CHICAGO | 1000M (1000 S Michigan) | 805 FT | 73 FLOORS

[the urban politician]

[QUOTE=Stunnies23;8149268]

Originally Posted by MakeChicagoGreatAgai

Some of your statement is factually incorrect. We had 3 rate hikes in 2017. CME futures are 50/50 on whether we will have a total of 3 or 4 rate hikes in 2018. The idea the fed is going to crash the housing market is just false. We will not see a 2008 replay due to a variety of factors.

Your quote has my name in it, but the statement was somebody else's

[the urban politician]

Originally Posted by rgolch

Does anyone know the price ranges for these units.....

There definitely are some tempting units on the website in terms of design and size, but price per square foot would really be the telling factor on what types of buyers they're targeting. For the typical well to do empty nester in their mid to late 50's looking to move back into the city.... I'd image most of them want to be north of the river, and steps from north Michigan ave. That's why I believe the Tribune tower addition and One Chicago square won't have the same slowness of sales like this building is experiencing.

But this tower has impeccable views.

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

[MakeChicagoGreatAgai]

Originally Posted by the urban politician

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.

[rgolch]

Originally Posted by the urban politician

But this tower has impeccable views.

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

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.

[IrishIllini]

Originally Posted by rgolch

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.

[rgolch]

Originally Posted by IrishIllini

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.....

[JK47]

[QUOTE=MakeChicagoGreatAgai;8149233]

Originally Posted by the urban politician

Sales are likely to slow because the fed is raising rates. We've had 4 rate increases last year and we'll probably get another 4 increases this year and that trend is likely to continue until the fed crashes the housing market.

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.

[west-town-brad]

Originally Posted by Kumdogmillionaire

Adding to the issue with increased interest rates and an economy that is slowing to a halt, people are going to start backing out of contracts if they don't see the building start construction in the next year. They'll take the 30k penalty or whatever it is specifically for this building and just buy somewhere else

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.

[HomrQT]

Originally Posted by west-town-brad

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.

[Kumdogmillionaire]

Originally Posted by HomrQT

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

[west-town-brad]

Originally Posted by Kumdogmillionaire

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

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.

[MakeChicagoGreatAgai]

Originally Posted by west-town-brad

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.

[Kumdogmillionaire]

Originally Posted by west-town-brad

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.

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

[Vlajos]

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

[MakeChicagoGreatAgai]

Originally Posted by Vlajos

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!

[HomrQT]

Originally Posted by west-town-brad

No, asset prices have nothing to do with it.

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.

[JK47]

Originally Posted by MakeChicagoGreatAgai

...and we're already seeing the effects of rising rates on the federal debt. Interest costs are growing substantially as a result!

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.

[gebs]

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

[Notyrview]

Hope this makes it in this cycle

[rgarri4]

Love it!