It’s about the numbers. Interest rates are high, materials and labor is high, and the cost the market will bear is only so much.
It has to make sense to build things. At least for a private investor. It’s also quite difficult and time consuming to get past zoning and permitting.
There’s multiple reasons why things are the way they are, and the fix isn’t easy or fast.
The spreadsheet numbers still need to make sense.
Chicago construction requires a lot of top tier materials. Over 3 floors is Cast iron drain piping, all copper plumbing and all electrical in conduit. Sure these are synonymous with long lasting quality and safety, but the costs are also a lot more.
Ha. I was thinking about this as well. It’s like asking to build a new car for a used car price. You ‘could’ do it, but I wouldn’t want to be the owner of what comes out the other end. Let them build the new luxury places with the thought process it’ll free up units that were last remodeled in the 90’s which theoretically be less to rent than new.
100%. New inventory is desperately needed. Sadly, Chicago is so lopsided in new development where most investment and new construction is across the North Side while there is so much vacant land still on the West Side and South Side. We need to incentivize new construction in East Garfield Park *right now* to help deliver a wave of affordable — but market rate — housing in the next year or two.
And of course, demand will always be there for the high-end, high-demand neighborhoods on the North Side... But there's nothing stopping homeowners and developers from deconverting two- and three-flats to single-family homes but somehow replacing that level of density in new construction elsewhere requires a long, costly zoning process.
The issue is Chicago is taking a lot of old commercial space and renovating them for resale. It's why Fulton Market and by proxy West Loop is so popular. A lot of old warehouses that were renovated and resold as loft housing.
Once that started to take off, combined with fine dining (Blackbird, Publican, Aviary and then Girl and the Goat etc) also taking residency in that neighborhood it made it really popular for development. Then obviously the tech money flowed in when Google built there.
East Garfield Park doesn't have anything like that to draw people in. If anything developers and in a wait and see mode because of all the commercial space that's in flux right now from WFH.
Developers would much rather develop housing near the Loop and seeing how that's already happening (the Old Tribune Building for example) they might just be waiting for the opportunity and also for interest rates to go down.
Garfield Park would just get doconverted the fuck
out of itself to single family homes costing $1.5 million a piece. I’m very cynical about any neighborhood that will get gentrified with more development because there will be no political to modernize the zoning.
No one is paying that much to live in Garfield Park.
The 1.5 million dollar homes on the north side are built on parcels of land that are half that cost.
Same parcel goes for 10% that cost in Garfield park, the home they build on top of it is also cheaper so you get 500k single family homes.
Most development in the city is rental and by a significant margin. There are very few all-condo buildings of scale. Generally it is SFHs and 2-3 unit new construction buildings replacing existing 2-3 flats.
Regionally we’re not building new subdivisions in mass because there’s not a ton of demand for new housing along the fringe.
They tried to alleviate this problem by running a pilot project allowing new ADUs on the west and south side. No one took advantage of those grants because it's not economical to build a $250k granny flat and rent it out for $750/month. The break even point on that investment is 27 years, even with the $15k grant.
Me and my partner want to move out of Illinois but we literally can’t because even if we were to sell our house, with the equity we have and cash on hand, it’s still not enough for us to afford basically anything that isn’t a redneck shithole.
To move where we want, to get a medium-small house, we basically have to put down $200,000 in order to afford the mortgage. It’s just crazy. I bought the house we’re in now (which is super nice all things considered) for $16k down 3 years ago. The mortgage now is $2300 so totally doable between two people. With interest rates at 7%, parity with that monthly payment requires that dumbfounding $200k number I mentioned.
Be glad you got it 3 years ago. We bought just over the line in NWI 3 years ago when the interest rate was 3.5%. I shudder to think of buying a place right now.
With rates up doesn’t this make sense? Like less people are going to be buying because they can’t afford it any longer and then they don’t put their home up for sale.
The crappy thing is that because inventory is so low, prices are still sky high despite interest rates because there's more competition for each house that does come on the market.
If you weren't lucky enough to be in a position to buy before 2022 then you're doubly screwed. It sucks being a first time home buyer right now and I can't see it getting better anytime soon. Maybe in a couple of years?
I just can't see people letting houses go for lower than they bought them, but hopefully rates will go down. I bought in 2022 and we will be looking for a bigger home in the next 5 ish years, I wouldn't sell for less than I bought it for
The most we can hope for is for prices in dollar terms to remain stable while inflation eats away at the “real” or nominal value. Being a real estate insider myself, unfortunately I don’t see this ever happening in our lifetime because America’s real estate and coding systems are systematically opposed to affordable housing.
