Is the condo market in danger of tanking? (Chicago, Atlanta: sale, to rent)

[Chigal777]

REALLY??? WOW!!! I just got a lease renewal and they're asking for $30 more a month. Hmm. They have been raising my rent $50 a month since I moved here few years ago but I'm looking at rentals online and they don't seem to be decreasing. Interesting. May I ask which neighborhood you're in?

Originally Posted by dtcbnd03

Yes, condos with no outdoor space and especially those in high rises will likely take a nosedive. Even before covid if you had a high rise condo it would have limited appreciation because anytime you sell you're competing against 15 other sellers in your building who have the exact same layout. So it's a race to the bottom. Not to mention HOA fees for high rise condos are outrageous. Walk up condos are better and appreciate better but not as much as SFH or multiunits do. I don't think those will nosedive as much but there appears to be a glut forming according to my broker.

Apartment rents are nosediving. I renewed my high rise lease right before covid and now I can get the same apartment for $500 cheaper per month! You will be able to get a steal on rents right now.

[dtcbnd03]

Originally Posted by Chigal777

REALLY??? WOW!!! I just got a lease renewal and they're asking for $30 more a month. Hmm. They have been raising my rent $50 a month since I moved here few years ago but I'm looking at rentals online and they don't seem to be decreasing. Interesting. May I ask which neighborhood you're in?

Gold Coast in a high rise. I imagine 2/3 bedroom rentals in 2-3 flat walkups are doing ok because you have a yard and outdoor space and are generally in areas with less density. All of my multi-units are doing fine and I have no problem filling them (so far). It's the high rise apartments where there are vacancies and you can get a hell of a deal right now.

[emathias]

Most professionals who can work from home are doing fine. Some of them may get nervous about close proximity, but they're not the people getting evicted. Prices will soften, but I don't see them crashing unless unemployment starts to affect professionals to the same degree that it's affecting the working class.

[chitown202020]

most of these comments are about rent but what about condo prices? Does rent directly correlate with condo price? I was looking for a studio on lakefront near montrose beach and saw one for 100,000 600 sq ft 450 HOA fees in a high rise would this be considered cheap or can the prices go down further?

Also I had a question I never lived in a high rise do some of them have shared ari conditioner and heat? That would be a deal breaker during covid for me. I would move out if I lived in a high rise and it shared air with other apartments not sure how it works in a high rise.

[NoMansLands]

The thing about buying a condo in Chicago is that the HOA and property taxes pretty much nullify any equity gain you may be making, especially in a high rise. It's cheaper to rent the same unit and not own it, even long term on many. Do the math on the same unit rent vs buy before making a decision. I've been playing around with these numbers since I was considering a move, and was surprised and scratching my head at how renting could sometimes be cheaper!

[chitown202020]

Originally Posted by NoMansLands

The thing about buying a condo in Chicago is that the HOA and property taxes pretty much nullify any equity gain you may be making, especially in a high rise. It's cheaper to rent the same unit and not own it, even long term on many. Do the math on the same unit rent vs buy before making a decision. I've been playing around with these numbers since I was considering a move, and was surprised and scratching my head at how renting could sometimes be cheaper!

yes but I am kind of regretting renting the past eight years on north side I feel all that money could have been paid toward something. On average I was paying 1100 for a one bedroom and now looking at buying.

I personally only feel the HOA would be worth it if I lived no less than one block from the lake. I would not pay more than 450 for HOA which is hard to find. The edgeeater beach hotel building has crazy HOA fees ranging from 1000 to 3000. A Majority of high rises on the north side I have seen HOA is on average 750.

So I guess I saved some money not paying HOA over the years but I have nothing to show for the money going towards rent.

[Kmanshouse]

Buying is somewhat overrated for many of the reasons described. Also, unless you are in a really hot area or time it right, the prices aren't exactly giving you a great ROI.

[BRU67]

Buying sure ain't what it used to be. It makes sense on a larger multi-unit but condo and even single family homes now are questionable. The house I sold in 2014 isn't worth any more now than when I sold it. Some of the problem is Millennials aren't buying big suburban homes anymore. They're either staying renters or buying multi-units.

Another problem is taxes. Municipalities are broke and equity you would have gotten will be eaten up by tax increases. Every dollar your taxes go up is less home value for you, as buyers and lenders look at the total monthly cost when determining what they can afford.

[UptownGuy3]

Originally Posted by chitown202020

I personally only feel the HOA would be worth it if I lived no less than one block from the lake. I would not pay more than 450 for HOA which is hard to find. The edgeeater beach hotel building has crazy HOA fees ranging from 1000 to 3000. A Majority of high rises on the north side I have seen HOA is on average 750.

The Edgewater Beach Apartments are a coop. Quite a few of those vintage high rises are, depending on your situation and the pricing they can be good deals. Unlike condos those HOAs will typically include your property taxes, all utilities, and the building is usually responsible for repairs inside of your unit.

Depending on the building they’re a pretty interesting middle ground between typical condo ownership and renting. Some coop apartment owners are delusional regarding price appreciation however. In the Edgewater Beach Apartments specifically. I’ve been seeing one bedrooms listed above $200K with fees of $1200/month. Cut that purchase price in half and maybe it’s a more reasonable arrangement depending on what you’d be paying to rent a comparable apartment anyways.

[dtcbnd03]

Originally Posted by chitown202020

yes but I am kind of regretting renting the past eight years on north side I feel all that money could have been paid toward something. On average I was paying 1100 for a one bedroom and now looking at buying.

I personally only feel the HOA would be worth it if I lived no less than one block from the lake. I would not pay more than 450 for HOA which is hard to find. The edgeeater beach hotel building has crazy HOA fees ranging from 1000 to 3000. A Majority of high rises on the north side I have seen HOA is on average 750.

So I guess I saved some money not paying HOA over the years but I have nothing to show for the money going towards rent.

I understand if you want to buy to have a "place of your own". But as others have said buying a condo in a high rise is usually not a good investment. I own several multi-unit buildings but still choose to rent a condo because I can switch to the ones with the latest amenities or now negotiate my rent down 20%. I'm not tied to upkeep or HOAs or special assessments or anything like that. Owning a single family, multi-unit or condo in a walkup is cool....but in a high rise...no way.

But to answer your question yes high rise condo prices will fall and are falling because just like rentals no one wants to be in a dense small space and outdoor areas and space is a priority right now for buyers. I imagine you'll see some great deals on condos in the next few months...but beware the HOAs and special assessments.