Market Conditions: Sales of New Downtown Condos Fall Year Over Year in Q3
The market for new downtown condos remains grim.
Crain’s reports that sales fell in the third quarter to 229 sales from 251 a year ago. That was, however, slightly better than the 196 sales recorded in the second quarter of 2011.
Sales were also boosted by dramatic price cuts at the Parkside of Old Town development, where 26 units closed.
“There’s always the herd mentality in purchasing real estate,” said Gail Lissner, Appraisal Research vice-president. “Right now, there’s a widespread reluctance to make the purchase, and renting becomes an easier decision.
Pricing continues to be an important factor in motivating those reluctant buyers, Ms. Lissner said. Once again, developers who cut prices were among the sales leaders in the third quarter.
Parkside of Old Town, for example, a redevelopment of the former Cabrini Green public housing development on Division Street, had the highest number of closings in the third quarter — 26 units out of 161 total, according to the Appraisal Research report — after aggressively cutting prices 30% to 40% in the summer. Built by Chicago-based Holsten Real Estate Development Corp., the project includes market-rate units, affordable units, and CHA replacement housing in townhomes and two midrise buildings.
Holsten worked with its lenders and the Chicago Housing Authority to roll out a new pricing schedule with significant discounts, said Andrea Keeney, senior development manager for Holsten.
“The reduction in price, along with an aggressive marketing campaign, drove people to the site,” Ms. Keeney said.
One-bedroom units that had been priced at $259,000, for example, were reduced to $155,040 with a free parking space. Two-bedroom units that had been priced at $379,900 were reduced to $229,500 including parking.
The development has drawn many young and first-time buyers, in part because of its price point and location, as well as incentives such as a $10,000 grant from the city, Ms. Keeney said.
First-time buyers — who are able to buy without having to unload homes they currently own — likely helped sales at some other buildings that sold relatively well in the third quarter, Ms. Lissner said, including 200 N. Dearborn, Silver Tower, 757 Orleans, 235 West Van Buren and Quincy 565.
However, she said, a few higher-end buildings that wouldn’t attract first-time buyers also fared relatively well, including Trump International Tower, Legacy at Millennium Park and Aqua.
“For properties like that, we’re hearing many buyers are paying all cash,” she said.
With new rentals sporting all the same amenities as condos (without having to come up with large downpayments, pay assessments for the use of that new pool and no property taxes)- what will it take to get people to buy condos again?
Or will it take a new generation before condo owning comes back in vogue?
Condo sales stall downtown in the third quarter [Crain’s Chicago Business, Mary E. Morrison, November 15, 2011]
“what will it take to get people to buy condos again?”
Well, this article only addresses new condos and downtown. Overall Chicago condo purchases in the 3rd quarter were up 11.3% over last year but that was a seriously depressed level. To put it in perspective 3Q11 is somewhere between the 1997 and 1998 activity level.
Now that sales activity has retreated to better than 99 levels, how long before prices do the same?
“To put it in perspective 3Q11 is somewhere between the 1997 and 1998 activity level.”
Which is probably where they belong. Pre-bubble.
“Now that sales activity has retreated to better than 99 levels, how long before prices do the same?”
On average, prices are pretty close to that now. We have basically erased the entire bubble. If/how far we will overshoot remains to be seen.
I don’t think we’ve erased the entire bubble. Maybe in Dolton but not in all areas.
“On average, prices are pretty close to that now. We have basically erased the entire bubble.”
August condo prices are back to June 2001 levels on average but it’s dramatically different for each neighborhood. I’ve given up on believing that certain parts of the city will ever erase the bubble because they are nowhere close to erasing it now – maybe down 15% from the peak.
“I’ve given up on believing that certain parts of the city will ever erase the bubble because they are nowhere close to erasing it now – maybe down 15% from the peak.”
And you will always have that. Just look at the US as a whole. Areas like Detroit are below pre-bubble levels, but areas like NYC are still way above. So, you will always have your winners and your losers in any bubble. Within Chicago, it is no different.
So how well is Legacy doing in terms of the sales? I wish these articles provided numbers to back up their claims…sigh
“I’ve given up on believing that certain parts of the city will ever erase the bubble because they are nowhere close to erasing it now – maybe down 15% from the peak.”
gary, which ones?
“First-time buyers — who are able to buy without having to unload homes they currently own — likely helped sales at some other buildings that sold relatively well in the third quarter, ”
The buyers who cannot move up or move on because they have a property they cannot sell is going to be a problem for a long time. Renting it out isn’t always an option, especially if your HOA restricts rentals. Even if you do get a loan, it won’t be for as much as if you didn’t have an additional mortgage, so the home you can purchase may not be the step up you’re looking for, so what’s the point of going that route?
“The buyers who cannot move up or move on because they have a property they cannot sell is going to be a problem for a long time.”
Which is why I think we are going to see principal forgiveness.
“Which is why I think we are going to see principal forgiveness.”
A few years ago Dick Durbin’s pet project was to legislate the cramdown of residential mortgages through Chap 13 bankruptcy and the banks freaked out and the bill died quickly. We all know the banks run the country, and there is no way they’ll ever let that happen. As it stands today, Fannie/Freddie guidelines don’t even allow for principal forgiveness. At best Fannie/Freddie allow for ‘principal balance deferment’ which is another word for a balloon payment at the end of the note that incurs no interest during the 40 year amortization period. So imagine paying your mortgage for 40 years and at the end of that time period you still don’t own the house, but instead, you still owe the TBTF bank another $40,000 or $80,000. It’s absurd. The solution is walkaways. That will be the principal forgiveness. We already have tax forgiveness in that you don’t owe taxes on the forgiveness of debt after foreclosure/short sale. IMHO I don’t think we’ll see a wholesale “you owe $250,000 but your house is worth $150,000 here’s a $100,000 reduction in your principal forgiven if you keep paying your mortgage.” But stranger things have occurred in life.
