CHICAGO | General Developments

[marothisu]

Originally Posted by the urban politician

^ Uhh, you missed the whole point of that post.

What's the point of the post? That you are assuming people on here think it's bad that people are making money? LOL...honestly I think there's only 1 person who is actually angry about these renovations and it's not me or west-town-brad.

Sure, these are more or less "cookie cutter" renovations, but the more power to the people who are doing this. It's actually probably good for the neighborhood at the end of the day for multiple reasons too. There's also obviously demand for them too, and even of the residents in these areas...there's more people there who can actually afford these homes ($200K-$300K) than some want to actually believe.

[the urban politician]

Originally Posted by marothisu

What's the point of the post? That you are assuming people on here think it's bad that people are making money? LOL...honestly I think there's only 1 person who is actually angry about these renovations and it's not me or west-town-brad.

Sure, these are more or less "cookie cutter" renovations, but the more power to the people who are doing this. It's actually probably good for the neighborhood at the end of the day for multiple reasons too. There's also obviously demand for them too, and even of the residents in these areas...there's more people there who can actually afford these homes ($200K-$300K) than some want to actually believe.

I don't have a clue what you are disagreeing with me about......

[marothisu]

Originally Posted by the urban politician

I don't have a clue what you are disagreeing with me about......

Okay - then it appears we agree that these are a good thing. More power to the renovators who are doing this. There's obviously demand too.

[Via Chicago]

Originally Posted by marothisu

What's the point of the post? That you are assuming people on here think it's bad that people are making money? LOL...honestly I think there's only 1 person who is actually angry about these renovations and it's not me or west-town-brad.

apparently stating the housing market is frothy as hell, which is plain as day to any objective observer, makes me "angry"

people should be angry that we're on the cusp of going through '08 all over again without a single lesson learned

[marothisu]

Originally Posted by Via Chicago

apparently stating the housing market is frothy as hell, which is plain as day to any objective observer, makes me "angry"

people should be angry that we're on the cusp of going through '08 all over again without a single lesson learned

You obviously know something we don't know, or claim to. Do you have evidence that these renovated houses in these neighborhoods are being purchased by people who cannot afford them?

[the urban politician]

^ Not only that, but the huge mark up in SFH prices is also based on real demand, as opposed to inflated speculation.

The housing boom of the 2000s was based on a lot of speculators and flippers buying property, coupled with easy mortgages for subprime borrowers.

Today, it's real people actually trying to buy homes to live in, and lenders are far stricter today than they were 15 years ago:

https://www.wsj.com/articles/america...d=hp_lead_pos4

[SamInTheLoop]

^ And, don't forget over the entire last decade - or actually a little more - we've built so many fewer homes than we should have. There are various reasons for that, and just recently sfh construction levels have been improving, but there is still a lot of ground to make up over the next several years - and hopefully we do.

SFH prices feel elevated and are advancing at a fast clip, but I certainly don't find any excessive speculation or unsound financing behind it. Years of low new supply, sustained very low interest rates, a huge cohort that is making some big moves now into the sfh market, and I would say a boost from the pandemic have converged.

What could really cool things off in the relatively near term? I think a meaningful and sustained increase in rates would be the most likely - however I don't think that is likely (in spite of the inflation panic party people.....who are always there lurking ready to pounce on any and all ephemera that appear to comport with their worldview). Note: this is not to say that there is a negligible probability of sustained meaningfully higher inflation and thus interest rates - only that it is definitely not the most likely scenario.

[left of center]

Originally Posted by Via Chicago

people should be angry that we're on the cusp of going through '08 all over again without a single lesson learned

I would say things are a bit different now than '08. Banks were literally doing 'no doc' loans in 08, meaning no income verification. You have a pulse? Then you get a mortgage. Sure its a high adjustable rate with PMI, but who cares! Its the swinging 00's!

Mortgage requirements nowadays a lot more stringent. While low rates are driving more people to buy homes, it isn't the frenzy that it was over a decade ago. Back then homebuilders were overbuilding on spec. Today, we have a decade's worth of underbuilding leading to historically low inventory. People who are more than qualified for a mortgage are unable to find a house, and that is what is driving prices up. Its lack of supply vs. "irrational exuberance".

[marothisu]

Common people on social media "why do they keep building things! Chicago is losing population! Who is buying these!?!?"

Multiple months later....open houses that have lines of people to be shown and hundreds of properties in the city alone (plus a lot more in the suburbs) having bidding wars. Well over 1200 to be exact in the first 4 months of the year.


Always weird too when people assume that everyone is OK with their current living situation and people don't want new or renovated property.

[the urban politician]

^ I can attest by providing an anecdote that I suspect other landlords are feeling. Several high quality tenants (sigh....) have bolted or are asking for month to month tenancies, all because they’ve either found a home or are waiting until an offer gets accepted. This mostly applies to couples (straight and gay). People are buying homes en masse, mostly in the burbs.

So the phenomenon being described by the media does appear real based on my experience.

[moorhosj1]

Originally Posted by the urban politician

People are buying homes en masse, mostly in the burbs.

So the phenomenon being described by the media does appear real based on my experience.

