What does it take to live in a nice suburb? (Chicago: for sale, condo)

[jman07]

Originally Posted by j33

listen here bud, I know how much money my own family made, what is your point.

To inform people and respond to your post.
I really just want my original question commented on. I'm open to more responses.

[j33]

fair enough, and I'll just leave off with the fact that labor these days isn't as rosy or lucrative as you are making it out to be.

.... carry on

[lisaurart]

Originally Posted by kirstenleigh

That does seem low. What year were those stats from? I find that data from the 2000 census is way off now, especially concerning housing. I can't speak for anyone else but I can tell you I live in Western Springs, and houses are very expensive here. Our 3,125 sq ft house cost $700k when we bought it two years ago. Our household income this year is $110k because I'm working part-time, but next year when I go back to full-time it will be almost $165k. We can afford our house because our mortgage is only $450k, but the property taxes are killer. We paid almost $11k last year. I know it could be worse, especially around here, but it's painful when my property tax bill is twice as much as my mortgage payment! I'd say household income has to be at least $100k to live anywhere decent.

Hi Kristen:
Interesting thread everyone---
I assume that one of the main reasons that people can afford the higher house prices is because they have been in this housing market with equity in their homes. Is that a correct assumption?That said, I agree with another poster, to most of the country 112,000 is more money than they will ever make. My husband is a chemical engineer and makes a high wage but we are coming with house money from the South so even with a high income the first down payment is tough. I realize the taxes are high to keep the schools at a high standard but I compare to someplace like Boston, where my sister lives, great schools, nice city, but the taxes are a fraction of the Chicago area taxes-- On a side note, I am a teacher as well, looking forward to making a decent wage for the first time in my career.

[oakparkdude]

Chicago has a disproportionate share of high-income earners relative to the national average. Think of all the highly-trained, highly-paid corporate lawyers, middle and upper level corporate managers, accountants, commodities traders, physicians, scientists , entrepreneurs etc who live here. A newly minted U of Chicago MBA or JD will make over 100K starting salary. If that person is married, you can double that household income. These people are taking jobs and living in Chicago, New York, and LA, not in Moline or Rockford.

On the one hand, its good that our region is attractive for these people, it ensures Chicago will remain a vital economic engine. On the other hand, it drives up the cost of real estate for everyone else. Its representative of the "winner take all" society that America is turning into. Those who are at the top do very well, and every one else stagnates or even loses. To make it even worse, government policies exacerbate the gap between the haves and have-nots.

[gardener34]

The older safe established suburbs are very expensive. What is making these areas in towards the city, skyrocket is the teardown mania, where they took houses that were maybe 1200 SF and putting a 6000SF house in it's place, that costs over 1 million. Sometimes they tear down two houses and build the mansion to fill both lots.

Leaving people who have college degrees and make just an average salary to go to the far suburbs, like oswego and plainfield and north aurora and crystal lake to get the new homes which are cheaper. but in my eyes, those areas will eventually get expensive too, because they are going to need school additions and road improvements because of sprawl.

I am aware that now the union construction tradesmen are under pressure because of the influx of low cost non-union labor from Mexico and Poland. And getting into the trades can be an extremely political process around here.

We make it fine in the burbs with both our salaries if we watch our spending and we do manage to save for retirement (never enought though). BUT if the property taxes continue to go up, we won't be doing fine that's for sure. They are getting ridiculous (Kane county).

[Steve-o]

Originally Posted by gardener34

The older safe established suburbs are very expensive. What is making these areas in towards the city, skyrocket is the teardown mania, where they took houses that were maybe 1200 SF and putting a 6000SF house in it's place, that costs over 1 million. Sometimes they tear down two houses and build the mansion to fill both lots.

Leaving people who have college degrees and make just an average salary to go to the far suburbs, like oswego and plainfield and north aurora and crystal lake to get the new homes which are cheaper. but in my eyes, those areas will eventually get expensive too, because they are going to need school additions and road improvements because of sprawl.

I am aware that now the union construction tradesmen are under pressure because of the influx of low cost non-union labor from Mexico and Poland. And getting into the trades can be an extremely political process around here.

We make it fine in the burbs with both our salaries if we watch our spending and we do manage to save for retirement (never enought though). BUT if the property taxes continue to go up, we won't be doing fine that's for sure. They are getting ridiculous (Kane county).

Well said. I think Hinsdale is the epicenter for this trend, been through there lately? Its stinkin hilarious.

[cottonwood2420]

Most areas cost alot of money in the Chicago Suburbs.

[BRU67]

It's a tough issue, no doubt. People nowadays will spend a greater percentage of income on housing than they were willing to, say, 20 years ago. Creative "loan products" such as short-term ARMs and interest-only loans has made it easy to buy more house than ever before. The old days of strict banks who would only offer people with 700+ credit scores 30 year fixed mortgages with 20% down and only 30% of income on housing are a thing of the past.

Of course, those who bought into the housing market prior to 2001 have a huge advantage in that they have a lot of equity to work with (in most areas that is). They too keep prices high in the most desirable areas.

First time buyers really have it tough. If you're risk averse and want to be in a "hot" area with good amenities, you can often get a small condo but there's so much building, and such a glut of condos now, that short term appreciation (i.e. < 7 years) is questionable. And if you have a family, that's probably out of the question anyway.

There are bargains out there in areas with potential but usually you have to take a chance, with some being more chancy than others. If you buy into an area with < $200k homes, it's a good bet that the area is also going to be attractive to low income buyers, who are faced with a smaller and smaller selection each year. Nothing wrong with being low income but it's a reality that this demographic creates challenges for the community's schools (a key for any real long term appreciation), may cause crime to increase, and won't draw the amenities that you need to have a decent quality of life. Ah, the joys of capitalism!

Interesting situation no doubt and one which I think most major metropolitan areas face.

[oakparkdude]

Originally Posted by BRU67

Interesting situation no doubt and one which I think most major metropolitan areas face.

I agree, its a national problem, resulting from long-term economic trends that skew against the interests of lower-income earners, exacerbated by poor government policies (recent tax policies, reliance on property tax for education, etc).

[trinity7774]

All those numbers go out the window for me!! I just get mad I didn't buy a house 6-7 yrs ago anywhere!!! All those people (like my parents) who bought a nice house in Elk Grove 20 years ago, are set...... They can make $70k in a household and live in a great area. Now us yougin's who can make $70k a year, can't afford to buy into those neighborhoods. I would need to make $150k a year to buy my parents house. So sad..... born at the wrong time. No wonder why so many move. Colorado Springs.... nice house $125-150k.