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Sadly many folks that post in these forums have zero experience with wha forces impact real estate values. For those of us that have been active in real estate for decades we've seen some areas become more desirable while others areas decline. Those trends can generally be traced to simple factors related to employment, schools, taxes and relative value.
Towns that have easy access to good paying jobs either by driving, commuter rail, or other transit have done much better that towns isolated from opportunity.
Towns that have well regarded schools are similarly far more desirable than areas where the schools are mediocre / poor.
Not surprisingly, taxes are a bit more complex. Towns that have such high tax rates that there are issues with affordability are increasingly a negative in towns that have few options to support needed services. In contrast, towns with a mix of commercial property and solid retail sales tax revenues can have nicer amenities with modest property taxes on home owners. At the most desirable tiers there are a handful of towns with much valuable property and very low tax rates, though finding a modestly priced home is rare and thus residents tend to be affluent...
Towns like Skokie with a huge regional shopping mall, nice mix of employers and access to other jobs via all modes of transit as well as well respected schools are in no danger of seeing values fall any more than the overall depression that will come as Illinois fiscal crisis deepens. Similar positives exist for most other nearby towns already mentioned -- Niles, DesPlaines, Norridge, and Harwood Heights might not be especially fashionable but neither are they likely to be burdened with sorts of taxes seen in areas that are facing more pressures to fund things solely on the backs of home owners...
Areas like Oak Lawn, Evergreen Park, and Burbank may not be quite as spiffy as towns to the north or west, but there are a solid base of hospitals, car dealers, retail and commercial as well as good transit and driving routes are all positives.
More likely threatened by the shrinking population are towns built near the fringes with poor rail / congested roads. Folks won't tolerate paying runaway taxes in these poorly conceived areas.
Why do you think they will decline? Decline to what level or relative to what? I think those inner-ring suburbs have certain benefits as they are close to the city, transportation, and employment centers. The places you mentioned don't exactly border the horribly rundown areas of Chicago.
While far flung suburbs like Wheaton are nice in their own right, not everyone wants to live that far away from the central city neighborhoods. Aside from a work commute, most don't want to be entirely reliant on "speedy" Metra service.
I don't consider Wheaton far flung. How "far" a town is from the city is not necessarily determined on a straight line. It's all about access. With two transit stops offering express service to the Loop and easy access to both 88 and 355, Wheaton's access to Chicago and the surrounding region is better than many suburbs that are "closer."
Quote:
Originally Posted by JJski
Towns which feel standard suburbia, standard construction (where smart builders build entire sub exactly same) will keep going down. Towns with easy big city commute, rail connection, + vibrant, safe, eventful, walkable, unique historical charm, solid core with good schools will continue to rise. Its a pretty simple formula... Hyper micro location, location, location focus is new norm for smart real estate investing in next decade...
Add in the fact that Wheaton checks all the boxes on this nice list put together by JJski, and I think its relative position is safe.
I actually think the future of the suburbs lies in towns like Wheaton, La Grange, Elmhurst and others that have large, old-growth downtown districts, that over time will begin to look and feel more like "central city neighborhoods" and dampen the need to travel anywhere for a good time.
Last edited by holl1ngsworth; 09-28-2016 at 12:27 PM..
Not surprisingly, taxes are a bit more complex. Towns that have such high tax rates that there are issues with affordability are increasingly a negative in towns that have few options to support needed services. In contrast, towns with a mix of commercial property and solid retail sales tax revenues can have nicer amenities with modest property taxes on home owners. At the most desirable tiers there are a handful of towns with much valuable property and very low tax rates, though finding a modestly priced home is rare and thus residents tend to be affluent....
It should be noted that the towns with the highest tax rates in IL are the poorest ones. These are:
•Harvey
•Park Forest
•Cairo
•Glenwood
•Warren
•Country Club Hills
•Dixmoor
•Hazelcrest
•East St. Louis
•Cahokia
None of these are usually mentioned on this forum as top places to live, that's for sure! The article notes Lake Forest and Oak Brook have among the lowest tax rates.
One key reason for this disparity is, of course, the fact that the needs of the schools in poor communities are high while the property values are low. So they need to impose a higher tax rate to have any semblance of school funding. And even with that, they're usually spending about 1/3 per pupil on instruction when compared to the richest districts. Sickening.
This election cycle has been a complete Ringling Brothers and Barnum & Bailey circus. But one thing I hope comes out of it is that those who rallied against the perceived hate by Trump and his supporters towards the poor and immigrants put that indignation into action - by trying to rectify the gross inequality we have in our own City and state. One great place to start would be to write to your State Representative and Senator telling them you support the School Funding Reform Act.
None of these are usually mentioned on this forum as top places to live, that's for sure! The article notes Lake Forest and Oak Brook have among the lowest tax rates.
One key reason for this disparity is, of course, the fact that the needs of the schools in poor communities are high while the property values are low. So they need to impose a higher tax rate to have any semblance of school funding. And even with that, they're usually spending about 1/3 per pupil on instruction when compared to the richest districts. Sickening.
This election cycle has been a complete Ringling Brothers and Barnum & Bailey circus. But one thing I hope comes out of it is that those who rallied against the perceived hate by Trump and his supporters towards the poor and immigrants put that indignation into action - by trying to rectify the gross inequality we have in our own City and state. One great place to start would be to write to your State Representative and Senator telling them you support the School Funding Reform Act.
