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How many of those cash buyers do you think will actually live in those house? As prices get even cheaper (they will for the next 1-2 years at least), I expect prices to attract vulture investors.
I actually wouldn't mind buying a couple of formerly 500k homes in Homewood for 100k cash each. I think this may be possible in 2012-2015.
The banks actually were not overly aggressive about selling homes for cheap. These homes are depreciating assets, particularly in the south suburbs. They were wise to dump them for whatever they could get.
I just think the south suburbs are a poor place to invest for the next few years. I feel really bad for anyone who bought in the last 10 years as they have surely lost money if they try to sell now. This is the case for most of Chicagoland, but is felt more acutely in the south suburbs.
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Foreclosures have been selling very cheaply in the southern suburbs for the past 3-4 years. This is not a recent thing. I purchased my home as a foreclosure several years ago and in it's current condition I could currently sell it for more than what I paid for it. Foreclosure prices have not declined very much in the past couple of years as they were rock bottom in the southern suburbs even 3-4 years ago. Some of the best foreclosure deals thus far sold 3-4 years ago. There where even a couple of mansions sold as foreclosures. Not so much anymore.
A home is where you live at. And most people buying homes in the southern suburbs look at a home that way. As I said, it just sounds counterintuitive to me to think that cheaper home prices on the exact same homes that were selling for substantially more less than 5 years ago is at all a bad thing for recent homebuyers in the southern suburbs. Very few single family homes in the areas you are talking about are available for rent. The overwhelming majority of buyers are buying to live there. Flossmoor has almost no single family homes for rent. Homewood and matteson have only a small number of single family rentals.
Most of the people I know who have purchased single family homes as investments including myself are investing in properties in the city or lower income suburbs. Low property taxes, high rents, less code enforcement etc. The south suburbs that have a very large amount of single family homes in certain neighborhoods as rental properties such as chicago heights, harvey, riverdale, etc. Those homes have way lower property taxes then most of the homes in the areas that you are talking about. There are very few neighborhoods in the nicer southern suburbs with a sizeable percentage of single family homes for rent. Most of the single family homes for rent in the nicer suburbs like homewood, flossmoor, olympia fields, etc. Are smaller homes in older sections of town, with considerably lower property taxes than the average home in the neighborhood.
The property taxes in the south suburbs that you are talking about like homewood and flossmoor are extremely high. Even if you purchased a 500k home for say 100k. The property tax bill without the homeowner exemption would probably be in the range of 12-16k per year. Unless you a trying to flip it, what would be your purpose of buying such an expensive single family rental property in the southern suburbs? How much rent could you really get from a single family property like that. It's not like it's in the middle of downtown chicago where there is a large upscale rental market. A very small percentage of single family homes are purchashed for rental purposes in areas like homewood, flossmoor, olympia fields, matteson. It just doesn't make sense at all from a cash flow basis.
Last edited by allen2323; 05-11-2011 at 10:02 AM..
As I said, it just sounds counterintuitive to me to think that cheaper home prices on the exact same homes that were selling for substantially more less than 5 years ago is at all a bad thing for recent homebuyers in the southern suburbs.
Tell me again why as a homeowner this would be a good thing??
Home prices going down is a bad thing for anyone who has bought a house in the past 10 years. Home prices in Chicagoland have taken a hit, not just the south suburbs.
By the time we hit bottom price-wise, anyone who bought within the last 15 years in much of Chicagoland will not have seen the value of their home appreciate.
It is already the lost decade of housing (stock market too), but it appears that it will be the lost 15 years, for housing at least.
The reality is that many desirable areas have seen FAR MORE MODEST price erosion. The worst areas have been the areas farther away from employment / transit. That would make it seem like "transit expansion" is a good way to stabilize prices, but history suggests the timeline for transit AND the long term ROI is so far out in the future as to be a non-factor...
There are lots of bits of other threads that need to be tied together, but the most important things that I see having impact are the very really trends of folks that have a large amount tied up their home being VERY VERY reluctant to sell at a loss -- I don't think that is a S/SW thing at all. Folks in the N/NW burbs or the core of the Western burbs (especially those with good train service) simply would rather STAY PUT vs listing in an environment that would make a loss likely.
If folks moved from older burbs (like Evergreen Park or Flossmore) to newer burbs like Mokena or New Lenox they probably got a bigger house, with a whole bunch more bells & whistles -- home theatre , three car garage, giant yards and things you just don't find in the older towns and are common in the newer areas. When the real estate markets were on fire and folks could sell at top dollar in the older towns and with very little "stretching" get a much snazzier home in a newer area the decision was easy. Unfortunately the price reversals have left some people stuck with some tough choices.
