Illinois is headed for disaster and I don't want to be here for it (Chicago: for sale, 2013)

[FalstaffBlues]

Originally Posted by Genghis

Housing price information is freely available. It should be clear that the housing market in Illinois is not particularly strong and many houses do not greatly appreciate in value here. It is ignorant to not do due diligence when purchasing a house. And during the housing bubble there were increases in home prices that were not representative of history. It was a mistake to have considered that to be the new norm.

The due diligence of knowing a house you bought in 2004 was going to irreversibly lose half of its value while you have a 2nd mortgage on it pay your cc debt and your kids college tuition?

Just stop man. You sound like a callous ignoramous.

[Genghis]

Originally Posted by FalstaffBlues

The due diligence of knowing a house you bought in 2004 was going to irreversibly lose half of its value while you have a 2nd mortgage on it pay your cc debt and your kids college tuition?

Just stop man. You sound like a callous ignoramous.

That was so clearly a bubble. I remember wondering who could afford houses at those prices, and I didn't even consider buying a place. Eventually I realized along with everyone else that the people buying them couldn't afford them either, when the market cratered.

[fusillirob1983]

Originally Posted by Genghis

That was so clearly a bubble. I remember wondering who could afford houses at those prices, and I didn't even consider buying a place. Eventually I realized along with everyone else that the people buying them couldn't afford them either, when the market cratered.

I can see that some people may have looked at prices back then and understood those increases were unrealistic. At the same time, a lot of people probably saw they can move into a big new house they always dreamed of but can never previously afford. Many people are not financially savvy enough to understand behind the scenes how they can suddenly afford their dream home, understand the ramifications of getting an ARM, or that banks may not have properly looked into a borrowers' income or creditworthiness sufficiently.

[Hiruko]

Originally Posted by Genghis

That was so clearly a bubble. I remember wondering who could afford houses at those prices, and I didn't even consider buying a place. Eventually I realized along with everyone else that the people buying them couldn't afford them either, when the market cratered.

In 2004, it was not at all clear that we were in the so-called 'housing bubble.' It did not become particularly apparent in our area until around 2007. Even then, it was very unclear how far values would fall here.

[damba]

Originally Posted by Hiruko

In 2004, it was not at all clear that we were in the so-called 'housing bubble.' It did not become particularly apparent in our area until around 2007. Even then, it was very unclear how far values would fall here.

What, you may have been 17-18 at that time? You weren’t buying RE then (still at NewTrier HS?). I don’t need current data to know what it was like back then. It was very close to many people’s version of a bubble.

[wase4711]

well, I went through it, and he is exactly on point with his comment

we bought in 2005; value went up 10% in 2006, and we thought we were on our way to housing nirvana
our value started to fall off in 2008 big time; by 2014, we had lost almost 50% of our original value

[Bitey]

The loss of home value is only part of the problem. My major complaint is that despite the loss in our home's value, our property taxes are actually 30% higher now than when we bought it, which makes it even harder to sell at something close to what we paid. It's infuriating that no matter what happens to property values, property taxes only seem to go in one direction.

[Grlzrl]

Originally Posted by Bitey

The loss of home value is only part of the problem. My major complaint is that despite the loss in our home's value, our property taxes are actually 30% higher now than when we bought it, which makes it even harder to sell at something close to what we paid. It's infuriating that no matter what happens to property values, property taxes only seem to go in one direction.

Make sure you appeal your property taxes EVERY time you can. Depending on where you live, it can be very easy. Sometimes I help my neighbors and friends do it because they are getting reamed. I just did one yesterday and it was a slam dunk. Don't leave this money on the table.

[Grlzrl]

Originally Posted by Hiruko

In 2004, it was not at all clear that we were in the so-called 'housing bubble.' It did not become particularly apparent in our area until around 2007. Even then, it was very unclear how far values would fall here.

This was not isolated to Illinois. It was nationwide. The current slowdown is much more prevalent in blue states because you can no longer deduct SALT.

