially real estate, perhaps you are going to be accountable for the first time in your life. Certainly the first time in the past fifteen years.
“But now, the largest contingent of Millennials, those age 29-33, are now finally marrying and, yes, buying homes.”
You just needed to hoodwink as many young people as you could to try to bail out the older folks but its now over, Sabrina.
The Federal Reserve certainly did their part to try to capture as many fence sitters as possible figuring family formation would have to dictate they have to buy assets at inflated prices. But the longer that went on the larger the eventual drop was going to be. And now we’re here and it’s going to be huge. Enormous.
“The Federal Reserve certainly did their part to try to capture as many fence sitters as possible figuring family formation would have to dictate they have to buy assets at inflated prices. But the longer that went on the larger the eventual drop was going to be. And now we’re here and it’s going to be huge. Enormous.”
Bob, come on. Even you know demographics are king.
They’re going to keep buying, regardless. It’s no different than the Baby Boomers who also bought homes en mass.
When you have 10 buyers for every 1 house, how do you get a drop? And how is it huge?
Reminder: in order for a decline in prices, you need inventory. It will take YEARS to get inventory. Meanwhile, people are getting 30% pay increases to change jobs at the moment. Rates at 3.5% aren’t doing anything to stall this market. 4% will slow it. We were at 5% in 2017-2018. It did slow then as well.
But was there a drop?
Gosh, I can’t remember Chicago home prices falling in that period.
Home prices have only fallen twice in the last 100 years in Chicago.
“College tuition has skyrocketed well above CPI as has college debts.”
Huh?
This started in the late 1980s. Has been trending above CPI for 25 years.
Yawn.
If they got rid of federal loans, there wouldn’t be those increases.
But I agree that those who benefited from the pandemic were those who owned assets. That much is clear.
“It’s over folks. If you bought asset prices at high valuations, especially real estate, perhaps you are going to be accountable for the first time in your life. Certainly the first time in the past fifteen years.”
Thank god Chicago real estate has never gone up and has actually depreciated during this time.
Whew.
We really dodged a bullet. Stacy, Sonies, MikeHG and others who moved to those crazy states and bought are in for a tough time though.
(Sorry, I just couldn’t resist.)
Demographics are usually a large factor in the business cycle. There are far bigger factors at play here.
When you could get a 30 year mortgage at below 3% and rates rise to 4.5% your 20% down payment just got mostly evaporated.
400k loan at 3% month 1 payment: $1,687 (Principal: $687, Interest: $1,000)
400k loan at 4.5% month 1 payment: $2,026 (Principal: $526, Interest: $1,500).
If you had bought a 500k house at 3% rates it becomes a 416k house at the same payment at 4.5%. That’s six rate hikes.
What people fail to understand is raising rates from an ultra-low rate environment is far more painful than raising them in even a normal rate environment. Down payments are going to get evaporated.
Rates were NEVER designed to be kept low for any even intermediate length of time much less long term. Now that they have been kept at near zero for the greater balance of a fifteen year span look out below.
Six quarter point rate hikes increases interest expense by 50% when rates are 3%. When rates are at 7% that increase is only 18%. Not really sure what the Fed thought they were doing all these years in terms of an exit strategy. Let the next sucker in their job figure it out more than likely and just bide for time. Well pencils down the test is over time is up.
The saddest part of this all is this was all completely predictable.
“No, I didn’t. But that will end quickly and then they’re paying even more. And yeah, if they are like my kids, they DON’T move when it expires. They renew at a MUCH higher rate.”
Ok so just ignore what ever facts aren’t in line with your way you view the world.
I see the apples don’t fall from the tree
“I can’t believe people on this site are actually acting like the rents aren’t outrageous when they are. Welcome to a Superstar city. You’re going to pay the price to be here.”
You’re not particularly intelligent, so not surprising
Why are you such a bear?
“ The 2/2s at the 23 West tower at One Chicago start at $4,730.
https://liveonechicago.com/floor-plans?bed%5B%5D=2+Bed
The $7K+ units in the taller tower are 1,553 to 1,746 square feet.
For the record, One Chicago is one of my advertisers.”
Thanks for the update Sabrina’s husband
Which one of you is the bigger bull these days?
“Give them what they want sellers. It doesn’t cost much to replace counter tops and backsplash. The market is tightening. Get a premium price.”
If the market is tightening, there’s no inventory, and there’s high demand, why do sellers need to do anything? For the millionth time, in a truly hot seller’s market, buyers already need to offer above list. If a year from now higher rates impact things enough, sure, sellers may need to install an on-trend kitchen countertop. But as of now, their countertop could be a sheet of unfinished plywood and they will have multple offers over list.
“If the market is tightening, there’s no inventory, and there’s high demand, why do sellers need to do anything?”
Because the only people actually buying expect a finished product? Or a total deal.
Which, as you note, is not really a sign of a “hot market”.
“If the market is tightening, there’s no inventory, and there’s high demand, why do sellers need to do anything? For the millionth time, in a truly hot seller’s market, buyers already need to offer above list. If a year from now higher rates impact things enough, sure, sellers may need to install an on-trend kitchen countertop. But as of now, their countertop could be a sheet of unfinished plywood and they will have multple offers over list.”
Chicago has its own unique supply & demand curves that only Sabrina and her husband JoeZ can comprehend
The market is so HAWT ™ that you must upgrade your 2/2 in the hopes of breaking even
“For the millionth time, in a truly hot seller’s market, buyers already need to offer above list.”
I think we can all agree that the California market, especially LA and West Hollywood, is “hot”, correct?
Yet there are condos sitting on the market for months and even, gasp, lowering their price.
Buyers of condos are still discriminating buyers. There are more condos than SFH on the market in Chicago so if you want to capture the hot market, you have to give them what they want. New.
It’s basic real estate 101. In EVERY market.
Inventory is at record lows in Chicago. Highest is downtown but even there, inventory is thinning quickly. Now a seller’s market.
“Not really sure what the Fed thought they were doing all these years in terms of an exit strategy.“
They’ve been helping keep borrowing costs low for trillion dollar government debts per year for 14 years.
“I think we can all agree that the California market, especially LA and West Hollywood, is “hot”, correct?
Yet there are condos sitting on the market for months and even, gasp, lowering their price.”
So you’ll take one off examples as a counter? Are these units that are “gasp, lowering their price.” still seeing a positive return?
You’re conflating individual property price discovery w/ the status of the market.
1200sf 2/2 lowrise – https://www.redfin.com/CA/West-Hollywood/1045-N-Kings-Rd-90069/unit-106/home/7104949
Booking a 10% return after sales costs and bathroom modifications. Most Chicago condo owners would be doing backflips
“Buyers of condos are still discriminating buyers. There are more condos than SFH on the market in Chicago so if you want to capture the hot market, you have to give them what they want. New.”
LOL discriminating
They reason they want new is they can take their monthly nut and rent a “New’ apartment for the basically the same price and not be stuck in 5 years having to chuck more money into the units in the hopes of breaking even
“Inventory is at record lows in Chicago. Highest is downtown but even there, inventory is thinning quickly. Now a seller’s market.”
Yet here we are. Limited if any gains for condo owners in a sellers market.