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  #81  
Old Posted Oct 2, 2019, 1:50 PM
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^ not to mention higher property taxes (at least in Chicagoland) and transportation costs.
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  #82  
Old Posted Oct 2, 2019, 2:01 PM
IrishIllini IrishIllini is offline
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Originally Posted by Crawford View Post
But that makes sense. Why would LA have average U.S. prices? Does London have average UK prices? Paris have average French prices? Of course not. The biggest urban centers are almost always much more expensive, because they're much more desirable and have much better job markets.

And the average U.S. home isn't a 3 bed/3 bath, minimum 2,000 ft. Such preferences would put you above the national median even in Bumblefunk, Alabama.
Chicago is sort of a unicorn in this sense. It’s affordable with a strong job market and has world class amenities. It’s affordable largely because it’s dense with viable transit, flat as a pancake, and unobstructed on 3/4 sides.
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  #83  
Old Posted Oct 2, 2019, 2:02 PM
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Originally Posted by Obadno View Post
The average home price in the usa is 226k as of 2018

You're home is was worth just shy of double the average home price in the USA in 2017 when you bought it. Its very easy to assume that your house is "average" and that your life is " normal" when it is far from.
i was talking specifically about dual income families.

the median dual income family in chicago has an AGI of ~$108K.

unless you're buried in outstanding debt, a family making $108K should be able to qualify for a mortgage on $420K home in most cases, if they can put 20% down.

again, one does not need to be "extremely wealthy" to own a comfortable family-sized home in a safe, urban, neighborhood with good schools in chicago.

the key is dual income. if a coupe decides that they want to have one of the partners be a stay at home mom/dad for the kiddos, then yes, affording a larger family-sized home in safe urban chicago on a single middle class salary will be a MUCH tougher challenge.
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  #84  
Old Posted Oct 2, 2019, 2:03 PM
Investing In Chicago Investing In Chicago is online now
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Originally Posted by Steely Dan View Post
not every city is manhattan or san francisco.

we are not extremely rich. we purchased a 2,300 SF 3 bed/3 bath condo in a 3-flat for $420K two years ago in a wonderful, safe, urban neighborhood on the northside of chicago with a good neighborhood school (so good in fact that enrollment is exploding and CPS is currently building a $20M addition).

now, $420K is obviously going to be out of reach for many families, but it's also not in "extremely wealthy" territory either. a dual-income family with two decent middle class salaries can make that work; it's not some unobtainable unicorn that only the top 5% can have.

and for the record, i'm not disagreeing with your premise that many young families do move out to the burbs once they have 2+ kids, i'm merely countering your false narrative that safe, comfortable, urban living for a family of 4 is only available for the "extremely wealthy". middle class families with children can and do live in urban neighborhoods in chicago. some of them are my friends and neighbors.
In Chicago - the challenge is High School, not K-8. There are very few quality public, non magnet, High School options in Chicago.
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  #85  
Old Posted Oct 2, 2019, 2:05 PM
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Originally Posted by IrishIllini View Post
Chicago is sort of a unicorn in this sense. It’s affordable with a strong job market and has world class amenities. It’s affordable largely because it’s dense with viable transit, flat as a pancake, and unobstructed on 3/4 sides.
I know the Chicago partisans keep pushing this, but I disagree. Yes, Chicago is cheaper than NYC, LA, SF, DC and Boston, but that's about it. Desirable areas in Chicagoland, with good schools, aren't cheap. And taxes/fees are high.

Chicago, apples-to-apples, is probably the most expensive metro in the U.S. outside of the coastal metros. The median looks cheap, because there are huge swaths of Chicagoland where property values are near zero. But if you want a nice home in Hinsdale or Lincoln Park, you're gonna pay up.
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  #86  
Old Posted Oct 2, 2019, 2:07 PM
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Originally Posted by Steely Dan View Post
i was talking specifically about dual income families.

the median dual income family in chicago has an AGI of ~$108K.

unless you're buried in outstanding debt, a family making $108K should be able to qualify for a $420K mortgage in most cases.

again, one does not need to be "extremely wealthy" to own a comfortable family-sized home in a safe, urban, neighborhood with good schools in chicago.

the key is dual income. if a coupe decides that they want to have one of the partners be a stay at home mom/dad for the kiddos, then yes, affording a larger family-sized home in safe urban chicago on a single middle class salary will be a MUCH tougher challenge.

a $420K mortgage (which would probably assume a purchase price just north of $500K) would equate to a total monthly payment of ~$3,000 (P&I + Taxes + Insurance) - this dual income family probably has daycare bills as well which would likely be, at minimum, $2,000 / month for 2 kids (we pay $30K annually for 1 kid).

Based on the above, that $420K mortgage is pretty unreasonable.
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  #87  
Old Posted Oct 2, 2019, 2:10 PM
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Wait, you pay 30k annually in day care for one kid? In Chicago?

