Residential Real Estate in your city - Page 9

JManc · #**161** Posted **Jun 3, 2021, 8:09 PM**

Quote:

Originally Posted by Crawford

This point keeps being repeated on SSP, but it isn't true.

Chicago doesn't have lower housing burden (% of income going to housing costs) as other metros. Miami and many FL metros have sky-high housing burden, the Bay Area actually has moderate housing burden. Chicago and Bay Area have very similar housing burden, actually.

You can't just ascertain affordability by looking at housing prices, obviously. You have to look at resale values (the resulting equity is your housing budget), taxes, fees, rents, incomes and the availability of non-market housing.

Just saying "wow, there's a Michigan Ave. condo for 300k and in Palo Alto it would be 1.5 million" doesn't indicate affordability when you're paying 5k in monthlies, and the same unit sold for 300k 20 years ago. That's an extremely unaffordable unit, and any interested buyer should rent instead.

Who pays $5,000 a month to live in a $300k condo? Again, we are comparing how far the dollar goes in Chicago compared to more expensive cities and for a person/ persons making comparable incomes regardless of location, they will get more for less in Chicago. That's not even up for a debate.

Camelback · #**162** Posted **Jun 3, 2021, 8:11 PM**

Quote:

Originally Posted by JManc

Who pays $5,000 a month to live in a $300k condo?

Maybe if the HOA is $3500/month?

Steely Dan · #**163** Posted **Jun 3, 2021, 8:34 PM**

Quote:

Originally Posted by Camelback

Maybe if the HOA is $3500/month?

That would be an EXTREMELY high monthly HOA in Chicago.

We own a small $200K highrise condo in downtown chicago with a monthly HOA of $375 and monthly taxes of $170.

Camelback · #**164** Posted **Jun 3, 2021, 8:38 PM**

Quote:

Originally Posted by Steely Dan

That would be an EXTREMELY high monthly HOA in Chicago.

We own a small $200K highrise condo in downtown chicago with a monthly HOA of $375 and monthly taxes of $170.

Yeah, I agree. Anything above $1,000 is insane for a condo listed at 300k in the most premier location of a city.

iheartthed · #**165** Posted **Jun 3, 2021, 9:26 PM**

Quote:

Originally Posted by mhays

Crawford misses some major points, no doubt.

One is the importance of trade value. Someone moving from an expensive city can often pay cash in Chicago.

I think he's hitting on something that gets glossed over in the Chicago discussions, though. I don't think "affordable" is a flattering adjective for Chicago. "Affordable" is a nice way of saying that your city's real estate market is depressed.

Steely Dan · #**166** Posted **Jun 3, 2021, 9:49 PM**

Quote:

Originally Posted by iheartthed

"Affordable" is a nice way of saying that your city's real estate market is depressed.

"Affordable" is neither good nor bad. It just is.

Urban residential real estate costs much less to purchase in Chicago compared to most of its peers.

That's it.

Whether you think that is a good reality or a bad reality is highly dependent on your perspective, but it is the reality nonetheless.

mhays · #**167** Posted **Jun 3, 2021, 9:49 PM**

Quote:

Originally Posted by iheartthed

I think he's hitting on something that gets glossed over in the Chicago discussions, though. I don't think "affordable" is a flattering adjective for Chicago. "Affordable" is a nice way of saying that your city's real estate market is depressed.

If units in prime spots sell for $300,000 AND there's a lot of construction of the same type and location, that's not a sign of a depressed market.

Steely Dan · #**168** Posted **Jun 3, 2021, 9:58 PM**

Quote:

Originally Posted by mhays

If units in prime spots sell for $300,000 AND there's a lot of construction of the same type and location, that's not a sign of a depressed market.

Chicago has much less demand for urban living compared to its "big 7" peers, and it also still builds a decent amount of new urban housing, so the supply demand curve here is pretty damn shallow.

JManc · #**169** Posted **Jun 3, 2021, 10:00 PM**

Housing costs on the coasts are so outrageous that everything else comes across as affordable even if the latter are more inline with most incomes. Houston is far from a depressed market but we're still affordable. Likewise with Chicago; all kinds of development around the city.

iheartthed · #**170** Posted **Jun 3, 2021, 10:05 PM**

Quote:

Originally Posted by mhays

If units in prime spots sell for $300,000 AND there's a lot of construction of the same type and location, that's not a sign of a depressed market.

For a market as mature as Chicago? Yeah... it kinda is. You used the example earlier that it is a plus for someone to be able to sell their home in an expensive market on the coasts and move to Chicago. But, doesn't that mean people who own on the coasts have more options than people who own in Chicago?

