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Old 01-20-2015, 08:56 PM
 
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Originally Posted by My Kind Of Town View Post
While material costs have risen (though the price of copper has dropped of late), I wonder how much labor costs have truly risen in the past 10 years. Wages have been relatively stagnant since the Great Recession and 2005 was near the peak of new home construction so demand pushed price then too
Copper prices are declining, but are still multiple times higher than in '03-'04. Regarding labor and wages... when we were remodeling in '13, our contractor (family friend; also does new construction) was complaining about how difficult it was to secure labor, and how he often had to pay exorbitant wages, many times upfront, just to get workers to accept a job. Obviously, he passes most of the cost through.

His sediments roughly reflect recent reports and surveys I've seen out of the NAHB: Housing Market Index: Special Questions on Labor and Subcontractors’ Availability

Page 15 is of particular interest. And it's all understandable, at least in our little nook of Chicagoland. It's a tear-down bonanza right now. There's healthy amount of activity in Wheaton and Elmhurst, and a new home going up on literally every block in Glen Ellyn. Clarendale and La Springs too. It's no wonder workers are hard to come by.
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Old 01-20-2015, 09:20 PM
 
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I don't imagine it's overly difficult to find subs but likely is difficult to find subs that you can trust. I have had some smaller home improvement projects contracted out over the past 2 years and never had an issue with finding a contractor. At times their schedule was a bit spotty and I could see that being an issue when schedule is very time sensitive and critical. There is no doubt that the activity has picked up over the last couple of years but it is nowhere near what it was in 2004-2007. I think what we are seeing now in this area is the new norm. The area has been well established for quite some time and it's just a matter of time before all 75 - 100+ year old homes in the area are either torn down or entirely renovated. Some homes even sooner if they haven't been maintained properly over the years. Of course this will first occur in the more desirable neighborhoods and then expand to other areas once supply is no longer available. This won't happen overnight but I certainly expect it to happen in my lifetime. Many parts of Hinsdale and Western Springs are already there and the nicer parts of towns like Glen Ellyn, Wheaton, and Elmhurst will be there soon enough. Nearly every house on the block will be a former teardown or complete rehab. That is of course assuming the local job market sustains it's relative strength.

Last edited by My Kind Of Town; 01-20-2015 at 09:39 PM..
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Old 01-20-2015, 10:16 PM
 
Location: Chicagoland
111 posts, read 164,245 times
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Quote:
Originally Posted by My Kind Of Town View Post
There is no doubt that the activity has picked up over the last couple of years but it is nowhere near what it was in 2004-2007. I think what we are seeing now in this area is the new norm. The area has been well established for quite some time and it's just a matter of time before all 75 - 100+ year old homes in the area are either torn down or entirely renovated. Some homes even sooner if they haven't been maintained properly over the years. Of course this will first occur in the more desirable neighborhoods and then expand to other areas once supply is no longer available. This won't happen overnight but I certainly expect it to happen in my lifetime. Many parts of Hinsdale and Western Springs are already there and the nicer parts of towns like Glen Ellyn, Wheaton, and Elmhurst will be there soon enough. Nearly every house on the block will be a former teardown or complete rehab. That is of course assuming the local job market sustains it's relative strength.
This is what I see happening, too. I'd argue that there is soon not going to be a middle in the best school districts/most desirable western suburbs. When new construction starts at $800,000 and only goes up from there - for a 3400 square foot house on a tiny city lot = that leaves no room for the typical family trying to move up from a tiny, older starter home.
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Old 01-20-2015, 10:24 PM
 
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Originally Posted by moderngnome View Post
This is what I see happening, too. I'd argue that there is soon not going to be a middle in the best school districts/most desirable western suburbs. When new construction starts at $800,000 and only goes up from there - for a 3400 square foot house on a tiny city lot = that leaves no room for the typical family trying to move up from a tiny, older starter home.
I completely agree. We would love to stay in Hinsdale but we have already seen that there is no "middle." It's basically a small/borderline tear down type home or it's a 3,000 sf + newer home that exceeds our budget. Very little in between, which is what I would like to build but is looking more and more like a pipe dream based on responses in this thread.
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Old 01-21-2015, 08:32 AM
 
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Originally Posted by holl1ngsworth View Post
Clarendale and La Springs too.
I see what you did there.
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Old 01-21-2015, 08:38 AM
 