Daycare, right? Not a fancy preschool or nanny? That would be on the high side even in Manhattan.
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  #88  
Old Posted Oct 2, 2019, 2:19 PM
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Originally Posted by Investing In Chicago View Post
In Chicago - the challenge is High School, not K-8. There are very few quality public, non magnet, High School options in Chicago.

i am aware of that.

i even directly said as much in this thread yesterday.
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the bolded is the tough part for chicago at the high school level.

we have a very good K-8 CPS neighborhood school that our kids are automatically enrolled in because we're in zone, but what comes after that is a phenomenally tougher gauntlet

as you noted, CPS has a handful of extremely excellent high schools, but as a white upper middle class family, it's gonna be tougher for us to get our two kids into one of them than it will be to get them into a good university. we might just have to bite the bullet and pony up for catholic high school.

i know the "high school issue" has caused many middle class families to move out to the burbs where they don't have to play any games once their kids are high school age.







Quote:
Originally Posted by Investing In Chicago View Post
a $420K mortgage (which would probably assume a purchase price just north of $500K) would equate to a total monthly payment of ~$3,000 (P&I + Taxes + Insurance) - this dual income family probably has daycare bills as well which would likely be, at minimum, $2,000 / month for 2 kids (we pay $30K annually for 1 kid).

Based on the above, that $420K mortgage is pretty unreasonable.
no, i'm talking about a purchase price of $420K with 20% down, so a mortgage of $336K. a family with an AGI of $108K will qualify for that in most cases.

yes, daycare payments can complicate that financial picture, but daycare is also a short window of time that eventually goes away. we're living through it right now with two kids in full-time daycare to the tune of $26,000/year. but next fall our daughter goes to (FREE!!!!!!!!!) all day kindergarten and our son will follow in fall 2021. it'll be like a $26,000 raise after all the belt-tightening we've had to do make it through the "daycare years".

i'm thinking about buying a Ferrari!
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  #89  
Old Posted Oct 2, 2019, 2:22 PM
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No most day care doesn't cost anywhere near $30K for one kid. We paid less than that for three kids. And now we pay nothing other than our RE tax bill (which is about 1.4% of hour homes' value) as all three are in very good CPS schools. Also, there is a very good catholic school in our area that for three kids costs $15K.
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  #90  
Old Posted Oct 2, 2019, 2:23 PM
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Originally Posted by Investing In Chicago View Post
In Chicago - the challenge is High School, not K-8. There are very few quality public, non magnet, High School options in Chicago.
Isn't a lot of that due to how recent the "gentrification" of a lot of the neighborhood K-8 schools in the North Side is?

I mean, my understanding is until pretty recently, the middle-class "thing to do" if you were in Chicago and used public schools was use the magnet system. But demand rose by so much that there weren't enough slots for all the gentrifiers, so they began trying out the neighborhood schools in already gentrified zones. Since the poor black/brown population in those areas had plummeted, the schools had very low enrollment, so it didn't take much interest for a "critical mass" to build up and the schools to start spiraling upwards in terms of test score results and reputations.

The kids of these "urban pioneers" should be aging into the high school level soon enough. Presuming enough of them stay in the neighborhood system the exact same dynamic should happen in whatever high schools they feed to - except perhaps in areas where both "good" and "bad" schools feed into the same high school.
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  #91  
Old Posted Oct 2, 2019, 2:25 PM
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yes, daycare payments can complicate that financial picture, but daycare also goes away. we're living through it right now with two kids in full-time daycare to the tune of $26,000/year. but next fall our daughter goes to (FREE!!!!!!) all day kindergarten and our son will follow in fall 2021. it'll be like a $26,000 raise after all the belt-tightening we've had to do make it through the "daycare years".
My defined-benefit pension (yes really) was frozen last month, but it just so happened to align perfectly with the end of day care payments for my son, so I actually came out ahead even with contributing more than the max required for the match in the new 401(k) plan.
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  #92  
Old Posted Oct 2, 2019, 2:31 PM
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The kids of these "urban pioneers" should be aging into the high school level soon enough. Presuming enough of them stay in the neighborhood system the exact same dynamic should happen in whatever high schools they feed to - except perhaps in areas where both "good" and "bad" schools feed into the same high school.
But high performing, non-magnet urban neighborhood high schools aren't a thing, anymore, really. Cities have generally gone to full school choice in the upper years, so the neighborhood HS concept is gone.

I live a few blocks from a neighborhood urban high school and there are almost no kids from the neighborhood attending this school. And the neighborhood is packed with upper-income families with public school kids. They all go elsewhere after 8th (and often after 5th).
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  #93  
Old Posted Oct 2, 2019, 2:37 PM
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Yes, Chicago is cheaper than NYC, LA, SF, DC and Boston, but that's about it.
LOL!!!!

but that's about it?

with the exception of philly, you've just named all of the major US cities with large-scale alpha-level urbanism (or at least beta-level if we rightfully place NYC alone by itself in the alpha category).

something like 98% of all US zip codes above 20,000 ppsm are in the following 7 metro areas:

Boston
NYC
Philly
DC
Chicago
SF
LA
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  #94  
Old Posted Oct 2, 2019, 2:41 PM
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LOL!!!!

but that's about it?

with the exception of philly, you've just named all of the major US cities with large-scale alpha-level urbanism (or at least beta-level if we rightfully place NYC alone by itself in the alpha category).
I don't understand the point. "Large-scale alpha urbanism" has nothing to do with relative cost. If that were the case, then the Bronx would be the second most expensive place in the U.S., and Silicon Valley would be dirt cheap.

