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  #861  
Old Posted May 18, 2022, 11:19 PM
the urban politician the urban politician is online now
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If stuff in Chicago is going under contract in 3 days, then........

Prices are about to head upward
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  #862  
Old Posted May 18, 2022, 11:20 PM
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Originally Posted by Steely Dan View Post
It's because you view real estate exclusively through the lens of ROI.

Whereas many regular people view real estate through the lens of INAFPTL.


And for the record, you're the only poster on the entire page of this thread who used the word "deal", a dead giveaway of your investor class status.
A better "return" is in the eyes of the beholder.

A better financial return? Or a return on happiness and comfort?
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  #863  
Old Posted May 19, 2022, 1:21 AM
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The actual dwelling structure quality and selection in Chicago is tough to beat not even including price.
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  #864  
Old Posted May 19, 2022, 2:05 AM
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Originally Posted by Steely Dan View Post
It's because you view real estate exclusively through the lens of ROI.
Everyone should view investments through the lense of ROI.

And especially if they're talking about determining whether said investment is a deal, bargain, or cheap, all terms used in this thread.
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  #865  
Old Posted May 19, 2022, 3:42 AM
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Quote:
Originally Posted by Crawford View Post
Everyone should view investments through the lense of ROI.
A. Not everyone who's looking for a place to live views it as an "investment", in the strictly financial sense.

B. As TUP touched upon, returns are not exclusively measured in dollars and cents.

A lot of regular (ie. not wealthy) people are in the INAFPTL realm.





Quote:
Originally Posted by Crawford View Post
And especially if they're talking about determining whether said investment is a deal, bargain, or cheap, all terms used in this thread.
You're the only person who said "deal".

Residential real estate in urban chicago is objectively "cheaper"(costs less money) than like for like residential real estate in most of America's other top tier urban cities.

"Bargain" can be a trickier word, because there is a context for it that does come with a value aspect, and in that usage, yes, "you get what you pay for" is a part of the equation, but I think the way most people use the word "bargain" in this thread when speaking about Chicago real estate prices is in the different sense of "wow, you can get so much for so little!".

Kinda like like someone at an outlet mall saying "holy crap, 5 factory-second dress shirts for only a hundred bucks, damn, what a bargain!" now, those dress shirts will never be worth a whole lot more than what they were initially purchased for, but it can still be a little surprising to get 5 fucking dress dress shirts for only a hundred bucks.

Chicago's seemingly infinite supply of missing middle "flat" housing is the factory-second dress shirt of American urban residential real estate. It doesn't possess a whole lot of intrinsic monetary value, but if you're just looking for a cheap-ass dress shirt, you're fucking gold, pony boy!
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Last edited by Steely Dan; May 19, 2022 at 12:11 PM.
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  #866  
Old Posted May 19, 2022, 11:17 AM
the urban politician the urban politician is online now
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Yeah, I have investment properties I view through the lens of “making money”

And I have my home that I view as my happy sanctuary. Having a good community, a place to raise my kids, etc are far more important to me here than whether my home value price increases are meeting some minimum percentage standard.

I don’t see how it’s hard to tell the difference between these two approaches.
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  #867  
Old Posted May 19, 2022, 2:18 PM
jmecklenborg jmecklenborg is offline
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Originally Posted by Steely Dan View Post
Chicago's MASSIVE inventory of legacy "missing middle" housing also helps out a lot too. 3-flats for miles and miles.

I feel like I still get the advantages of the "neighborhoodiness" of living on a SFH block, but with the necessary density to support a decent level of functional urbanism.
Small multi-families are more often owned by small-time landlords than guys who own 100~ units. This means many of them are rented below market value.

Those incendiary "rent is too damn high" articles have no access to this data. They have no idea how much someone who owns a single rental property is renting the place for. There are people who have been living in the same small place for the past 15 years who are still paying the same rent they were paying the day they moved in.

I also think that Chicago has much better inter-neighborhood mobility by transit and car than cities like...Boston or even Los Angeles (Valley versus Mid-City versus sheer distance), where there is often just one way to get there from here, and so people who live in some neighborhoods realistically do not have access to jobs in another part of the metro.

