I'm simply obsessed with Chicago

[sentinel]

destroycreate, at the end of the day, YOU know what is right for you, regardless of what us numbnuts tell you in this thread. If you love Chicago, get to know the city and the various neighborhoods; make friends here that will show you their favorite places and hoods; learn the area, figure out what is right for you, and if you find a place that makes you feel like it's home, trust your gut. You don't have to rent first, especially if your budget allows you to buy a place that you really really love.
I'm glad you love it here so much, you'll grow to love it more if you do move here, and realize that the area is so much more than the sum of it's parts, AND is a (still relatively) undiscovered jewel by many people, around the country and the world at large.

[Steely Dan]

^ I think some people missed his first post on this sub-tobic, so for the record, destroycreate is not looking to buy a condo to move into here in Chicago. He was inquiring as to what people here thought about him buying a small condo in Chicago (while still living in Cali) to rent out and use as an investment property, due to the fact that he's been essentially locked out of the LA real estate market.

Being a one-off, long-distance landlord of a housing type known for very slow appreciation in its given market is not something I would ever do (or advise others to do), but hey, it's a free country.......

[DCReid]

Originally Posted by Steely Dan

If history is anything to go by, appreciation will likely be very slow.

Not only does Chicago real estate in general have slow appreciation, but small condos are like the slowest of the slow here. People who bought SFH's in trendy Chicago hoods 10 years ago have done well for themselves, but thats largely because there's so few of them where people want them, but the supply/demand curve for small condos seems to stay in a pretty relative stasis.

I would recommend buying a small condo in Chicago to live in. I would not recommend doing so as any kind of investment, especially because property taxes here are very high relative to home value.

Actually, it depends and it is hard to predict. I bought a condo in Edgewater in 1995 for $114K and sold it for $299K in 2006. When I moved to Chicago in 1985, I was told that someone bought a house in Wrigleyville for $30K, and by the mid 1990s, I am guessing you could not touch a house in that neighborhood for less than $300K and by the 2000s, certainly not less than $500K. Neighborhoods were undergoing much gentrification, which spread to the near south and near west of downtown. A friend literally flipped a loft in the South Loop in 2001 for a $5-$10K profit as he accepted a job offer in DC before moving into the loft.

With regards to being a long distance landlord, I am not sure I would do so unless I was very familiar with the area. But where I live in south Florida, I have neighbors and friends that rent out their condo during the summer months (of all times).

Chicago is a reasonably price large city, but you probably would want to live there for a few months before deciding to buy. That would give you a better idea of neighborhoods

[Steely Dan]

Originally Posted by DCReid

I bought a condo in Edgewater in 1995 for $114K and sold it for $299K in 2006.

That's awesome!!

But 160% appreciation over 10 years is extremely atypical for small condos in Chicago these days, unless someone is pouring a lot of money into a full gut re-hab.

You should go look up your old condo on Zillow and report back to us what the zesstimate now is for it 2 decades later.

[sentinel]

Originally Posted by Steely Dan

^ I think some people missed his first post on this sub-tobic, so for the record, destroycreate is not looking to buy a condo to move into here in Chicago. He was inquiring as to what people here thought about him buying a small condo in Chicago (while still living in Cali) to rent out and use as an investment property, due to the fact that he's been essentially locked out of the LA real estate market.

Being a one-off, long-distance landlord of a housing type known for very slow appreciation in its given market is not something I would ever do (or advise others to do), but hey, it's a free country.......

Thanks for the clarity, and I think the point is still good, just from a different perspective. Strange enough, I have an architect friend from Chicago who lives in LA now, and still has a condo in Chicago that they rent. They wanna buy a 2-3 flat too, rent one unit out, and have their own unit for when they’re in town, and don’t wanna crash with family.
It can be complicated, but still worth doing for many reasons.

[Steely Dan]

^ sure, people have reasons for doing all the things they do.

Destroycreate was simply asking for the opinions from locals about his proposed plan.

I don't think it's a great plan (too much risk and work, IMO). I'm totally with Crawford, stick that $200K in an index fund, and then proceed to do absolutely nothing other than forget about it for a couple decades.

But I'm a total slow-cooker when it comes to wealth building- slow, safe, and consistent, so he should take my advice with that context in mind.

[DCReid]

Originally Posted by Steely Dan

That's awesome!!

But 160% appreciation over 10 years is extremely atypical for small condos in Chicago these days, unless someone is pouring a lot of money into a full gut re-hab.

You should go look up your old condo on Zillow and report back to us what the zesstimate now is for it 2 decades later.

I checked it a few years ago, I think around 2017 or 2018, and the price in my building for a similar unit was listed at $350K. So it only went up about $50K in the next 10 years. It was a 2 bedroom 2 bath in the six flat with parking in back and a sun room in front. We did have 3 special assessments, for new windows, to replace the back decks, and to refurbish the roof.

[KnoxfordGuy]

Went to Chicago for a week last October and fell in love with it. Head over heels.