Let's say somebody sold in EGP in the $400s around 2004. They bought new construction in Mokena for high fives same year. They used a an ARM and have only fractionally higher payments than their higher rate 30 yr conventional on the old house. In 2006 or so they did a cash out refi and sunk maybe $50k into a killer deck and home theatre. After the upgrades they had an appraisal for a HELOC and $840K or something, fully supported by neighboring sales of similar houses.
Then something BAD happened. Markets imploded. Prices tumbled. If they try to find a comp they'd be lucky to find something that would justify them listing in the sixes. UNLESS THEY NEED TO MOVE they'd be nuts to list! They'll stay put. Why accept a 25% ++ loss of equity since peak? How they gonna pay off the HELOC they tapped to turn the place into something fit for HGTV?
In my opinion, I think the south/southwest suburbs have went downhill in the last 16 years. When I say southwest suburbs, I mean Orland Park and etc. The Whites that moved to Frankfort and Orland Park from areas like Homewood, Flossmoor and etc. all flocked to Orland Park and surrounding areas. The whites that I see there are no way in comparison to your whites say downtown, or North Shore. As I was told these Whites are the ones that couldn’t afford or not accepted say downtown or North shore (i.e. White Collar vs. Blue Collar. My point I am trying to make now is that it is a class issue. When I go to Orland Park, I feel that it is a little hick for my liking. Now 16 years ago, the classes of people were a little different. Now in regards to Homewood and Flossmoor, I believe that it has changed. You have minorities such as me that are of a different class. I am not rich but I am middle classed, highly educated, and lived abroad. I was raised in the Chatham in the late 70s to early 90s (my family had to leave… i.e. Black flight). Most of the minorities that live in these areas including Olympia Fields want a metropolis for our children to prosper such as Martha’s Vineyard. Our families have worked hard for the American dream and want the same opportunities such as our White counterparts. However, I have seen in recent years, more people walking the streets and a different class of minorities frequenting the area via pockets (Harvey, Dolton, and etc). Now, I don’t want to be around those types of people. Hopefully and Lord willing, I hope the area doesn’t continue to go in that direction; if so my family and I are making plans to move around like minded people such as on the Northside. The only reason why I chose the South Suburbs is because of the proximity to my family; sister in Oak Forest, mom in Hazel Crest, and family in Olympia Fields, and my daughter attending a decent school. The hubby and I are in the process of maybe moving when our daughter graduates in high school in 3 years. Although, I don’t like the city, I like integration. I like my Whole Foods, Trader Joes, wine tasting, soy milk in my lattes, Louis Vuitton, and proximity to my job. Yes call me a Buppie; admiring beautiful homes, nature, and not worrying about lil Pookie and Ray-Ray capping me while I drive my BMW or walking my Chin…. LOL. To sum it all up… I think it is a class issue more than ever now; however, in order for the region to prosper, we all have to want the same things.
Quote:
Originally Posted by Humboldt1
It was rock vs country music where I grew up. Rap was virtually unknown until the 90s.
Does anyone on here apart from Allen believe that the south suburbs are getting better or even stabilizing?
I think in a few years you will be able to purchase sfh in area like homewood/flossmor that went for 500k 10 years before for less than 200k (2015 vs 2005).
Imagine what that will do to the schools as the affordability increase in the formerly affluent south suburbs.
In my opinion, I think the south/southwest suburbs have went downhill in the last 16 years. When I say southwest suburbs, I mean Orland Park and etc. The Whites that moved to Frankfort and Orland Park from areas like Homewood, Flossmoor and etc. all flocked to Orland Park and surrounding areas. The whites that I see there are no way in comparison to your whites say downtown, or North Shore. As I was told these Whites are the ones that couldn’t afford or not accepted say downtown or North shore (i.e. White Collar vs. Blue Collar. My point I am trying to make now is that it is a class issue. When I go to Orland Park, I feel that it is a little hick for my liking. Now 16 years ago, the classes of people were a little different. Now in regards to Homewood and Flossmoor, I believe that it has changed. You have minorities such as me that are of a different class. I am not rich but I am middle classed, highly educated, and lived abroad. I was raised in the Chatham in the late 70s to early 90s (my family had to leave… i.e. Black flight). Most of the minorities that live in these areas including Olympia Fields want a metropolis for our children to prosper such as Martha’s Vineyard. Our families have worked hard for the American dream and want the same opportunities such as our White counterparts. However, I have seen in recent years, more people walking the streets and a different class of minorities frequenting the area via pockets (Harvey, Dolton, and etc). Now, I don’t want to be around those types of people. Hopefully and Lord willing, I hope the area doesn’t continue to go in that direction; if so my family and I are making plans to move around like minded people such as on the Northside. The only reason why I chose the South Suburbs is because of the proximity to my family; sister in Oak Forest, mom in Hazel Crest, and family in Olympia Fields, and my daughter attending a decent school. The hubby and I are in the process of maybe moving when our daughter graduates in high school in 3 years. Although, I don’t like the city, I like integration. I like my Whole Foods, Trader Joes, wine tasting, soy milk in my lattes, Louis Vuitton, and proximity to my job. Yes call me a Buppie; admiring beautiful homes, nature, and not worrying about lil Pookie and Ray-Ray capping me while I drive my BMW or walking my Chin…. LOL. To sum it all up… I think it is a class issue more than ever now; however, in order for the region to prosper, we all have to want the same things.
