I'm glad that condos never rally came back

[Steely Dan]

Originally Posted by Doady

So Chicago is building only rental units and likely with one or no bedrooms only. All that this thread has suggested to me is that people only live in Chicago for a few years, then they move to the suburbs to start a family. Chicago is not a city that people are willing to make a personal, long-term investment in and establish new roots in. If this is true, it is not a positive trend.

When people are invested in a condominimum, they are also invested in the building, in the neighbourhood, in the city, so they will care more and take better care of their neighbourhood and their city, and establish a deeper and more permanent connection with their neighbourhood and their city. And apparently Chicago doesn't have that.

I am a literal living breathing refutation to your nonsense post.

[Reverberation]

Originally Posted by mhays

In some cities, they're not happening because liability laws got too tight and made them dramatically more expensive to build. In some states, in a multi-unit building lawsuits happen when the majority of the ownership wants them to happen, vs. in a single unit or a townhouse where the properties might be considered separate, and lawsuits don't need to have a ton of merit to make it to the courts. There are big differences between areas where developers have a chance to fix problems before it gets to the courts, vs. going straight to the legal system. That takes away a housing option. Then again people like me are making a killing because we own undersupplied assets that we bought when prices were much lower.

Hopefully this will be fixed. Condos are an important part of an urban core and any urban neighborhood. They don't have to have tons of parking, even though they often tilt toward people in established careers etc., and the parking tends to be more than with rentals.

What?! Liability laws? It sounds like someone knows what they’re talking about.

[maru2501]

Originally Posted by Steely Dan

I am a literal living breathing refutation to your nonsense post.

same here

There is some obvious North Side churn where kids from Big 10 schools move within shouting distance of Wrigley, use tinder, find a mate, have a baby and then move to Oak Park or whatever, but that's a small part of the city dynamic. There are plenty of multi-generational families, and older couples who move back, you name it, plus upwardly mobile couples that have kids and don't leave.

Most of the newer jobs that are coming in are in sectors that are fairly highly paid, so couples stay in the city and pay their way around school issues without blinking. More common than it was 10 years ago.

There is an Austin-level boomtown here embedded in the stats that you have to dig to find. If not for all the cranes it would be harder to guess at. The city is so big it's just a part of the picture

Headlines focus on crime and low-income neighborhoods emptying out. The closest ones are being redeveloped for the aforementioned upwardly mobile couples that buy and don't leave.

[Steely Dan]

Originally Posted by maru2501

There is some obvious North Side churn where kids from Big 10 schools move within shouting distance of Wrigley, use tinder, find a mate, have a baby and then move to Oak Park or whatever, but that's a small part of the city dynamic.

i've noticed 3 distinct patterns among my non-city-native peers once they've coupled up and started procreating:

1. stay put, commit to the city (obviously the best option )

2. move to the burbs because schools/affordable SFH

3. move back to MI/WI/IN/IA/wherever to "be closer to my mom"

[Pedestrian]

Originally Posted by Reverberation

What?! Liability laws? It sounds like someone knows what they’re talking about.

California gives HOAs up to 10 years to sue the developer for "construction defects". After the 10 years are up, anything wrong with the building cannot be claimed a fault of the builder. So the usual practice, and has been for decades, is for HOAs to sue the developer for everything they can think of as the 10 year mark approaches. My HOA did it. They all do and have done. This isn't anything new in the Golden State and developers seem to factor it into their estimates of building costs.

Other states may be just catching up to CA on this though.

Pretty good summary of construction liability law here: http://www.gerardlaw.com/constructio...law-california

[JManc]

Originally Posted by the urban politician

Again, in Chicago the extra parking is being built for condos as a choice of the developer based on perceived demand, it is not being mandated by zoning

I didn't read thread but how is this done. Feasibility studies? What if they base a study assuming low demand and wind up coming up short. I know...Chicago and all and probably not the demand like Houston but curious there is no set formula. Here we have a stupid ratio of more space than needed but that's something the CoH needs to re-examine.

[Reverberation]

Originally Posted by Pedestrian

California gives HOAs up to 10 years to sue the developer for "construction defects". After the 10 years are up, anything wrong with the building cannot be claimed a fault of the builder. So the usual practice, and has been for decades, is for HOAs to sue the developer for everything they can think of as the 10 year mark approaches. My HOA did it. They all do and have done. This isn't anything new in the Golden State and developers seem to factor it into their estimates of building costs.

Other states may be just catching up to CA on this though.

Pretty good summary of construction liability law here: http://www.gerardlaw.com/constructio...law-california

My understanding is that the hardest states for building condos are California, Washington, and Texas. Legally speaking.