“Which is probably where they belong. Pre-bubble.”
I agree. However, there are now many more condos, so prices will continue to fall.
It has already started:
http://homeloanhelp.bankofamerica.com/en/nhrpannouncement.html
“I wish these articles provided numbers to back up their claims…sigh”
I laughed every time the shill proclaimed “relatively well.”
“I agree. However, there are now many more condos, so prices will continue to fall.”
Do you have any numbers on how many units there were in 1998 vs now?
“It has already started”
What’s new about the banks announcing programs that will help only a few in order to give others hope and keep them paying?
“Since the initial outreach to customers under the NHRP in December 2008 through March of this year, the Bank has offered an NHRP modification or started an NHRP-eligible trial modification under HAMP for more than 200,000 homeowners.”
So in three years they’ve offered 200,000 permanent or trial modifications? Seems a bit disingenuous to me especially that Fannie/Freddie doesn’t allow it…
http://ecreditdaily.com/2011/10/fannie-freddie-regulator-principal-forgiveness-mandate/
“The idea of reducing principal or forgiving principal for borrowers who are underwater in their mortgages has been widely discussed and has gotten a lot of attention,” DeMarco said. “The conclusion that we’ve reached is that principal forgiveness does not accomplish our conservator mandate relative to the loan modification tools and techniques that we have in place now. “
For those among you who don’t know it, the person that G – a vile anonymouse – flippantly refers to as a shill is one of the most respected and sought-after analysts in the country for her objectivity, diligent research and extensive knowledge.
If “Sabrina” knew anything about real estate s/he wouldn’t tolerate this kind of slur.
For the record, Gail wroteo a column for several of our publications over the years.
So what’s your point Joe? David Lereah was at one time one of the most sought after analysts too. He even had a book:
Are You Missing the Real Estate Boom?: The Boom Will Not Bust and Why Property Values Will Continue to Climb Through the End of the Decade – And How to Profit From Them
http://www.amazon.com/Are-Missing-Real-Estate-Boom/dp/0385514344
homedelete,
I’m off to a busy day. I’ll let Sabrina or anyone else here explain why ARC’s research is valued more than the NAR’s. I don’t expect you to understand any explanation or admit its validity if you do.
Tax forgiveness ends at end of 2012 as it stands now. Although one could guess this will be extended along with all the other government “temporary” emergency measures.
Whats funny is the inventory levels show the developers getting out with nary a nick in this downturn due to giving the banks all the time in the world with low interest rates & backstopping their debt. I just hope thosr that purchased realize there will be no similar bailout treatment for them.
http://www.realtor.org/pac.nsf/pages/futuregenerations
For the first time in generations, the American dream of homeownership is being threatened. We need to keep housing first on the nation’s public policy agenda, because housing and home ownership issues affect all Americans, and “Future Generations” reinforces NAR’s commitment to doing just that.
“gary, which ones?”
I’ve been shocked at the neighborhood that I am currently looking at for myself – Grand to Chicago and highway to Western and it’s not even Green Zone. Newer SFHs only down 5 – 20% from the peak. I’m sure it’s the same in east Lincoln Park and elsewhere. Then I routinely see areas that are down 25 – 30%.
“Do you have any numbers on how many units there were in 1998 vs now?”
Good question.
“So what’s your point Joe?”
He has admitted to being paid to comment here, so shouldn’t that be “So what’s your master’s point Joe?”
“The solution is walkaways.”
Absolutely. Why would the banks voluntarily lower principal on a performing loan, unless people get serious about walking away. There are different opinions about how moral/ethical this is, so a lot of people would be reluctant to do it, but if you are way underwater you need to decide: Would I rather have $100K or a great credit score? I can’t believe how many people are currently choosing credit score. I think if a critical mass of borrowers decides to walk away it will alleviate the social stigma of it and the flood gates will open. And if that happens, the fear of not getting a new loan due to credit score will also be less of a problem because the banks/brokers/realtors/etc. will still need the loan/sales activity to make money. I think they’ll be able to get a loan in 3-5 years with a small penalty, maybe .25% higher rate or something.
“On average, prices are pretty close to that now.”
chuk: you have to remember that HD talks only in *nominal* dollars. So we aren’t below ’99 in his mind, eve if in reality we are.
Hi all, first time commenter on cribchatter, in need of some advice. I’ve got a 2 BR apartment that I bought 5 years ago to live in and started renting out this Fall as I had to move out of state. I want to refinance my mortgage which is currently a 6.125 30 yr fixed through US Bank (and Freddie Mac). My apartment is likely underwater but almost certainly within 125% of my loan balance so I should qualify for a refi through HARP. I called US Bank to inquire but they told me my building was on the decline list because our association bylaws has a right of first refusal clause. I know from prior research that in Fall 2009 FHA changed its rules to allow ROFR clauses in their underwriting for loans, but am not sure what the majority of banks do. I’m also confused as to how I was able to get a mortgage through US Bank in the first place given that the ROFR clause has been in my building’s bylaws from the start. Any ideas and/or suggestions?
“I’ve been shocked at the neighborhood that I am currently looking at for myself – Grand to Chicago and highway to Western and it’s not even Green Zone. Newer SFHs only down 5 – 20% from the peak. I’m sure it’s the same in east Lincoln Park and elsewhere. Then I routinely see areas that are down 25 – 30%.”
Yes I would say that gentrifying neighborhoods in general would be down <20% because they have the positive momentum of an improving/more desired neighborhood behind them. It's like they are down 30% with the housing market but plus 15% due to gentrification, so net down 15%. IMO the near northwest side is in that category.
