Patrick

Wow - Matt, great stuff.

Ryan, you also have to remember in Chicago, the vast majority of transactiions in some neighboorhoods are condos, flats, or some form of "attached housing". You don't buy single family or detached in the Loop or many other areas. Further, those "condos", as Matt stated, are more often than not, on the high end.

So its quite possible 50-75% of Chicago transactions are missing from Case Schiller - 100% in some blocks/neighborhoods.

Even in many of hte suburbs of Chicago, I would guess half the transactions are condos, townhomes or some form of attached housing. And quite often, due to their prime locations, these attached houses are higher priced than single family.

As I stated in the other thread you started, in the neighborhoods you desire, if you find something you like, and plan to stay a few years - its a good time to buy. Supply is not huge in some blocks (and never will be). - Fri May 23 2008, 07:10

Great response Matt - I too always wonder how Case-Shiller became so popular given it is so biased and flawed.

Further, the median value is so skewed right now due to the uptick in foreclosures - couple that with a slower high end...the median shrinks quick.

Yes, the market is slow...but I would agree, its overblown by the media and limited data such as Case. - Thu May 22 2008, 20:13

Man - this thread is still going strong??? I ditched a few days back as all it has turned into is a spitting match between two sides.

Those that are prospective buyers want it ALL - the best house, in the best neighborhood, move in ready and at a price that is lower than anyone has paid to date. Thats just not the case now - but alwasy has been and always will be.

Sellers on the other hand, have unrealistic expectations - thinking their home is the best - that no other can match it and that they can get top dollar - 100% of asking price within 30 days.

Somewhere, somehow and someway, it meets in the middle and transactions occur - always have.

I almost have to agree with another poster - just go rent a place and move on - as all this thread is a ping pong of "my numbers are more accurate than yours". No one is going to convince the other - as there is always some comeback.

The market is what it is - your not going to time the bottom. This was a good thread when it started - but at no time do you appear open to buying - you had your question answered before you asked it. No data that has shown you reasons to buy is good enough - there is always some study to contradict it.

Roll the dice, rent and see if your hunch pays off.

I have said it numerous times - if you find the place you love and plan to stay 5 or more years - no reason to not buy in Chicago right now (from my standpoint.) - Wed Apr 30 2008, 12:12

Chandler -

I agree with you - if you are a current homeowner and just a 'casual' shopper,and tirekicker right now with no 'need' to buy, I would wait and give it another 6-12 months. If your renting - I think you need to start getting serious about buying - but you can probably wait a bit longer. The people sitting with the best poker hand right now are renters looking to buy. You have so much power - much more than someone with another property to unload.

However, if you need to move - as Ryan does - I don't see a need to wait in the Chicago market if you plan on living there for 5+ years. I am not sure how it is in Maryland...

As I stated before, I would never recco someone to buy a home if they plan to stay under 3 years - unless it is fairly clear we are in a mass appreciation cycle like we were several years ago (I can't envision that happening again for quite some time). - Fri Apr 25 2008, 09:07

Paul - while metal based costs have gone up - many of the major costs of construction have gone down.

Lumber is so cheap right now that I would recco anyone building anytime soon should buy it and store if they can.

Drywall is very cheap compared to the boom years.

Labor costs have dipped as most contractors just 'want work' right now and are not greedy.

Land is much much cheaper.

This is the best environment there has been in years if you plan to build your own home - unfortunately, that is a very niche and small market that not many play in. - Fri Apr 25 2008, 08:59

Aj - nice response, i dont disagree...

But your assuming the 6% is a lock - in this environment, hard to say that. Plus, your still going to get hit with the same tax rate on your investment gain.

The safer bet - especially when we are talking 5+ years is to buy.,,,my opinion would change if were talking 3 or less years - then I would say rent.

I yes, I am a bit bias - real estate has been good to me and continues to be good to me. - Thu Apr 24 2008, 20:39

Inflation is inflation - I understand what it means - but we can do nothing about it.

Would you rather buy a $500,000 house, have it appreciate 5% over 5 years - so it is then worth $525,000 - while you also probably paid down $20,000 in principal over that time and saved $25,000 on tax breaks.

OR

Rent for those five years at $1,500 a month - spending $90,000 on rent payments.

All the while inflation is increasing - meaning your saved dollars that you had earmarked for that $500,000 home are now worth $450,000 - while the house is now going to cost you $525,000.

