Well, and now we are at the crux of the issue at hand - Fannie Mae and Freddie Mac, with our tax money, are holding a monstrous inventory of foreclosed/distressed properties that they will not bring to market in an effort to keep prices up - the supply would crush the market. FM and FM asked for (and received) the big extension from the Fed for float on that monstrous carry. De facto, the Fed is artificially keeping the real estate market at status quo and from further collapse vis-a-vis this 'carry float'.
Good explanation. I was wondering why there are so many high-rises where only 20% or less of the windows have lights on at night. I don't understand why prices haven't fallen so hard in the near north side given all this empty inventory. If I were to hazard a guess on what fair value for a two bedroom condo in the city should really be, I'd say it should be around 150k to 225k, not 345k. Plus, no one in their right mind sends their kids to CPS if they can avoid it. The market prices I see make no sense to me. Now, if the fed is propping it up I understand, but a lot of these units are actively for sale and the price is just not falling that hard. Is it because real-estate can really only register so many ticks downward in so much time?
in one of the best properties in Miami...the mayfair, the bed bath and body have not paid rent for 2 years and they are going to be closing after january. they offered my friend who has a clothing store next door the extra square footage once bed bath leaves for FREE...and he turned it down...its ugly
Take a drive from 87th street south down Cicero to 159th and it's a ghost town compared to what it used to be. Nothing but empty strip malls and empty lots that used to be car dealerships. Then take a peak at the corridor from Wolf Rd to 355 between 159th to 143rd (close to my hood) and you'll see one for sale sign after another on all those beautiful homes that were built during the boom in the 90's. It's a crying shame all those people leveraged themselves to the hilt only to have the rug pulled out from under them. Literally one for sale sign after another.
I am on the North Shore - looking to buy distressed properties. The foreclosure lists on the Cook County and Lake County Sherriff's office are orders of magnitude - literally, in size compared to what Fannie and Freddie have released to realtors, the FHA, or on their own website for resale. They are floating everything. With our money.
bone, I am in kind of similar position, looking for distressed properties in AU. What you describe, same type of setup here. Here in addition play with rents by converting empty flats to furnished appartmets to cater for 'rich executives' going on holidays to suburbia . Source of money for that same as in US. With that keep rents up and help property investors not to trip over. Not exactly sustainable situation. But can last for looong time. Properties on artificial supprt have little upside, so buy only if essential.
Macro: I am in complete agreement. Sitting tight, cash in hand. It's kind of like the QE2 and the Fed - fade them at your considerable peril. I am looking, and I have bid - but I think the available inventory on the open market is quite modest compared to what I know for a fact has been legally foreclosed. Is the Fed wrong? Sure. Can I outlast them in terms of capital? No way. Ditto for Fannie Mae and Freddie Mac.
I'm from the northeast not chicago but have been there a bunch of times. A lot of people say how mid westerners are really nice people. For the record, I've never met more rude people. The northeast gets a bad rep but chicago has far more miserable, cocky, ignorant a-holes IMO.
I'm telling you, I've hung out in a few bars and have felt like I was about ready to get into a fight for nothing. Really weird. I think it might be mid westerners get defensive or offended easily, thin skin perhaps. Where north easterners can take a joke. I do love the city though, and the food, and the night life.