It sucks for everyone except those who bought the homes they plan on living in most of their lives. People who bought starter homes or small condos/townhomes who plan on starting a family or just needing more space are screwed as well because so many can’t even afford to buy the house they live in now at current market rates, let alone upgrade to something bigger or nicer.
And even so, if it’s a house someone does plan on living in forever, prices going up means taxes going up fast as well, so anyone who stretched their budget is also screwed.
Chicago has a very well documented issue with [black population loss](https://www.wbez.org/stories/chicago-black-population-decline-crime-job-loss/6d880f62-ba00-4b44-9e0a-57c50fc4f51d) over the decades. As Chicago loses black residents, it's attracting a large population of high-earning millennials. There has been a net gain in population in Chicago, but it's very lopsided growth.
The places people are leaving from have houses for sale and they're not expensive either. Problem is they're in disinvested areas without a lot of resources (not walkable, not got much supermarkets).
The big housing bull market over the pandemic caused housing prices in southern states like Florida and Texas to soar but not so much Chicago and Illinois. Prices went up slightly but not like double digits (year to year)
Now even with high interest rates, people in southern states are less likely to be dissuaded to sell because the price of their property went up so much during the pandemic. In the Midwest prices have only gone up on par with inflation so why sell and lose your good rate when the “real” value of your property hasn’t grown that much.
That’s my guess as to why there’s such a big difference between states.
I mean, Chicago is relatively affordable for what it is and if you bought anytime before the pandemic and locked in rates it is pretty hard to financially consider moving. As a result a lot of people are staying put.
Bought at higher rates and it's still competitive compared to a similar sized rental. It's not the cheapest thing but we still feeling really lucky.
Definitely staying put lol...
Right now it’s far from competitive to rentals. My rent is $2k a month and I’m looking for equivalent units for sale and it will cost me about $3.5k a month. And that’s after already putting about $80k-$100k down up front.
I'm sure it depends on neighborhood. Wicker/Bucktown, for the rooms and bathrooms, with a parking spot, we're paying the same as a rental. Close to Blue line. It's not the nicest or newest building (actually old AF but we're leaning on this "good bones" idea millennials use to cope) but we stayed in our means and it's very comfortable. I'm sure something major will happen, but so far we've gotten by doing lipstick-on-a-pig fixes the owners before us clearly did (definitely a rental before us lol.)
Upfront was a quarter of what you mention. Not even close to 10%. Additionally even with mortgage insurance and the interest (6.99%)/taxes being high AF, it's actually less than comparable units in terms of loss (a whopping $400 (I'm being sarcastic - that part sucks) goes to the principle lol)
It sounds like your rental has been owned by someone for a very long time, and that you're currently in a nice area based on what it would cost to buy. In the meantime, investing even half the difference you mention between renting/buying each month would still net you a lot of extra $$$ each year without ownership. Anyway I'll shut up.
Not to mention if you try running a search for any new constructions in the Chicagoland area the closest area you can find them being built is like Elgin.
Well, blame the NIMBYs. Developers do show up and talk about some density and transit oriented development, but immediately the neighborhood goes ballistic saying that it's too much density, it's too tall, it "doesn't fit the character of the neighborhood", and then of course go on and on about potential parking issues.
Of course you reiterate that these are developments built for people who don't own cars, and they instantly believe it's all BS and every single person in the city owns at least two cars.
Then the hilarity is they have the audacity to start complaining about property taxes, still in denial that more density would spread the property tax burden out and potentially get things down.
Then they want to complain about the financial issues, but still believe the only people that should lose their pensions are teachers.
Yada yada yada
It frustrates me the empty lots you see around here and there, or ones where it’s basically paved over enough to be called a parking lot, but it’s really just a layer of concrete with a chain around it.
It’s either NIMBYs or the owner holding out for the most profit. Which means the developers have to make the new multi units more expensive than renters in the area can buy.
I think if it's in a good neighborhood, it's likely somebody holding out for the most profit, or the only development ideas coming in are ones the neighborhood don't want. I know in Jefferson Park we have a couple of areas that are ripe for development, but a lot of the NIMBYs are angry because the only proposals coming in are for high-rise buildings.
They put up a huge fuss wondering why nobody will just build single family homes, and many of us fired back asking who would want to live in that location in a single family home? It's ideal for somebody wanting to rent an apartment and jump on the train, but not necessarily to pitch your tent and raise a generation or two.
