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Experts finally admit severity of home mortgage crisis in America, prices falling faster than post war housing bust, seeking opinions on declining home prices
[quote=Wild Style;4101416]
Bloomberg said that in 2007 population didn't grow nor did it fall. He said it didn't fall because of birth rates. That means, working adults are leaving. /quote]
Did nobody die in NYC over the past year? I'm sure that the birth rate is larger than the death rate, but when you factor in the deat rate I think you'll less of a mass exodus thus far.
Bloomberg said that in 2007 population didn't grow nor did it fall. He said it didn't fall because of birth rates. That means, working adults are leaving. /quote]
Did nobody die in NYC over the past year? I'm sure that the birth rate is larger than the death rate, but when you factor in the deat rate I think you'll less of a mass exodus thus far.
They explained in this report what accounted for the loses and while death was a part of it a large part according to them was people leaving. They even broke it down by what the common factors were among people leaving the city. For example people with young kids were more likely to leave than not etc. etc.
The report was posted by Elvira in the NYC section when I mentioned it. She being the great detective she is found it and posted it for everyone. Wish I could point you to the report but I don't remember where I read it.
Bloomberg also sent out another report where they said economically the city expected the economy there to return to the state of the 70s. He said the difference this time is, they will make sure they have a will trained non corrupt police force in tact to make sure the social issues that came with the 70s don't return.
I THINK it might be on the city website, might have to do some digging.
Good thing you didn't invest in a greystone yet in Chicago. This is usually 2-4 unit apartment building built 1880-1930s, very solidly built.
My properties do cashflow. My townhouse costs me $1450/mth and I rent it for $1600/mth. My 4 unit apartment building costs me $2300/mth (including mortgage, property taxes, utilities, insurance) and generates $2400/mth. I rent out 3 units and live in one. Basically, I make $100/mth to live for free. It works cashflow-wise but I am looking forward to moving out of there once I identify my next property in the next 12-18 months.
I hope I don't have to wait until early 2010 to buy another as 2 years of living in an impoverished neighborhood in the worst unit in my building is getting old.
It just depends where you look but overall the market is down. Condos are still being built downtown, leading to oversupply. Generally, you will do best in the areas that boomed and subsequently busted the most. This is generally the west and south sides of the city.
There are a lot of foreclosure and short sales out there and there will be more in Chicago, especially in low-income areas where many buyers stretched themselves to buy property. Basically life-long renters should have stayed renters but instead bought real estate they could not afford.
On the west side (Humboldt Park), we have many people who stretched themselves to become landlords, buying multiple properties with little or no money down trying to get rich through appreciation. Now, many of these 2-4 flats are going into foreclosure. I bought one of these in July 2006 right at the height of the market but put 20% down and my building cashflows and I have a nice bank job which allows me to cover my payments even if the building is completely empty, which it was earlier this year after I kicked out all my tenants at the same time (got sheriff involved and everything after they refused to pay rent for 4 months). It is a whole other thread but you don't rent to ghetto blacks without going section 8. 4 months was painful enough. I can only imagine how long it would have taken to get them out had they been section 8. I know one landlord who it took 13 months to kick out one of his section 8 tenants.
For this reason and the quality of the tenants, I refuse to go section 8.
If you are still looking at Chicago to buy I would recommend follow the listings closely for the next 12 months, waiting for prices to drop a bit more. I am hoping to cash in on another's misfortune via a shortsale or foreclosure but would buy the right regular property if it came up.
The biggest deals to be made will be in "up and coming" neighborhoods, but one needs to be careful and check out the neighborhoods as some are more up and coming than others.
It just depends where you look but overall the market is down. Condos are still being built downtown, leading to oversupply. Generally, you will do best in the areas that boomed and subsequently busted the most. This is generally the west and south sides of the city.
There are a lot of foreclosure and short sales out there and there will be more in Chicago, especially in low-income areas where many buyers stretched themselves to buy property. Basically life-long renters should have stayed renters but instead bought real estate they could not afford.
On the west side (Humboldt Park), we have many people who stretched themselves to become landlords, buying multiple properties with little or no money down trying to get rich through appreciation. Now, many of these 2-4 flats are going into foreclosure. I bought one of these in July 2006 right at the height of the market but put 20% down and my building cashflows and I have a nice bank job which allows me to cover my payments even if the building is completely empty, which it was earlier this year after I kicked out all my tenants at the same time (got sheriff involved and everything after they refused to pay rent for 4 months). It is a whole other thread but you don't rent to ghetto blacks without going section 8. 4 months was painful enough. I can only imagine how long it would have taken to get them out had they been section 8. I know one landlord who it took 13 months to kick out one of his section 8 tenants.
For this reason and the quality of the tenants, I refuse to go section 8.
