Real Estate in your city

[iheartthed]

Originally Posted by Steely Dan

as was noted earlier, chicagoland housing was clearly very overvalued in the great big bubble leading up to the great recession, and the local market did not have the underlying fundamentals to rebound as quickly as other places, and it was (and continues to be) further hobbled by chicagoland's extremely high property taxes.

i should know, i was one of those people greatly affected by it. it took over a decade for my condo to get back up to its 2007 purchase price. hell, my sister has owned her exburban house for nearly 2 decades, and it took the recent pandemic-induced suburban home buying frenzy to finally bring it above its 2002 purchase price. two! fucking! decades!

these experiences still haven't soured me on home-owning in chicago. as i said before, as long as i have any say in the matter, i will never rent again. the peace of mind of owning is absolutely priceless to me.



FWIW, since purchasing our home nearly 4 years ago, and taking the current median estimated value from zillow, redfin, & homesnap, its value is up 18%. i can live with that.

it certainly ain't gonna make me rich, but at least i get to actually own a kick-ass home in a kick-ass neighborhood to raise my kids in.



as my broken record continuously spins: lower barriers/lower ceilings or higher barriers/higher ceilings. pick your poison.

if you're only capable of seeing the value of home ownership as a potential investment vehicle, then the chicagoland market is NOT for you.

but if you're looking to own a home in an awesome US city for not a lot of money, then.........

I'm not really concerned about the virtues of homeownership versus renting. I just don't think it's sustainable for Chicago's real estate market to not have kept pace with inflation for two decades. You're all trying to convince us that Chicago can be a growing, dynamic metropolis while having a depressed real estate market. I love Chicago, but I'm extremely skeptical that this is possible.

[Buckeye Native 001]

Originally Posted by JManc

Hence why pension funds are snapping up entire neighborhoods all over the country so they can turn around and rent these houses out to the same people who they outbid.

I see that as a huge problem (my gf and I have been trying to buy for what feels like forever only to see prices skyrocket and houses, townhouses and condos going for way over the asking price in our market) but we're lower middle class and I'm relatively liberal so maybe my worldview is off?

There was a Wall Street Journal article published within the last week (I don't have a subscription) about, if I understood correctly, Blackwater buying up homes and renting them out to the people they outbid. For whatever reason, it makes me (irrationally?) angry, but do I have that right? It's basically capitalism at its finest. Can or should that kind of stuff be regulated?

[Steely Dan]

Originally Posted by iheartthed

I'm not really concerned about the virtues of homeownership versus renting.

I am.

Originally Posted by iheartthed

You're all trying to convince us that Chicago can be a growing metropolis while having a depressed real estate market.

i'm not trying to convince you of that.

currently, chicagoland is clearly a very stagnant metropolis.

that's just an objective fact. i don't know how anyone could attempt to argue otherwise.

[the urban politician]

The problem is that if you look at the entire Chicago region as one giant aggregate, then it's stagnant and slipping behind the rest of the country.

But if you break it into subregions, you have a much more interesting story.

Pre-pandemic, you had mostly stagnant suburbs, some city neighborhoods in free fall, and then a central area booming like nothing else in the country, along with some strong core neighborhoods, particularly on the north side.

[Crawford]

Core Chicago isn't "booming like nowhere else in the country". Not even close. Pre-pandemic it was doing much better than Chicagoland suburbs, following the same trends as everywhere else. But no one would claim that core Chicago is some economic outlier among metropolitan cores.

I'd bet if you compared core Chicago valuations to other metropolitan core valuations, it would be a significant laggard, overall, with tech-focused places like SF, Austin and Seattle likely showing the largest core value increases in recent years.

[Steely Dan]

^ I think TUP is speaking SSP-ese.

In that language, "booming" means "shitloads of skyscrapers being built!!!"

And on that particular score, chicago's recent run of constructing a bewildering number of new towers, in one of the nation's most stagnant large metros, is definitely a bit of an outlier.

[the urban politician]

^ Exactly, I should have been more clear, I was not talking about increases in property values. I was talking about construction, skyscrapers, and population growth.

[edale]

Chicago is a really strange real estate market. On the one hand, we have stories like those that have been discussed in this thread about condos and SFHs that have barely appreciated, or actually depreciated over the last 20 years. But then you still have a pretty robust luxury market, where someone paid 60 million for a penthouse, and new luxury towers continue to rise. It doesn't really make sense to me. How are these towers continuing to go up in a market like that?

[JManc]

Originally Posted by Crawford

Of course you're getting something out of the deal. You're getting a place to live.

If that's the only reason, then, sure, renting is fine but there is an intrinsic value to owning your own home that goes beyond how much return you'll get on your investment. Why do you own if renting is just fine? Especially in New York where probably ~70% of the city rents.

Originally Posted by jmecklenborg

Big money has bought up single-family homes since the recession because they're seeking a substitution for bonds in our ongoing ultra-low interest rate environment. Bonds were as easy to own as stocks but real estate of any type requires active management.

