Rent or buy? Good deal and a good time to buy? (Chicago: rental, insurance)

[wase4711]

[quote=xycrazy;61465951]Don‘t wanna expose myself here so I can‘t really name the neighborhood. /QUOTE]

If you feel that way, then don't expect anyone to bother giving you any detailed answer
9 million people here, and you are worried about being "exposed"?

[xycrazy]

Why can’t anyone give an answer without knowing exact identity? What‘s the point here?
Why can‘t one say this and that neighborhood does sell well even in bad times without any furhmther details? Makes no sense whatsoever

[G in MP]

Originally Posted by xycrazy

Don‘t wanna expose myself here so I can‘t really name the neighborhood. What neighborhoods are selling well based on your experience no matter what kind of market we‘re in

Well, generally everything sells if it's priced right.

[wase4711]

Originally Posted by xycrazy

Why can’t anyone give an answer without knowing exact identity? What‘s the point here?
Why can‘t one say this and that neighborhood does sell well even in bad times without any furhmther details? Makes no sense whatsoever

no one cares about YOUR IDENTITY; but if you want an answer about specific towns, then SAY WHICH ONES you are asking about..

is THAT so difficult to comprehend???

[xycrazy]

I named the towns already... Kildeer, LZ, Deer Park. Go back one page and you will see it... jeez

[ChiGuy2.5]

Originally Posted by Hiruko

The market is volatile and returns on real estate in Chicagoland have historically been very poor over the last few decades.

To expand on this, you will pay approximately 10% of the homes value in Real Estate taxes, fees, and realtor commissions to buy this home. If you sell in 5 years, your chance in earning that back through appreciation is SLIM to NONE.

DO NOT BUY if you think there is a chance you will move in another 5 years. Keep renting. Many people don't understand that you can find good deals renting too!

As for your questions around which areas depreciate less or appreciate the most. It's hard to say. All of the areas you listed are located in Lake and Cook Counties. The tax problems plaguing both counties are significant. Lake county has one of the highest tax rates in all of Illinois, including above Cook county. The state is going broke so it's hard to say what a bankruptcy might have on real estate.

Finally, one thing to consider in the areas you're looking at is Flooding. It sounds to me like this house is a steal, but why? Does it flood during 100 year storms? 100 year storms are more like once every decade now. Be sure that whatever you buy is dry. Be sure that you upkeep maintenance on the home and hope that Illinois doesn't go into bankruptcy before you sell.

[xycrazy]

Understood. However, I would also think that rising inflation will have a significant impact on home prices as well. It‘s hard to predict the market but since Chicago was one of the least appreciating market I would assume that there‘s upward potential, factoring in inflation. IL might lose people but Chicagoland is still a huge market for housing demand with 9 million people, as long as the house is not completely in the woods or in a bad school district. And areas like Lake Zurich, Kildeer or Deer Park seem to hold their value pretty good. Or is that a wrong assumption?

[Logic87]

Trying to time this market is going to be tough. In the long term, prices should go up (i.e. follow inflation) despite the high property taxes in Illinois. In the short term, maybe there is a mini-correction to get back to 2019 levels sometime in the near future (2022?.) No one knows. If you need to a place to live in then buy. If you could afford to wait 6-12 months maybe inventory picks up but there’s no guarntees.

I bet you could find thousands of posts on citydata revolving around the topic of “Is it a good time to buy?” And you would find similar responses to what you see in this thread.

Many people 5 years ago thought the market was overvalued and it was going to crash once interest rates went up. Well interest rates have further declined, inventory has declined and prices have only gone up. People thought last year when COVID hit that real estate prices would dip (including myself) and it never happened. Point is no one knows and anyone that claims to know what the market will do in 5-10 years is full of it.

Generally I wouldn’t look at real estate as an investment especially in the Chicagoland area with declining population and high property tax. I would look at real estate as a home first then an asset afterwards.

[mwj119]

Originally Posted by xycrazy

And areas like Lake Zurich, Kildeer or Deer Park seem to hold their value pretty good. Or is that a wrong assumption?

Short answer, that’s the wrong assumption.

Many, if not a majority of homes in towns like Kildeer and Deer Park were selling at a loss prior to COVID. A ton of examples of homes in these areas selling below early 2000s purchase price. Lest we forget, these were boomtowns through much of the late 90s and early 2000s before the recession and overall buying behavior shifted inward towards the city.

In terms of Chicagoland, they’re not unique in that regard. But asking these towns to hold 2021 values is asking a lot.

[tpadul]

Originally Posted by xycrazy

Thanks @Bobnchi but can you explain why?

Because if you overpay now for your home and you have to sell it in the next 4 or 5 years and the market slows down you will then most likely be upside down on your mortgage an you will owe more on it than what you might be able to sell it for.