And the East Lincoln Parks and Manhattans of the world have enough demand and money that people won't let them fall as much, on average. The impact of the recession has been very different on the low/high income crowds. While many of the wealthier people lost wealth, they still have good jobs and income and much of the wealth has rebounded outside of housing. (cue anecdotal responses about your lawyer/MBA friend who is now making half of what he used to)
home builders index out this morning. another month over month increase….
http://duplexdown.com/2011/11/16/home-builders-index-highest-since-may-2010/
“Do you have any numbers on how many units there were in 1998 vs now?”
Yes. So does ARC.
Yes, nominal dollars. 1999 nominal dollars. I see 2002 or better in a lot of the places I look, fortunately, there are a lot of long time owners with equity who can afford to sell. in the places gary talks about, there are far fewer owners with long term equity, and they can’t/won’t sell and the property stays off the market. The few homes that do go on the market sell only a slight bubble reduction because inventory is weak due to most of the bubble buyers being underwater.
“Absolutely. Why would the banks voluntarily lower principal on a performing loan, unless people get serious about walking away.”
Well, they won’t want to on a performing one. Which is why they usually refer to stipulations like “you must be xx months delinquent”, etc. For loans that are NOT performing, they can lower the principal from 400k to 300k and hope they can become performing (key word “hope”), or they can foreclose and get 225k-250k for it after fees, etc.
“Yes. So does ARC.”
I wasn’t doubting you, I was actually curious.
How does new downtown condo inventory compare to last year and years past? With very few new condos going up, sales of new condos are going to go down regardless. I’m not saying that’s a bullish fact (after all, the lack of new condos is due to low demand), just saying that these numbers are less meaningful now. The market is more or less at a low inventory/low sales standstill while we trend toward equilibrium
“I see 2002 or better in a lot of the places I look,”
And you and Sabrina were just telling me how many 1980’s prices you are seeing as well. That’s why it is called “an average”. Weakest ares get hit hardest. Strongest areas get hit the least.
“How does new downtown condo inventory compare to last year and years past?”
http://www.chicagorealestatedaily.com/apps/pbcsi.dll/storyimage/CG/20111115/CRED0701/111119889/AR/AR-111119889.jpg&maxw=368&q=100
“Well, they won’t want to on a performing one. Which is why they usually refer to stipulations like “you must be xx months delinquent”, etc. For loans that are NOT performing, they can lower the principal from 400k to 300k and hope they can become performing (key word “hope”), or they can foreclose and get 225k-250k for it after fees, etc.”
I agree and this is another reason that nothing sensible will be done here. The government only wants to help performing borrowers, because they are backstopping these loans and actually want to get paid back these days. The bank only wants to help non-performing loans because they are screwed on those loans anyway. The government would be way out of place to force private companies to forgive principal, and the banks would be outside of their fiduciary duty to shareholders to voluntarily lower principal on performing loans. The only solution is for the borrowers and lenders to negotiate and work something out, which will only happen when borrowers start walking away in mass, starting in non-recourse states, and then the lawmakers in recourse states will be pressured to change to non-recourse so their residents can do the same. I’m not saying this WILL happen, but that would be the “free market” solution. What probably will happen will be a clusterf**k gov’t program that accomplishes nothing.
Why don’t they let people roll up the remainder of their old mortgage into a loan and sell their properties, so they can move up to new houses? Several people at my office want to move and would be willing to take out a loan on the money for the difference between the sales price of what they owe.
So, say a person has $50,000 is savings and is $25k underwater on their current home. Why not let them take a loan for $25k and let them put the $50,000 towards the down payment on a new place? I suppose the $25k loan would be unsecured, but isn’t it better than having people just walk away?
I agree, DC. Which is why I laugh at an “objective” analyst repeatedly using a subjective term such as “relatively well.”
Thanks Chuk. Sorry I didn’t actually click on the article before…
“but if you are way underwater you need to decide: Would I rather have $100K or a great credit score? I can’t believe how many people are currently choosing credit score.”
My understanding is that if you walk away your credit score will affect things like your insurance, ability to buy a car, even employment. Yeah you might still be able to buy a car, but you won’t get the best rate. Same with your insurance. And employers deciding between you and another candidate now have a reason to pick the other guy.
Like you said, it might only be a small penalty which may or may not be offset by the $100K.
Why are some areas weak and some areas strong?
Is it the income of the occupants? The ability to sell? What is it?
Park Ridge has gotten ‘hit’ pretty hard but there are hardly any REO’s or short sales; there are lots of long term owners selling, so values have dropped. Dolton and Calumet City has gotten hit pretty hard too – that’s because lots of foreclosures are selling at firesale prices? so what is it?
I posit that some of it is because of the owners ability to sell. Recently gentrified areas have fewer long term owners and more underwater sellers. So supply is restricted, leading to less sales, which keeps prices up. The hardest hit areas seem to have the largest supply, for whatever reason , long term owners or distressed properties. The best areas seem to have less supply. Maybe I’m wrong here but that’s my observations.
“I suppose the $25k loan would be unsecured”
Jenny, that’s exactly why. Now that lenders are actually expect to get paid back, no one would take on that loan (6 years ago, no problem! And take an extra $20K for some new jets skis, you deserve it!). Something like this might be able to work if the the same lender was used for the new loan, but that would also cause that loan to be different on their balance sheet (I assume) if it is not secured. Even though the difference would only be on paper, when a transaction occurs they actually have to mark it appropriately and then it would probably mess with their capital ratios, etc. I am guessing, but something like that I think.
Here’s a person who is making her payments but motivated to walk away because it will take so long to recoup just to where she started eight years ago.
http://www.chicagotribune.com/classified/realestate/foreclosure/chi-foreclosures-limit-seller-options-glink-20111114,0,63341.column
I know someone from Cal City & they are very bitter it went from hispanic to black over the years so likely demographic factors at work here so bad example for this bust.
“Why don’t they let people roll up the remainder of their old mortgage into a loan and sell their properties, so they can move up to new houses?”
