Why is Chicago's real estate market so affordable?? (crime rates, how much)

[LovelySummer2020]

I've been binge watching HGTV episodes and I've noticed that Chicago has beautiful affordable homes, in relatively good areas of the city. This is astounding to me, because most major cities are simply too costly for middle income persons, even if you make a good six figure income, because more often than not, the properties are well over 700K.

I will admit that I don't know much about Chicago, since I'm from the Northeast (NY), but after viewing the inventory of homes available and the price points, it seems like Chicago is a wonderful place to purchase property, if one enjoys city life and the cold. Honestly, I can do without the cold, but I'm curious as to your take on living in Chicago. I loved visiting, but of course I visited during the lovely summer months...

I currently own a home in NY, which I plan to keep, but I'm thinking about heading down to Chicago, and learning more about your wonderful city, (and possibly purchasing real estate).

The homes featured in the below video are amazing for the price-point!


https://www.youtube.com/watch?v=tFXZcKmZCLQ

[Brian_M]

It's simple market economics... lots of supply + little demand = low prices. The fact that someone in Chicago is shot every 2 hours and 26 minutes, and murdered every 12 hours and 48 minutes probably has nothing to do with the low demand.

I'm sure that perspective comes into play as well, NY doesn't exactly have the cheapest of housing.

[MikeMak27]

Property tax rates are very high in the Chicagoland region. Many homes that are worth 200k have tax bills of 6k or more a year. These high rates help keep housing more affordable. Additionally, massive pension obligations will likely cause further hikes in property taxes, so that has caused investors to be skittish becuase they do not know how much higher they will go (possibly 5-6% of a Homes value may happen within a few years).

[LovelySummer2020]

Originally Posted by Brian_M

It's simple market economics... lots of supply + little demand = low prices. The fact that someone in Chicago is shot every 2 hours and 26 minutes, and murdered every 12 hours and 48 minutes probably has nothing to do with the low demand.

I'm sure that perspective comes into play as well, NY doesn't exactly have the cheapest of housing.

Well obviously the crime is not occurring throughout Chicago. 95% of the crime occurs only in certain pockets of the city --that tend to be very impoverished.

Have you ever visited Chicago?

[prhill]

Originally Posted by LovelySummer2020

Well obviously the crime is not occurring throughout Chicago. 95% of the crime occurs only in certain pockets of the city --that tend to be very impoverished.

Have you ever visited Chicago?

It used to be that way but the crime has spread all over the city now more and more

[DougStark]

Another major factor. Read article:

Chicago area leads U.S. in population loss, sees drop for 2nd year in a row - Chicago Tribune

[BRU67]

Originally Posted by MikeMak27

Property tax rates are very high in the Chicagoland region. Many homes that are worth 200k have tax bills of 6k or more a year. These high rates help keep housing more affordable. Additionally, massive pension obligations will likely cause further hikes in property taxes, so that has caused investors to be skittish becuase they do not know how much higher they will go (possibly 5-6% of a Homes value may happen within a few years).

That's true but taxes don't make homes more affordable. They just shift more of the percentage people pay for housing to the government.

[Vlajos]

Wait, all I ever hear is how expensive housing is here. I'm really confused.

[Brian_M]

Originally Posted by LovelySummer2020

Have you ever visited Chicago?

Yup, not a place for me and I highly doubt I'll return. Don't worry though, it's not Only Chicago, I'm not a fan of urban areas the world over. My limit seems to be about a half-million total area population.

Meanwhile, I think I just saw that NYC, a city 4 times (or more) larger, has had less than half the murders of Chicago?

Even if the crime Isn't everywhere, who wants to be associated with the city that has the highest homicide rate in the country? That's just not something with which a sane person wants to be associated.

Sorry, I know some people hate it and feel stuck because they grew up there, have family there. But it's a Really hard sell for the rest of the country.... it's like saying you're going to move your kids to the SE for the public schools. Or Fairbanks, AK for their even and moderate climate.... But the bottom line is that it IS a part of why there's a ton of housing supply and very low demand. Not all (wow at those tax rates!), clearly, but to dismiss it is to cast into doubt the validity of your opinion.

[Vlajos]

Originally Posted by prhill

It used to be that way but the crime has spread all over the city now more and more

No it hasn't. Look up historical crime rates. The vast majority of the City is safer than ever.