Quote:
Originally Posted by Camelback
They both seem like steals in today's insane RE world. Both cities could see some huge investments in the near term, while the existing infrastructure gets upgraded. The existing infrastructure is nice, compared to cities that are having to play catch up. If CHI and PHL were listed on the NYSE I'd be buying as a long hold (I'm not old and have time to watch the investment grow).
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Why? lol. This seems to be the antithesis of what people are claiming to be Chicago's strength: that it's cheap. If that is true then buying Chicago stock would be a bad deal, right? You should be buying stock in a place that is keeping pace, or outpacing, the market as a whole.
I spot checked Chicago's historical median price just to loosely confirm a suspicion that I had, which is that Chicago was previously an expensive city but isn't anymore (for whatever reason). In 1980, Chicago's median sales price for single family homes was $70,000, and the U.S. median was $47,200. So Chicago was roughly 50% more expensive than the U.S. as a whole. In 2020, the U.S. median sales price was roughly $350,000, and Chicago's was $316,000. So today Chicago is inexpensive to the U.S. median.
Checking this against "expensive" San Francisco, the data I could find suggests that the median there was in the $180,000 range around 1983 (calculated using the Case-Schiller index, but if someone has an actual number for 1980 that would be helpful). If what I calculated is correct, that is almost 4x the national median of $47,200 in 1980. Interestingly, the median in San Francisco in 2020 was about $1.5M, or roughly 4.5x the U.S. median.
In other words, San Francisco isn't really
that expensive today from a historical (1980) perspective -- today it's only about 13% more expensive relative to the U.S. median than it was in the 1980s. But Chicago is MUCH cheaper from a historical (1980) perspective, as it's median is -50% off from what it was relative to the U.S. in 1980. If Chicago's market had appreciated in parallel to the U.S. over the past 4 decades, Chicago's median should be around $525,000 today.