[iheartthed]

Originally Posted by DCReid

Actually, it depends and it is hard to predict. I bought a condo in Edgewater in 1995 for $114K and sold it for $299K in 2006. When I moved to Chicago in 1985, I was told that someone bought a house in Wrigleyville for $30K, and by the mid 1990s, I am guessing you could not touch a house in that neighborhood for less than $300K and by the 2000s, certainly not less than $500K. Neighborhoods were undergoing much gentrification, which spread to the near south and near west of downtown. A friend literally flipped a loft in the South Loop in 2001 for a $5-$10K profit as he accepted a job offer in DC before moving into the loft.

Have you checked how much the condo is worth now? You sold right before the housing crisis and Chicago struggled to recover from that. I wouldn't be surprised if the condo is worth the same today as what you sold for.

[DCReid]

Originally Posted by iheartthed

Have you checked how much the condo is worth now? You sold right before the housing crisis and Chicago struggled to recover from that. I wouldn't be surprised if the condo is worth the same today as what you sold for.

See my previous post. In 2016, it had gone up in value to only $350K. Zillow won't give me an estimate, but the neighborhood has some condos in the range of $300K -400K for 2 bed/2bath.

[Steely Dan]

^ so, let's say your old unit has gone up to $375K now.

1995 -> 2006: +160% appreciation over 11 years

2006 -> 2025: +25% appreciation over 19 years

You did extremely well!

The VAST majority of condo buyers in Chicago do not come anywhere close to touching 160% appreciation in just 11 years time these days.

[destroycreate]

CRAZY how different Chicago's real estate market is from major coastal cities. I get the midwest overall is extremely affordable, but you really can't find any megacity in America remotely accessible these days. The fact that there's an abundance of condos in desirable, walkable, safe, and attractive areas is so foreign to me. All I've ever known are expensive AF cities and hyped real estate markets my entire life lol: Seattle, SD, LA, SD

[Steely Dan]

^ Chicago's low-barrier real estate market is wonderful for regular people like me who just want the security of owning their own (nice) home.

But it's relatively low returns are terrible for investor class people like Crawford who only see real estate as an investment vehicle.

[mhays]

Past price trends suggest NOTHING when it comes to future trends.

West Coast real estate may be the least likely to grow in value due to massive policy changes that should open up development potential and reduce entitlement processes. Further, prices are unpalatable enough that any new spikes might kick up more outmigration, a moderating effect.

[pip]

Originally Posted by destroycreate

CRAZY how different Chicago's real estate market is from major coastal cities. I get the midwest overall is extremely affordable, but you really can't find any megacity in America remotely accessible these days. The fact that there's an abundance of condos in desirable, walkable, safe, and attractive areas is so foreign to me. All I've ever known are expensive AF cities and hyped real estate markets my entire life lol: Seattle, SD, LA, SD

I'm from Boston originally. Have a one bedroom condo in Lakeview. To duplicate in Boston in a similar neighborhood - if that exists, I would argue that it doesn't exist, would cost me triple Chicago - straight up no joke. Also in Boston many condos are owned by investors who rent out. There are few buildings with condos were there isn't a constant turnover of tenants and not owned by investors and the maintenance of the buildings is minimal.

As much as I love Boston, it simply isn't worth the price.

[Crawford]

Boston is maybe 2x Chicago, but not 3x. No way is a 700k house in Chicagoland a 2.1 million house in Boston area.

I feel Boston is kinda a bad "deal" but these things are subjective. My friends there are happy. Mass overall has the best public school scores in the U.S., jobs are extremely plentiful and NE is great.

[pip]

Originally Posted by Crawford

Boston is maybe 2x Chicago, but not 3x. No way is a 700k house in Chicagoland a 2.1 million house in Boston area.

I feel Boston is kinda a bad "deal" but these things are subjective. My friends there are happy. Mass overall has the best public school scores in the U.S., jobs are extremely plentiful and NE is great.

I am talking about a condo not a house first of all. And yes a condo in Boston is triple Chicago.

I get it, you have experienced every possible scenario known to SSP and you also know someone everywhere who has also had every experience.

[Crawford]

Home prices are 2x, per Case-Schiller.

And I can think of plenty of vaguely Lakeview-like areas in Boston area where condos won't be 3x. South End, East Cambridge, Fenway, etc.

[twister244]

Originally Posted by Steely Dan

^ so, let's say your old unit has gone up to $375K now.

1995 -> 2006: +160% appreciation over 11 years

2006 -> 2025: +25% appreciation over 19 years

You did extremely well!

The VAST majority of condo buyers in Chicago do not come anywhere close to touching 160% appreciation in just 11 years time these days.

I don't view this as a bad thing.....

Yes, It can suck if you bought and watch the coastal cities appreciate at insane rates. But, it's a good thing for everyone else that hasn't bought here yet, or wants to live here.

Again, if you want something in the city that will appreciate to some degree beyond a simple condo, you can find higher-end properties in up-and-coming neighborhoods around the city. But that's the beauty, you have that choice here......

You have a choice from a high-end condo with Lambos driving by in the West Loop to a older simple place in Edgewater where it won't appreciate as much, but you can call it your own.

I actually don't want that to ever change. The greedy part of me wants my condo to appreciate more, but the other part would rather see the city have more low-throttle appreciation allowing a wide array of folks to live in the city.

[twister244]

Again - Not to try to turn this into a city-vs-city conversations, just want to highlight the affordability here.

Redfin search for condos at/under $500k:
Boston - 132 results....
Chicago - 1,543 results.....

The numbers speak for themselves.