[QUOTE=Stunnies23;8149268]Your quote has my name in it, but the statement was somebody else's :cool:

But this tower has impeccable views.

And for the luxury buyer, how important are interest rates anyway?

Not so important for a guy with $200m who's buying a $3m condo but still very relevant for a guy with $1m buying the same one. The idea that the rich don't care about rates, assessments, or taxes is ridiculous.

Well.... again, it looks like at least the 2bd are more than $800 a square foot.... that's absolutely the higher part of the Chicago market, right? I think that's a lot for the South loop, especially given you could spend a bit more, and be in Vista. And again, with the Tribune addition, and One Chicago square on the horizon, this building might not make it.

A few here have mentioned Vista getting over $1k PSF. The building may technically be in the south loop submarket, but the views are unparalleled, even in places like Streeterville, the Gold Coast, and Lakeshore East. Lincoln Park is maybe the best proxy, but even that feels like a stretch. I don't think buyers will be turned off by $800 PSF and a south Michigan Avenue address. A few blocks west would be a different story.

I prefer every other high-profile development to this one (although the original design was nice), but I wouldn't be upset to see this one built.

I dunno.... the south loop just feels kinda sterile to me compared to the N. Michigan ave area. And Vista is much closer to Lake Michigan, and has LSE to boot. What’s more, a building like No. 9 Walton can command extremely high prices because it has that Gold Coast charm, and has a sort of Astor Street vibe...

Views are definitely a selling point. But I sorta feel like a lot of potential buyers are going to see the south loop as a bit of a turn off; particularly at the same price point. Now... if I could get one of those amazing 3bd facing north with 3100 sq ft for less than 2M.... that would peak my interest.....

[QUOTE=MakeChicagoGreatAgai;8149233]
What are you talking about? There were 3 increases in 2017 not four and there are 3 increase planned this year not four. The most recent comment from the Fed indicated 2 increases in 2019 and two more in 2020 as they are trying to get back to a more normal 3 to 3.5% Fed Funds rate. The current sub 2 percent rates are a historical aberration that is causing market distortions. Mortgage rates at 5 to 6 percent aren't going to crash the housing market...don't be a chicken little.

My parents purchased their first home in the early 1980s with an 18% interest rate on the mortgage. That was the prime rate.... and rich people (not my parents) were still buying expensive properties.

Houses now being multiples in overall price to what they were in the 80's of course.

Yeah... I wasn't even going to reply to his comment as I didn't want to waste time discussing someone's anecdote, but this exactly the reason why interest rates can't be that high these days. If you had a 20% interest rate on a mortgage for a 3 million dollar condo... well let me put it this way, you wouldn't :haha:

No, asset prices have nothing to do with it. Interest rates wont be that high today because inflation is low. Target inflation from the fed is 2%. We are below that today but very close to it. But if inflation spikes, you better believe we can have interest rates in the double digits - it has nothing to do with asset values.

To say people will stop buying homes when interest rates go up sounds like you are taking financial advice from your Realtor. Which was exactly what my anecdote was attempting to get across.

Of course people will continue to buy homes but increasing rates mean the underlying asset is worth less.

My line of thought is more that people don't want to put themselves in a situation where going underwater is extremely easy

The likelihood of double digit interest rates anytime soon is very low.

Agreed but even a small increase from such a low starting point is significant and we're already seeing the effects of rising rates on the federal debt. Interest costs are growing substantially as a result!

That's not exactly correct then is it. The asset price, in relation to the current value of the dollar, absolutely determines how many people will be taking out mortgages. If all other variables were in place, and the values of homes across the nation were suddenly cut in 1/3rd, there would surely be more people taking out loans.

Interest costs are rising quickly because the gov't is flooding the market with T-bills to 1) finance the deficit following this ludicrous round of tax "reform" and 2) remove assets accumulated by the Federal Reserve on its balance sheet as part of the quantitative easing strategy.

Renderings from their sales center, which include NEMA and Essex.

https://i.imgur.com/g5BWEo9h.jpg

https://i.imgur.com/eAIVUtSh.jpg

Hope this makes it in this cycle

Love it!