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Old 04-22-2008, 07:47 PM
 
179 posts, read 419,538 times
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Illinois home sales drop nearly 30% in March -- chicagotribune.com

Summary: Illinois home prices down 1%, but:

- Chicago area up 1%

- City of Chicago up 5% (and condos 8%?!)
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Old 04-29-2008, 08:18 AM
 
Location: Placentia, Orange County, CA
201 posts, read 511,256 times
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I wouldn't be surprised by the 5%-8% upswing in the city. I work on the near west side of the loop and condos are sprouting like dandelions in a Spring lawn. I live on the far Northwest side and housing here is selling as long as the seller doesn't get greedy with the selling price.
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Old 04-29-2008, 09:10 AM
 
28,383 posts, read 67,903,744 times
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The data holds no real surprises -- the median selling price includes LOTS of people essentially dumping places before the ol' foreclosure orders kick-in and really leave them without a pot or a window...

While I an not going to say that I feel any pity for developers that have unsold inventory (or unfinished buildings) that is priced FAR in excess of that $317K for condos, the reality is that those places are going to be kryptonite UNLESS they are in "pure platinum" buildings -- even then if the developers end up enticing folks to move from a building that is older are right around the corner by throwing in finishing/renovations there could STILL be a rise in selling price BUT the developers are going take a big cut to their profit margins. Smart developers WILL do it, as the alternative is to hold on to stuff in the hope of getting full price, but the lenders will eventually want to see those construction loans paid off and things would then get really ugly...

The nice thing about the "throw ins" that developers can be doing only hurt the developer a little bit and the buyers get a place that is nicer for a lower total out-of-pocket so they don't have to be so greedy about the places they are leaving behind, which is good for the buyers in existing buildings too. Prices can still move up, if people flex a bit.

For sellers of single family home in the City and established suburbs things are a little bit trickier. Typically the places built on spec are already costing the developer quite a lot -- if they don't get a price close to ask it might not just be profit they are giving away, they might be better off defaulting and letting the lender sell it. All that shiny granite and SS has already been paid for and the lender doesn't really care about that as much as they flat out need some cashflow.

Of course in all but a handful of places the spec houses are far outnumbered by existing homes that people may have owned for quite a long time and might be selling for a long list of reasons. As long as the current owner is going to be a seller of one place and buyer soon after they don't have too much incentive to sell on the cheap -- they need that cash to put into another house. My gut tells me that is STILL the heart of the Chicago area deal -- there just are not as many absolute nut jobs in our region as there were out in Vegas making up all kinds of income that they just didn't have to buy places that there was no way to afford. And as hot Chicago was, it was never the inferno of California with hordes of people in the flippin' game driving prices to levels of total unaffodability -- the majority of Chicagoland home buyers have a pragmatic "this is a good place to live" sort of mindset that was in sharp contrast to the craven dealing that lead to California's "unaffordability index" being off the charts...

Sure Chicago is more expensive that the rest of the State, but we have more jobs that pay people a decent amount of money and that is something that we can thank our diverse employment base for. For every corn farmer downstate that got a boost from EtOH there are dairy farmers and soybean farmers that are getting killed by high feed and fertilizer prices.
We may not boom the way that oil is driving things in Texas, but we won't bust the way that Vegas is when people realize gas prices kill tourism and the local economy with the same blow.
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Old 04-29-2008, 01:10 PM
 
Location: Humboldt Park, Chicago
2,686 posts, read 6,829,504 times
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Default chet

Chet,

I agree with everything you say except that soybean farmers are not being hurt by high fertilizer costs. With more and more people planting corn the price of beans have gone up. Corn is now 5.70 a bushel as of last night when I talked with my dad, a farmer. The same guys who plant beans plant corn. Bean prices have gone up with corn as has wheat, oats too. All grain farmers such as my dad have had fertilizer, pesticide and insecticide costs more than double but nearly 6 corn and nearly 15 beans more than make up for it.

So, getting back to Chicago home prices, I feel prices will go down with increased foreclosures and short sales, just not sure how much or for how long. I believe it will get worse before it gets better.
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Old 04-29-2008, 02:05 PM
 
Location: University Village
439 posts, read 1,314,224 times
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Quote:
Originally Posted by Humboldt1 View Post
So, getting back to Chicago home prices, I feel prices will go down with increased foreclosures and short sales, just not sure how much or for how long. I believe it will get worse before it gets better.
Which, if you have been playing this game for a while, you know spells O-P-P-O-R-T-U-N-I-T-Y. Prices in fringe areas are already at 2005-2006 levels. If they drop much further, the market will re-ignite and the window of opportunity will slam shut.

This is a once-every-ten year (or possibly once in a generation) opportunity to swing for the fences if someone has the cojones to do it.

But you've got to be brave, have no illusions of a quick profit, and be willing to tough it out for 5-10 years if that's what it ends up taking.
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Old 04-29-2008, 02:24 PM
 
28,383 posts, read 67,903,744 times
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It is town by town and area by area as far as foreclosures go -- nobody really can say with are accuracy what specific jobs will mean that certain towns will hurt more than others -- it is like predicting weather with a calendar -- if someone bet me that there'd be snow falling in the last week of April I would not take that bet, but if they gave me even money that June will be hotter than May that'd be fair.

I'm OK laying out some money that towns with high percentages of white collar workers are going to do OK. I'd probably feel OK about about certain towns with a high percentage of minorities if sizeable numbers of 'em are in healthcare related work.

If we get into towns that have a lot of folks in construction or generic light assembly/warehouse things seem like a much risker bet.

A real bargain is going to be hard to find -- even at a 2005-2006 price that had a lot price appreciation from people that got burned by the tech bubble/stock fallback that happened before 9/11/01. Find me a place I can buy at a ten year old price and it is not in a war zone I'll be by with my checkbook...

It is a lot smarter to find something with a nice "on base" percentage than to end up a "Frank Thomas" long ball hitter...
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Old 04-30-2008, 08:27 PM
 
179 posts, read 419,538 times
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Quote:
Originally Posted by NearWestSider View Post
Prices in fringe areas are already at 2005-2006 levels.
That's probably true. Unfortunately, gas prices are not at 2005-2006 levels or anywhere close. The value proposition of fringe areas only goes down as the price of gas increases. I'd say the odds of the fringe market "reigniting" (your words) are fairly long.
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Old 04-30-2008, 09:20 PM
 
28,383 posts, read 67,903,744 times
Reputation: 18188
I wonder if NWS was talking "fringe" as in "there are still farmers here" or fringe as in "there is a crack house next door but there are some investors looking to open a retro themed PBR tap room and make it look hip"?

Either way I'm not going to bring my check book even IF those sorts of places are at pre 9/11/01 prices...
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Old 04-30-2008, 09:42 PM
 
Location: Chicago
15,587 posts, read 22,380,796 times
Reputation: 1761
That big condo development plan at Ashland and Belmont in Lake View in Chicago has been downgraded to rentals. All deposits are being refunded.

Pic (broken link)

Centrum Properties

Lofts at Lakeview Collection
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