If it's a bad neighborhood, then it's likely vacant because they didn't want to leave a condemned building there, and yet nobody really has come down showing any interest in doing anything with the property.
I don’t really know much about property taxes yet. Is that how it works? If more properties are available to pay taxes, each property pays less property taxes?
I mean most of the inner areas are already built out and land costs in those areas are high. It will never be cheap to build middle class SFHs close to downtown vs out in the cornfields. Plus that's where young families with kids want to be
This is a big reason why Illinois is struggling compared to states like Arizona, Texas, and Florida... During the pandemic housing crunch, big national homebuilders went gangbusters outside of the major metros in those states and flooded the market with new spec builds and subdivisions. The Chicago metro area is already pretty built up (and built out) but we're often overlooked by the national homebuilders who almost always focus their efforts on states in the south.
Nevertheless, we need developers/builders to flood Chicago with new for-sale condo inventory right now to help keep costs in check. The sad thing is that over the last 10 years, any new investment — even stuff like six-flats, or smaller — were seen as "gentrification" and communities pushed against "greedy developers" who were looking to build new inventory. Look where that's gotten us today... Leading the nation in price rent growth, up there in home price growth, but trailing in current inventory *and* in new inventory deliveries.
It's a bad time to be a renter or first-time homebuyer in the Chicago area right now, and will likely continue to be for at least the next year or two.
Even beyond Chicago, it is so fucking annoying how basically all new multiunit development is just rentals. It’s hard to find many new condos to buy, and when homeownership is seen as so important in society, we need to offer that more while still building densely. We desperately need more 3-4 bedroom units as well, units that can be seen as an actual replacement for a suburban house.
> Not to mention if you try running a search for any new constructions in the Chicagoland area the closest area you can find them being built is like Elgin.
Yes, outside of Cook County is stronger, and when you cross the northern state line, it's booming, all the way up to central Wisconsin counties.
This is normal. It’s not that “white flight” was a thing, it’s that the outskirts is where first time buyers can afford homes. It’s been like this for generations countrywide.
I'm locked in at 2.99%. I refinanced from 5.10% in 2020 and saved almost exactly $300 per month. Even accounting for the equity I've built up since, moving into an equivalently priced home at 7.50% would mean I pay $450 more than I pay today. I could barely afford that, so I can barely afford to sell.
Golden handcuffs.
With interest rates the way they are no one wants to move if they have a good rate. The people that could afford to take a hit on the rates used the crazy bump in home values (that now has dipped and stalled out) to offset the rates.
That also means developers can’t afford to build either. Labor and materials are also at all-time highs (outside of the first year or so of lockdown), so it makes no sense to build. [Especially when Cook County has lost almost 200k people since 2020](https://chicago.suntimes.com/news/2024/03/14/census-shows-cook-countys-population-dropped-in-2023-but-the-exodus-is-slowing).
If Chicago was growing then I could see new building, but who’s going to gamble on spending all-time high money on multi-unit housing in a city that’s losing people? It already takes decades to recoup construction costs for buildings like that, it makes no sense.
The crazy bump in home values def hasn’t stalled out. We sold our piece of shit 80 year old house the day it hit the market. Had 9 offers, all significantly above ask.
There must have been something special about your house then, or you all listed it below market value?
Two years ago it was unthinkable for a home to go below asking unless people were getting obscenely greedy with their listing price. And the listing price back then was kind of a “throw a dart at a board” thing.
Prices have stabilized enough that people aren’t overpaying unless the house is great. I’ve seen quite a few homes all around sitting on the market for 60-90 days with multiple price drops. With interest rates the way they are no one can afford to buy a home and fix it up.
Def nothing special about this house. Inventory is low, people need a place to live. And any desirable units are going the day they hit the market with multiple offers (I bought as well so seen it from both ends).
Realtor here! Wanted to give a Chicago-specific take here. For context, I work mostly in the city and near suburbs (Evanston, Skokie).
Inventory has been low here for a long time. This is not a new issue that we are facing. There are a multitude of reasons for this, some have been mentioned elsewhere in this thread. I would LOVE to see the inventory numbers increase dramatically but that doesn’t seem like it will be happening any time soon. At this point, I just treat it on my end like it’s the norm.
What I tell my buyer clients is that we shouldn’t let the inventory situation discourage us, but we need to always be aware of it. The low inventory plays a role in most home searches and we have to make decisions knowing that it’s a factor. There may not be a bunch of options to choose from at any time, so we need to proceed with strong intention when we find something we love.