Inflation sucks and is certainly a consideration - but you'll rarely beat it. In fact, unless house prices drop considerably more (possible in CA, AZ - I dont think very much more in CHI) inflation will whip you pretty quick if house prices go up.

Just my two cents... - Thu Apr 24 2008, 13:32

Well, here is some more news that is local to Chicago.

Large scale study by SunTimes concludes most markets have gone up in price over the past 2 years...

I am sure many on here who want the market to collapse so they will shoot holes all over it and come back with some national numbers or some figures from torn up markets in CA or NV....but it is what it is, past 2 years, focused on Chicago area. All in all - doesnt paint the bleak picture many on here like to paint.




http://searchchicago.suntimes.com/homes/910546,homeprices23.… - Thu Apr 24 2008, 11:44

Zack - I love how someone from Westchester is an expert on the Chicago market - I dont know Westchester and dont pretend to.

Given the Chicago area is the 3rd most populous in the country - one would expect it to be near the top all the time given its size.

For me, living in this market, not employed in real estate - but do buy and sell properties as investments - yes, its soft, but its not that bad. In areas where I buy, sell, I would say prices have been flat to down 10% since the summer of 2006. Recently, it appears to me a bottom may (and I say may) be appearing (or already having occured). Properties I track have fallen but most never get below a certain point - demand kicks in at a certain point.

So my uneducated, drone mentality (as you call it) says we are near the bottom (maybe it drops another couple % on a absolute basis). I would imagine any real price appreciation is far off - as I envision prices stay flat for several years.

The major problem is many sellers simply are hanging on to prices from 2005 - most sellers who adjust there pricing down 10% (and have an attractive property in a good location) still seem to be able to mover their properties within 4 months. - Wed Apr 23 2008, 11:48

Adding to the story in todays Tribune...while sales volume is down...median prices are up in Chicago, Cook County, Lake County. Basically flat in DuPage County and Kane County, and down in Kendall, Will adn McHenry Counties (counties thatr have the far flung suburbs in them).

All in all, I think this again shows, what us few in the minority on here have been saying - Chicago IS NOT faring as poorly as the Boom markets as the boom was not the big here. Is it soft and a buyers market - yes - but those of us that live here know that the economy is solid and more people are coming into the area than leaving.

With companies such as McDonalds, Kraft, Motorola, ATT, Boeing, Sara Lee, Gatorade, Zurich, Con Agra, AllState, Baxter, United, Lucent, Chase, BofA, Sears, with HQ or major presence in the area - in addition to the financial center downtown and some of the major employment centers on the North Shore, in the Schaumburg area and in the Naperville/Downers Grove/Oak Brook corridor - the market is just not going to fall through the floor here.



http://www.chicagotribune.com/business/chi080423homesales_gfx… - Wed Apr 23 2008, 11:38

Just a nugget here...its interesting the media reports of the March data.

While the data is down - it did come in slightly better then expected. As expected, all we are seeing is "HOUSING IS DOWN XX%", "HOUSING TUMBLES".

The same media could have reported, "HOME SALES FALL LESS THAN EXPECTED" or "MARCH HOME SALES BEAT FORECASTS."

I am not saying the latter is the way to report it - but always interesting - the media spin. - Tue Apr 22 2008, 10:55

Zack, Ryan - you make fine points - I guess we will jsut have to agree to disagree. Sure foreclosures are up, its a soft market, blah blah blah. If I were in LA (riverside) or Miami - I would not be buying. I think Chicago - and almost anywhere else - is a buy if you FIND THE RIGHT PLACE.

My wife and I (now at the age of 31) did not amass over $500k in home equity by renting - it was made through buying smartly, paying our mortgage, getting some appreciation and having folks like Ryan pay me.

Last year - with a HH income of $145,000 - my wife and I still got back over $10,000 on our tax return - without real estate - we likely would have gotten $1,000 back.

I don't know - I guess its different mindsets we have. I still say buy if you find what your like, Ryan. I am not quite sure how you are going to rent a property valued at $600k for $1300 but if true - your still going to spend $16,000 on rent you will never see again, plus another $1-2k to move your stuff again.

My final advice would be you might as well wait until July - take a look at the market then (my take is it will be exaclty the same) and make your decision - as you seem 100% bent on renting. - Fri Apr 18 2008, 13:52

Ryan - while that study used 2007 data - most would agree the downturn began in late 06 - so to many on here - 2007 was a down year.

I am not saying you should buy - but if chicago is going to be your home for the foreseeable future - I think you can get a good deal right now.