I think the general layout in 2026 will be affluent people in the City center - which will expand out from where it is now. How far will depend on how good Chicago is at attracting high paying jobs. The working class, whose wages are declining, will continue to move towards the inner-ring suburbs and some bungalow belt neighborhoods. The poor, much like today, will continue to occupy much of the south and west sides, with a few more in economically challenged inner-ring suburbs due to gentrification on some of the fringes. For example, you could see parts of East Garfield Park and North Lawndale gentrify if the City does really well. And, of course, there will always be very wealthy suburbs for the most affluent (Oak Park, River Forest, North Shore, etc.).
I think you'll see severe decreased demand for homes in car-dependent far flung suburbs. These offer difficult commutes to the large job center (Chicago) and I don't think the houses built in the 1990s and 2000s will age well. The build quality generally isn't there and they will become obsolete. They will be seen as too large and wasteful to millennial home buyers.
So in short, real estate values will increase in the City center and affluent suburbs. They will decrease somewhat in the inner-ring as the average income there declines and property taxes increase to address increased demands placed on schools, parks, etc. They will decrease a lot in exburbs due to decreased demand.
I think your general forecast of future trends is accurate, yet I do not think that the movement of the working class to certain inner-ring suburbs is necessarily a harbinger of decline. Elmwood Park, for example, has seen appreciation in real estate prices and brisk sales activity over the past 18 months. It is easy to find examples of suburbs which have not recovered nearly as much ground as Elmwood Park in regards to the 2008 Housing Crisis. Elmwood Park has been incorrectly described as experiencing a steep decline, which does not seem to be the case. I believe that much of the perception stems from a strident social media presence which some residents maintain in order to perpetuate their intra-village feuds.
I don't consider Wheaton far flung. How "far" a town is from the city is not necessarily determined on a straight line. It's all about access. With two transit stops offering express service to the Loop and easy access to both 88 and 355, Wheaton's access to Chicago and the surrounding region is better than many suburbs that are "closer."
Add in the fact that Wheaton checks all the boxes on this nice list put together by JJski, and I think its relative position is safe.
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I also think Wheaton has many of the characteristics of a nice suburb, and is safe for the foreseeable future. However, the express Metra service may not be a benefit for every family if their employment is not in the Loop. Some people may prefer to live in an inner-ring suburb and have the same Metra commute downtown when needed and not have to be reliant on the 88 or 355, and the traffic headaches those could entail, when they have to pick up the toddlers from Grandma's house in Lincolnwood after work and then head over to Brookfield zoo for a play date.
I think your general forecast of future trends is accurate, yet I do not think that the movement of the working class to certain inner-ring suburbs is necessarily a harbinger of decline. Elmwood Park, for example, has seen appreciation in real estate prices and brisk sales activity over the past 18 months. It is easy to find examples of suburbs which have not recovered nearly as much ground as Elmwood Park in regards to the 2008 Housing Crisis. Elmwood Park has been incorrectly described as experiencing a steep decline, which does not seem to be the case. I believe that much of the perception stems from a strident social media presence which some residents maintain in order to perpetuate their intra-village feuds.
I think in the short term, you are correct. Families are leaving Chicago due to violence and poor schools and locating in the inner ring suburbs for safer schools and neighborhoods. The demand is pushing prices upwards, making things look good in a lot of inner-ring suburbs.
Of course, this has to be examined within the big picture. Working class wages are not increasing. But the inner-ring suburbs will face greater needs (largely with regard to schools) and they will have to raise taxes. Eventually, they'll hit a "zero sum" game where every dollar they take from the homeowner for taxes each month will be one dollar less that person can spend on the mortgage payment.
This will cause property values in working class areas to lag behind the affluent class. Without getting political on this, it's a very sad situation, but it's the economic reality we are facing.
Is there an alternate link to the (annotated) map below? It seems dead.
thx
Unfortunately no but there's a lot of info out there on tax rates. The Illinois Department of Revenue has a tax rate database. My computer is being goofy today so I can't get the link to open but you can google it.
I think in the short term, you are correct. Families are leaving Chicago due to violence and poor schools and locating in the inner ring suburbs for safer schools and neighborhoods. The demand is pushing prices upwards, making things look good in a lot of inner-ring suburbs.
Of course, this has to be examined within the big picture. Working class wages are not increasing. But the inner-ring suburbs will face greater needs (largely with regard to schools) and they will have to raise taxes. Eventually, they'll hit a "zero sum" game where every dollar they take from the homeowner for taxes each month will be one dollar less that person can spend on the mortgage payment.
This will cause property values in working class areas to lag behind the affluent class. Without getting political on this, it's a very sad situation, but it's the economic reality we are facing.
What makes you think inner ring burbs will need to raise taxes for schools? Many inner ring burbs have highly regarded schools without insane tax burdens. Skokie (which Chet mentioned) is an example of this.
I think in the short term, you are correct. Families are leaving Chicago due to violence and poor schools and locating in the inner ring suburbs for safer schools and neighborhoods. The demand is pushing prices upwards, making things look good in a lot of inner-ring suburbs.
Of course, this has to be examined within the big picture. Working class wages are not increasing. But the inner-ring suburbs will face greater needs (largely with regard to schools) and they will have to raise taxes. Eventually, they'll hit a "zero sum" game where every dollar they take from the homeowner for taxes each month will be one dollar less that person can spend on the mortgage payment.
This will cause property values in working class areas to lag behind the affluent class. Without getting political on this, it's a very sad situation, but it's the economic reality we are facing.
I don't want to get political either, but citizens should take a hard look at which factions have been in power for decades, who are their constituents are, and what have been the results of their policies/leadership.
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