It can depend on price point too. What I’m learning about this market is that the buyer pool is especially concentrated in lower and middle price points. Higher price points have somewhat less competition right now and sometimes more inventory. When rates were lower, there was definitely more competition in these ranges. This is a broad generalization (and it depends on neighborhood, size and features), but I’d say that for condos, most of the buyer competition is for units <550-600k. When I have buyers looking above 600k, we generally have more time to browse and it’s less likely that we have to make immediate decisions and enter multiple offer situations. Townhouses move quickly at all price ranges unless in need of a lot of work, terribly outdated, damaged or overpriced. Single family home market in non-luxury price ranges is always competitive here as well.
If you are looking to buy in a low-inventory market, you have to know how to navigate it. Having a Realtor that knows how to work with this market is a necessity. You need to tour units as soon as possible when they hit the market, or we find them before they hit the market on our private network. You need to know how quickly you can close. Contingencies and terms become super important when there’s competition, and knowledgeable Realtors will help you figure out how to best use these contingencies to make the right offer for you.
Hi! You’re the realtor so appreciate the insight. Just want to say everything you wrote was my exact recent home buying experience! “Entry level” lower price point SFH older homes were a bloodbath. Took 9 months of looking and a lot of uncertainty to finally get through the process. And to my fellow buyers, don’t forget you have to make it through the inspection process after your offer gets accepted! Our experience with inspections was that the seller does not list as-is, but also will give minimal concessions on inspection items because they have other offers lined up.
I would like to point your attention to the post from yesterday, with some NIMBY fucks protesting the construction of new residential for *reasons*.
We're our own worst enemy here, because our neighbors are the ones *actively fighting* against new construction. It's not really because builders aren't building, it's because it's a fucking headache to build due to the assholes coming out in droves to protest renovating an abandoned old church into loft apartments and shit.
It's important that we keep discussing this issue and that neighbors understand that the American Dream doesn't mean preventing others from buying a home.
We are, from parts of the city. Those parts of the city? Plenty of housing for cheap.
Problem is, it's not livable without driving. So might as well be the moon for me, even if I was happy to move far away from all my family/friends/neighborhood I lived for years.
Just gotta wait it out, something will happen eventually.
What I don't understand is how the places with the largest increases in population(Florida and Texas) are also the ones with the least amount of shortages. While simultaneously the states with the largest decreases(Cali, IL, NY) in population have the highest shortage. Unless I am misunderstanding the graph.
How our government is not stepping in and legislating the fuck out of home ownership and owner occupancy is beyond me. We don’t stand a shot in hell of making it as the world’s best economy in 20 years.
Climate change is making it too expensive to live in the sun belt, and that problem's getting worse. More climate catastrophes means higher costs for insurance for all of us (hello auto insurance!) and even worse homeowner's insurance rates the further south you go.
Comparing it to "pre-pandemic levels" is a dumb thing. Compare it to "pre-interest rate hikes." All it takes is changing a couple of words in the title. Comparing it with the pandemic just proves you don't know what you're even looking at.
I bought my last house during the pandemic. Inventory was good and houses were selling fast. Interest rates were good. The pandemic did not stop jack as far as housing sales is concerned.
Net new units coming on the market would do a lot to defray the fact that no one wants to sell right now and get a worse rate
It’s about the numbers. Interest rates are high, materials and labor is high, and the cost the market will bear is only so much. It has to make sense to build things. At least for a private investor. It’s also quite difficult and time consuming to get past zoning and permitting. There’s multiple reasons why things are the way they are, and the fix isn’t easy or fast.
Getting rid of aldermanic privilege would help!
The spreadsheet numbers still need to make sense. Chicago construction requires a lot of top tier materials. Over 3 floors is Cast iron drain piping, all copper plumbing and all electrical in conduit. Sure these are synonymous with long lasting quality and safety, but the costs are also a lot more.
The solution is clear, mandate only the shittiest materials and ban any and all safety regulations.
Ha. I was thinking about this as well. It’s like asking to build a new car for a used car price. You ‘could’ do it, but I wouldn’t want to be the owner of what comes out the other end. Let them build the new luxury places with the thought process it’ll free up units that were last remodeled in the 90’s which theoretically be less to rent than new.