I asked Russ that question the other day. He said you cannot do that. He didn’t state the exact argument why they won’t let you, though I suspect it’s “to make sure what happened during the boom never happens again.”
At best, if you have good credit and income, you can get a personal loan for the balance of your old mortage.
“My understanding is that if you walk away your credit score will affect things like your insurance, ability to buy a car, even employment. Yeah you might still be able to buy a car, but you won’t get the best rate. Same with your insurance. And employers deciding between you and another candidate now have a reason to pick the other guy.”
You’re right, it is more than just your credit score but the general idea is still that those are probably small consequences for people who are WAY underwater ($100K or so). I assume these people already have jobs because they would have already defaulted if they didn’t… so keep your job, pay cash for a car, pay a little more for insurance I guess (I don’t drive so I forget about that one). And again, if people do this in mass then I don’t think many employers will discriminate on this basis down the line… it will just be a sign of the times that becomes accepted.
“The solution is walkaways.”
The problem with this is that Illinois is a recourse state. The bank has 7 years to collect. Even if a home owner who walks away has no assets now, they may have some in 6 years. Thus, a walk away leaves you in jeopardy for 7 years (longer than your credit history ding). Most banks are not pursuing walk aways without significant assets b/c the transaction costs (hiring people to do it, court, etc..) is prohibitive. However, banks are now selling their rights of recourse (bundled…just like the mortgages were) to collection agencies who specialize in monitoring and collecting bad debt years later.
I have a friend who was an early walk away (2009) in a recourse state and thought he was home free/smart and was just sent a letter notifying him that he owed 70K to his mortgagor and that the right to collect was assigned to an agency. They attached a report of his income and assets to prove that he had assets that they were aware of…
I’ve never heard of an employer checking credit score as part of a background check. I’ve heard tales about it enough to believe it happens in certain fields, but not in mine nor have I heard of it being done to anyone I know.
I agree a local. But I rarely see deficiency collection actions based upon first mortgages, only 2nd mortgages.
a local the key is never to pay a dime on that debt so it becomes aged. But at that amount they might go for wage garnishment. Its tougher to get around that for those that don’t job hop much but if you job hop I’d bet they can’t keep the paperwork shuffle current enough to get any sort of meaningful recovery. Then it gets aged with no recovery and eventually goes away.
Also I realize for some garnishment could be a problem as in certain fields (ie:law & high finance/public accounting) that might look real bad at the office. So the opportunity for professional deadbeat is only open to some.
Bad advice Bob. Better advice is to settle for pennies on the dollar with the assignee if the debt.
Bob,
That’s not the demo shift that occurred in Cal City, or any of the south burbs.
Quite a few fields check credit nowadays for employment. Every bank and consulting job I’ve held had a credit check of some kind. They aren’t really looking for specific scores but just making sure you don’t have significant money issues that might cause a lapse of judgment when handling sensitve information. A ton of mortgage brokers got flushed out because of credit checks last year under some new federal licensing rules. Of course, they all work at the Too Big Too Fail banks now since they don’t have to follow the same rules.
They are going to find away to signficantly punish foreclosures one way or the other. However, I know borrowers with short sales (no mortgage lates) barely a year old with over 700 FICO scores. They still will have an issue getting mortgages, but I’d be surprised if car loans and other creditors look beyond the score like mortgage lenders do.
Some people really have no choice and will eventually walk away as a strategic default. I saw a condo appraised at $38k on the southside. $180k mortgage. Every comp was a foreclosure and that essentially was the cash value of the place. Borrower paid almost $200k for it six years ago. It isn’t the greatest area and I highly doubt the value will be coming back in the near future or even to the point that the borrower has a chance in hell of digging his way out. At some point, he is just going to say screw it.
a local,
yes, recourse is a huge part of the discussion. i know most banks aren’t pursuing it on firsts but i didn’t realize they had 7 years to collect “new” assets (acquired during subsequent years). i would be interested in knowing what can be taken: retirement assets, one car, etc. If you learn how it works, could there be places to stuff your assets where they can’t be taken? I didn’t realize they could get as far as wage garnishment.
but still, most states are non-recourse. so if they start a huge trend by walking away, and getting away free and those housing markets and economies start picking up, do you really think the residents of illinois and other recourse states will stand by and let others get those benefits and not clamor for them in their own state? and will those politicians not cave to public pressure? what kind of evil politician wouldn’t want to help the “homeowners” (who actually own nothing) who were duped by the big, bad banks?
Bob, Illinois just recently passed a law stating that its illegal for an employer to discriminate based on your credit
http://www.accuratebackground.com/images/sections/010111.pdf
which is kind of a dumb law IMO that once again puts the nuts of the owner of a business in a bind. I mean would you want someone who can’t pay their bills manning your cash register? How would you know now?
“I’ve never heard of an employer checking credit score as part of a background check. I’ve heard tales about it enough to believe it happens in certain fields, but not in mine nor have I heard of it being done to anyone I know.”
It’s done in the financial services field all the time.
“Illinois just recently passed a law stating that its illegal for an employer to discriminate based on your credit”
Couldn’t most white collar places use this as their out to check credit: “Involve access to confidential information, financial information, or trade secrets”?
“I agree. However, there are now many more condos, so prices will continue to fall.”
That is what I think too, but there is an article in economist saying that the excess housing supply is very limited given the restrained growth of nineties and the fact that fewer houses are being added this year than in any year since records began in 1968. Also “the total number of vacant homes for sale has steadily declined and is at the lowest since 2006.” It also says that rental market looks stronger as vacancy rates are down and rents are up (nationally 2.1%).
But of course this is all based on national data and is not specific to the Chicago market. The question is what is the situation in Chicago specifically?
I had two offers from top management consulting firms when I graduated and none of them warned me that they would do a credit check. Shouldn’t they inform you if they are going to do this?