[Via Chicago]

so much of the stuff built in the 2000s is such pure garbage. even driving around town so much of the "newer" designs already have rust streaks all over the facade, peeling finishes, issues with water diversion, etc. And of course you run into the situation that new inventory is always coming online, which means your "new" condo from 2007 or whatever is already completely dated, as is its design aesthetic (and lacks all of the craftsman charm of prewar buildings). To say nothing of all the nonsense around HOA boards. its one thing to deal with all that when youre renting, but if im going to be a homeowner i dont need some busybody building organization having issues with my outside deck furniture, or my music volume, or whatever else. it just seems to me condos retain their value poorly in relation to SFHs, and id much rather have a small starter home a little bit outside the bustling downtown core. i realize this isnt even an option in some cities so condos are the best you can hope for, but in Chicago its still very attainable for a middle class person to become a homeowner. i want a garden, i want a space where i can work on wood projects, i want to rig up a darkroom in the basement, etc.

[Steely Dan]

Originally Posted by Via Chicago

it just seems to me condos retain their value poorly in relation to SFHs

as i mentioned earlier in the thread, we've been quite lucky with the 4 condos we've owned in chicago retaining (and even increasing) their value. i'd certainly be a lot poorer today had i continued to be a renter over the past 12 years as opposed to jumping into the home ownership game with that modest little marina city studio that i bought oh so many years ago.

Originally Posted by Via Chicago

in Chicago its still very attainable for a middle class person to become a homeowner.

good luck affording your dream SFH in a desirable urban chicago hood with great schools unless you're like a top 10% income earner.

my wife and i looked for over a year........

i suppose we could have tried to over-reach for a $650,000 mortgage or whatever, but neither of us were comfortable with being anywhere close to that house poor.

or we could have moved to portage park or jeff park or wherever, but the bungalow belt doesn't tick enough urban boxes for my tastes (i'm a bit of a location snob).

[Pedestrian]

Originally Posted by Via Chicago

i want a garden, i want a space where i can work on wood projects, i want to rig up a darkroom in the basement, etc.

I want somebody else to worry about maintaining landscaping, fixing the roof if it leaks, replacing the windows when new designs come along, generally doing exterior maintenance and renovation. I want to be able to leave town for months at a time by just walking out the door and locking it with the expectation that all will be as I left it when I get back--no need for a house sitter/grass mower/pool man etc.

And I'm not alone. Not everybody wants to worry about the garden or the other "Harry Homeowner" standards you site. Which is why there's a market for condos that isn't going away not at all unlike the one for single family homes.

You should think outside your own box.

[the urban politician]

The nonsense that condos don't hold their value in Chicago are indeed just that. Like any investment product, there is a lot of variety, and some do better than others.

I think smaller condos built in bulk for the middle class and in non-prime locations have performed the worst, particularly as age has created maintenance issues. Those are most amenable to apartment conversions.

Contrarily, larger condos with better design and in prime locations will continue to do well in this (unfortunately) rich is getting richer, middle class is shrinking world. I also think that family sized condos in smaller walkup buildings and in quiet locations will. It only perform well, but seem to continue to be in demand today.

[JManc]

Originally Posted by Steely Dan

....

i suppose we could have tried to over-reach for a $650,000 mortgage or whatever, but neither of us were comfortable with being anywhere close to that house poor..

$650k in a decent part of Chicago is still not bad. At all. Sticker shock yes, but it's still Chicago. In New York or San Fran, the same s/f'age in an equally decent area would be several times that and the amenities would be the same.

Chicago is amazingly affordable for the type of city it is. Sure, it us crazy expensive in a few areas but for the most part, fairly reasonable overall.

[Via Chicago]

Originally Posted by Pedestrian

Not everybody wants to worry about the garden or the other "Harry Homeowner" standards you site. Which is why there's a market for condos that isn't going away not at all unlike the one for single family homes.

theres a finite supply of SFHs, and its unlikely vast numbers more will be built in the city. on the other hand, more condos are always going to be built. i dont really see the demand for SFHs ever diminishing, but theres always going to be more supply of newer and better condos that you will be competing against as a seller. that said, i dont plan on having kids so the schools issue is moot. i do believe motivated kids with involved parents can perform and succeed anywhere, however (my SO is a product of CPS in little village and went on to U of I and University of Chicago, and her parents held it as a point of pride that they stayed in the neighborhood while all their peers fled to the burbs).

the SFH market in the urban market is not "going away" lol, and anyone who looks at the trends in real estate should pretty easily see that. its true the market for homes in the exurbs might be struggling, but thats not really the same thing and you know that. if anytjing, theres that much higher of a premium on those that remain (or is the next thing youre going to tell me is that theres simply no interested buyers for those Painted Ladies...)