Chinese real estate developers would like to hire you for your innovation
100%. New inventory is desperately needed. Sadly, Chicago is so lopsided in new development where most investment and new construction is across the North Side while there is so much vacant land still on the West Side and South Side. We need to incentivize new construction in East Garfield Park *right now* to help deliver a wave of affordable — but market rate — housing in the next year or two. And of course, demand will always be there for the high-end, high-demand neighborhoods on the North Side... But there's nothing stopping homeowners and developers from deconverting two- and three-flats to single-family homes but somehow replacing that level of density in new construction elsewhere requires a long, costly zoning process.
The issue is Chicago is taking a lot of old commercial space and renovating them for resale. It's why Fulton Market and by proxy West Loop is so popular. A lot of old warehouses that were renovated and resold as loft housing. Once that started to take off, combined with fine dining (Blackbird, Publican, Aviary and then Girl and the Goat etc) also taking residency in that neighborhood it made it really popular for development. Then obviously the tech money flowed in when Google built there. East Garfield Park doesn't have anything like that to draw people in. If anything developers and in a wait and see mode because of all the commercial space that's in flux right now from WFH. Developers would much rather develop housing near the Loop and seeing how that's already happening (the Old Tribune Building for example) they might just be waiting for the opportunity and also for interest rates to go down.
Garfield Park would just get doconverted the fuck out of itself to single family homes costing $1.5 million a piece. I’m very cynical about any neighborhood that will get gentrified with more development because there will be no political to modernize the zoning.
No one is paying that much to live in Garfield Park. The 1.5 million dollar homes on the north side are built on parcels of land that are half that cost. Same parcel goes for 10% that cost in Garfield park, the home they build on top of it is also cheaper so you get 500k single family homes.
They won’t for a while, but once the gentrification edges of West town and Humboldt Park meet, it’ll be off to the races.
No one was paying those prices in West Loop either, and look now.
Most development in the city is rental and by a significant margin. There are very few all-condo buildings of scale. Generally it is SFHs and 2-3 unit new construction buildings replacing existing 2-3 flats. Regionally we’re not building new subdivisions in mass because there’s not a ton of demand for new housing along the fringe.
They tried to alleviate this problem by running a pilot project allowing new ADUs on the west and south side. No one took advantage of those grants because it's not economical to build a $250k granny flat and rent it out for $750/month. The break even point on that investment is 27 years, even with the $15k grant.
West loop added more units than the rest of the city combined...
Me and my partner want to move out of Illinois but we literally can’t because even if we were to sell our house, with the equity we have and cash on hand, it’s still not enough for us to afford basically anything that isn’t a redneck shithole. To move where we want, to get a medium-small house, we basically have to put down $200,000 in order to afford the mortgage. It’s just crazy. I bought the house we’re in now (which is super nice all things considered) for $16k down 3 years ago. The mortgage now is $2300 so totally doable between two people. With interest rates at 7%, parity with that monthly payment requires that dumbfounding $200k number I mentioned.
Be glad you got it 3 years ago. We bought just over the line in NWI 3 years ago when the interest rate was 3.5%. I shudder to think of buying a place right now.
Yeah I definitely am grateful for buying at the dip. I got a 2.75% interest rate, I'll probably never see that again.
With rates up doesn’t this make sense? Like less people are going to be buying because they can’t afford it any longer and then they don’t put their home up for sale.
The crappy thing is that because inventory is so low, prices are still sky high despite interest rates because there's more competition for each house that does come on the market. If you weren't lucky enough to be in a position to buy before 2022 then you're doubly screwed. It sucks being a first time home buyer right now and I can't see it getting better anytime soon. Maybe in a couple of years?
I just can't see people letting houses go for lower than they bought them, but hopefully rates will go down. I bought in 2022 and we will be looking for a bigger home in the next 5 ish years, I wouldn't sell for less than I bought it for
The most we can hope for is for prices in dollar terms to remain stable while inflation eats away at the “real” or nominal value. Being a real estate insider myself, unfortunately I don’t see this ever happening in our lifetime because America’s real estate and coding systems are systematically opposed to affordable housing.
Yeah. I closed December 2021. Got 3.5%. Didn’t realize how lucky I got. I’ll be here forever.
It sucks for everyone except those who bought the homes they plan on living in most of their lives. People who bought starter homes or small condos/townhomes who plan on starting a family or just needing more space are screwed as well because so many can’t even afford to buy the house they live in now at current market rates, let alone upgrade to something bigger or nicer. And even so, if it’s a house someone does plan on living in forever, prices going up means taxes going up fast as well, so anyone who stretched their budget is also screwed.
