Sobering statistics about IL property tax (Highland Park, Wilmette: rent, mortgage, loan)

[MSchemist80]

Originally Posted by JonhE

Our plan is to stay for 4-5 years while kids finish high school. I like the idea of buying over renting.

You would be crazy to buy a house with the intention of staying only 4-5 years. Even if housing prices rise normally, which I highly doubt they will here, you will not break even with the transaction costs until at least 7 years.

[JonhE]

That is one of my worries. Renting is an option for us also. Didn't check Wilmette rentals yet, but Lake Forest there are not that many for rent. We are looking at the lower end of the price spectrum in these areas with the thought (hope) that they would be easier to sell later.



I think I read a stat somewhere that the average "owner" stays in a house about 6 years.

[Hiruko]

Originally Posted by JonhE

That is one of my worries. Renting is an option for us also. Didn't check Wilmette rentals yet, but Lake Forest there are not that many for rent. We are looking at the lower end of the price spectrum in these areas with the thought (hope) that they would be easier to sell later.



I think I read a stat somewhere that the average "owner" stays in a house about 6 years.

North Shore agents typically take between 5% and 6% combined commission. There is also a real estate transfer tax here. Keep that in mind.

[DougStark]

Originally Posted by JonhE

That is one of my worries. Renting is an option for us also. Didn't check Wilmette rentals yet, but Lake Forest there are not that many for rent. We are looking at the lower end of the price spectrum in these areas with the thought (hope) that they would be easier to sell later.



I think I read a stat somewhere that the average "owner" stays in a house about 6 years.

If I was in your shoes, I'd rent a nice apartment near your job for 6 years, then get out of Dodge...

[MSchemist80]

Not to mention the stress, physical, and emotional toll of buying and especially selling a house. If you can rent and come out financially ahead that is a good way to go.

<10 years
renting is the better choice financially, flexibility wise, and convenience wise.

You can play with this calculator
https://www.nerdwallet.com/mortgages...buy-calculator
Remember to go to more options and increase property tax to 2.5-3.5% and home appreciation probably 1% is generous for Illinois.

[damba]

Originally Posted by JonhE

That is one of my worries. Renting is an option for us also. Didn't check Wilmette rentals yet, but Lake Forest there are not that many for rent. We are looking at the lower end of the price spectrum in these areas with the thought (hope) that they would be easier to sell later.



I think I read a stat somewhere that the average "owner" stays in a house about 6 years.

Keep on doing the research/math carefully before diving in. If your kids were still in elementary school and you were dissatisfied with the quality of your local middle/high school, then perhaps you could break even on a fixer upper in the north shore and get them in better schools. A shorter time frame though, even doing all the upgrades/labor yourself would likely still lead to a small loss. YMMV

[JonhE]

Hi Damba, Thanks for the advice. Been looking at homes to buy recently. Regardless of what others have replied with, property taxes are having a big effect on prices. Wondering if demographics (age) is also starting to become a factor in the nicer areas. There are some good deals out there right now (in some cases one can purchase a home for the same price as 1998). Rents seem to be about $1000 more per month than you would get by purchasing. This is in the $450k-750k range.



Illinois suburbs still have some of the best high schools in the country so my thought is we might as well stay the extra 4 years. Is the rest of the country now becoming a buyers market as well? I missed out on an job opportunity in Austin about 4 years ago (homes there have gone up about 20-40% since). I will probably start to look at rentals now also.



5% commission on 500k is 25k (realtor fees) which is about 250 a month over 4 years. One would think that Illinois homes would not go down that much more in price.

[Hiruko]

Originally Posted by JonhE

5% commission on 500k is 25k (realtor fees) which is about 250 a month over 4 years. One would think that Illinois homes would not go down that much more in price.

That's a significant amount of money for most people to have in their pocket...Perhaps you are a Walton?

[ngrome]

Yet property values are still rising...

[wase4711]

they are still no where near where they were before the crash, in most areas..certain hot spots in Chicago are appreciating faster than the run of the mill suburbs..