Is it shocking that Chicagoland is cheaper than the Bay Area and NYC? Is it shocking that's it's more expensive than Indy or Cleveland? Nope.
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  #95  
Old Posted Oct 2, 2019, 2:53 PM
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Is it shocking that Chicagoland is cheaper than the Bay Area and NYC? Is it shocking that's it's more expensive than Indy or Cleveland? Nope.
who said anything about it being shocking? i was simply responding to obadno's silly claim that you have to be "extremely rich" to afford a family-sized home in US cities.


all i'm saying is that chicago offers a great value for anyone who wants to own a family-sized home in one of america's most urban cities.

even you agree that lincoln park is a prime urban neighborhood.

here's a 3 bed/3 bath 2-story 1,600 SF condo in the freaking heart of lincoln park with an asking price of $490,000.

that is ABSURDLY inexpensive compared to prime NYC, LA, SF, Boston, and DC.
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  #96  
Old Posted Oct 2, 2019, 2:55 PM
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Chicago is significantly cheaper than all those cities. My taxes would double in CA or NY. My transportation costs would go up too. How much would a 4 bedroom/3 bath 3000+ SF home in a safe, high amenity area, in a high demand attendance area public school with an average 35 minute train commute cost in any of those cities?
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  #97  
Old Posted Oct 2, 2019, 3:00 PM
IrishIllini IrishIllini is offline
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Originally Posted by Crawford View Post
I know the Chicago partisans keep pushing this, but I disagree. Yes, Chicago is cheaper than NYC, LA, SF, DC and Boston, but that's about it. Desirable areas in Chicagoland, with good schools, aren't cheap. And taxes/fees are high.

Chicago, apples-to-apples, is probably the most expensive metro in the U.S. outside of the coastal metros. The median looks cheap, because there are huge swaths of Chicagoland where property values are near zero. But if you want a nice home in Hinsdale or Lincoln Park, you're gonna pay up.
You’re overestimating the number of neighborhoods where real estate is basically given away. A detached single family home in Lincoln Park or Hinsdale isn’t cheap, but they’re no more reflective of Chicago’s housing market than Englewood or Roseland.
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  #98  
Old Posted Oct 2, 2019, 3:02 PM
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Wait, you pay 30k annually in day care for one kid? In Chicago?

Daycare, right? Not a fancy preschool or nanny? That would be on the high side even in Manhattan.
There are definitely cheaper options, the least expensive reasonable options are ~$1,500/mo. - but the Yuppie daycares are all in the $25-30k annually range.
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  #99  
Old Posted Oct 2, 2019, 3:32 PM
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I'm not fully on board with the Chicago forumers on this. Crawford does have a point that yes, even though home costs are lower in Chicago than those other cities, the higher property taxes and other fees they keep adding on do make a difference.

California has Prop 13 which severely lowers property taxes. Yes, it has a much higher income tax to make up for it, but guess what? JB Pritzker is about to close the gap on that ever so slightly.

Our sales tax is high, and you cannot ignore the fact that with our having the highest unfunded pension liability in the entire US, it's only a matter of time before more fees and tax increases will be levied to bury the local homeowner/resident.

Truth is, I would rather have a much higher mortgage, and hence a chance at gaining equity in a much more valuable property--something you get in the coastal cities--than a lower mortgage but higher taxes and fees--something that happens in Chicago and generates zero wealth.

That's why I prefer investment property in Chicago but am not too keen on homeowner occupied residential property; my suburban house is decent but nothing luxurious, but it's in a great school district hence it will keep its value. But I would never buy something lavish in this area; I would, however, buy something lavish in NY or California.
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  #100  
Old Posted Oct 2, 2019, 3:41 PM
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even though home costs are lower in Chicago than those other cities, the higher property taxes and other fees they keep adding on do make a difference.
our property taxes are $8,000/year.

do you honestly think that i would be paying significantly less than $8,000/year on property taxes for a 2,000+ SF home in urban NYC, LA, or SF?



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Yes, it has a much higher income tax to make up for it, but guess what? JB Pritzker is about to close the gap on that ever so slightly.
JB is only raising income taxes on the wealthy, not us middle class schlubs.



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Truth is, I would rather have a much higher mortgage, and hence a chance at gaining equity in a much more valuable property
that's fine, but i would much rather not be "house poor".

to me there's not much point in living in the city if you can't afford to do anything in it because of a crippling mortgage payment eating up 50% of your take-home.
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