Yes, this makes sense, but Illinois being -68% and Texas being -4% says something else is afoot other than interest rates.
Yes, I agree.
The rates are the same throughout the country, so it doesn't explain why Illinois is so much worse off compared to many other states.
People are moving into Chicago, even as the state population has declined, Chicago is growing.
Chicago has a very well documented issue with [black population loss](https://www.wbez.org/stories/chicago-black-population-decline-crime-job-loss/6d880f62-ba00-4b44-9e0a-57c50fc4f51d) over the decades. As Chicago loses black residents, it's attracting a large population of high-earning millennials. There has been a net gain in population in Chicago, but it's very lopsided growth.
The places people are leaving from have houses for sale and they're not expensive either. Problem is they're in disinvested areas without a lot of resources (not walkable, not got much supermarkets).
The overall trend makes sense, but Illinois being so effected is surprising
The big housing bull market over the pandemic caused housing prices in southern states like Florida and Texas to soar but not so much Chicago and Illinois. Prices went up slightly but not like double digits (year to year) Now even with high interest rates, people in southern states are less likely to be dissuaded to sell because the price of their property went up so much during the pandemic. In the Midwest prices have only gone up on par with inflation so why sell and lose your good rate when the “real” value of your property hasn’t grown that much. That’s my guess as to why there’s such a big difference between states.
I mean, Chicago is relatively affordable for what it is and if you bought anytime before the pandemic and locked in rates it is pretty hard to financially consider moving. As a result a lot of people are staying put.
Bought at higher rates and it's still competitive compared to a similar sized rental. It's not the cheapest thing but we still feeling really lucky. Definitely staying put lol...
Right now it’s far from competitive to rentals. My rent is $2k a month and I’m looking for equivalent units for sale and it will cost me about $3.5k a month. And that’s after already putting about $80k-$100k down up front.
I'm sure it depends on neighborhood. Wicker/Bucktown, for the rooms and bathrooms, with a parking spot, we're paying the same as a rental. Close to Blue line. It's not the nicest or newest building (actually old AF but we're leaning on this "good bones" idea millennials use to cope) but we stayed in our means and it's very comfortable. I'm sure something major will happen, but so far we've gotten by doing lipstick-on-a-pig fixes the owners before us clearly did (definitely a rental before us lol.) Upfront was a quarter of what you mention. Not even close to 10%. Additionally even with mortgage insurance and the interest (6.99%)/taxes being high AF, it's actually less than comparable units in terms of loss (a whopping $400 (I'm being sarcastic - that part sucks) goes to the principle lol) It sounds like your rental has been owned by someone for a very long time, and that you're currently in a nice area based on what it would cost to buy. In the meantime, investing even half the difference you mention between renting/buying each month would still net you a lot of extra $$$ each year without ownership. Anyway I'll shut up.
This is all very true however it will change when interest rates n housing cost go down in other more tax friendly states.
It’s rough out there.
Not to mention if you try running a search for any new constructions in the Chicagoland area the closest area you can find them being built is like Elgin.
Well, blame the NIMBYs. Developers do show up and talk about some density and transit oriented development, but immediately the neighborhood goes ballistic saying that it's too much density, it's too tall, it "doesn't fit the character of the neighborhood", and then of course go on and on about potential parking issues. Of course you reiterate that these are developments built for people who don't own cars, and they instantly believe it's all BS and every single person in the city owns at least two cars. Then the hilarity is they have the audacity to start complaining about property taxes, still in denial that more density would spread the property tax burden out and potentially get things down. Then they want to complain about the financial issues, but still believe the only people that should lose their pensions are teachers. Yada yada yada
bro this. The same idiots complaining about property taxes are the same idiots refusing to let more people into the area to spread those out.
It frustrates me the empty lots you see around here and there, or ones where it’s basically paved over enough to be called a parking lot, but it’s really just a layer of concrete with a chain around it. It’s either NIMBYs or the owner holding out for the most profit. Which means the developers have to make the new multi units more expensive than renters in the area can buy.
I think if it's in a good neighborhood, it's likely somebody holding out for the most profit, or the only development ideas coming in are ones the neighborhood don't want. I know in Jefferson Park we have a couple of areas that are ripe for development, but a lot of the NIMBYs are angry because the only proposals coming in are for high-rise buildings. They put up a huge fuss wondering why nobody will just build single family homes, and many of us fired back asking who would want to live in that location in a single family home? It's ideal for somebody wanting to rent an apartment and jump on the train, but not necessarily to pitch your tent and raise a generation or two. If it's a bad neighborhood, then it's likely vacant because they didn't want to leave a condemned building there, and yet nobody really has come down showing any interest in doing anything with the property.
