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In my experience, the South Suburbs of Chicago had a big runup from the mid-90's until the housing crisis in about 2007, then crashed hard during the crisis, and have recovered only slightly since then. This is the same scenario as happened in most of the country, except we ramped up especially hard, fell especially hard, and while most of the country's real estate has rebounded, ours has not. I attribute this to our real estate taxes being so onerous; anyone looking to buy my home will have one mortgage to the bank, and an almost equal-in-size mortgage to the assessor in the form of taxes. This is not true in the vast majority of the U.S., Some unfortunate souls to the direct south of Chicago now have real estate taxes that are six-to-ten percent of their home's real value. I believe the same is true in parts of western and northern suburbs as well (mine is currently about 3-to-3.5% of real value).
I'll give you a true example. A nearby neighbor sold his home, a decent-but-dated brick raised ranch that was worth maybe $140,000 in the mid-90's, for $265K in 2006. The buyer totally remodeled the home with "high end" stuff - oak bars, cabinets, ceramic baths, roof, gutters, fascia, windows, tray and gable ceilings in the bedrooms, fencing, garage, deck, you name it - I'd guess over $100K in improvements. He sold it for $235K in about 2015. My home, very similar (still dated, never remodeled), is worth maybe $160K as-is. That is $100,000 less than I could have sold it for in 2006, and has only modestly increased in value since the mid 1990's. Sound like a good investment to you?
Now, I know that there are areas in Chicago that are booming near downtown. But I'll bet you that the majority of property in northern Illinois has a story more like mine. Again, property taxes have and are killing real estate values in Illinois. And if you think it can't get worse, I've got a bridge over Lake Michigan to sell you.
In my experience, the South Suburbs of Chicago had a big runup from the mid-90's until the housing crisis in about 2007, then crashed hard during the crisis, and have recovered only slightly since then. This is the same scenario as happened in most of the country, except we ramped up especially hard, fell especially hard, and while most of the country's real estate has rebounded, ours has not. I attribute this to our real estate taxes being so onerous; anyone looking to buy my home will have one mortgage to the bank, and an almost equal-in-size mortgage to the assessor in the form of taxes. This is not true in the vast majority of the U.S., Some unfortunate souls to the direct south of Chicago now have real estate taxes that are six-to-ten percent of their home's real value. I believe the same is true in parts of western and northern suburbs as well (mine is currently about 3-to-3.5% of real value).
I'll give you a true example. A nearby neighbor sold his home, a decent-but-dated brick raised ranch that was worth maybe $140,000 in the mid-90's, for $265K in 2006. The buyer totally remodeled the home with "high end" stuff - oak bars, cabinets, ceramic baths, roof, gutters, fascia, windows, tray and gable ceilings in the bedrooms, fencing, garage, deck, you name it - I'd guess over $100K in improvements. He sold it for $235K in about 2015. My home, very similar (still dated, never remodeled), is worth maybe $160K as-is. That is $100,000 less than I could have sold it for in 2006, and has only modestly increased in value since the mid 1990's. Sound like a good investment to you?
Now, I know that there are areas in Chicago that are booming near downtown. But I'll bet you that the majority of property in northern Illinois has a story more like mine. Again, property taxes have and are killing real estate values in Illinois. And if you think it can't get worse, I've got a bridge over Lake Michigan to sell you.
What happened in the South Suburbs is unfortunate. I don't think that's the case all over northern Illinois. Many suburbs are doing quite well, not just near downtown, although it appears there is becoming an even greater divide between the location of modestly priced homes and lower priced homes. I moved about two years ago to the Western Suburbs. I wish I bought in 2014. I could have gotten quite a bit more house in slightly better location because prices keep going up in the areas I researched. Suburbs with a reputation for strong schools, a good commute and a downtown core keep getting tougher to get into, whereas others others are increasing much slower. Most area not decreasing though unless they already have a poor reputation.
You're right about the city, though. Younger people keep wanting to move to the city, driving up demand and price, and it keeps pushing gentrification further out from the core. Lakeview seems to have had its own surge after the Cubs won the World Series and the Ricketts completed construction around the ballpark, even though that area was already pretty gentrified.
What happened in the South Suburbs is unfortunate. I don't think that's the case all over northern Illinois. Many suburbs are doing quite well, not just near downtown, although it appears there is becoming an even greater divide between the location of modestly priced homes and lower priced homes. I moved about two years ago to the Western Suburbs. I wish I bought in 2014. I could have gotten quite a bit more house in slightly better location because prices keep going up in the areas I researched. Suburbs with a reputation for strong schools, a good commute and a downtown core keep getting tougher to get into, whereas others others are increasing much slower. Most area not decreasing though unless they already have a poor reputation.
You're right about the city, though. Younger people keep wanting to move to the city, driving up demand and price, and it keeps pushing gentrification further out from the core. Lakeview seems to have had its own surge after the Cubs won the World Series and the Ricketts completed construction around the ballpark, even though that area was already pretty gentrified.
Where I am, in Lake Forest and Lake Bluff, and in much of the rest of Lake and McHenry Counties property values and prices are down substantially.
Even "hot" markets like Evanston and Skokie have seen very mild price increases relative to other parts of the country considered "hot." Values in Evanston are about where they were at the peak of the market (circa 2007).