Say you buy - for whatever reason - say prices drop another 5% - you stay 6 years in your place - and it appreciates back above that point anyhow - not to mention the equity you have built by not paying someone else's mortgage for them via rent payments - and also, not to metion the tax break - which typically equates to $300 per month...

I never believed in the "wealth is created in real estate mantra" until I bough a rental property and watched people write me checks every month for more than my mortgage payment on the place . Nothing more comforting than that - someone building equity for you. So go ahead and rent - you will make some landlord very happy - as rents in my area have probably gone up 10%+ over the past 24 months. - Fri Apr 18 2008, 12:29

I guess I am jsut not that negative - I have seen places in my hood' sell quickly and for 95% of list over the past month.

Truth is, in the Chicago area, population growth has been constant and strong. Add in the simple fact that people get married, divorced, transfer jobs, graduate college, die, upsize, downsize, retire, get laid-off, etc - the housing market is always fluid - many of those buying - need to buy - jsut as sellers need to sell. - Fri Apr 18 2008, 12:23

CONTINUED....

“There is a huge selection out there, and I don’t see in the future that our industry is going to be building many ‘spec’ houses. Once the supply is reduced, I don’t see it returning. We will build on demand,” he said.

Spec homes are built on speculation that in a vibrant market, willing buyers will basically just show up. The current economic climate has taught builders not to build up that inventory, since their own costs for land, labor, materials and government permits are going up whether they are selling or not. Likewise, he said, buyers should not count on discounts and incentives lasting too much longer.

Lasting value in Chicagoland

And the same economic value that makes home ownership the American dream applies across the buyer spectrum, whether it’s a first-timer looking at a townhouse, a family looking for a spacious four-bedroom in a clubhouse community, or someone looking for a home built exactly to their needs and specifications.

Basic gave this example: “In 1991 the average price of a home was $120,000. Now it’s around $246,000. That’s more than double. You can never lose in housing. That’s where all the nation’s wealth is sitting.”

“Wealth” is relative, and the Chicago area has more of it than most areas of the country. That means housing here is a more stable investment.

The reason why this area of the Upper Midwest has the hottest growth areas is that Chicagoland has everything, and much of it is getting better. In the far South, for example, Basic pointed to the new and expanded Metra stations, the tying of Interstates 55 and 355 into I-80, and those dynamics of transportation that allow people to have jobs in places like Schaumburg and Oak Brook and Bolingbrook, and live in more rural areas like Lemont and New Lenox. This has opened up housing opportunities in Grundy, Will and Kendall counties that never existed before.

Apply that to any segment of the Chicago region, from the Fox Valley with its rolling open spaces to Chicago with its world-renowned jewel, the Lake Michigan lakefront.

The housing stock also covers the field. Chicagoland has everything from affordable city condominiums to rural townhouses, age-restricted retirement communities to family-oriented “clubhouse” communities, lakefront and riverfront developments to sprawling “master-planned” communities that offer choices from several dozen builders, exclusive luxury communities and “starter” subdivisions, custom and semi-custom homes, and builders offering everything in between.

Lay all that on top of current market conditions, and “anyone buying a home right now is the smart buyer,” Ritke said.

Lev’s advice to prospective buyers is to set aside the “gloom and doom” and look at their own situation.

“People should buy a home when they have the need and the want. Buy when it’s the right time for you. Buy what’s right for you. If that’s what you want, why wait?” - Fri Apr 18 2008, 12:05

CONTINUED....

Confidence a major factor

What some prospective buyers lack, he said, is confidence.

“Until the media starts reporting that things are getting better, it all comes back to the confidence level,” Lev said.

Basic said confidence has taken a beating — and somewhat unnecessarily so — from “how the press is looking at it.”

For example, the media widely reported defaults in the subprime mortgage market, but “what’s not put out there is that 97 percent of mortgages are being paid, and of the subprimes, 83 percent are being paid.”

Citing financial and economic reports, including those of the National Association of Homebuilders, he said that few realize that 37 percent of the housing stock doesn’t even involve mortgages.

“The best buyer is the most informed. They’ve got to do their homework, look at the models, talk to the builders, get a good feel for the community character,” Basic said.

Lev said people need to realize that a lot of the “bad news” is coming from the West Coast and East Coast markets, which differ greatly from the Chicago area housing market.

