Chicagoland Housing Prices (Detroit: real estate market, condo, crime)

[chet everett]

The facts show that Illinois is NOT experiencing "strong GDP growth" but in fact has seen a contraction -- Illinois economy shrinks in first quarter, economic growth slows during first half of 2016 - Reboot Illinois


Though there are certainly pockets of growing affluence, and the scramble for folks to secure a nice rental or purchaee a home in those pockets has driven up the costs, the much larger story is the pressure that mismangement of the state's fiscal polices have put upon even the well off. While folks in who face high COL in Silicon Valley can at least bask in the knowledge that the dynamics of their economy are unprecedented for creating wealth, there are simply neither enough start-ups nor outposts of tech firms in the Chicago region to ever replace the jobs driven away by terrible policies and the threat of run away taxes make all but the richest of the rich vulnerable to be taxed out of living here.

A quick drive west or south of Chicago's Loop reveals not any boom in office campuses that flourish in Silicon Valley but instead mile after endless mile of blight that has largely been festering since the violence of the 60's triggered massive flight. Understanding that history and the scramble of Chicago to replace lost revenue helps one to reconcile the findings of both UBS reports -- the focus of the COL study was for global professionals. For them to purchase the basket of goods that included not just housings but meals, clothing, utilities, etc the effects of high sales / use taxes and constrained retail choices impact the costs mightily. The ranking of the relatively good wage base enjoyed by those same professionals and the eagerness of Chicago Alderman to greenlight as much building / renovation as possible means that housing is not nearly as constrained as it is in places like NYC or San Francisco where rent control and similar artificial government deterrents to residential construction warp those markets.

Just this evening, becuase of a meeting, I drove home instead of relying on my regular commuter train. Heading out past hip offices that have replaced food distribution / processing facilities it is easy to see some improvements, but continuing out into parts of Chicago poorly served by transit, with abysmal schools, listening to reports of a looming strike by the CTU and traffic tie-ups caused by investigations of earlier fatal incidents caused not by vehicles but the armed fools in them, it is impossible not to realize how unlikely further enhancements are for those stuck in such situations ...

[OyCrumbler]

Compared to other dense urban cities in the US, Chicago does seem to have a lot more empty or underutilized space in short commuting distance to downtown and a very developer friendly city government, so maybe that has a lot to do with its lower housing prices and will probably continue to have a lot of room to continue adding more housing within a short commute to downtown for decades, especially south and west of the Loop.

[IrishIllini]

Originally Posted by chet everett

The facts show that Illinois is NOT experiencing "strong GDP growth" but in fact has seen a contraction -- Illinois economy shrinks in first quarter, economic growth slows during first half of 2016 - Reboot Illinois


Though there are certainly pockets of growing affluence, and the scramble for folks to secure a nice rental or purchaee a home in those pockets has driven up the costs, the much larger story is the pressure that mismangement of the state's fiscal polices have put upon even the well off. While folks in who face high COL in Silicon Valley can at least bask in the knowledge that the dynamics of their economy are unprecedented for creating wealth, there are simply neither enough start-ups nor outposts of tech firms in the Chicago region to ever replace the jobs driven away by terrible policies and the threat of run away taxes make all but the richest of the rich vulnerable to be taxed out of living here.

A quick drive west or south of Chicago's Loop reveals not any boom in office campuses that flourish in Silicon Valley but instead mile after endless mile of blight that has largely been festering since the violence of the 60's triggered massive flight. Understanding that history and the scramble of Chicago to replace lost revenue helps one to reconcile the findings of both UBS reports -- the focus of the COL study was for global professionals. For them to purchase the basket of goods that included not just housings but meals, clothing, utilities, etc the effects of high sales / use taxes and constrained retail choices impact the costs mightily. The ranking of the relatively good wage base enjoyed by those same professionals and the eagerness of Chicago Alderman to greenlight as much building / renovation as possible means that housing is not nearly as constrained as it is in places like NYC or San Francisco where rent control and similar artificial government deterrents to residential construction warp those markets.

Just this evening, becuase of a meeting, I drove home instead of relying on my regular commuter train. Heading out past hip offices that have replaced food distribution / processing facilities it is easy to see some improvements, but continuing out into parts of Chicago poorly served by transit, with abysmal schools, listening to reports of a looming strike by the CTU and traffic tie-ups caused by investigations of earlier fatal incidents caused not by vehicles but the armed fools in them, it is impossible not to realize how unlikely further enhancements are for those stuck in such situations ...

IL had something like +34 billion in GDP growth last year. Only a few states (CA, NY and maybe one more?) had stronger growth.

[beaniemac]

Originally Posted by IrishIllini

Does it really matter where the State is going? Many states are headed in the same direction as IL, yet their housing costs have skyrocketed while incomes have not. What I took away from the article is that people in Chicago have the incomes to support higher housing costs while other markets are considerably overvalued (Vancouver, SF, etc.). There has been strong growth in Chicago's median income and number of affluent households, yet housing costs remain "low". It's an interesting phenomena. Wonder how long it stays this way. It's almost a guarantee that investors begin purchasing more properties in Chicago if this data is accurate.

for a world class city, the cost of owning a home in quite a few neighborhoods is reasonable compared to other cities in the united states.

[IrishIllini]

Originally Posted by beaniemac

for a world class city, the cost of owning a home in quite a few neighborhoods is reasonable compared to other cities in the united states.

100% agree

[Bloomfield1]

Originally Posted by beaniemac

for a world class city, the cost of owning a home in quite a few neighborhoods is reasonable compared to other cities in the united states.

This is true but there are good reasons for the lower housing prices.

Chicago has lower home appreciation than most major metros, and is a (relative) economic and demographic laggard. It just isn't as desirable as the more expensive housing markets.

Low housing prices are only good if you don't care about resale value; you just want to buy something for a cheap price.

[IrishIllini]

Originally Posted by Bloomfield1

This is true but there are good reasons for the lower housing prices.

Chicago has lower home appreciation than most major metros, and is a (relative) economic and demographic laggard. It just isn't as desirable as the more expensive housing markets.

Low housing prices are only good if you don't care about resale value; you just want to buy something for a cheap price.

See link in first post. People in Chicago have the incomes to support higher housing costs.

[OyCrumbler]

Originally Posted by IrishIllini

See link in first post. People in Chicago have the incomes to support higher housing costs.

Are higher housing prices actually necessary for developers to male a profit though? Evem if average housing prices stayed the same, new developments can still make a healthy profit even at current prices as little as long as there is demand for housing.

[JTE1969]

Originally Posted by Bloomfield1

This is true but there are good reasons for the lower housing prices.

Chicago has lower home appreciation than most major metros, and is a (relative) economic and demographic laggard. It just isn't as desirable as the more expensive housing markets.

Low housing prices are only good if you don't care about resale value; you just want to buy something for a cheap price.

That is TOTAL BULL**** ECONOMIC THINKING THAT INCREASING AND HIGHER RISING HOUSE PRICES IS GOOD FOR THE ECONOMY. EVENTUALLY, A POINT COMES WHERE HOUSES ARE TOO EXPENSIVE, THEN A CRASH COMES TOO. FALSE ECONOMIC CYCLE - REALLY!

[Bloomfield1]

Originally Posted by IrishIllini

See link in first post. People in Chicago have the incomes to support higher housing costs.

I don't think you understand what's being measured in that link. Has nothing to do with whether or not "people in Chicago have the incomes to support housing costs".

And we aren't talking incomes; we're talking property values. Chicago has (relatively) low property values for a major city, and there are good underlying reasons for this.