Then who is buying all the homes in the city? For days we've been going over how homes in the city are selling quickly and above asking price. Anecdotes from my neighborhood reinforce that data.

[Busy Bee]

Reminds me of all the news reports talking about "PEOPLE MOVING OUT OF NYC TO THE BURBS!!!" during the Covid height. In reality it was a pretty tiny percentage of people MOSTLY from Manhattan and MOSTLY white and well-off. And already we're seeing news of those same folks returning to the city after the 2020 stress has subsided.

[Handro]

Lots of renters and condo owners moving. There are two condos in my building that have been on the market for months and one that just got taken off the market after languishing since January. I don't think it's a city vs. suburbs phenomenon, it's people looking for a space upgrade. Some want that upgrade with a big yard and driveway and SUV and opt for the burbs, some want to stay in the city and forgo some of the trappings of suburbia. Some want both and are moving to neighborhoods where they can afford a suburban style property in the city. My gf and I are WFH in the same small "home office"... I can see the allure of moving.

[Barrelfish]

Interesting tidbit (via the new book on Amazon): Apparently Chicago, Raleigh, and Philly were Amazon's 3 internal finalists for HQ2, but then Bezos went with his gut to pick NYC instead.

Source (with screenshot of the NYT excerpt): https://twitter.com/eliotwb/status/1392848608605605890

[sentinel]

My neighbors across the street are selling their SFH and moving to a condo in the St. Regis (one of the couple is a senior exec at Magellan). Their youngest kid will be graduating high school in a year, so they don't need the large, SFH anymore. They bought the condo as a pre-construction deal AND were able to get an employee discount too. The one who works for Magellan is most excited about their new commute being less than 2 minutes haha.

Their SFH is being sold as a private, pocket listing, I suspect, as I cannot find it on any real estate website, like Zillow, etc. But they texted me yesterday that they already have 3 offers.

Different strokes for different folks. I sold my lakefront condo in Lakeview four years ago, because it was a one-bedroom and felt...stifling. I was there for 9 years, loved the hood, but as I got older, I wanted a change. Plus, I'm having a kid (relatively) soon, and I wanted to be within a 10 minute drive of family that will hopefully be around to help me.

That being said, I fully expect to buy another condo in the City, as a rental/investment property or pied-a-terre, possibly within the next 3-5 years.

[marothisu]

Originally Posted by Barrelfish

Interesting tidbit (via the new book on Amazon): Apparently Chicago, Raleigh, and Philly were Amazon's 3 internal finalists for HQ2, but then Bezos went with his gut to pick NYC instead.

Source (with screenshot of the NYT excerpt): https://twitter.com/eliotwb/status/1392848608605605890

I'm half surprised but half not. I thought he'd be more rational but my opinion of Jeff Bezos as a business person has slightly gone down now.

[marothisu]

Wasn't April one of the highest months in real estate sales in the city in years? Thought I read that somewhere but have to find it.

As someone mentioned before, its like here in nyc. A bunch of people left because they stupidly thought the pandemic would go on forever, or they could work remotely forever. Now that is looking not true for the most part, many people are moving back to the city. I think we'll see it in multiple cities ramp up in the coming months.

[the urban politician]

Originally Posted by Handro

Lots of renters and condo owners moving. There are two condos in my building that have been on the market for months and one that just got taken off the market after languishing since January. I don't think it's a city vs. suburbs phenomenon, it's people looking for a space upgrade. Some want that upgrade with a big yard and driveway and SUV and opt for the burbs, some want to stay in the city and forgo some of the trappings of suburbia. Some want both and are moving to neighborhoods where they can afford a suburban style property in the city. My gf and I are WFH in the same small "home office"... I can see the allure of moving.

I agree. I’m sure that city homes are selling well too. There seems to be a move towards having more space.

The good news for city apartment owners is, there is definitely demand for apartments to backfill the units that have gone vacant, and it’s up from 2020. Rents are still below pre-pandemic levels, but we are definitely not in some sort of free fall situation.

[marothisu]

Originally Posted by the urban politician

I agree. I’m sure that city homes are selling well too. There seems to be a move towards having more space.

The good news for city apartment owners is, there is definitely demand for apartments to backfill the units that have gone vacant, and it’s up from 2020. Rents are still below pre-pandemic levels, but we are definitely not in some sort of free fall situation.

I think this may shift various areas of Chicago even more upper middle class white collar. In all my data in the typical "hot urban neighborhoods", it's the 2 and 3 bedroom condos that are doing well, not necessarily the 1 bedroom condos. These aren't dirt cheap but still attainable for a large number of people/families still. It will probably push out some (either priced out or they just want a legitimate back yard) but attract others. While we are moving back to Chicago, we'll be looking to buy a 3 bedroom condo in the city (we are currently in a 1 bedroom). While ideally paying $3500-$4500/mo for it including HOA and tax isn't dirt cheap, it's still way more attractive than moving to the suburbs right now (maybe later..who knows) and way more attractive than continuing to pay $3600/mo for a 1 bedroom here in NYC.. Can't imagine we are even close to the only ones in this situation. If Chicago could clean up its external image a bit right now, it would probably make some areas go crazy.

[the urban politician]

^ You should fulfill Steely Dan’s lifelong dream and buy a house in Schaumburg