“There’s this ‘one size fits all’ ... that there are problems in Miami or Phoenix, and the articles make it sound like it’s the entire U.S.,” he said. “But historically, we don’t have the out-of-control appreciation that Miami and the West Coast have. We haven’t had as much speculation. We don’t have the highest highs and we don’t have the lowest lows. We don’t see downturns as much. It’s a lot steadier here.”

Ritke added that some sectors of the economy actually are doing well, but “one of the dynamics of the media seems to be to focus on the negative and not to accentuate the positive.”

“A lot of people who export are doing well, and I don’t think the oil companies are struggling,” he said. “They’re making record profits, and that money goes somewhere. They employ people. Farmers and the agricultural sector have done quite well. The sale of agricultural equipment is going well.”

The positives in the housing market are too good for prospective buyers to ignore, Lev said.

“Interest rates are ridiculously low. There’s a lot of good quality product. Prices are favorable,” he said. “So if it’s on your horizon to buy and stay someplace for several years, you’ll make out well. It isn’t going to be better than this.”

Positive signals

There are signs that housing is turning upward. Basic said that last year, of 100 people touring model homes, perhaps 3 percent became buyers. More recently that “conversion rate” ranges up to 9 percent. That means “the people who were walking through were really buying.”

Give credit to first-time buyers and the rental market, and maybe toss in some kudos to the folks and Grandma and Grandpa.

“People are coming out now because they’re being told by their elders that is the time,” Basic said. “A renter sees they can purchase a townhome and be at the rent or slightly above, but then they get the tax benefits form the mortgage interest and property taxes. They’re paying themselves, and they’re building equity in their home.”

“We’ve become more realistic,” Austin said. “We’re going to look more closely at the credentials of those who are applying. But if you have a good credit rating, it’s not a problem.”

“It’s a sound financial move. Rapidly rising rents make it very attractive to the first-time buyer. Mortgage rates are at an all-time low. Mortgage interest is deductible on taxes. As long as you’re in a good community, a good area with good schools, it makes a difference. Houses will hold their value.”

There is somewhat greater hesitation in the resale market, in which people are selling their existing homes to buy “up” to something larger and better. Buoy said some people are using the “worth” of their homes from two to three years ago as a benchmark. But it is to their advantage to reduce their asking price because they can take advantage of current market conditions on a new home, he said.

Ritke provided a general example of the economics of this: You live in a house you value at $300,000 and the house you want to move up to is priced at $500,000. If you give a discount of 10 percent ($30,000) on your house and get a 10 percent discount ($50,000) on the new home, “you just made $20,000 in equity.”

“That’s a good investment any way you look at it,” he said.

Prospective buyers of custom and semi-custom homes, on the top end of the market, also need to be aware of the opportunities and the new economics of builder inventory, said Ritke, a custom homebuilder.


CONTINUED AGAIN IN NEXT POST - Fri Apr 18 2008, 12:05

One more more 'positively' tinged article...and I am not saying I'm 100% positive - but some in this thread make it sound as if houses will be selling for $1 come end of the year....

This may be the moment to seize

April 15, 2008

BY PAUL KELMA - Suburban Chicago News

Today might be an ideal time to buy a home.

Bill Basic has seen this time come around maybe three times in the past 25 years.

The long time homebuilder and president of the SouthWest Suburban Homebuilders Association ticks off the key points:

* Interest rates are at historic lows.

* Mortgage money is available to qualified buyers.

* Rising rents are roughly equal to monthly mortgage payments.

* Prices are stable.

* Builders are holding off price increases even though their own costs are still rising.

* Many are offering incentives such as free upgrades on inventory homes they need to sell.

It is THE single biggest wish in the American dream of home ownership: the “buyer’s market.”

Basic saw those conditions in 1983-86 and again in 1989-91, first when the market stalled during the presidency of Jimmy Carter, with interest rates near 22 percent, and again during the first Gulf War.

After each, pent-up buyer demand, dropping interest rates, too much inventory and stable prices opened the floodgates of a home buying upturn. He sees the pre-conditions for that kind of upturn right now.

And once it starts — and it will, with growing population and pent-up demand — prices will rise and the buyer’s market will be history.

“The time to buy is now. A lot of people are ‘down’ on housing and the (economic) times, but you can always find some bitterness. People who sit on the sidelines ... if they’re going to sit on the fence, they’re going to be kicking themselves,” he said. “Once that inventory is down, you will see prices rise.”

Lynne Austin, president of the Home Builders Association of Greater Fox Valley, said the “kick” will come when a buyer sees other people living in “their” home.