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Originally Posted by moderngnome View Post
This is what I see happening, too. I'd argue that there is soon not going to be a middle in the best school districts/most desirable western suburbs. When new construction starts at $800,000 and only goes up from there - for a 3400 square foot house on a tiny city lot = that leaves no room for the typical family trying to move up from a tiny, older starter home.
If every house were replaced with an $800,000+ house, we'd see a collapse in prices (assuming today's dollars). Most people in Glen Ellyn and Wheaton can't afford a house at that price point. There are surely a lot of people who can, but I can't see a real estate market where these high-end buyers can support those prices on every block of every nicer suburb. The median detached single-family house in Glen Ellyn sold for somewhere around $540,000 the last period I saw data for... That's what the market is supporting at this time.

Granted, it would take a very very long time for the entire housing stock of Glen Ellyn to be replaced or gut-rehabbed. There are still plenty of nicer 1920's houses in that $500k-$700k range that are mostly updated (but not entirely), and that are just too expensive to warrant a teardown in all but the most choice locations/best lots. We are not Hinsdale, as much as some residents would like us to be.
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Old 01-21-2015, 08:49 AM
 
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hey i think that is a shot "LA Springs" at LG... pretty funny...

Kinda of late to this thread - but we also looked at the build option approx 1Y ago. What we discovered (looking at LG and Elmhurst and WS) was that we could not get close to the core/metra without going over 800K factoring all costs and quality. That is when we switched and focused on rehab projects...
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Old 01-21-2015, 09:23 AM
 
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Default The reality is that such an approach can be cost effective...

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Originally Posted by JJski View Post
hey i think that is a shot "LA Springs" at LG... pretty funny...

Kinda of late to this thread - but we also looked at the build option approx 1Y ago. What we discovered (looking at LG and Elmhurst and WS) was that we could not get close to the core/metra without going over 800K factoring all costs and quality. That is when we switched and focused on rehab projects...
I know the OP has expressed some concerns about running into issues with renovating an older home; the degree to which the OP has an ability to assess the condition of their home certainly factors into the sell / renovate / tear down equation. It is wise to find a trustworthy general contractor / experienced architect that can poke around before you even make an offer on home to assess the suitability of eventual renovation / expansion.

If current home is reasonably sellable that may be a sensible way to capture some equity / appreciation and apply that to another project. Daunting though it may sound, there is an argument to be made that existing home, that has had some upgrades / repairs is no longer wise as the basis for a more extensive expansion. It may be wise to find a home that is technically smaller but more affordable / of more recent vintage as the basis for next project. I know there are some homes in the desirable towns along the BNSF or UP-W line that were built not in the early days of development but closer to the "Brady Bunch Era". The level of "standardization" that was common then likely means major system are "modern" and one need only focus on the actual space needed / updating decor as well as kitchens & baths. I suspect that if one were to focus on this the overall financial situation might be more postive than facing $800k++ of new construction.

Of course these situation is in some ways more challenging than new construction as it requires a more thorough inspection of the home to be sure that it is suitable not just for current habitition but cost effective expansion. Further the availability of such homes may be even worse than a potential tear down. Finally the acquisition cost of such a home will likely be greater than a lot / teardown...

The upside for such a situation is how easily it lends itself to doing the work in phases --I know quite a few folks that have bought their "Brady" era home and put in a master bath and more current kitchen before they even moved in. That might have been a high five figure project. While living there they then added on so they'd have the desired space for bedrooms / home office. A few years later they tackle the basement and/or attic / outdoor spaces. Over the course of a few years the transformation can be quite dramatic and surprisingly cost effective...
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Old 01-21-2015, 12:25 PM
 
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Quote:
Originally Posted by JJski View Post
hey i think that is a shot "LA Springs" at LG... pretty funny...

Kinda of late to this thread - but we also looked at the build option approx 1Y ago. What we discovered (looking at LG and Elmhurst and WS) was that we could not get close to the core/metra without going over 800K factoring all costs and quality. That is when we switched and focused on rehab projects...
Just curious, what price of lots you were looking at? More than $250k? What size home did you want? More than 2500 SF?
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Old 01-21-2015, 12:29 PM
 
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The lots we were finding were all tear down homes - all of them were 250k+ even in Elmhurst. But we were very picky of the location, wanted .25 Miles max of town core... Desired home size was 3K Sqft+, open floor plan... We luv older homes and the character but hate the older layouts, too many rooms...

Last edited by JJski; 01-21-2015 at 12:46 PM..
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