I was looking at Case-Schiller data and noticed that the prices bounced off of a long-term trend line that's the average growth. So there was this exponential spike and an exponential crash. Question I have is: Because of all the ARM resets coming up, will Chicago prices drop further? How do I calculate how much impact the the ARM resets will have on the local market? I'm looking to buy a home within a 40-min commute to downtown, somewhere between 150 and 250k, the cheaper the better. Some questions: i) Should I go around low-balling everyone, and aggressively target bank-owned properties? ii) Is it worth becoming a realtor and taking the exam just to get access to the local data? iii) Should I avoid the summer buying cycle? iv) What are some essential books I should read? v) In the suburbs, I've read certain areas are variable-rate in terms of property taxes. Online forums are saying crazy numbers like 5-8% in some areas. I'm not looking to buy a home as an investment, I'm looking to buy a home I can pay off quickly in the event of job loss. I want this home to become a base or platform from which I can tinker with business and money-making ideas without the fear of a heavy monthly payment.
i am in chicago not the suburbs. condos have gone down since '05 and the new construction where I am is finally done but not sold AFAIK. i) it doesnt hurt. but realtors want u to put down deposits to bid on houses to show you're not a flake ii) waste of time iii) why? iv) books to buy a house? just do it. there's a lot of fees involved and the lawyer just says sign this, sign here, etc. Dont go through a mortgage broker. dont trust either the buyer or seller realtor v) no idea about taxes.
Also in Chicago. Adjustable Rate Mortgage Resets in the next 2 years will probably cause a bigger wave of defaults than the one we've just been through. Buy in 2 years. On the positive side Chicago is resilient, and prices didn't go up as high as Manhattan or San Fransisco, for instance. On the negative side we've lost the Olympics, Oprah (don't laugh, she's brought in billions and improved an entire area of town), and the town is full of ex-pit traders (like myself), when everything's going electronic.
How much lower do you think the median will go? Another 50k? http://www.housingtracker.net/asking-prices/chicago-illinois/, median is currently 229k. The jobs situation here is really bad. A lot of recent grads I know are fighting for retail sales and fast food positions just to cover bills. Would be nice if we crashed down hard to a median around 140-150. Friends of mine are looking into the ghettos now, just paying in cash for 30-40k homes and tolerating the crime. I'm not keen on that idea, because if the economy tanks further, the ghettos will become even more of a war-zone.
This echoes what an experienced realtor friend of mine told me recently ... and she's actually helping another friend of mine who wants to buy NOW. If you're a 1st time buyer though, you should also consider the $8k credit which expires soon, plus the fact that rates will surely be higher in 2 years.
This is the biggest factor for me. Currently paying $2200/mo. Figured this'd be fine for one year while I got settled in, but I have no interest in staying here as a renter at this price for much longer. Looks like I need to go fishing in the foreclosed home markets.
You are paying 2200/month in rent in chicago and you want to buy a house for 150K? Are you prepared for the drop in living standards you are going to get? If I were you, the first thing I would do is find a new apartment. I am assuming you are a single guy, you can get decent 1 bedroom in lincoln park for $1000 to 1200/month and cheaper as you go farther north. 5yr
Great idea...hopefully they don't end up like that old timer who got killed picking up chicken at Popeyes for some party. Happened a couple of weeks ago, it was on the west or south side...don't remember. It's not a bargain if you lose your life in the deal.
I moved here from NYC, and didn't realize the prices were so different. So I was ecstatic when I found out I could live in a luxury building for the same money I was paying in NY. Since my salary went up, I decided to stick with the current rent level for the first year. It's not bad, view of the lake and city skyline, private parking, private gym, doormen, etc. But I don't need all this. I'm ok with the lifestyle drop. My lease expires in August, but I decided to start doing the research and reading now, aggressively look in March through June, and try to get something going before I got in around August.