“Every bank and consulting job I’ve held had a credit check of some kind. “
“Couldn’t most white collar places use this as their out to check credit: “Involve access to confidential information, financial information, or trade secrets”?”
That’s broad enough to cover anyone who processes a payment, ever. And by “processes a payment”, I mean “swipes a credit card”.
Miumiu, credit checks are typically done on new hires after the offer is accepted.
Thanks Russ. That is interesting to know.
The only thing that bill does is makes it harder for small businesses to hire competent people. You mention white collar jobs, but what about blue collar or service industry jobs?
Rents are increasing in Chicago, probably in line with the national average.
There are very few jobs that don’t involve handling of some sort of sensitive information. The problem with not checking credit is the employer’s liability. Say you hire some person with obviously bad credit and that employee steals customers’ information or something similar. When they are caught, any plaintiffs attorney is going to say the business should not have hired the employee because of the risk associated with the employee’s financial issues. Does that law banning credit absolve the employer of any liability? Probably not….
Sonies, I agree with you there. I’m less familiar with blue collar and service industry hiring practices. I thought credit checks were more prevalent in white collar hiring. I know my dad doesn’t run credit checks to hire people at his convenience store.
Going back to the article, which mentions Parkside of Old Town: I’m curious what people think of that area. I realize it’s getting built up, but it still seems unattractive to me, especially because some of Cabrini is still right there (the townhouses), and the main streets (Division and Clybourn) are so ugly. I wouldn’t want to live in any of the new developments over there, and I’m guessing I’m not alone, which is why the developers are offering bargain basement prices.
“I realize it’s getting built up, but it still seems unattractive to me, especially because some of Cabrini is still right there (the townhouses)”
Those will gone in a few years. CHA is already looking move the remaining folks out and redevelop it.
lots of new businesses going up in the cabrini area, you can barely see it anymore as its only like 2 rows of homes now on Chicago ave next to that huge garden, I’d highly consider buying a bigger place around there if I could move, a few poor people don’t bother me as there isn’t really any “gang” element there like there used to be, probably thanks to the cops being everywhere, and most of the highrises being town down helps
Vlajos is correct. CHA annouced that it is moving residents out of the old Cabrini Row homes that were supposed to be rehabbed. CHA also told the court that it does not intend to remodel or make that site Section 8 housing (which was the original plan). It will probably take some time given the economy but this area is poised for long-term appreciation b/c its so close to downtown/restuarants and many of the units have fabulous views of the loop and Michigan Avenue. I’m with Dan regarding actually living on Division or Clybourn, especially since Target and retail are going in on Division and Clyborn, but the side streets (with less traffic) in south Old Town and near Chicago Avenue (Kingsbury, Larrabee, Superior, etc…) are much quieter and neighborhoodish. This area is one of the few true GZ areas that has yet to realize its full potiential and thus has room for appreciation based on location. Obviously, quality of the acutal house/unit will play a large role in value too….can’t really compare Parkside to the Montgomery.
Regarding recourse states and garnishment. My friend’s mistake was to begin saving again as soon as he did his walk away. He has cash assets which are easy to attach. His plan was to walk away and save for a downpayment to take advantage of the down real estate market. He thought his credit score would improve by 2012-13 such that he could buy. Walk away and then buy something better for less. Unfortunately for him, he now has a collections agency after him. He’s trying to negotiate a settlement with the agency (assignee) but hasn’t been able to get it lower than 60% of the amount owed. He will probably pay it but it was definately a roadblock in his grand plan. So yes, massive walk aways will affect the banks and government policy, but it may not play out well for an individual owner. If it affects your job (i.e. credit checks) or prevents an owner from buying well beyond 7 years then the owner may not be able to take advantage of the down real estate market. Thus, it seems really to be an option for owners who have lost huge amounts (like the guy on the southside who bought for 200K and has a unit worht 35K) or those who will never really have significant assets again or are fine with renting beyond a decade. This is perhaps why there are not more walk aways. People who have lost 20% or are underwater may not be bad off enough to risk the downside of the walk away, particularly if they have families and need to purchase a home again sometime in the nearer future.
“I’m curious what people think of that area. I realize it’s getting built up”
The long term trend is definitely improvement for the area and the location is fairly convenient. It’s been a while since I’ve looked at the economics of the housing stock there but the townhomes I have been in had fairly low quality finishes, which is OK as long as it’s priced accordingly.
lol at the dislike on my 10:25 comment. I am merely quoting an article I read which I am not even sure applies to Chicago. Some people are just pathetic they cannot even read something that potentially challenges their views.
miumiu, I would guess that the dislike is not based on it being a bad comment, but rather that the person disagrees with the idea from the Economist. It’s hard to convey exactly what you mean with a simple thumbs up/thumbs down.
“lol at the dislike on my 10:25 comment. ”
Miumiu, you might want to lower your expectations when it comes to the Chatarati
I wouldn’t take it personally, miu
“lol at the dislike on my 10:25 comment.”
It was a single neg rating (at the time you commented). And, as noted, who knows what it means exactly.
I’m sure jenny isn’t losing any sleep over her -99, or whatev it is, rating.
The 90’s, particularly the late 90’s were one of the biggest boom times of America’s economic history. I graduated college in this time period, and practically everyone got a job, usually multiple good offers, even if you had crap grades it didn’t matter. Interest rates were also very low then. Unemployment was near all-time lows. Accordingly RE values were high. Anecdotally many of my college cronies were raring to buy a house or condo, even before settling into that first job. (I agree our age group was a small segment of the market, but this illustrates the conventional and disastrous wisdom of the day. The same is true now. Conventional wisdom / commonly held beliefs on the matter haven’t changed.) Just because RE values are ridiculously high now, doesn’t mean they weren’t also high 12 years ago in a booming economy. It’s a matter of perspective. To say that RE is or would be fairly valued (now in our dismal economy) at the ’99 level when the economy was absolutely on fire in 1999 doesn’t make sense.