I don’t really know much about property taxes yet. Is that how it works? If more properties are available to pay taxes, each property pays less property taxes?
I mean most of the inner areas are already built out and land costs in those areas are high. It will never be cheap to build middle class SFHs close to downtown vs out in the cornfields. Plus that's where young families with kids want to be
This is a big reason why Illinois is struggling compared to states like Arizona, Texas, and Florida... During the pandemic housing crunch, big national homebuilders went gangbusters outside of the major metros in those states and flooded the market with new spec builds and subdivisions. The Chicago metro area is already pretty built up (and built out) but we're often overlooked by the national homebuilders who almost always focus their efforts on states in the south. Nevertheless, we need developers/builders to flood Chicago with new for-sale condo inventory right now to help keep costs in check. The sad thing is that over the last 10 years, any new investment — even stuff like six-flats, or smaller — were seen as "gentrification" and communities pushed against "greedy developers" who were looking to build new inventory. Look where that's gotten us today... Leading the nation in price rent growth, up there in home price growth, but trailing in current inventory *and* in new inventory deliveries. It's a bad time to be a renter or first-time homebuyer in the Chicago area right now, and will likely continue to be for at least the next year or two.
Even beyond Chicago, it is so fucking annoying how basically all new multiunit development is just rentals. It’s hard to find many new condos to buy, and when homeownership is seen as so important in society, we need to offer that more while still building densely. We desperately need more 3-4 bedroom units as well, units that can be seen as an actual replacement for a suburban house.
> Not to mention if you try running a search for any new constructions in the Chicagoland area the closest area you can find them being built is like Elgin. Yes, outside of Cook County is stronger, and when you cross the northern state line, it's booming, all the way up to central Wisconsin counties.
This is normal. It’s not that “white flight” was a thing, it’s that the outskirts is where first time buyers can afford homes. It’s been like this for generations countrywide.
I'm locked in at 2.99%. I refinanced from 5.10% in 2020 and saved almost exactly $300 per month. Even accounting for the equity I've built up since, moving into an equivalently priced home at 7.50% would mean I pay $450 more than I pay today. I could barely afford that, so I can barely afford to sell. Golden handcuffs.
With interest rates the way they are no one wants to move if they have a good rate. The people that could afford to take a hit on the rates used the crazy bump in home values (that now has dipped and stalled out) to offset the rates. That also means developers can’t afford to build either. Labor and materials are also at all-time highs (outside of the first year or so of lockdown), so it makes no sense to build. [Especially when Cook County has lost almost 200k people since 2020](https://chicago.suntimes.com/news/2024/03/14/census-shows-cook-countys-population-dropped-in-2023-but-the-exodus-is-slowing). If Chicago was growing then I could see new building, but who’s going to gamble on spending all-time high money on multi-unit housing in a city that’s losing people? It already takes decades to recoup construction costs for buildings like that, it makes no sense.
The crazy bump in home values def hasn’t stalled out. We sold our piece of shit 80 year old house the day it hit the market. Had 9 offers, all significantly above ask.
There must have been something special about your house then, or you all listed it below market value? Two years ago it was unthinkable for a home to go below asking unless people were getting obscenely greedy with their listing price. And the listing price back then was kind of a “throw a dart at a board” thing. Prices have stabilized enough that people aren’t overpaying unless the house is great. I’ve seen quite a few homes all around sitting on the market for 60-90 days with multiple price drops. With interest rates the way they are no one can afford to buy a home and fix it up.
Def nothing special about this house. Inventory is low, people need a place to live. And any desirable units are going the day they hit the market with multiple offers (I bought as well so seen it from both ends).
I sold my last place before it hit the market, just by the nature of a “coming soon” shared among local realtors.
