Does anyone think we're entering another real estate bubble? (Chicago: affordable house, buyers)

[KerrTown]

Originally Posted by JJski

Chicago is a destination and one of the top desirable big cities (globally recognized) so IMO I think the prices are catching up to reflect that...

Millennium Park actually fits in well with the skyline and other adjacent parks in The Loop, unlike the copy in Houston from the same firm called Discovery Green (and a park over a freeway in Dallas which is a copy of Discovery Green).

Chicago also has the gorgeous lakefront, which seals the deal with tourists and prospective residents. After the recession, I would not be surprised that prices will go up as demand to live in Chicagoland is starting to pick up again.

[My Kind Of Town]

Originally Posted by KerrTown

Millennium Park actually fits in well with the skyline and other adjacent parks in The Loop, unlike the copy in Houston from the same firm called Discovery Green (and a park over a freeway in Dallas which is a copy of Discovery Green).

Chicago also has the gorgeous lakefront, which seals the deal with tourists and prospective residents. After the recession, I would not be surprised that prices will go up as demand to live in Chicagoland is starting to pick up again.

Exactly, the current prices are nowhere near the 2007 highs, especially when factoring inflation. So to answer the original poster, I do not believe that Chicagoland real estate market is entering another bubble because the post-recession increases have been small relative to other major metro areas. I do think that there are certain areas within the US that are absolutely entering another real estate bubble but Chicago is not one of them.

[mr roboto]

Originally Posted by My Kind Of Town

Do you have statistics to support this claim? If anything, Chicago has been in a bit of a slump over the past few years but is certainly trending upwards of late. Slow, steady growth for a well established metro like Chicago is a good thing...

http://www.chicagobusiness.com/artic...nation-in-2015

Chicago ranked 100 I believe in Forbes latest list of best places for business and career. Neighboring states purchase time on WGN to try to entice Illinois companies to move because taxes are high here. The state is in woeful economic condition.

Chicago will never go the way of Detroit, Cleveland, Buffalo etc because it's a global city and it's more diversified than those former manufacturing towns but if I had to guess the mid-level metros (SEA, Nashville, Minneapolis, Raleigh etc) will continue to grow and take jobs and companies from the large expensive areas.

Chicago 228th metro for unemoyment http://www.bls.gov/web/metro/laummtrk.htm

[My Kind Of Town]

Originally Posted by mr roboto

Chicago ranked 100 I believe in Forbes latest list of best places for business and career. Neighboring states purchase time on WGN to try to entice Illinois companies to move because taxes are high here. The state is in woeful economic condition.

Chicago will never go the way of Detroit, Cleveland, Buffalo etc because it's a global city and it's more diversified than those former manufacturing towns but if I had to guess the mid-level metros (SEA, Nashville, Minneapolis, Raleigh etc) will continue to grow and take jobs and companies from the large expensive areas.

Chicago 228th metro for unemoyment Unemployment Rates for Metropolitan Areas

and yet Chicago is ahead of NYC and LA on the BLS list cited...

If companies are so anxious to move out of Chicago then why would Google, one of the world's smartest and most profitable companies, being do this?

http://www.chicagobusiness.com/reale...office-project

[mr roboto]

Originally Posted by My Kind Of Town

and yet Chicago is ahead of NYC and LA on the BLS list cited...

If companies are so anxious to move out of Chicago then why would Google, one of the world's smartest and most profitable companies, being do this?

http://www.chicagobusiness.com/reale...office-project

I'm not arguing there aren't good things happening in and around Chicago. I'm not saying there are no jobs or that there is no future. I linked one national metric and referenced another. You countered with one specific example. Go google how Chicago MSA compared nationally on employment and job growth.

Another combined metric: Chucago is 47th of 66 'large' MSA's for employment growth. Large Cities Rankings - 2014 Best Cities for Job Growth | Newgeography.com

Their methodology 2014 How We Pick the Best Cities For Job Growth | Newgeography.com

States ranked by growth of middle class jobs - Illinois is 37th Middle-Wage Jobs That Have Survived, and the States That Are Fostering Them | Newgeography.com

I'm done with this back and forth because I don't know how better to prove my opinion that the Chicagoland region is not faring well compared to other metro regions for job growth, creation especially relating to middle class families. The original question of this topic was about another RE bubble. My belief is that outside of the wealthier areas of the Chicagoland region I wouldn't be bullish long term.

[Lookout Kid]

Businesses are spooked by the uncertainty of our state government's financial situation. Businesses like certainty and the ability to forecast future costs. Illinois doesn't currently offer this, as it is looking more and more like new "revenue sources" will have to be tapped to patch the hole (or in other words, taxes will be raised--and no one yet knows which taxes or how much).

This is why, beyond all else, the pension crisis needs a real, workable solution as soon as possible. Heck, I'd argue that a BAD solution is almost better than NO solution at this point. Everyone needs to understand the impacts so decisions can be made and we can move forward, but unfortunately our doofus state leaders are still hand wringing and pissing lines in the sand around the special programs they want to preserve.

[JTW2013]

Originally Posted by destination-unknown

The better parts of Minneapolis and Atlanta are not much cheaper than Chicago. As for the other cities, Indy, STL, Charlotte, etc. most workers moving from Chicago to those areas will be taking a significant pay cut to do so. This cut will more than offset any savings associated with relatively inexpensive real estate. Sure you will have exceptions but generally speaking this is the case. Chicagoland is one of the most affordable major metro areas in the World in terms of real estate prices. That's why this argument just drives me nuts.

