Chicago, America's best city for the price? (Alpha: sales, real estate)

[MikeNigh]

From what I've been researching... Chicago is one of the world's few Alpha + cities (from Global city - Wikipedia, the free encyclopedia) and on that scale it is only under New York. It seems like the value of the home is incredibly low compared to San Fran or NYC. What exactly is the catch? Just colder weather and being mid west?

[Heyooooo]

In SF and NYC, land is at a premium. Chicago it really isnt. Theres a lot of new development that could happen just by acquiring the land. NYC and SF there isnt much room. This is one reason though.

It absolutely is the best for the price, no question. It goes toe to toe in world class offerings with any city, and costs very cheap for it. No brainer.

[marothisu]

The weather isn't even that much colder than NYC. 7-10 degrees colder in the winter on average. Similar temps the rest of the year.

Price is often set by demand, so I'm guessing the fact Chicago lost population, like 200,000 people, between 2000 and 2010, had a little to do with it too. The population has been rising again lately though.

I have no idea why it's so low though, but it is. In NYC you're within arms reach of Boston, Philadelphia, and DC, but I don't think that would be even close to an entire reason for making prices higher. You can definitely buy expensive stuff here if you really want though.. The thing is that in the kind of "downtown" areas (like Streeterville, River North, and South Loop) here where most of the high rises are, prices have been rising. You can get some pretty expensive places, but the difference is that outside of that you can get something for much cheaper in another neighborhood. Google bought Motorola Mobility awhile ago, which had 3000 employees in the suburbs of Chicago. In a few months, they'll all be moving downtown here so I expect real estate prices in the same area to probably go up a tad, but not much.

if you know where to look, mainly outside of those three areas plus Gold Coast (although a few cheap places exist), you can get some really cheap places that aren't that bad in Chicago. It's pretty amazing. It's funny more people don't know about it. Everyone just assumes Chicago must be **** expensive to live in and it's not.

[Bird4Prez]

There is very little to dispute how reasonably priced most of the city is. I just read something on Yahoo that lists Chicago as the number 5 moving destination in the country. The median house price is 190,000, which is incredible for an Alpha city. I think the climate and the crime rate (although it is almost half of what it was in the 80s, 90s, and early 00s) play a factor in keeping the price low. There are also some pretty large swaths of the city that are empty unfortunately. I'm not a realestate expert, but that has to factor in. Also, we do have some issues with expensive gas, high sales taxes, and terrible traffic.....which probably deters some from moving here.
Top 10 Moving Destinations in the U.S. - Yahoo! Finance

[Heyooooo]

Originally Posted by marothisu

The weather isn't even that much colder than NYC. 7-10 degrees colder in the winter on average. Similar temps the rest of the year.

Price is often set by demand, so I'm guessing the fact Chicago lost population, like 200,000 people, between 2000 and 2010, had a little to do with it too. The population has been rising again lately though.

I have no idea why it's so low though, but it is. In NYC you're within arms reach of Boston, Philadelphia, and DC, but I don't think that would be even close to an entire reason for making prices higher. You can definitely buy expensive stuff here if you really want though.. The thing is that in the kind of "downtown" areas (like Streeterville, River North, and South Loop) here where most of the high rises are, prices have been rising. You can get some pretty expensive places, but the difference is that outside of that you can get something for much cheaper in another neighborhood. Google bought Motorola Mobility awhile ago, which had 3000 employees in the suburbs of Chicago. In a few months, they'll all be moving downtown here so I expect real estate prices in the same area to probably go up a tad, but not much.

if you know where to look, mainly outside of those three areas plus Gold Coast (although a few cheap places exist), you can get some really cheap places that aren't that bad in Chicago. It's pretty amazing. It's funny more people don't know about it. Everyone just assumes Chicago must be **** expensive to live in and it's not.

Climate is really a non-factor. I actually think Chicago has a better climate than NYC does. To think what theyre paying to live in in the winter time?

[Bluefox]

Originally Posted by Heyooooo

In SF and NYC, land is at a premium. Chicago it really isnt. Theres a lot of new development that could happen just by acquiring the land. NYC and SF there isnt much room. This is one reason though.

It absolutely is the best for the price, no question. It goes toe to toe in world class offerings with any city, and costs very cheap for it. No brainer.

I would say land is still at a premium in Chicago - not everywhere in the city but certainly the areas in and around the Loop and neighborhoods to the north and in particular areas well-served by public transportation. Location is still very important. But, unlike NYC or SF, there are far less restrictions on redevelopment in Chicago. For example, even though there's currently a huge demand for rentals downtown, you don't see rents skyrocketing because developers can and are simply building more high rises to meet the demand.

Another factor is that Chicago, unlike NYC and SF, does not have rent control. At least part of the reason why those cities are so expensive is because rent control also artificially depletes the housing stock, thereby ratcheting up the demand.

I agree with other posters that Chicago's geographical location is a factor as well, though I daresay it's not a very prominent factor.

[urbanlife78]

Originally Posted by Bluefoxwarrior

I would say land is still at a premium in Chicago - not everywhere in the city but certainly the areas in and around the Loop and neighborhoods to the north and in particular areas well-served by public transportation. Location is still very important. But, unlike NYC or SF, there are far less restrictions on redevelopment in Chicago. For example, even though there's currently a huge demand for rentals downtown, you don't see rents skyrocketing because developers can and are simply building more high rises to meet the demand.

Another factor is that Chicago, unlike NYC and SF, does not have rent control. At least part of the reason why those cities are so expensive is because rent control also artificially depletes the housing stock, thereby ratcheting up the demand.

I agree with other posters that Chicago's geographical location is a factor as well, though I daresay it's not a very prominent factor.

I don't really agree with that, in the case of SF, the rents are high because it is near impossible to ever meet the demand for housing there due to zoning restrictions which prevent anything tall being built in a number of neighborhoods and there are plenty of wealthy people there that will fight anyone wanting to take away a view they have.

In the case of NYC, there is no land to build on in NYC and the city itself can't keep up with the demand for new housing, plus with NYC it is a very attractive city to invest in on the international market which also pushes prices up even higher.

[Now What]

Originally Posted by MikeNigh

From what I've been researching... Chicago is one of the world's few Alpha + cities (from Global city - Wikipedia, the free encyclopedia) and on that scale it is only under New York. It seems like the value of the home is incredibly low compared to San Fran or NYC. What exactly is the catch? Just colder weather and being mid west?

Shhh!! Dont tell anyone it's so much less expensive, they might raise the prices! ; )

[Heyooooo]

I think Chicago has a great location to be honest.

[Bluefox]

Originally Posted by Heyooooo

In the case of NYC, there is no land to build on in NYC and the city itself can't keep up with the demand for new housing, plus with NYC it is a very attractive city to invest in on the international market which also pushes prices up even higher.

That makes sense, but I don't think that is the sole reason why rent is so high in NYC. What I was trying to emphasize was that there are a number of factors at play as to why Chicago is more affordable than NYC or SF.

And rent control absolutely plays a role in the high rents of both NYC and SF. It's just basic economics.

This study is a bit older but it yielded some dramatic findings about how such policies drive up rental costs:

http://heartland.org/sites/all/modul.../pdfs/7803.pdf

See also
https://www.baycitizen.org/columns/s...es-super-rich/
Why Rent Control Won't Go Away | Heartland Institute
http://www.startribune.com/opinion/c...8.html?refer=y