We are still in an enormous RE bubble. By many accounts we are still higher than the PEAK of every previous bubble. We are perhaps one-third of the way through the decline of what history might eventually deem the biggest bubble of all time. (Yes, tulips and south sea shares, had enormous swings, but you did not have the wide-spread and long-term population participation we have today.) Today we have the grand illusion of the masses. And plenty of conventional wisdom types / shills / researchers to encourage them and hold their hands. The fact that the mainstream media has taken seriously and continues to take seriously the shill propaganda / research, that led countless unsophisticated borrowers to their financial doom is just an exemplification of the bubble period we are in. (The mainstream media of course wants to keep RE advertising dollars flowing.) The prevailing (yet declining) social stigma of paying a non-credit, market determined floating price for RE as you consume it (aka renting) is also illustrative of our current bubble period.
Anyway, if you don’t like what I’m saying, keep listening to the shills and salesmen/women, pay their out-sized compensation, take a big debt gamble (like most everyone else) and get that illusory home “owner” social status.
If you take a future 10-year window from 2011 to 2021, how many current homeowners would agree that this present moment, perhaps this very day, is the highest value they will see on their RE for the next 10 years? I would estimate a very small percentage perhaps less than 1%. How many people reading this would also agree?
What is the logical conclusion regarding the future value of RE from the fact that an extremely high percentage of the population believes the value of RE will increase over the next 10 years? And keep in mind that not only do people believe this, they are willing to risk not only money they have managed to save, but also large amounts of other people’s money that they can borrow at low interest rates to buy into this belief.
oh man, how did we miss this one?
http://yochicago.com/check-out-the-new-cribchatter-and-sabrina-3-0/24622/
Nice find, Icarus. Not very charitable comments there are there? Joe left out the part about how it gets more traffic than his own site: http://siteanalytics.compete.com/cribchatter.com/ Maybe that’s what really irks him.
Wouldn’t a bankruptcy filing put a stop to any deficiency judgment? And why not file; it wouldn’t trash your credit any more than a foreclosure?
“oh man, how did we miss this one?
http://yochicago.com/check-out-the-new-cribchatter-and-sabrina-3-0/24622/”
Holy sour grapes batman
Joe would get a lot more visitors if he allowed 2 sided conversation to take place, rather than the unilateral, my clients are awesome, buy new construction BS that litters his site. Like people want to visit a commercial over and over again
Zekas shows his maturity (lack thereof) yet again. Doesn’t he ever get tired of his same old crap?
“what appears to be either yet another “Sabrina” or one who has become increasingly dogmatic about spouting the few bright-line, generic real estate nostrums in his or her repertoire”
WHAT A DICK! That is basically a repackaging of the comment I made with different words. I have to dig that up!
JJJ (November 8, 2011, 12:08 am)
“Your views and comments have become increasingly doctrinaire during the year or so I’ve been following your site. You seem to have a few truisms you’re intent on proving through these postings, and seem to try to cheerlead discussion towards these concepts. When analysis is necessary, you return to these truisms.”
Ok DC, but can you explain your -2 rating? lol
It just cracks me up, I am definitely not losing any sleep over this : )
Where’s clio?
don’t say its name
Good point, JJJ
Does anyone here ever do their homework? Or are they totally comfortable isolating the single reporting period this year that Compete shows a higher traffic count for Crib Chatter?
http://siteanalytics.compete.com/yochicago.com/
Compete radically understates traffic for both YoChicago and CribChatter. It’s worthless.
I’d be perfectly happy to submit our server logs to a neutral third party who would report on whether we draw a larger audience than CribChatter. I’d also be happy to serve up our Google Analytics results on traffic from CribChatter. Is Sabrina willing to do the same for traffic from the posts we frequently link on our Chicago Real Estate News page?
We also serve up periodic traffic reports in posts on YoChicago. Is Sabrina willing to do the same?
Or is everyone here content to live in their fantasy world?
“I’d be perfectly happy to submit our server logs to a neutral third party who would report on whether we draw a larger audience than CribChatter.”
No one cares.
“I’d also be happy to serve up our Google Analytics results on traffic from CribChatter.”
No one cares.
“Or is everyone here content to live in their fantasy world?”
No one cares.
“Or is everyone here content to live in their fantasy world?”
If this is what you think of CC why bother posting here all the time?
No need to look at web traffic analytics. Just eyeball the daily comment count on cribchatter and compare to yochicago. There are more posts on cribchatter in one day than there are on yochicago in a week. And this is on a consistent basis.
Many cribchatter regulars have been banned from yochicago at some point for posting something that differed from Zekas’s narrow world view. Or perhaps they criticized one of his advertisers. Either way, cribchatter is a real estate discussion forum and yochicago is an advertising billboard.
miumiu,
I think I’ve made it clear why I post here. Too many CribChatterers are perfectly comfortable making stuff up and sliming anyone and everyone with no basis for doing so. And too many other CCers either lack the knowledge to challenge them or don’t want to incur the abuse that would follow from doing so.
I have clients who pay my company to participate in various venues to supply facts where they’re missing or offer an alternate opinion to some of the mindless venom that spews freely on the Internet.
In some cases, as with Appraisal Research, I just think there are decent, credible people who don’t deserve to be known here only by what the likes of a G has to say. G has pretensions to being a data guy. He’s an utter know-nothing compared to the person he so readily trashed, and it just isn’t right to allow that to stand.
I think I’d rather have beers with Clio than Joe Zekas
“If this is what you think of CC why bother posting here all the time?”
what’s the O/U for G’s standard response to this type of question?
Pete,
“No need to look at web traffic analytics.”
Thanks for a perfect summary of the CribChatter ethos.
For the record, no one has ever been banned from YoChicago for stating negative facts about one of our advertisers or clients, or simply for disagreeing with me.