If you are still looking at Chicago to buy I would recommend follow the listings closely for the next 12 months, waiting for prices to drop a bit more. I am hoping to cash in on another's misfortune via a shortsale or foreclosure but would buy the right regular property if it came up.
The biggest deals to be made will be in "up and coming" neighborhoods, but one needs to be careful and check out the neighborhoods as some are more up and coming than others.
I want a greystone, not to rent though. Growing up in brooklyn I just ALWAYS loved those brownstones (greystones in chicago). as for areas, man I absolutely love Hyde Park, that place is the ish! I would love to live over there. My wife has been looking for jobs in Chicago but hasn't seen much in her field. Although I hear daily is corrupt, I do like a lot of his green initiatives. I also like his Urban Farming initiative. I like where he has lead Chicago and I like where Bloomberg has lead NYC. So those are the two places I am serious about looking into.
You think Rogers park will be one of those "up and coming" areas? Where else would you suggest?
Daley is corrupt but the city has gotten better while he has been mayor. The riff raff is being forced out and yuppies are moving into areas that were formerly gang ridden.
If you like Hyde Park, you should look at Bronzeville and Kenwood. It sounds like you are looking at a single family. I am looking at a greystone as a 2-4 unit apartment building, but similar housing stock.
Another great area lined with greystones is Logan Square along the boulevards (i.e. kedzie (3200W), palmer (2200N), sacramento (3000W), and logan (2600W).
I don't think Rogers Park has as much potential as some of the other areas. It seems to be staying about the same to maybe getting a little better. Rogers Park has a significant black population, which is more affluent than the west side, but certainly less affluent than Hyde Park. Kenwood is next door to Hyde Park and is where Obama has a $1.5MM house.
For what you are looking for, stay east of the Dan Ryan (90-94) and north of 75th street. You should also look at Bucktown, Wicker Park, Lincoln Square, Lincoln Park, and Lakeview.
What is your budget? This will better help me lead you as the last areas I mentioned could cost you $1MM or more for solid greystone, depending on the exact location and size of the building.
Remember when everyone was like 6% to 10% drop in home prices max? Well now they say another 50%. This goof in the report says "this is the most they have seen and the fastest they have seen in any previous bubble". Well ahh no kidding, prices have run up faster and higher than annual income than any previous time. The correction MUST be drastic to make up for the drastic increase in prices. Hope these home owners trying to sell, get it now. The game is over.
HA! HA! I read this article too the other day online.
I can't help but to not feel sorry for most people who are suffering through this...plain stupidity and greed.
Most people living in million dollar homes today are seriously delusional. If you don't have an amazing view; if it's under 2000 sf; if you're not in a MAJOR metro area in a tall highrise with a PH address; if your acreage is listed in square footage and not acres; and if you earn less than $300K and you're living in your first home...then guess what?? You are probably living in a home whose million $$$ price tag is inflated! You're not a high earner, you didn't "move-up" and you're not a millionaire...get over it and cut your losses while you can.
True story (changed names to protect the ignorant, oops! I mean innocent):
2000 Home Purchase - Fred and Wilma bought a modest home on the outskirts of a major city for under $200K in a golf course community.
2003 - Fred and Wilma began living above their means, off of the equity in their home.
2005 - Fred and Wilma convince in-laws to move in with them in a much larger home. They convince the in-laws to sell their modest home that was almost paid for to assist in the down payment of this new...Fred and Wilma couldn't pay a down, 'cause by now they had sucked over $250K worth of equity out of their home.
2006 - Fred, Wilma and the in-laws place their name on a waiting list and sit in on "raffles/lotteries" for their new home - around the corner - and finally, their names are drawn for a tract built home. They buy the largest one, due to their new family size, upgrade it to the max...costing them upwards of $800K.
2008 - Fred refuses to work extra hours to help pay the HUGE mortgage, the in-laws are paying it with their retirement $$, and the home's value is barely appraising in the mid $400K's. Wilma is looking for a short-sale but can't find anyone to qualify - not even for FHA (full docs required); and the in-laws will soon be coming out of retirement!
You all are forgetting on big factor in all this. New home building. Materials and all associated costs with building a new home have went up and are going up drastically due to energy costs. As home prices continue to fall, builders will stop building (as they are now) supply will shrivel and prices will again begin to rise.
You all only compare the drops and rise based on income, when supply is the key factor. Right now there is a large surplus of homes for sale due to forclosures and investors bailing. When these folks get these houses off the market over the next 24-36 months, you will see the true bottom and then a gradual rise again.
You all only compare the drops and rise based on income, when supply is the key factor.
Because housing is tied to income, all the foreclosures could vanish tomorrow and the homes still wouldn't be affordable.
Quote:
you will see the true bottom and then a gradual rise again.
Housing will raise again with the rate of inflation like it has historically. But you won't see appreciation beyond inflation until there is another housing bubble.
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Wild Style
Stupid is as stupid does...