Whatever their end game, they are driving up the cost of housing because they pay cash and outbid normal buyers by paying more than asking price. They are going to sit on these houses and rent them out to the folks they outbid. We own two houses and are constantly pestered with junk calls and mail asking us to sell. They are vultures.

[the urban politician]

Originally Posted by edale

Chicago is a really strange real estate market. On the one hand, we have stories like those that have been discussed in this thread about condos and SFHs that have barely appreciated, or actually depreciated over the last 20 years. But then you still have a pretty robust luxury market, where someone paid 60 million for a penthouse, and new luxury towers continue to rise. It doesn't really make sense to me. How are these towers continuing to go up in a market like that?

Luxury condos are doing fairly well, when in the right locations.

Condo construction in Chicago is a shadow of its pre-2008 self. That's one thing that has helped--there is far less risk of oversupply. Most of the construction you are seeing in Chicago today is apartments, and (pre-pandemic) office. Now we are even beginning to see some office geared towards Biotech in the Fulton Market district.

So even with a small ultra-luxury condo market, there is plenty of construction in Chicago going on to support other needs.

Hotel construction mostly dried up during the pandemic, but I'm guessing that by 2023 or so it will fire back up again.

[galleyfox]

Originally Posted by Steely Dan

^ I think TUP is speaking SSP-ese.

In that language, "booming" means "shitloads of skyscrapers being built!!!"

And on that particular score, chicago's recent run of constructing a bewildering number of new towers, in one of the nation's most stagnant large metros, is definitely a bit of an outlier.

From the developer’s POV, Chicago is not going to spend 10 years deciding whether to approve or reject a skyscraper, and construction costs are mostly reasonable with decent financial returns. So not a bad deal. Also, why bid more for an old condo, when a brand new condo or apartment unit can be had for about the same price?








https://www.brookings.edu/research/b...e-coronavirus/

[DCReid]

Originally Posted by the urban politician

Luxury condos are doing fairly well, when in the right locations.

Condo construction in Chicago is a shadow of its pre-2008 self. That's one thing that has helped--there is far less risk of oversupply. Most of the construction you are seeing in Chicago today is apartments, and (pre-pandemic) office. Now we are even beginning to see some office geared towards Biotech in the Fulton Market district.

So even with a small ultra-luxury condo market, there is plenty of construction in Chicago going on to support other needs.

Hotel construction mostly dried up during the pandemic, but I'm guessing that by 2023 or so it will fire back up again.

Chicago is also still a major corporate center with much wealth, including some new wealth. Despite its challenges, Chicago still is in a fairly enviable position compared with most Midwest legacy manufacturing cities. What I really don't understand about US cities, is why Philly has always remained relatively inexpensive just about forever in the Boston-Washington corridor - I can't recall a period when Philly was considered expensive.

[the urban politician]

^ Philly is just too close to NYC, that's its problem.

To the north you've got NYC, and then to the south you've got DC. Both of those hugely important regions just pull ambitious people in both directions.

[The North One]

Originally Posted by iheartthed

I'm not really concerned about the virtues of homeownership versus renting. I just don't think it's sustainable for Chicago's real estate market to not have kept pace with inflation for two decades. You're all trying to convince us that Chicago can be a growing, dynamic metropolis while having a depressed real estate market. I love Chicago, but I'm extremely skeptical that this is possible.

These housing market issues are hardly exclusive to low growth areas. How many shacks that were worth literally millions of dollars in Florida in 2005-2006 just now or recently got their value back?

[SIGSEGV]

Originally Posted by The North One

These housing market issues are hardly exclusive to low growth areas. How many shacks that were worth literally millions of dollars in Florida in 2005-2006 just now or recently got their value back?

Exactly, comparing just-before-the-housing crash values to post-housing crash values is a little cherrypicky.

[dimondpark]

Okay Cow Hollow, we see you....I like the outdoor-indoor living thing, but the city can be too cold for that most of the time imo so idk about this, but it looks very cool in any event.

Here is the sale history of this house on 2582 Filbert Street

1997: Sold for $2,400,000
1998: Sold for $3,300,000
2016: Sold for $14,400,000
2021: For sale at $46,000,000

Before...


Now...










https://www.estately.com/listings/info/2582-filbert

[JManc]

Different house. Much bigger and far more opulent.

[Crawford]

To be fair, you can't compare sales prices to for-sale offerings. Anyone can offer anything for sale at any price. Only closed sales matter.

[Camelback]

Five metros with the biggest home-price increases according to Redfin
-Phoenix, Las Vegas, Sacramento, Austin and Miami were ranked the five cities with the biggest home-price increases, according to Redfin data
https://www.foxbusiness.com/real-est...creases-redfin

Austin saw the largest increase year over year at 42.4%.
Phoenix second-largest increase at 33.3%.

[Steely Dan]

The national home price surge is apparently real; it's now trickling down to the most unlikely of places.

Even in the most stubbornly stagnant-ass major real estate market in the country (Chicago), our home's value is now up 20% YOY according to Zillow. WTF!?!

That kinda shit has been unheard of here for decades.

Whenever I see growth curves that suddenly steep, my "bubble-senses" start tingling.

But everyone says it's different this time.......



Time will tell.