“Assume people feel the market has bottomed. You’ll be in more competition for that house you’ve had your eye on. Now suppose (the price) fell another $10,000. What does that mean on your mortgage? Another $50 or $60 a month? Is it worth losing that house?”

“If you’re serious, you don’t want to wait six months or a year. You don’t know where the rates will be. But you know where the rates are now. And you’ve got a wonderful inventory out there,” Austin said.

They and the presidents of other homebuilder associations in the Chicago area agree on one belief and one absolute about the current housing market: it may well have reached bottom, and there will definitely be a comeback.

“While you can’t predict the absolute bottom of the trough, in my opinion we’re very close to it,” said Jim Buoy, president of the Northern Illinois Homebuilders Association.

“Interest rates are pretty close to being at the bottom," he said. "In my opinion the Fed (Federal Reserve) won’t make many more negative adjustments in the rate (that drives key financial factors). There is a glut of inventory, and that tends to keep prices down. And the bigger builders have cut back (new housing) production. That means there’s a very good opportunity in the next several months.”

“But as soon as that inventory gets down, say about half of where it is now, you’re going to see prices start to go the other way,” he said.

“Some people think if they only wait a month or two, there will be a better deal out there,” said Randal Ritke, president of Will-Grundy Counties Home Builders and Associates. “But I think it has bottomed out. A builder can only discount to a certain point, and I think the builders have bled everything they can bleed. I’ve been through a number of these cycles, and we all know that when it comes back, prices are going to rise. Right now, you’ve got a great selection and you can get a great bargain.”

Alan Lev, president of the Homebuilders Association of Greater Chicago, agrees that the market might have hit bottom. Like Basic and Ritke, he’s seen a few of these up-down cycles and “usually you’re six months into it before you realize it, and six months out before you realize you’re out of it.”

“My guess is we’re at the bottom, if not up a bit. People are not coming out to the sales centers for sport. They’re coming out because they’re looking to buy,” he said.

“I don’t think anybody knows where the bottom is,” Austin said. “The only way to know is when it starts to rise. And why would you want to wait until it rises?”


CONTINUED IN NEXT POST - Fri Apr 18 2008, 12:01

A little less "the world is ending vibe"...attached is an article from yesterdays SunTimes....

Prices still solid in numerous neighborhoods
April 17, 2008
BY DON DEBAT - Special to SearchChicago-Homes
The location of property is still the driving force in Chicago’s residential real estate market, experts say.

Despite the gloomy reports on falling property values coming from national surveys that show lower home prices in 77 markets, prices of residences rose in 73 markets country wide. And, Chicago was one of the good real estate news stories of 2007.

Yes, fewer homes and condos were sold here last year than in 2007, but prices—especially in high demand North Side neighborhoods—rose, in some cases substantially, according to David Hanna, president-elect of the Chicago Association of Realtors.

Overall, the median price of condominiums in the city rose a solid 5.8 percent in 2007, although the number of units sold fell 10.4 percent. Meanwhile, the median price of single-family homes eked out a thin half of 1 percentage point rise, while the number of units sold fell 24 percent.

So what neighborhoods were the big winners in 2007? Surprisingly, the Loop, a relatively expensive neighborhood, led the condo-price appreciation downtown with an impressive 41.97 percent median gain to $397,250 for the 1,046 units sold.

In 2008, say two successful Loop projects—235 Van Buren, new-construction by CMK Development and 200 North Dearborn, a conversion by American Invsco, should continue to lead the downtown boom, experts say. The two projects—one in the Financial District, the other near the Theatre District—accounted for nearly 550 sales last year.

Other hot city neighborhoods that posted rising condo prices last year include: quiet Montclare on the Far Northwest Side with a gain of 29.83 percent to a median price of $235,000 on 41 units sold; emerging Kenwood on the Mid-South Side with an increase of 24.40 percent to $279,900 on 198 units sold, and leafy Forest Glen with a 23.73 percent gain to $365,000 on 13 units sold.

High-demand, and highly priced North Side neighborhoods posted solid gains in 2007, according to CAR. And, the market on the emerging Near West Side also was strong. Here are some highlights:

• Gold Coast and Near North Side. Condominium values appreciated a solid 9.53 percent posting a median price of $392,000 for 3,131 units sold, while median single-family home values rose 2.57 percent to $1.995 million on 36 sales.