[Via Chicago]

Originally Posted by Steely Dan

as i mentioned earlier in the thread, we've been quite lucky with the 4 condos we've owned in chicago retaining (and even increasing) their value. i'd certainly be a lot poorer today had i continued to be a renter over the past 12 years as opposed to jumping into the home ownership game with that modest little marina city studio that i bought oh so many years ago.

theres an opportunity cost to everything. had you invested that money in the market you would have earned even more (and traditionally stocks do provide higher returns than real estate, over the long run). hindsight is 20/20 in all things, but on average, home ownership is not going to make you wealthy. its just going to give you a place to live, with a predictable payment plan and modest YOY appreciation keeping slightly ahead of inflation (which certainly has value in itself). that said, the period from 2007 to present is pretty unlikely most in United States history, and is unlikely to be repeated.

[Steely Dan]

Originally Posted by JManc

$650k in a decent part of Chicago is still not bad. At all.

no it's not bad compared to america's other alpha level urban cities like SF or NYC or boston or wherever, but it was still out of our ideal price range.

we really wanted to stay as close as we could to $400K for our family's new home, and as became apparent over the course of our search, that doesn't buy you very much in the way of SFH's in highly-desirable north side hoods (pretty much only money pits requiring an expensive gut-rehab or tear-down/rebuild). so we ended up in a large 2 floor condo unit in a vintage 3-flat because i'm a location snob.

it's all good; we're very happy. ideally we'd have more outdoor space than just our back deck and tiny front yard and rear garden, but it will all work. we've committed ourselves to being a city family so the kiddos are just gonna have to go to any one of the 6 city parks/playgrounds located within a 10 minute walk of our home for their run around space.

[Crawford]

Originally Posted by Via Chicago

i do believe motivated kids with involved parents can perform and succeed anywhere, however (my SO is a product of CPS in little village and went on to U of I and University of Chicago, and her parents held it as a point of pride that they stayed in the neighborhood while all their peers fled to the burbs).

I know it's douchey to say "If you were a parent you would think different", but as someone who used to have your views pre-child, I think non-parents can't really relate.

The suburbs (and certain urban neighborhoods) will always be a draw due to schools. We bought a condo in a specific location almost entirely due to schools. I'd happily live in a shack over a penthouse if the schools were appreciably better.

[Vlajos]

Originally Posted by Steely Dan

no it's not bad compared to america's other alpha level urban cities like SF or NYC or boston or wherever, but it was still out of our ideal price range.

we really wanted to stay as close as we could to $400K for our family's new home, and as became apparent over the course of our search, that doesn't buy you very much in the way of SFH's in highly-desirable north side hoods (pretty much only money pits requiring an expensive gut-rehab or tear-down/rebuild). so we ended up in a large 2 floor condo unit in a vintage 3-flat because i'm a location snob.

it's all good; we're very happy. ideally we'd have more outdoor space than just our back deck and tiny front yard and rear garden, but it will all work. we've committed ourselves to being a city family so the kiddos are just gonna have to go to any one of the 6 city parks/playgrounds located within a 10 minute walk of our home for their run around space.

Between Welles, Horner, Waters and even Manor Park, you should be fine!

[Steely Dan]

Originally Posted by Via Chicago

had you invested that money in the market you would have earned even more

but if i had taken all of my rent money over the past 12 years and invested it, i wouldn't have had a place to live, which is kinda important, at least to me.

and now that i'm actually an investment property owner, the deal is even sweeter! that modest little studio in marina city not only nets me a small little profit of ~$150/month, my tenant who has been in there for 6 years now has built my equity for me. and i don't have to do anything. it's all free money.

[Eightball]

Originally Posted by Via Chicago

theres an opportunity cost to everything. had you invested that money in the market you would have earned even more (and traditionally stocks do provide higher returns than real estate, over the long run). hindsight is 20/20 in all things, but on average, home ownership is not going to make you wealthy. its just going to give you a place to live, with a predictable payment plan and modest YOY appreciation keeping slightly ahead of inflation (which certainly has value in itself). that said, the period from 2007 to present is pretty unlikely most in United States history, and is unlikely to be repeated.

you are ignoring the leverage factor as well as cheap (for now) lending rates

Originally Posted by Pedestrian

I want somebody else to worry about maintaining landscaping, fixing the roof if it leaks, replacing the windows when new designs come along, generally doing exterior maintenance and renovation. I want to be able to leave town for months at a time by just walking out the door and locking it with the expectation that all will be as I left it when I get back--no need for a house sitter/grass mower/pool man etc.

And I'm not alone. Not everybody wants to worry about the garden or the other "Harry Homeowner" standards you site. Which is why there's a market for condos that isn't going away not at all unlike the one for single family homes.

You should think outside your own box.

Couldn't agree more!

[Via Chicago]

Originally Posted by Steely Dan

but if i had taken all of my rent money over the past 12 years and invested it, i wouldn't have had a place to live, which is kinda important, at least to me.

well all situations are different, but i saved money by renting below my means and aggressively saving 30%+ of my salary. its not like i didnt have a place to live. (i also fully realize that not all people are able to do that.)