There are more high paying jobs in Chicago but the middle and lower range jobs don't pay all that much more in Chicago than in other midwestern markets. So the average Chicago area family earning $50K a year isn't going to make that less in Indianapolis or Minneapolis. The difference between the average Chicago family and average Indianapolis family is the COL.

WRT to the "affordability" of Chicago, you also must factor in the QOL. The city itself is very affordable for families but most of the schools are unacceptable. Similarly, Chicago is ringed by suburbs with decent housing stock and affordable prices but most of these suburbs have second rate schools.

[RogerMarrino]

Originally Posted by My Kind Of Town

We were talking about middle class. Why do you keep harping on working class?

You've been mistaking the upper strata of the middle class for the entirety of the middle class. I had to correct your blind spot since you continued to post links to houses that were out of reach of the average Illinois family - the real middle class, or working class as I prefer to call them.

Working class could not afford to buy a nice home in good school districts in the Chicagoland suburbs in the prior generation either. Most working class folks rent anyway, especially if they want their kids to attend above average schools.

It's flat-out wrong to say that working-class families in Chicagoland never had access to good neighborhoods or schools. Adjusted for inflation, the house that my father bought in the early '60s in the heart of what evolved into Yuppieville cost him $120K ($16K in '60s dollars). He raised 4 children in that house on a blue-collar salary while my mom stayed at home and raised us. As the cornfields of Dupage County gave way to modest ranch houses, plenty of working-class families just like mine thrived in nice neighborhoods with good schools - schools that eventually turned into Yuppieville's most prized possessions.

Hell, even in the worst-hit areas of Cook County, the schools were nowhere near as bad as they are today. I had family that lived in a suburb that fed into Proviso West and, unlike a large percentage of students in that school district today, none of my cousins or their friends dropped out. Some went to college, others went into the trades. They certainly didn't have to deal with the problems that plague that district these days.

Just to underline my point about the drastic decline in Chicagoland's working-class neighborhoods: one of the first major commercial developments in the western 'burbs was a mall a couple blocks from Proviso West called Hillside Mall. Richard Nixon visited it after construction was complete (he landed by helicopter) and The Three Stooges did a live show at a nearby theater. My uncle paid even less for his house ($90K in modern dollars) than my dad paid for ours and all of this took place a couple blocks from his place.

The working class had it pretty good in Chicagoland.

[destination-unknown]

Originally Posted by RogerMarrino

You've been mistaking the upper strata of the middle class for the entirety of the middle class. I had to correct your blind spot since you continued to post links to houses that were out of reach of the average Illinois family - the real middle class, or working class as I prefer to call them.

It's flat-out wrong to say that working-class families in Chicagoland never had access to good neighborhoods or schools. Adjusted for inflation, the house that my father bought in the early '60s in the heart of what evolved into Yuppieville cost him $120K ($16K in '60s dollars). He raised 4 children in that house on a blue-collar salary while my mom stayed at home and raised us. As the cornfields of Dupage County gave way to modest ranch houses, plenty of working-class families just like mine thrived in nice neighborhoods with good schools - schools that eventually turned into Yuppieville's most prized possessions.

Hell, even in the worst-hit areas of Cook County, the schools were nowhere near as bad as they are today. I had family that lived in a suburb that fed into Proviso West and, unlike a large percentage of students in that school district today, none of my cousins or their friends dropped out. Some went to college, others went into the trades. They certainly didn't have to deal with the problems that plague that district these days.

Just to underline my point about the drastic decline in Chicagoland's working-class neighborhoods: one of the first major commercial developments in the western 'burbs was a mall a couple blocks from Proviso West called Hillside Mall. Richard Nixon visited it after construction was complete (he landed by helicopter) and The Three Stooges did a live show at a nearby theater. My uncle paid even less for his house ($90K in modern dollars) than my dad paid for ours and all of this took place a couple blocks from his place.

The working class had it pretty good in Chicagoland.

I said it before and will say it again, this issue is NOT unique to Chicago. It's happened everywhere throughout the U.S. How many families can afford a home on a single modest income in a major metro area? This is a simple excerise of supply and demand. The Chicago metro population has increased by nearly 50% since the 60s. As a result, the suburbs have become more and more populated and the affordable "cornfield" suburbs have pushed further and further out. What you described can still be had in places like Minooka, Huntley, Sycamore, etc.

[knitgirl]

Originally Posted by destination-unknown

I said it before and will say it again, this issue is NOT unique to Chicago. It's happened everywhere throughout the U.S. How many families can afford a home on a single modest income in a major metro area? This is a simple excerise of supply and demand. The Chicago metro population has increased by nearly 50% since the 60s. As a result, the suburbs have become more and more populated and the affordable "cornfield" suburbs have pushed further and further out. What you described can still be had in places like Minooka, Huntley, Sycamore, etc.

It isn't so much an issue of supply and demand as it is an issue of economic inequality getting way more extreme than it was in the 50's and 60's. Those were really the golden years for the average American family. The income disparity in the US is now as bad as it was in 1928 - right before the Great Depression. If you haven't seen it, watch "Inequality for All" on demand. The VAST majority of new income since the Recession has gone to the top 1%.