Chicagoland Housing Prices (Virginia, San Jose: sales, real estate, 2013)

[IrishIllini]

http://www.chicagobusiness.com/reale...bs-report-says

Swiss Bank UBS that ranked 18 financial centers based on its “bubble index,” an indicator that measures home prices relative to other metrics, like incomes. Chicago ranked dead last, the only city where UBS found homes to be undervalued.

Interesting. Thoughts? Seems like Chicagoland has higher incomes with lower housing costs. Good news in my book!

[xsboost]

Good news if you're looking to buy and assuming the prices will climb. Bad news if it's an indication the direction the city (and state) is heading with all the fiscal/financial issues we've been having. I hope it's not the latter.

[IrishIllini]

Originally Posted by xsboost

Good news if you're looking to buy and assuming the prices will climb. Bad news if it's an indication the direction the city (and state) is heading with all the fiscal/financial issues we've been having. I hope it's not the latter.

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.

[ChiGuy2.5]

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.

Agree with you fully. There are already a ton of investors moving to Chicago! You have tons of residential towers in development within close proximity to downtown. You also have quite a few in other parts of the city. I think we are getting ready to see a boom in mid-high class residents mostly related to the relatively "cheap" cost of labor this city has to offer, mostly because Cost of Living is so much lower compared to other major cities.

My old company had offices in San Fran, NY, and Chicago. Guess which office is biggest? Chicago. Why? Because they didn't need to pay us $100K plus in wages... Not including the benefits that Californians are used to...

[chet everett]

I sincerely hope the same folks who viciously attempted to discredit UBS for ranking Chicago very high in cost of living tear this to shreds with same ferocity...
Chicago 7th most expensive city in the world?

It is clear that the issues impacting Chicago are negatives --
http://www.businessimmo.com/system/d...index-2016.pdf

The pace of price recovery has been weak due to relatively high unemployment and fiscal problems.

Chicago. Bubble risk:

“Real house prices are still 31% below their 2006 peak. They only began to recover in 2013 and have increased since by about 8%. The recovery remains comparatively weak, dragged down by the sluggish local economy.”

Pundits at ZeroHedge also got this zinger in -- The Global Housing Bubble Is Biggest In These Six Cities | Zero Hedge

However, considering the daily shooting spree that takes place in that city, it is probably not a big surprise.

[IrishIllini]

Originally Posted by chet everett

I sincerely hope the same folks who viciously attempted to discredit UBS for ranking Chicago very high in cost of living tear this to shreds with same ferocity...
Chicago 7th most expensive city in the world?

It is clear that the issues impacting Chicago are negatives --
http://www.businessimmo.com/system/d...index-2016.pdf


Chicago. Bubble risk:


Pundits at ZeroHedge also got this zinger in -- The Global Housing Bubble Is Biggest In These Six Cities | Zero Hedge

I was waiting for this

I'm not 100% certain this data is accurate, but I am 100% certain Chicago is not one of the seven most expensive cities in the world. It's not even top 5 in the U.S.

Chicago's economy did suffer as a result of the Great Recession, but the economy continues to improve, Chicago's unemployment is dropping (albeit slowly), and home sales have picked up considerably in August. Things are headed in the right direction. The conclusion of this analysis, if true, indicates good things are ahead for Chicagoland.

[xsboost]

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.

It matters in the sense that the larger a deficit the state has, the more likely taxes (including property) will be raised. I own my home so I hope you're right and everything is on its way up, but you still have to wonder why investors aren't pouring in if real estate here is a steal.

[IrishIllini]

Originally Posted by xsboost

It matters in the sense that the larger a deficit the state has, the more likely taxes (including property) will be raised. I own my home so I hope you're right and everything is on its way up, but you still have to wonder why investors aren't pouring in if real estate here is a steal.

They are. Chicago's construction spending has skyrocketed over the past year.

[chet everett]

Originally Posted by IrishIllini

I was waiting for this

I'm not 100% certain this data is accurate, but I am 100% certain Chicago is not one of the seven most expensive cities in the world. It's not even top 5 in the U.S.

Chicago's economy did suffer as a result of the Great Recession, but the economy continues to improve, Chicago's unemployment is dropping (albeit slowly), and home sales have picked up considerably in August. Things are headed in the right direction. The conclusion of this analysis, if true, indicates good things are ahead for Chicagoland.

Mod cut.

The same sorts of DATA that UBS used to rank Chicago as among the MOST EXPENSIVE places to live are EXACTLY what they relied on to suggest that there is a big lag between where other cities have real estate price spike up while Chicago suffers with its miserable economy.

Mod cut.

when we think we're reasoning, we may instead be rationalizing. Or to use an analogy offered by University of Virginia psychologist Jonathan Haidt: We may think we're being scientists, but we're actually being lawyers (PDF). Our "reasoning" is a means to a predetermined end—winning our "case"—and is shot through with biases. They include "confirmation bias," in which we give greater heed to evidence and arguments that bolster our beliefs, and "disconfirmation bias," in which we expend disproportionate energy trying to debunk or refute views and arguments that we find uncongenial.

Cheers!

[IrishIllini]

Originally Posted by chet everett

[snip]

The same sorts of DATA that UBS used to rank Chicago as among the MOST EXPENSIVE places to live are EXACTLY what they relied on to suggest that there is a big lag between where other cities have real estate price spike up while Chicago suffers with its miserable economy.

[snip]

Cheers!

Where are you getting this?

I think the differences between the two articles shouldn't require an explanation.

You and I both know Chicago is not the seventh most expensive place to live in the entire world. We both know that Chicago's economy has grown considerably and Illinois has some of the strongest GDP growth in the nation. We all have our opinions on GPD as a measure of wealth or success, but there's no denying IL has made tremendous gains in the last 3-4 years.

As has also been discussed countless times, affluent households in Chicago are growing at similar rates as San Francisco and San Jose.

Chicago has a large population of blue collar workers and individuals without the education to succeed in the knowledge economy. That is why the economy looks worse on paper than it is reality. THESE are the people who leave Chicagoland, not the ones with advanced (or even bachelors) degrees and the means to live here. Those who leave are replaced by those with the skills to contribute to the knowledge-based economy. Demographics are in transition.