[chet everett]

Originally Posted by wase4711

what investment have you made in your life bigger than your home?
unless you bought a business, there is no larger one
yeah, the value of my 500k house went up from a low of 300 to the 340 I was able to sell it for; that was after owning it for 13 years..great recovery
as I said before, houses in certain areas of Chicago are selling, but, in the suburbs surrounding the city, its slow as molasses..
and, saying you'd rather live in Illinois than California is sort of like saying you'd rather live in purgatory then hell...neither is very desirable, IMO

Originally Posted by wase4711

I agree Damba; frankly, after 13 years, I felt the home should have at least come back to close to what I had paid for it; I wasn't trying to make money, just break even..after paying a mortgage for 13 years, and then having to sell at a major loss to get out of it shouldn't happen to anyone who buys a nice house in a nice area..

I know plenty about the broad Hinsdale market, it's been a focus of mine as I live immediately adjacent to it and have both owned investment properties there as well helped many buyers and sellers.

Currently Redfin rates the market as not very competitive for sellers, and I would generally agree. The specifics on what has happened over the past three month, which include the traditional prime selling season is sobering --

I do think that Redfin has reasonable standards for making this sort of conclusion, their "Compete Score" is based on the kind of data that experienced real estate agents have shared with buyers and sellers for many decades, nothing really new about this --

When it comes to the specifics of the Hinsdale market, or frankly any area where there is "diversity of demand" (which honestly is EVERY PLACE these days...) one must keep their focus of "location" as both a macro factor (includes things like schools, tax rates, overall reputation) BUT INCREASINGLY the "micro location" is taking on greater and greater importance. That means being adjacent to busy roads, undesirable commercial sections, having freight trains rumble through your backyard or too near to hospitals can all be huge mistakes. My mantra, "find the worst house in the nicest part of town and fix it up to standards that broaden its desirability" is more important than ever.

I completely sympathize with wase4711, and I have no desire to rub salt in the wounds they may feel about the loss they took. Neither do I doubt what happened to them was a real loss, nor do I have any desire to 'dox' the details of what happened in their specific situation. That said I do feel that folks need to understand that the price they sold for remains far below the median for the area and almost certainly is an illustration of why my mantra about location and 'worst house in best location' is especially importantly.

Lets look more closely at the where in Hinsdale the least pricey sales have occurred -- There are a handful of condos, a category of real estate that I have long advised against except in specific situations (like urban high rise, senior down sizing, or vacation setting), so those are not very relevant to the discussion. The fact too is despite tremendous negative pressure there is still a market for sites being sold for "land value" to developers or home buyers who want to do a tear down and build new in the right location, I'm not going to spend time in this post explaining why "dream homes" are generally a financial nightmare, but neither am I going to say it never makes to sense to build from scratch, though I know for a fact at least some of those "no picture / 'value in the land' listings have been rehabbed inexpensively and THAT might very well be way to sort "not flip yet" for savvy buyers who need a cost effective place to live. The rest of the homes are those that suffer from what even appraisers often deem "irremediable negative" that I already discussed. I gotta assume that was4711 is in the last category. If so the lesson is pretty clear -- "location always trumps every other factor".

Of course the "super macro" of location is ultimately even the hottest parts of Chicago are still very much in Illinois. Which brings up a sort of dilemma that I believe is going to basically spread to essentially every homeowner in Illinois very soon -- if one is faced with having no good choices in even the traditionally desirable parts of most "in demand" city or town, being forced to swallow unconscionably high taxes, does it make sense to buy a home at all when there is near absolute assurance that doing so will saddled you with poor resale prospects? I don't have an easy answer but given that all signs point to Illinois continuing to under-perform the rest of the nation due to the dominance of insiders. Given the somewhat unbelievable criminality that even the current Billionaire Democratic Governor's candidate resorted to in his effort to lessen the bite of property taxes Rex Huppke: J.B. Pritzker's toilet-yanking 'scheme to defraud' is just typical billionaire stuff | Commentary | fltimes.com and the large lead he maintains I would suggest things are likely get significantly worse before they get better...