You’re right, Pete, that once I made it abundantly clear that I wouldn’t tolerate mindless ugliness on YoChicago our comment volume plunged drastically. I’m happy about that.
“I have clients who pay my company to participate in various venues”
Say no more….
I once saw Joe threaten somebody’s career with some sort of magical Realtor authority just because the guy disagreed with him.
Facts, Andy?
I recall the same thing, Andy. I believe it was an apartment broker (or maggot/bedbug as Zekas would say). How’s that for sliming someone with no basis, Joe?
According to Zekas’s many yochicago postings, ALL apartment brokers are scum, although I’m sure he’ll try to backpedal and claim he said otherwise.
” G has pretensions to being a data guy. He’s an utter know-nothing compared to the person he so readily trashed, and it just isn’t right to allow that to stand.”
THANK YOU JOE ZEKAS!!!!!!!! Seriously, THANK YOU – obviously you know more than these morons/idiots – deep down, I think many people realize that – but thank you for letting the more intellectually challenged people know that the reason that people “in the know” don’t argue w/ G, HD, sonies, sabrina, JJJ on this site is because they know that these are idiot nonsense spouters of garbage and don’t want to waste their time.
Joe Z and clio are quite a pair. Zekas, are you hiring any guest writers/trollers at yochicago? If so, clio is your man.
Pete, go back to restocking the shelves, or refilling people’s water – rent is due in two weeks – leave the grown up talk to adults
Joe how many times are you going to say you are done with CC and then come right back. Stay in your crappy website. Oh wait, hardly anyone comments on your website so you come here out of boredom and jealousy. Everyone knows you read every post and comment. For someone who hates CC so much, you seem to be one of the most active readers and followers of CC.
You also have a sick infatuation with Sabrina. How many times have you claimed she is a guy and is in some conspiracy to take you down. No one cares about you.
Site traffic yochicago vs CC
Rank yochicago = 424,263
Rank CC = 166,066
http://www.alexa.com/siteinfo/yochicago.com
http://www.alexa.com/siteinfo/cribchatter.com
“For the record, no one has ever been banned from YoChicago for stating negative facts about one of our advertisers or clients, or simply for disagreeing with me.”
This is one of the best things I’ve read in a long, long time.
Hey Pete- remember how Joe used to argue circa 2006 that housing prices could NEVER go down downtown because all the junior lawyers could keep buying expensive 2-bedroom condos for forever? And heaven forbid if you told him he was wrong?
Ah- those were the days.
But don’t gang up on Joe too much. He just comes to Crib Chatter every day because he’s lonely. Obviously, there’s no one discussing any real estate on his own site. So what’s a guy to do?
“And heaven forbid if you told him he was wrong? ”
No kidding! Post an opinion on Joe’s site, if he disagrees then get ready for a verbal attack. No wonder there are hardly any comments on his site.
Sabrina,
Sorry to see you pander to your audience by radical distortions of what I’ve said. Is that really the best you can do?
Alexa’s easy to manipulate. We don’t play those games. You guys can babble all day long about the relative size of our audience vs CC’s. I’m willing to submit it to an objective test.
Read Matt Cutts, Google’s search guru, and the comments there on the subject of Alexa.
http://www.mattcutts.com/blog/thoughts-on-alexa-data/
For casual readers here, if you stick around you’ll learn that CCers consider a fact an attack.
I don’t really have a horse in this race, and I am not a RE salesperson or in anyway associated with the industry. But a couple years ago when I started surfing for local websites I ended up at Joe Zekas YoChicago. I watched about one and a half videos before I really started to wonder why someone who has minimal presentation skills and comes off like such a fossilized idiot would keep putting videos of himself on the internet. Part of my take away was that in such an inflated brainless industry practically anybody can make a go of it, if there are enough equally brainless prospective debtors anxious to sign up for the american dream. So I got the impression that rather than learning something about the local RE especially on the northside of Chicago, YoChicago was a smattering of poorly produced commercials of this f-ing jagoff tell me that now is the perfect time to buy a new construction townhouse in timbuktu. Needless to say, I never went back to YoChicago again, thereby saving myself the disgust. Since then I’ve been visiting cc quite regularly, and I hope that whomever is behind cc keeps up the good work and perhaps adds more to it.
Joe- as chuk so aptly put it earlier in this thread: no one cares.
I don’t even check my analytics! I have no idea what they are. I haven’t even installed it yet on the new website (though I’ll probably get around to it eventually.) And I’m sure that drives you crazy that I really don’t care about such things.
“” G has pretensions to being a data guy. He’s an utter know-nothing compared to the person he so readily trashed, and it just isn’t right to allow that to stand.”
sorry – had to repeat this – it…just….makes……me…..smile!!!!
“G has pretensions to being a data guy. He’s an utter know-nothing compared to the person he so readily trashed, and it just isn’t right to allow that to stand.”
Except listen to Joe Zekas and his shills and you wouldn’t even know this bust was underway until you could no longer deny it and would likely be financially ruined, like all those idiots Joe interviews on his website.
Listen to G like me and you’d be aware of it and the details behind the market, and have dodged a bullet.
This is one dysfunctional blog family. It reminds of a man I once dated and he took me to his parents house for dinner. It started out as intellectual conversations and towards the end they were snide with one another and then it got to the point of flinging subtle insults to one another to where finally one abruptly stood up and said I am out of here!
I like the real estate comments are great and then it get’s weird.
I love the new rating option. Really tells you what the mood is. -12 has to be a new record.
“Except listen to Joe Zekas and his shills and you wouldn’t even know this bust was underway until you could no longer deny it and would likely be financially ruined, like all those idiots Joe interviews on his website.”
