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Old 02-23-2011, 01:33 AM
 
143 posts, read 438,755 times
Reputation: 72

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Possibly because the following:

1. city population has decreased by 200,000 over the past decade, and is projected to become the 4th largest city in the next 5 years, overtaken by Houston.
2. grim unemployment picture, with unemployment rate above national average, and many underemployed.
3. city and state budget crisis on the horizon, possibly headed for bankruptcy, more taxes possibly?
4. Over-reporting of previous home sales by the national association of realtors. Actual market condition may be a lot worse.
5. Large shadow inventory, unsold condos in downtown, lakeshore east, river north etc, more home owners going into foreclosure.
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Old 02-23-2011, 03:35 AM
 
Location: Austin, TX/Chicago, IL/Houston, TX/Washington, DC
10,138 posts, read 15,948,941 times
Reputation: 4047
Quote:
Originally Posted by smallvillejane View Post
Possibly because the following:

1. city population has decreased by 200,000 over the past decade, and is projected to become the 4th largest city in the next 5 years, overtaken by Houston.
No, because Houston is 600,000 people away from being the 3rd largest city and in a good decade (for Houston) it has only added a maximum of 330,000 people. I don't think it will be adding 600,000 at all anytime soon.
Quote:
Originally Posted by smallvillejane View Post
Possibly because the following:

2. grim unemployment picture, with unemployment rate above national average, and many underemployed.
No it's not, its actually below national average and has been that way for 3 months now. Chicago's economy compared to national average has stabilized, in fact Atlanta, Los Angeles, San Francisco to name a few other big cities have a far worse unemployment than Chicago.
Quote:
Originally Posted by smallvillejane View Post
Possibly because the following:

3. city and state budget crisis on the horizon, possibly headed for bankruptcy, more taxes possibly?
Yeah except New Jersey, New York, California are all doing worse. It's the norm, almost everywhere is doing terrible, its not exclusive only to Illinois.
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Old 02-23-2011, 05:14 AM
 
Location: Chicago
4,085 posts, read 4,304,849 times
Reputation: 688
"is chicago drifting towards another 10-15% drop in home prices in 2011?"

If I knew I sure would not tell anyone on here.
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Old 02-23-2011, 10:05 AM
 
11,289 posts, read 26,073,473 times
Reputation: 11353
Quote:
Originally Posted by smallvillejane View Post
Possibly because the following:

1. city population has decreased by 200,000 over the past decade, and is projected to become the 4th largest city in the next 5 years, overtaken by Houston.
2. grim unemployment picture, with unemployment rate above national average, and many underemployed.
3. city and state budget crisis on the horizon, possibly headed for bankruptcy, more taxes possibly?
4. Over-reporting of previous home sales by the national association of realtors. Actual market condition may be a lot worse.
5. Large shadow inventory, unsold condos in downtown, lakeshore east, river north etc, more home owners going into foreclosure.
What are you talking about? Houston isn't going to grow by 29% in the next 5 years when it only grew by less than 8% in the past 10 years.

The Chicago unemployment rate is below the national average.

I'm curious where you got your point #4, since the first two were just plain made up.

LOTS of places have unsold condos, and Chicago is certainly not the worst in this category. It's actually come down a lot in the past year or so if you actually read actual data on the subject and not just post random words.
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Old 02-23-2011, 11:01 AM
 
Location: Tower Grove East, St. Louis, MO
12,063 posts, read 31,491,703 times
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Just because I'm curious, how would realtors over report home sales? That's some pretty easily trackable numbers right?
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Old 02-23-2011, 05:16 PM
 
Location: Humboldt Park, Chicago
2,686 posts, read 7,843,385 times
Reputation: 1196
I think Chicago home prices may drop another 10 percent over the next year.

I think 200,000 folks leavoing did negatively impact Chicago as a whole but many of the more desiravle neighborhoods such as Lakeview actually added people.

I am still looking to buy another place in Logan Square. Humboldt Park just has too far to go though I will keep my place as it does cashflow.
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Old 02-23-2011, 09:45 PM
 
98 posts, read 96,432 times
Reputation: 28
Quote:
Originally Posted by Humboldt1 View Post
I think Chicago home prices may drop another 10 percent over the next year.

I think 200,000 folks leavoing did negatively impact Chicago as a whole but many of the more desiravle neighborhoods such as Lakeview actually added people.

I am still looking to buy another place in Logan Square. Humboldt Park just has too far to go though I will keep my place as it does cashflow.
A 10% drop can very well happen here. Most deals in the city are short-sales and REOs...huge oversupply of condos (real disasters and real hard to get financing on)...the 200,000 population loss only contributes to real estate problems in more than one way: fewer buyers and more less desirable people getting into once stable areas becoming unstable with people leaving...who will rent the apartments and buy the homes?

Prices here are off 7.5% in a year so 10% is a possibility...
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Old 02-24-2011, 10:34 AM
 
Location: Tower Grove East, St. Louis, MO
12,063 posts, read 31,491,703 times
Reputation: 3798
^But I have yet to see any evidence that it was stable neighborhoods where we are seeing major population drops.
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Old 02-24-2011, 11:22 AM
 
Location: Denver, CO
818 posts, read 2,162,006 times
Reputation: 329
For a 10-15% decrease to occur in a single year, wouldn't some kind of a tipping point need to be reached, or some kind of event need to occur? The '07-'08 home value correction occurred relatively rapidly due to a tipping point being reached with the number of foreclosures related to ARM adjustments. I am just wondering if you see any particular event occurring to cause home values to decline. Obviously we have the population decline and the state tax hike, both of which will put downward pressure on prices. Some formerly stable neighborhoods are becoming unstable, and prices should decline rapidly there. However, some neighborhoods are actually benefiting from gentrification, and, those near the train lines, higher gas prices, which makes public transit access more of an asset. I can see prices still increasing in these places, especially those that actually did see population increases in the census. Do you see another round of foreclosures, a state/county/municipal debt default, or some other economic factor causing a sharp decline? Otherwise, I see a decline more on the order of 3-5% city-wide, with a good amount of variance by neighborhood.
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Old 02-24-2011, 02:52 PM
 
80 posts, read 267,121 times
Reputation: 52
With the shadow inventory that is waiting in the wings and the difficulties with financing coupled with a weak economy we could easily see still lower prices. You never know when a market will make a bottom but when prices get below replacement cost it might be better to be a buyer than a seller.

I like the Logan Square area as well but I'm not sure I want the work involved in managing a building. So far I've stuck with buying three condos for cash. When it comes to REO properties having cash seems to make a big impression on sellers who have seen deals fall through time after time on financing issues.
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