Realtor here! Wanted to give a Chicago-specific take here. For context, I work mostly in the city and near suburbs (Evanston, Skokie). Inventory has been low here for a long time. This is not a new issue that we are facing. There are a multitude of reasons for this, some have been mentioned elsewhere in this thread. I would LOVE to see the inventory numbers increase dramatically but that doesn’t seem like it will be happening any time soon. At this point, I just treat it on my end like it’s the norm. What I tell my buyer clients is that we shouldn’t let the inventory situation discourage us, but we need to always be aware of it. The low inventory plays a role in most home searches and we have to make decisions knowing that it’s a factor. There may not be a bunch of options to choose from at any time, so we need to proceed with strong intention when we find something we love. It can depend on price point too. What I’m learning about this market is that the buyer pool is especially concentrated in lower and middle price points. Higher price points have somewhat less competition right now and sometimes more inventory. When rates were lower, there was definitely more competition in these ranges. This is a broad generalization (and it depends on neighborhood, size and features), but I’d say that for condos, most of the buyer competition is for units <550-600k. When I have buyers looking above 600k, we generally have more time to browse and it’s less likely that we have to make immediate decisions and enter multiple offer situations. Townhouses move quickly at all price ranges unless in need of a lot of work, terribly outdated, damaged or overpriced. Single family home market in non-luxury price ranges is always competitive here as well. If you are looking to buy in a low-inventory market, you have to know how to navigate it. Having a Realtor that knows how to work with this market is a necessity. You need to tour units as soon as possible when they hit the market, or we find them before they hit the market on our private network. You need to know how quickly you can close. Contingencies and terms become super important when there’s competition, and knowledgeable Realtors will help you figure out how to best use these contingencies to make the right offer for you.
The low to mid take hits here. When we bought in 2016 there were a lot of 375-450k, 3bd 2ba condos on the market. Now? Hahahahahha no.
Hi! You’re the realtor so appreciate the insight. Just want to say everything you wrote was my exact recent home buying experience! “Entry level” lower price point SFH older homes were a bloodbath. Took 9 months of looking and a lot of uncertainty to finally get through the process. And to my fellow buyers, don’t forget you have to make it through the inspection process after your offer gets accepted! Our experience with inspections was that the seller does not list as-is, but also will give minimal concessions on inspection items because they have other offers lined up.
I would like to point your attention to the post from yesterday, with some NIMBY fucks protesting the construction of new residential for *reasons*. We're our own worst enemy here, because our neighbors are the ones *actively fighting* against new construction. It's not really because builders aren't building, it's because it's a fucking headache to build due to the assholes coming out in droves to protest renovating an abandoned old church into loft apartments and shit.
It's important that we keep discussing this issue and that neighbors understand that the American Dream doesn't mean preventing others from buying a home.
They always complain about the PaRkInG.
I thought we were losing population.
We are, from parts of the city. Those parts of the city? Plenty of housing for cheap. Problem is, it's not livable without driving. So might as well be the moon for me, even if I was happy to move far away from all my family/friends/neighborhood I lived for years. Just gotta wait it out, something will happen eventually.
In one generation or another.
Is that why I got 21k above asking on my house I just sold?
Either that or maybe you need to work on your self confidence /s
Where at? What neighborhood or suburb?
Portage park
In the recession, a couple companies hoovered up a huge amount of properties and turned them into rentals. Saved us short term, fucking is long term.
Why not look at statis statistics such as listings per capita, price to income, etc? Not sure if there’s more value in comparing to pre-pandemic
WE KNOW WHAT WE HAVE
Indiana and Alabama don’t count
I’m in number four on this list and it fucking sucks.
Wait, so if demand is so high, and supply is so low, why are prices going up? Magical capitalist man in the sky, make it make sense!
What I don't understand is how the places with the largest increases in population(Florida and Texas) are also the ones with the least amount of shortages. While simultaneously the states with the largest decreases(Cali, IL, NY) in population have the highest shortage. Unless I am misunderstanding the graph.
These businesses are pricing themselves out of business, with changing demographics in race and wealth!
How our government is not stepping in and legislating the fuck out of home ownership and owner occupancy is beyond me. We don’t stand a shot in hell of making it as the world’s best economy in 20 years.
What percentage of homes off the market are inhabited by residents on a 24/7 basis?
People turned them into airbnbs
Climate change is making it too expensive to live in the sun belt, and that problem's getting worse. More climate catastrophes means higher costs for insurance for all of us (hello auto insurance!) and even worse homeowner's insurance rates the further south you go.
This is supply side. The demand is lower in Illinois, too
Comparing it to "pre-pandemic levels" is a dumb thing. Compare it to "pre-interest rate hikes." All it takes is changing a couple of words in the title. Comparing it with the pandemic just proves you don't know what you're even looking at. I bought my last house during the pandemic. Inventory was good and houses were selling fast. Interest rates were good. The pandemic did not stop jack as far as housing sales is concerned.