Yeah – but examine your level of happiness – would you rather be a happy fool (eg clio) or an unhappy miserable ugly person (eg G, HD)? Seriously, ask yourself that question and realize that you are all going to die (and many of you are going to die a lot sooner than you think – life is short, be happy)
Doesn’t clio claim to be a doctor? Or some sort of professional at least?
Clio’s comment above is now at a -18.
Why should it matter what I do? Opinions on this site have nothing to do with someone’s job. That is the whole problem with you guys – you emotionally assign a value to an opinion based on the poster without actually understanding what the poster is trying to say –
clio/Clio/CLIO (assuming you are the same person),
Someone’s job has nothing at all to do with their opinions or the presentation of facts regarding real estate. I am more concerned with the complete lack of professionalism you show here day after day. If you believe in such objective evaluation of the facts and opinions given by the posters here, regardless of their job, then why do you try so hard to degrade the character and insult the intelligence of others here? Why not simply state your case in a civilized manner?
I simply wonder if you would proudly assign your real life name to your statements here and share said content with your real life clients.
@HD and actually everyone
I suspect that Sabrina has the capability to move towards user self moderation.
Since Sabrina has introduced the ratings systems for comments – she could now turn on a popular feature of rating systems: highlighting or hiding comments. Whether or not Sabrina is ready or willing to move to this feature-set is of course up to her.
Please see:
http://wealthynetizen.com/wordpress-plugin-comment-rating/
from the above link:
Poorly rated comments (too many Dislikes, not enough Likes) can be hidden in a click-to-see link, just like those on Digg. Highly-rated comments (a lot Likes and few Dislikes) can be highlighted. Hotly-debated comments (many Likes and
Dislikes) can also be highlighted to draw more attention, to fan more votes and comments.
—
@HD So this would mean that a -18 rating means that comment is hidden unless you specifically click on it. Not bad, eh?
Regarding the article and Parkside of Old Town…while I am not a fan of the construction quality, I do agree that the development makes sense at a certain price point. I do look forward to the continued development of the “New” Old Town area.
“@HD So this would mean that a -18 rating means that comment is hidden unless you specifically click on it. Not bad, eh”
We are moving toward an oppressive societal model – free speech has been quashed along with free thinking. This is yet another example. You should be ashamed of yourself – go move to the middle east if you don’t like this country
Joe Zekas is a crotchety old man. I do, however, derive entertainment value from his seeming inability to grasp that unlike tv, the internet is an interactive communications medium that is not easily subject to control. It is about the dissemination and democritization of ideas and sharing. But I believe all of these things: democracy, sharing, etc are beyond the grasp of this selfish shill of a bygone era.
If you guys keep “disliking” me, you are going to hurt my feelings and I am going to stop posting. Sure, that may make you feel good for awhile – like a spoiled kid who wants her parents to go away so she can eat cookies – but, in the long run, you will regret it – like that spoiled kid who ends up becoming fat and lonely bc she is so ugly.
Yeah sabrina, we really should hide comments that are -10 or higher like yahoo does, that way we don’t have to read stupid ass troll posts from losers with no life or racist douchebags
Joe Zekas: “I have clients who pay my company to participate in various venues to supply facts where they’re missing or offer an alternate opinion to some of the mindless venom that spews freely on the Internet.”
Clio: “THANK YOU JOE ZEKAS!!!!!!!! Seriously, THANK YOU – obviously you know more than these morons/idiots – deep down, I think many people realize that – but thank you for letting the more intellectually challenged people know that the reason that people “in the know” don’t argue w/ G, HD, sonies, sabrina, JJJ on this site is because they know that these are idiot nonsense spouters of garbage and don’t want to waste their time.”
Ahhhhh! It all makes sense now.
Joe, could you at least be man enough to admit that there have been some seriously bad actors on CC that have been on “your side”? I mean, you have read the posts of Clio and Steve Heitman, right? Can you really defend their behavior as factual, rational and objective?
I’ll agree with you that the comments on CC are a cesspool. But at least Sabrina allows posters to disagree. As with all of the internet, you have to take the good opinions with the bad if you want a truly open debate. I really don’t know what to do with your hatred and venom toward Sabrina. She may not always be right, but she conducts herself with much more tact and respect towards others than you.
I dare you guys to dislike me……
Joe Zekas doesn’t want dissenting opinions. Dissenting opinions on his website would be akin to inviting a customer onto an infomercial to say the product is crap & not worth it or they actually did not get rich off of classified ads/foreclosures with no money down/etc afterall.
Open debate is the enemy of the snake oil salesman.
“Open debate is the enemy of the snake oil salesman.”
it is also what made this country great and is part of the foundation of any democracy. anyone that doesn’t like it should move to another country – see how you like it there, you ungrateful morons.
I cant wait to see how many diskikes clio garners when he talks about his fictional lambo.
—
chichow: “Poorly rated comments (too many Dislikes, not enough Likes) can be hidden in a click-to-see link, just like those on Digg. Highly-rated comments (a lot Likes and few Dislikes) can be highlighted.”
—
Oh, yeah, quash dissenting opinions, so that the majority dominates even more. Dissenters and unpopular opinions won’t even be heard. What an f-ing brilliant idea! Joe freggin Zekas should hire you to be editor for YoChicago. You sound like one of the idiots leveraging up at the peak of the market, probably to the very day. Sabrina does this and I’m going to stand up and say, I’m outta here.
Open debate is the enemy of the snake oil saleman and the 2/2 or SFH circa 2005 salesman.
Brad, I don’t think people usually vote down a comment to a large extent because it is a dissenting opinion. They do it because it is an insulting/derogatory/trolling comment. IMO, intelligent comments on either side of a debate are fairly well respected here
“Brad, I don’t think people usually vote down a comment to a large extent because it is a dissenting opinion. They do it because it is an insulting/derogatory/trolling comment. IMO, intelligent comments on either side of a debate are fairly well respected here”
and what do you think YOUR comment is, you moronic hypocrit?