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I am looking to buy 2-4 flat in the city of Chicago in most likely Logan Square or maybe Bucktown area. I already own a 4-flat in Humboldt Park. I am also looking at WestTown. I have noticed prices have come down considerably, especially in Logan Square due to a high number of foreclosures and short sales. When do you guys see things bottoming out price-wise?
Also, what do you see as a bottom price-wise in the suburbs? I also have a rental in Itasca (townhouse) and wouldn't mind buying another property there in the future, probably a single family if I ever settle down and have a family.
Humbolt1, you gotta let me know which Bank loans you the money. Would be a great stock to short, no doubt!
By the way, how much At-A junk was used in Chicago? That will be a major factor over the next few years, personally I have no idea how much they were used in Chicago though.
We own a two flat in Bucktown. I read once, and can't remember where for the life of me, that apt buildings have not lost any value and possibly have risen in value because it is a heavy renter market. Since so few are buying and so many apts were converted to condo here during the boom there is more need for apts therefore making apt buildings more valuable. I have no idea how true this is and probably just one opinion but thought I would throw it out there anyway.
Apartment buildings in most areas are holding up better, but usually they are referring to things bigger than 4 unit buildings. Apartments with more units tend to make better investments. Are there really many 4 unit apartments in Chicago that were originally built as apartments? Or rather are they converted from houses? I don't see why a conversion would hold up in value much more than a house.
There are literally thousands of 2-4 unit buildings in Chicago that were built 1890-1930. Most of them are 2 flats with garden units in basements. Some of them are 3 flats with garden units in basement. There are also traditional 4 unit buildings, but way more 2 and 3 unit buildings.
To the poster with the 2-flat in Bucktown, prices are coming down. I have spent the last year looking to buy 2-4 flats in Bucktown, Logan Square, West Town, and even Humboldt Park (I am thinking of buying 6-flats there now as it is so much cheaper now). 2713 W Medill is the perfect example. It sold for $550M in Nov 05 and then after foreclosure sold Jan 08 for $390M. I believe this is typical. My building was bought July 06 (worst time possible btw) for $360M. I would expect it to sell for $325M today (though it appraised for $382M in Feb 08). I think in 12 months, it would sell for $300M. I am not looking to sell that building anytime soon, however and will most likely hold it for at least another 5 years as I have good tenants that pay my bills on the property. I will most certainly make a much better buying decision on my next property.
Humanoid,
Any bank will loan me money with 20 percent down, 800 empirica and good debt/income ratios. I am a single guy with no kids, no credit card debt, no school debt, no car loans, no medical bills, etc. Getting a loan is not the problem. Finding the right property is.
Well Humboldt1,
According to the Case-Schiller Report, the Chicago area has been floating around 150 for the last 3-4 months. Also, the OFHEO reports shows the East-North Central region to be bouncing around pretty much no change for the last 3 months with a total drop of -1.15% (Y/Y) for Chicago/Naperville area. Affordability has reached back to mid 2005 levels according to the HOI.
For older areas, I think most of the apartments units your looking at, they should of had less distressed/sub-prime financing in the last 5 years... so prices should follow more with the OFHEO reports (since the reports track sales from conforming loans).
I agree with the others that you'll have to see how much poor financing was issued in the last 5 years to determine whether or not the Chicago market is just delayed, or if the markets are regaining stability.
If there wasn't much sub-prime/option ARM financing in the areas your looking at, then I'd think the prices in the area will behave pretty normally. You'd probably get better prices during the winter when no one really wants to buy/sell.
This is an interesting note from the bloomberg report, from the Conference Board on Consumer Confidence:
"Past declines in house prices may be spurring higher demand. The Conference Board said more consumers plan to purchase a house in the next six months than any time since March."
Well Humboldt1,
According to the Case-Schiller Report, the Chicago area has been floating around 150 for the last 3-4 months. Also, the OFHEO reports shows the East-North Central region to be bouncing around pretty much no change for the last 3 months with a total drop of -1.15% (Y/Y) for Chicago/Naperville area. Affordability has reached back to mid 2005 levels according to the HOI.
For older areas, I think most of the apartments units your looking at, they should of had less distressed/sub-prime financing in the last 5 years... so prices should follow more with the OFHEO reports (since the reports track sales from conforming loans).
I agree with the others that you'll have to see how much poor financing was issued in the last 5 years to determine whether or not the Chicago market is just delayed, or if the markets are regaining stability.
If there wasn't much sub-prime/option ARM financing in the areas your looking at, then I'd think the prices in the area will behave pretty normally. You'd probably get better prices during the winter when no one really wants to buy/sell.
This is an interesting note from the bloomberg report, from the Conference Board on Consumer Confidence:
"Past declines in house prices may be spurring higher demand. The Conference Board said more consumers plan to purchase a house in the next six months than any time since March."
-chuck22b
Thank you Chuck, for doing my homework for me. Humboldt and KCfromNC, apply this to my last post on the "don't buy" thread.
Last edited by fairmarketvalue; 08-26-2008 at 11:59 AM..
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2012 housing bottom?