A good example is...how many people who live in Brooklyn work in New Jersey? Or vice-verse? That's right, almost zero. People have to orient their housing around where they work and where they work around where they live to an extreme degree in some cities, but not to the same extent in Chicago. If you have fewer people in the process of moving to simply be closer to a new job, then there is less unused housing that is between occupants.
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  #868  
Old Posted May 19, 2022, 3:40 PM
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Originally Posted by the urban politician View Post
If stuff in Chicago is going under contract in 3 days, then........

Prices are about to head upward
Nevermind.

Crains is now reporting that housing prices in Chicago are going down.

Yay
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  #869  
Old Posted May 19, 2022, 3:41 PM
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Quote:
Originally Posted by Steely Dan View Post
A. Not everyone who's looking for a place to live views it as an "investment", in the strictly financial sense.
We aren't talking about a place to live. We're talking about leveraged RE homeownership, which, historically, wasn't even a thing, and is still relatively unusual in the global context. Most places to live are rented or inherited or cash purchases.
Quote:
Originally Posted by Steely Dan View Post
B. As TUP touched upon, returns are not exclusively measured in dollars and cents.
Of course not exclusively, but primarily. Or there's no point. There are plenty of places to live that don't require leveraging wealth.
Quote:
Originally Posted by Steely Dan View Post
A lot of regular (ie. not wealthy) people are in the INAFPTL realm.
I don't know what that acronym means, but non-wealthy people should absolutely be the most cautious about leveraging their assets. It's actually wealthy people who don't need to be counting ROI.
Quote:
Originally Posted by Steely Dan View Post
You're the only person who said "deal".
I'm not going through this thread to see who said what, but irrelevant. These terms are roughly synonymous and the discussion is about good deals.
Quote:
Originally Posted by Steely Dan View Post
Residential real estate in urban chicago is objectively "cheaper"(costs less money) than like for like residential real estate in most of America's other top tier urban cities.
Disagreed. There are good reasons why Chicago RE costs less. The main reason is that the returns are comparatively terrible. And there are plenty of first tier metros with comparable apples-apples housing prices. Philly, Atlanta, Dallas, Houston are all in the same ballpark.

Quote:
Originally Posted by Steely Dan View Post
"Bargain" can be a trickier word, because there is a context for it that does come with a value aspect, and in that usage, yes, "you get what you pay for" is a part of the equation, but I think the way most people use the word "bargain" in this thread when speaking about Chicago real estate prices is in the different sense of "wow, you can get so much for so little!".
You don't get "so much for so little". That's the point. Bad returns means you get "so little for so much". This puts downward pressure on prices. You're plowing money into an asset that sells at 2005 prices. That isn't cheap.
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  #870  
Old Posted May 19, 2022, 3:42 PM
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Originally Posted by jmecklenborg View Post
Small multi-families are more often owned by small-time landlords than guys who own 100~ units. This means many of them are rented below market value.

Those incendiary "rent is too damn high" articles have no access to this data. They have no idea how much someone who owns a single rental property is renting the place for. There are people who have been living in the same small place for the past 15 years who are still paying the same rent they were paying the day they moved in.

I also think that Chicago has much better inter-neighborhood mobility by transit and car than cities like...Boston or even Los Angeles (Valley versus Mid-City versus sheer distance), where there is often just one way to get there from here, and so people who live in some neighborhoods realistically do not have access to jobs in another part of the metro.

A good example is...how many people who live in Brooklyn work in New Jersey? Or vice-verse? That's right, almost zero. People have to orient their housing around where they work and where they work around where they live to an extreme degree in some cities, but not to the same extent in Chicago. If you have fewer people in the process of moving to simply be closer to a new job, then there is less unused housing that is between occupants.
Those small time landlords continue to get squeezed by policies that lead to the opposite outcome of their original intent (as always), and eventually those rents will rise further.
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  #871  
Old Posted May 19, 2022, 3:48 PM
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You can buy a SF of good-condition residential real estate in desirable urban Chicago for less than $250.

