Bad time to buy? (Chicago, Lincoln: sales, real estate, 2015)

[Needahomefast]

ToriaT

While I undeniably have limited knowledge about home ownership. I agree with all of your points. Mortgage rates are low so I'd like to capitalize on that for sure. My intention would be to stay in the home (whether in Chicago or elsewhere) 20 years. I'm ready to be part of a community an not just rent anymore. My goal is to own a home in 2017. Just doing all the reading I possibly can on the future of the Chicago area as possible so I feel informed. Thank you.

[ToriaT]

The only thing I would say is don't be overly swayed by the pessimistic opinions you read on hear because some people really have a dim view of the future. Go in with eyes wide open and do research but don't let it paralyze you.

[chet everett]

Originally Posted by ToriaT

The only thing I would say is don't be overly swayed by the pessimistic opinions you read on hear because some people really have a dim view of the future. Go in with eyes wide open and do research but don't let it paralyze you.

I freely admit to being pessimistic about the region's future. That said, if the OP has solid employment prospects and is fairly well connected to other avenues that would allow for them to maintain current income levels even if their employer leaves the region that goes A LONG WAY to offsetting general negative outlook.

There are some firms in the region that are unlikely to ever completely shutdown their operations and if the OP is connected to them even tangentially that ought to be a pretty solid path to longer term stability -- worst case scenario one can look at folks that have survived wave after wave of downsizing in Detroit and there are still folks that get a paycheck from GM, Ford or Chrysler, some of them pretty darned happy to be part of what still a major component of the overall US economy. There are similarly some firms here that are exceedingly unlikely to ever completely "turn out the lights" on their Chicago regional operations, if the OP is a well respected member of such an organization that is very different than being part of some field office that could just as easily be run with a 10th the staff, and all of them connected not to a costly office with pingpong and foosball but on a very tight leash with slackbots reporting their every actual revenue generating meeting to a micro-manager in San Francisco...

[King Harold]

Personally I think the best thing to do in Chicago is to rent.

Chicagoland suburbs, IDK. I look at the price history of some of the homes in the cheap suburbs and they are like a sine wave. 150, 250, 89, 150, now selling again for 250. That's just in the past 10 years. Of course the yuppie suburbs probably hold steady. Even then I am not so sure. You can probably pick up Michael Jordan's house in Highland Park in a few years for 800K. I am still kicking myself for not buying the Ferris Bueller house.

[chet everett]

Originally Posted by King Harold

Personally I think the best thing to do in Chicago is to rent.

Chicagoland suburbs, IDK. I look at the price history of some of the homes in the cheap suburbs and they are like a sine wave. Buy for 150, sell for 250, sell for 89, buy for 150, now selling again for 250. Thats just in the past 10 years. Of course the yuppie suburbs probably hold steady. Even then I am not so sure. You can probably pick up Michael Jordan's house in Highland Park in a few years for 800K. I am still kicking myself for not buying the Ferris Bueller house.

If the OP is considering a town that has any "boom cycles" they should be aware that often there are similar cyclic "busts".

In contrast, many of the towns that fared best through the last catastrophic real estate implosion are currently at or above previous highs. The areas that are largely "built out" are more likely to be resistant to downward pressures than those that still have enough space for development / redevelopment for major shifts in the overall kind of housing that is available...

With a budget of $400k the obvious suburban targets that are mostly immune from major shifts can include towns like Wheaton as well as Oak Park, there are major differences in kinds of options each area has around the target price, but either could be a good solution to avoid the boom/bust roller coaster...

[via chicago]

Originally Posted by ToriaT

I certainly would not invest in the stock market before you buy a home for your family. The stock market gains can be lost in a day....of course if you are a long term investor you will likely see a rebound.

My family are not renters and we have owned many homes and properties and never lost on any of them.

1. Stay for the long term -- five or preferably more years
2. Single family homes fair better than condos or townhomes
3. Buy when mortgage rates are low
4. Don't buy at the top of the market
5. Always get a thirty year fixed mortgage...don't gamble with adjustable rates etc.
6. Buy in a good area
7. buy within your budget even it the bank says you qualify for more.
8. Keep your property up once you own it.

Well FWIW the stock market has provided better returns than real estate over the long run.

With the disappearance of pensions and the power of compounding interest, young people would be well advised to pay themselves first in the form of heavy contributions to 401ks, etc, certainly before buying a house IMO. (im not talking about day trading or "play money" tho, im talking about buy and hold for 40 years)

Also, to your 4th point, no one knows where the "top" is. Thats trying to time the market, and its a fools errand. As others have said, none of us have crystal balls. Prices might continue to rise for another 10 years. Who knows. And in the deepest recesses of the recession, Im sure most people didnt think we'd be where we are in just a few short years.

But I agree that staying for the long run, both for stocks and real estate, is the way to go. And even better, living below your means.

[EffortPoaster]

Piggybacking on this thread, what do people think about buying in areas like Beverly and Mt. Greenwood? Based on Zillow estimates some very nice houses seem relatively cheap ($500-800k) compared to what those homes would cost in the North Shore area or certain suburbs, and there are many houses in the $300-400k range.

I was raised on the Southside and may look to buy in the next few years, so I really wouldn't mind living in that area. In fact, when I was a kid Beverly had a certain Southside aura to it and that was where the super rich people lived (at least in my upper lower-class to lower-middle class little world). My income and savings allow me to look in the nice to very nice house range in those areas, but I'm kind of out of my element when looking at home prices.

Anyways, what do people think of the prices in this area? Too high? Too low? Prices driven down due to Southside reputation and the neighborhoods not necessarily being "hip"?

[chet everett]

I was down in the area this past Saturday, while the rain was coming down. Might've had a hankering for my favorite multi-flavor frozen treat... Rainbow Cone -- FAQs

I guess like anything else there are some folks that have an attachments to the area but I could not help but think that anything that happens with UofC building more beds for high value cardiac treatments and similar things (along with the money losing adult trauma center they've agreed to build...) will make the relative profitability of Little Company of Mary and Advocate / Christ Hospital more challenging. Those are HUGE factors in why folks live in those areas and the "domino effect" that might come with cutbacks or shifts in those areas would have major repercussions... Illinois Healthcare Facilities Board Raises Questions Over UofC Expansions

I'd wait to see how that plays out...

[ToriaT]

Michael Jordan's house in Highland Park is a monstrosity in my opinion an many others. Its not hard to see why it has not sold. It should not be an example or bellweather of the real estate market. There is a monstrosity house near where I live and its been vacant for years. IT looks like a faux Versaille Palace met a southern belle mansion. Nobody wants this expensive piece of c__p.

[King Harold]

Of course the Jordan estate is a monstrosity but I guess my point was not that it is a bellwether of the Chicagoland RE market but that there aren't any bellwethers.