Carrying costs in Illinois are VERY high, so it's been next-to-impossible to see any ROI as a homeowner.
Where I am, in Lake Forest and Lake Bluff, and in much of the rest of Lake and McHenry Counties property values and prices are down substantially.
Even "hot" markets like Evanston and Skokie have seen very mild price increases relative to other parts of the country considered "hot." Values in Evanston are about where they were at the peak of the market (circa 2007).
Carrying costs in Illinois are VERY high, so it's been next-to-impossible to see any ROI as a homeowner.
Yeah, it seems different depending on where you are in the market and when you bought. Most of my friends that own bought in the past six years and can sell for a gain today regardless of whether they're in the city or burbs. They happened to pick the right locations.
My parents and in-laws, who bought a few decades ago, can also sell for a massive gain quite easily, and they're in significantly different suburbs. Both could've bought in the past 2-3 years and sold today for a decent gain. I have a relative in a less popular northern suburb who likely has added minimal value, even with substantial upgrades. He/she just happens to not be in a great school district.
I know someone much older living closer to your location who has a higher priced home, and he struggled with selling his home.
To what you're saying and what the other poster is saying though. You're saying Evanston and Skokie have "mild increases". The other poster is discussing Illinois property values "declining significantly". Those are pretty different things, and one is much broader than the other. I agree with you to an extent, though. There are areas around Chicago that have not bounced back as much as other areas of the country and are just lukewarm, whereas other areas have surpassed their pre-recession values. There are areas with property tax issues like the South Suburbs, parts of Lake County, Oak Park and Riverside. There's plenty of nuance to go around without applying one situation upon everyone else's.
Yeah, it seems different depending on where you are in the market and when you bought. Most of my friends that own bought in the past six years and can sell for a gain today regardless of whether they're in the city or burbs. They happened to pick the right locations.
My parents and in-laws, who bought a few decades ago, can also sell for a massive gain quite easily, and they're in significantly different suburbs. Both could've bought in the past 2-3 years and sold today for a decent gain. I have a relative in a less popular northern suburb who likely has added minimal value, even with substantial upgrades. He/she just happens to not be in a great school district.
I know someone much older living closer to your location who has a higher priced home, and he struggled with selling his home.
To what you're saying and what the other poster is saying though. You're saying Evanston and Skokie have "mild increases". The other poster is discussing Illinois property values "declining significantly". Those are pretty different things, and one is much broader than the other. I agree with you to an extent, though. There are areas around Chicago that have not bounced back as much as other areas of the country and are just lukewarm, whereas other areas have surpassed their pre-recession values. There are areas with property tax issues like the South Suburbs, parts of Lake County, Oak Park and Riverside. There's plenty of nuance to go around without applying one situation upon everyone else's.
I am in the Northshore suburbs and there are people who live in Highland Park and Deerfield who can't sell their houses, according to my neighbor. I don't know what they are listing them for but I assume it was reasonable. My friend listed her house for what I thought was about $100k too low and they have dropped it twice in a month and crickets. I would say the higher end market has taken a 20% hit because everyone knows what's coming is worse than now. People were mad as he$$ when they raised the state and property taxes huge amounts in 2016 and 2017. They were already leaving. So knowing that they are going to elect JB and raise them again is just the final nail in the coffin for a lot of people.
I am in the Northshore suburbs and there are people who live in Highland Park and Deerfield who can't sell their houses, according to my neighbor. I don't know what they are listing them for but I assume it was reasonable. My friend listed her house for what I thought was about $100k too low and they have dropped it twice in a month and crickets. I would say the higher end market has taken a 20% hit because everyone knows what's coming is worse than now. People were mad as he$$ when they raised the state and property taxes huge amounts in 2016 and 2017. They were already leaving. So knowing that they are going to elect JB and raise them again is just the final nail in the coffin for a lot of people.
Please read the last sentence of the post before yours. I would need more specifics about your friends’ properties for sale.
RE is very localized as you know. Right now there are four new homes in the process of being constructed after the previous ones were torn down. That’s all along a one block strip 6 blocks from me in NE Df. At one point the same builder had over 20 unsold properties in the immediate area. That has changed drastically over the summer with a lot of activity.
Certain price bands are definitely not moving at all but clearly there’s action elsewhere involving RE with very high property tax bills. People moving in are not flinching at the prospect of a progressive income tax because they are often arriving from areas that already have it. Areas in north suburban Cook near you by the good school districts are also still popular, so the doom and gloom is really not that significant given the variability in net financials involved in selling a home, etc.
I understand that real estate is local. I used to be an appraiser. But this decline is happening. It might be slower in some areas than others. But it's happening. The realtors can deny it all they want but all you have to do is see the DOM and how many fewer sales there are this year as compared to last.
I understand that real estate is local. I used to be an appraiser. But this decline is happening. It might be slower in some areas than others. But it's happening. The realtors can deny it all they want but all you have to do is see the DOM and how many fewer sales there are this year as compared to last.
Sure, sales are slower- realtors aren't denying this. That's not what's in question though. It's the 'doom and gloom' scenario you are painting. A very broad brush stroke at that.
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