Great post webbermishoe, I totally agree with your sentiment. Although I think people who talk about certain areas like flossmoor, olympia fields, or crete declining are starting to sound a bit retarded. A bunch of $200-$400k plus homes with $8,000-$16k annual property tax bills going into foreclosure does not have the same effect on a neighborhood as a bunch of $15k homes with $1,300 annual property tax bills in foreclosure like in the englewood neighborhood of chicago. All it really means is deals for current buyers. It's not like you are going to ever have any boarded up abandoned homes in flossmoor. What's the average time on the market for a foreclosure in flossmoor? Like one or two months at the most. The home prices when you factor in the extremely high property taxes had gotten a bit high in certain affluent south suburban areas which lead to the high number of foreclosures when the market declined. But make no mistake these are exceptional areas. And that's with or without whites moving here. Or how expensive or "cheap"the homes are. The thing is with the high as hell property taxes, most people still can't afford those areas. That is for the nicer homes anyway. Buying a 250k foreclosed home with a 15k property tax bill using a mortgage will still come out to about 3k or more per month.
Last edited by allen2323; 05-16-2011 at 09:08 PM..
Subdivisions in Olympia Fields are as ritzy and as squeaky clean as ever. Lincoln Highway (Olympia Fields and Matteson) has seen Blockbuster and Borders close down. I suppose the south suburbs as a whole have seen a decline but AMERICA is in a recession.
Quote:
Originally Posted by webbermishoe
In my opinion, I think the south/southwest suburbs have went downhill in the last 16 years. When I say southwest suburbs, I mean Orland Park and etc. The Whites that moved to Frankfort and Orland Park from areas like Homewood, Flossmoor and etc. all flocked to Orland Park and surrounding areas. The whites that I see there are no way in comparison to your whites say downtown, or North Shore. As I was told these Whites are the ones that couldn’t afford or not accepted say downtown or North shore (i.e. White Collar vs. Blue Collar. My point I am trying to make now is that it is a class issue. When I go to Orland Park, I feel that it is a little hick for my liking. Now 16 years ago, the classes of people were a little different. Now in regards to Homewood and Flossmoor, I believe that it has changed. You have minorities such as me that are of a different class. I am not rich but I am middle classed, highly educated, and lived abroad. I was raised in the Chatham in the late 70s to early 90s (my family had to leave… i.e. Black flight). Most of the minorities that live in these areas including Olympia Fields want a metropolis for our children to prosper such as Martha’s Vineyard. Our families have worked hard for the American dream and want the same opportunities such as our White counterparts. However, I have seen in recent years, more people walking the streets and a different class of minorities frequenting the area via pockets (Harvey, Dolton, and etc). Now, I don’t want to be around those types of people. Hopefully and Lord willing, I hope the area doesn’t continue to go in that direction; if so my family and I are making plans to move around like minded people such as on the Northside. The only reason why I chose the South Suburbs is because of the proximity to my family; sister in Oak Forest, mom in Hazel Crest, and family in Olympia Fields, and my daughter attending a decent school. The hubby and I are in the process of maybe moving when our daughter graduates in high school in 3 years. Although, I don’t like the city, I like integration. I like my Whole Foods, Trader Joes, wine tasting, soy milk in my lattes, Louis Vuitton, and proximity to my job. Yes call me a Buppie; admiring beautiful homes, nature, and not worrying about lil Pookie and Ray-Ray capping me while I drive my BMW or walking my Chin…. LOL. To sum it all up… I think it is a class issue more than ever now; however, in order for the region to prosper, we all have to want the same things.
You were called a racist African once. Avenger callled me a self hating white person. Chuckity reported me for racism after I called school shootings "a middle class white thing". And I have been accused of racism against my own race and called "wigger" for my City Data posts on that Other Forum That Shall Not Be Named.
But anyway, yeah, I agree with you. This new poster just said the south suburbs are declining, specifically said that Homewood and Flossmoor are declining and that she plans on flying away to the north side after her daughter graduates. I guess it's a great post because she's black.
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South Suburbs