That's why people call it "cheap" and "affordable".

It costs less money PSF.
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  #872  
Old Posted May 19, 2022, 3:57 PM
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Originally Posted by Steely Dan View Post
You can buy a SF of good-condition residential real estate in desirable urban Chicago for less than $250.

That's why people call it "cheap" and "affordable".

It costs less money PSF.
But some of the reasons you get it for cheap in Chicago are:

1. It costs more money to maintain property in urban Chicago
2. Real estate taxes, as we all know, are haphazard and tend to get out of control
3. Appreciation is pretty poor in Chicago, as Crawford said. That matters to some people, but of course not to everyone.
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  #873  
Old Posted May 19, 2022, 4:21 PM
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Originally Posted by Crawford View Post
The main reason is that the returns are comparatively terrible.
Not if you want to live in Chicago. . .

. . .
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  #874  
Old Posted May 19, 2022, 4:45 PM
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Originally Posted by the urban politician View Post
But some of the reasons you get it for cheap in Chicago are:

1. It costs more money to maintain property in urban Chicago
2. Real estate taxes, as we all know, are haphazard and tend to get out of control
3. Appreciation is pretty poor in Chicago, as Crawford said. That matters to some people, but of course not to everyone.
All true. However, even when you account for all of these additional costs, the COL in Chicago is still far lower than so many other places. Forget SF, Denver RE is now more than Chicago (even after accounting for taxes, etc). Chicago is definitely an anomaly that people haven't quite picked up on en masse.
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  #875  
Old Posted May 19, 2022, 4:52 PM
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All true. However, even when you account for all of these additional costs, the COL in Chicago is still far lower than so many other places. Forget SF, Denver RE is now more than Chicago (even after accounting for taxes, etc). Chicago is definitely an anomaly that people haven't quite picked up on en masse.
How is Chicago overlooked when almost 3 million people live there? And another 6 million live in the surrounding area.
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  #876  
Old Posted May 19, 2022, 4:58 PM
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How is Chicago overlooked when almost 3 million people live there? And another 6 million live in the surrounding area.
Because it hasn't had the level of population growth over the last decade compared to other metros in the country. Yes, there are parts of the city that have grown tremendously, but I think it's still a bit of a hidden secret how affordable Chicago is for what you get.

When I talk about Chicago RE to my Denver friends, they are actually shocked most of the time and had no clue how affordable it is here. One or two decades ago, Chicago was overall more expensive than many of these metros. That's no longer the case, and has been for a few years now.
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  #877  
Old Posted May 19, 2022, 5:07 PM
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Originally Posted by the urban politician View Post
Those small time landlords continue to get squeezed by policies that lead to the opposite outcome of their original intent (as always), and eventually those rents will rise further.
Most small landlords are breaking even, at best. When a landlord loses money over time, in some cases it means the tenant was quite literally subsidized by the landlord.

Yet landlords are all leaches, so sez the Twitter mob.
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  #878  
Old Posted May 19, 2022, 8:17 PM
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Well, I don't know about homes, but some rentals are suddenly on fire.

One of my properties is in Lincoln Park and the top floor apartment rented all last year for $1800. We relisted it for $2100 (just for kicks) and within a day of listing we got 12 requests.

Suddenly there was a bidding war and finally I approved the group who offered $2300 and a 22 month lease.

$500 increase in rent in just 1 apartment in 1 season!
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  #879  
Old Posted May 19, 2022, 8:22 PM
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^ what's the size?

My neighbors upstairs are renters and they're paying $2,500/month on a 3/2 w/1,300 SF, 1 year lease, and this is all the way up in Lincoln Square.
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  #880  
Old Posted May 19, 2022, 8:28 PM
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How is Chicago overlooked when almost 3 million people live there? And another 6 million live in the surrounding area.
Probably because it's not cool enough for Cali transplants to move to as an "affordable" new city, all while driving the local housing prices up.
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