SIGSEGV · #**171** Posted **Jun 3, 2021, 11:39 PM**

Quote:

Originally Posted by JManc

Housing costs on the coasts are so outrageous that everything else comes across as affordable even if the latter are more inline with most incomes. Houston is far from a depressed market but we're still affordable. Likewise with Chicago; all kinds of development around the city.

Right, for the midwest (and most places not on the coasts), Chicago is NOT cheap. It's CA/NY/MA/DC/WA that are the anomalies in the US.

F1 Tommy · #**172** Posted **Jun 3, 2021, 11:45 PM**

Quote:

Originally Posted by iheartthed

I think he's hitting on something that gets glossed over in the Chicago discussions, though. I don't think "affordable" is a flattering adjective for Chicago. "Affordable" is a nice way of saying that your city's real estate market is depressed.

It could also mean Chicago prices are closer to reality and other cities are over valued. Are we heading for 2007-2008 again? Unfortunately all prices will fall if that happens, some more than others.

iheartthed · #**173** Posted **Jun 3, 2021, 11:58 PM**

Quote:

Originally Posted by F1 Tommy

It could also mean Chicago prices are closer to reality and other cities are over valued. Are we heading for 2007-2008 again? Unfortunately all prices will fall if that happens, some more than others.

The coastal cities recovered faster in 2008/2009. And San Francisco barely even felt it at all. If there were another crisis like that, it would probably be the weaker markets that are most affected.

craigs · #**174** Posted **Jun 4, 2021, 12:51 AM**

Quote:

Originally Posted by iheartthed

The coastal cities recovered faster in 2008/2009. And San Francisco barely even felt it at all. If there were another crisis like that, it would probably be the weaker markets that are most affected.

You're wrong about San Francisco and the Great Recession. The city's unemployment rate flirted with 10% for nine months and didn't drop back down to the pre-GR rate for six full years.

Steely Dan · #**175** Posted **Jun 4, 2021, 1:07 AM**

Quote:

Originally Posted by iheartthed

But, doesn't that mean people who own on the coasts have more options than people who own in Chicago?

The other side of that coin is that people who don't own on the coasts have less options to buy into the real estate market than those who don't own in Chicago.

Pick your poison: higher barriers or lower ceilings.

That's the trade off. You can't really have it both ways.

SIGSEGV · #**176** Posted **Jun 4, 2021, 1:57 AM**

Daniel Kay Hertz makes the convincing (to me) argument that being affordable and being a good investment are (naturally) at odds with each other.

https://cityobservatory.org/housing-cant-be-affordable_and_be-a-good-investment/

Steely Dan · #**177** Posted **Jun 4, 2021, 5:42 AM**

^ yeah, that was essentially my point with the whole "pick your poison" thing.

I ain't gonna get rich of off owning my Chicago home.

I do know and openly acknowledge that. It's simply the truth.

But I do like the fact that I get to even own a family-sized urban home in a higher-tier US city in the first place.

As I frequently say, there are advantages to home ownership that transcend investment potential.

38 Geary · #**178** Posted **Jun 4, 2021, 6:18 AM**

Quote:

Originally Posted by Steely Dan

^ yeah, that was essentially my point with the whole "pick your poison" thing.

I ain't gonna get rich of off owning my Chicago home.

I do know and openly acknowledge that. It's simply true.

But I do like the fact that I get to even own a family-sized urban home in a higher-tier US city in the first place.

As I frequently say, there are advantages to home ownership that transcend investment potential.

Sometimes there's more to life than just making money. Like basic quality of life stuff. You really just need enough so you can live comfortably and to cover the occasional rainy day. Any more is just gravy, or in some cases, just added stress. Like my friends who constantly obsess over their investment portfolios.

JManc · #**179** Posted **Jun 4, 2021, 6:26 AM**

Quote:

Originally Posted by Steely Dan

As I frequently say, there are advantages to home ownership that transcend investment potential.

Exactly. A home should be a home first and foremost, not merely an investment opportunity.

glowrock · #**180** Posted **Jun 4, 2021, 12:56 PM**

Quote:

Originally Posted by JManc

Housing costs on the coasts are so outrageous that everything else comes across as affordable even if the latter are more inline with most incomes. Houston is far from a depressed market but we're still affordable. Likewise with Chicago; all kinds of development around the city.

And in many ways, Chicago is far cheaper than Houston to live in. At least when talking about apartments, condos and townhomes. SFH, of course, is a different animal.

No way in hell could I rent an apartment like I've got in Chicago (a mile from the Belmont Blue Line station), about halfway between The Loop and O'Hare, still an urban neighborhood, etc., in even a somewhat similar neighborhood in Houston for the same cost. Of course much of that is because Houston has very, very few urban neighborhoods, and the ones that exist have urbanized very recently, so the housing is more of the ultra-modern, as in very expensive type.

Aaron (Glowrock)