• Lincoln Park. Median condo prices rose 7.55 percent to $413,400 on 1,447 units sold, while home prices rose 4.14 percent to $1.51 million on 183 sales.

• Lakeview. Condo values increased 5.51 percent to a median price of $333,400 on 2,331 units sold, while home prices rose 11.11 percent to $1.15 million on 129 sales.

• Near West Side. Median condo prices rose 7.08 percent to $326,582 on 1,575 units sold, while home prices rose a hefty 32.35 percent to $450,000 on 47 sales.

• North Center. Condo values inched ahead 1.74 percent to a median price of $380,000 on 495 units sold, while home prices rose 4.86 percent to $849,500 on 192 sales. Belle Plaine Commons, an affordable 92-unit condo development targeted to buyers age 55 or better, posted strong sales in 2007, according to Rena Appel of North Center Associates LLC, the developer.

• Lincoln Square. Median condo prices rose 8.95 percent to $280,450 on 574 units sold, while home prices declined 3.4 percent to $625,000 on 103 sales. “The restaurant, retail and nightlife attractions of this neighborhood have sparked demand for condos along Lincoln Avenue,” said developer Richard Lettvin, who is marketing Lincoln Crossings development.

• Albany Park. Condo values rose 5.7 percent to a median price of $222,500 on 247 units sold, while home prices skyrocketed 25.9 percent to $480,000 on 91 sales. “A strong condo-conversion market exists in the neighborhood for renovated units in walk-up buildings,” said Charles Huzenis of Jameson Realty Group.

• Logan Square. Median condo prices slipped 0.80 of 1 percentage point to $305,000 on 653 units sold, however home prices posted a solid 12.31 percent gain to $677,500 on 162 sales.

The Home Front, Don DeBat’s weekly real estate column syndicated by DeBat Media Services, unravels the complexities of home buying, mortgage shopping, homeownership, renting, building, renovation and remodeling. For more home-buying information visit his website at: http://www.dondebat.net. - Fri Apr 18 2008, 11:47

Wow - its kind of like the democratice primary - people run about 50/50 - with half saying the sky is falling (mostly buyers) and half saying things arent that bad (realtors).

To answer Ryan's original question - in Chicago area - its depends on what area you a buying in. Some submarkets here are pretty steady - others cold. If your looking downtown at a condo - there probably is more room to fall given the amount of construction that went on - but a hot building in a hot location still commands a good price. Out in the burbs - can vary greatly. In a hot trendy area- prices are more steady. In a not so hot area - or areas in the far reaches of the burbs - a lot tougher.

We bough a teardown house in Janurary - and are currently trying to sell a townhome. We bought because the price was right - sure, maybe the market bleeds another 5% here - but the sky is not falling. While we have yet to sell our townhome, traffic has been decent - and comparable units are going under contract for about 5-10% less than they were going for 2 years ago.

Chicago was never that out of hand as the west coast and Florida were - so there is much less it needed to fall. I would say most markets have come down 10% and I firmly beleive it will limp along at hold steady there for a couple years. I dont forsee prices trening up - but I dont see them trending down much either.

Inventories are pretty good and if you can find a desperate seller or you find exaclty what you want - I can't imagine why you would not buy now. Just as nobody timed the peak of the market - nobody will time the bottom either.

I also think interest rates will hover between 5.8 - 6.5% for quite awhile.

So while I can't say you need to buy now - I dont see why you would wait if you find what you like.

Property in good locations seems to be moving...

In Chicago, your likely going to pay $1,500 minimum rent for a two bdr - so if you rent for 18 months - you just threw away $27,000 that could have paid principal and got you a tax break. - Thu Apr 17 2008, 12:06

I'd like to see that $944 rental....probably 500sq ft. Not too many places at that price point in desirable areas.

John likes to flash the stats that all newspaper love to front page.....FORECLOSURES UP 50%, HOMESTARTS LOWEST IN 17 YEARS, etc.

I dont have the source or line...but it goes something like 90% of mortgage ARE NOT subprime and 85% of those that are subprime are PAYING ON TIME. Further, 30% or so of the housing market does not even involve mortgages.

Further, all thes housing start stats are POSITIVE. If we saw housing starts going up - it would be awful news for the housing market. Less housing starts begins to bring the market into balance by lessening the amount of inventory coming online.
So while I agree, the market is slow and down, you are simply not going to get a $650k place in Lincoln Square for $375k two years from now. Prices DO NOT have tons of room to fall (with the exception of SoCal). - Thu Apr 17 2008, 12:20