Speculators ‘Want To Find A Sucker’ In Chicago
The Chicago Tribune has this report on home sales. “Apparently unfazed by reports of the imminent demise of the housing market, Illinois consumers bought homes in record numbers last month. Chicago-area sales, however, were generally flat. Rising inventories of unsold homes, the nation has 39 percent more properties on the market today than a year ago, coupled with the rising costs of oil and home mortgages might tell a different story as the spring home-selling season plays out.”
“In Chicago alone the number of single-family homes on the market jumped to 6,040 as of Tuesday from 4,220 on March 31, according to data from the Multiple Listing Service of Northern Illinois.”
“‘Inventory definitely has grown way too much,’ said North Side agent Jay Michael. ‘A lot of people bought on speculation or they bought just for the sake of buying something, and now they’re selling,’ often asking unrealistically high amounts.”
“‘Thirty percent of that market are people who don’t need to sell; they just want to see if they’re going to find, well, a sucker,’ he said.”
“On Tuesday Michael was showing North Side condos to Karen Cole of Glenview, who was on the first day of her house hunt. ‘She’s looking in a saturated price range, $750,000 to $999,000. There is so much in that price range right now,’ he said.”
“Cole said she hoped the inventory would work in her favor. ‘I’m hoping that because there are a lot of condos available, the prices won’t be astronomical,’ said the North Side schoolteacher, who on Tuesday was scheduled to walk through 10 of the 14,232 condominiums on the market in the city. Of those, 3,206 have been listed for sale since March 31.”
“Glenview agent Georgia Pierini said buyers seem to realize that the market has shifted to their favor, but they are influenced by mortgage rates. ‘There’s a little bit of wonder and fear that interest rates are going to continue to rise and buyers had better get in and do something before it gets worse,’ she said. ‘But I can see that prices are starting to stabilize and not be so outrageous. We’re having more price changes now because some houses started out too high.’”
‘A lot of people bought on speculation or they bought just for the sake of buying something, and now they’re selling’
Just for the sake of buying something?
Buy a music CD or a TV not a house if you are looking for buying something for the sake of buying something. These dolts deserve to be slaughtered.
Um, a TV? When I’m in the mood to ‘just buy something” I head to the dollar store.
I presume they are speaking of the phenomenon I have my hubby doing (less so lately, thank you ben and co.!) –the kids are growing! I am getting old! I don’t yet own a house! At this point, I’ll settle for a condo! I must get in this market, or I’ll never be okay and my children will need to see psychologists because the grass outside their dwelling didn’t “belong” to them! We’ll never be able to pay off an abode if we don’t start now! What’s on the market that we can afford at least kind of? If it’s got a kitchen a bathroom and a couple bedrooms, it’s good…please let’s just buy *something* already.
that kind of buy something…
What schoolteacher can afford a 3/4 of a million dollar condo? This is sheer madness! Is she a trust fand baby merely working as a teacher to satisfy the conditions of the trust? This is lunacy!
Exactly. I see stupidity is still in the air. It almost seems we’re not anywhere out of this mess when I read stuff like this.
How the fukk can anyone earning 50k/yr be looking at borrowing 750k? Has the world gone crazy or is it just me?
>How the fukk can anyone earning 50k/yr be looking at
>borrowing 750k?
How much would the monthly payment be with an OptionARM? With an OptionARM’s “low monthly payments”, you can buy anything! She should think buying in Malibu…
With the Option Arm the possibilities are endless. Half of this blog could have bought that $22 million place next to the Playboy mansion we read about afew weeks ago. Come to think of it, I am going to make an offer right now……………..
If she’s making less than 120k a year she can’t afford that without at least 30% down Option Arm or no Option Arm she couldn’t afford it with the new Option Arm that came out with 0% intial rate and 4 mo’s of no payments. She needs a conversation with a banker more than a tour of condo’s with a realtor
Where on earth do you get the idea that a teacher is making $50,000 a year around Chicago? Quite a lot of them (if they have a Master’s or better) are well north of six figures. As a matter of fact it has become the smart strategy to leak the teachers’ salary list to the newspaper so the taxpayers find out just how “underpaid” they are when they go on strike.
Why, unless she got recently divorced, would anyone move from Glenview to Chicago. Probably divorced with the settlement being sufficient to purchase the condo.
A big problem that I see is that a lot of people just don’t think that half a million dollars is a lot of money anymore. Who knows, they may be right in the long term.
Your cash ain’t nothing but trash!
Comment by santacruzsux
2006-04-26 11:48:06
A big problem that I see is that a lot of people just don’t think that half a million dollars is a lot of money anymore. Who knows, they may be right in the long term.
Your cash ain’t nothing but trash!
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Funny thing you should mention this. I was in the presence of a brain surgeon of a broad last week. She was babbling on how her and her boyfriend were gonna “buy ocean front property in tahiti and build a hotel on it.” I asked how she was gonna finance this venture. Her response was “Oh, it’s only gonna cost 3.5 million and we can get that much on a signature via business loan.” Now this broad was serious. No joking, no $hit. She talked like she earns 500k/yr.
All this talk people do about huge sums of cash is hilarious. Everyone a friggin millionare….. in their minds.
Chicago has 29,823 properties for sale, not the 6,040 as listed in the report. Why can’t these people get the numbers right?
You beat me to the punch! There is *no* way a school teacher in Illinois can afford a condo this expensive (property taxes are killer here).
The article should say “millionaire school teacher looks for gold coast condo”… .
I would hope she’s not a math, history, or economics teacher.
*begin sarcasm*
But it does explain why our education system is so good.
*end sarcasm*
Guru that’s the first question that popped into my mind.
NY Spitzer to announce mortgage fraud ring case
http://news.yahoo.com/s/nm/20060425/pl_nm/crime_spitzer_mortgages_dc_1
Good!
those poor school teachers w 80% pensions
whoops ,100% in PA
Good for them. Everyone should have 100% pension. The problem is that there are a few who don’t who are just plain ENVIOUS.
Don’t worry, 100% of your current salary 10 years from now will be equal to 10% of your current salary… The govenment will have to pay the bill somehow. Printing press is a lot easier.
Yeah, everyone should, but they’ll have to pay for it one way or the other.. Deferred salary mainly, as long as the taxpayer doesn’t get raped over a barrel by teh yoonyuns…
You do realize that a pension is just a way to delay paying you, right? A 100% pension means that you are earning about 20% less than you would be with no pension or you and the company (because Penny Benny isn’t giving you nearly that much) are gambling on highly speculative investments paying off for a long time.
I prefer a generous 401k contribution and match so I can spread my credit risks out a little.
Don’t you think that for the miserable pay they have, they at least should retire with dignity?
Comment by Max
2006-04-26 13:20:40
Don’t you think that for the miserable pay they have, they at least should retire with dignity?
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Republicans who have no retirement security would like to take it away from those that do. I love how neo-cons cry “class warfare” when it’s they who wage it.
This is the inapprorpriate forum for this discussion, but please explain why your are in favor of a generational wealth transfer vis-a-vis a Ponzi scheme.
Additionally, please compare and contrast the housing bubble Ponzi scheme with the above situation.
Thanks.
This is blog, not a forum. Shame on you.
A blog can be a forum for discussion, regardless of the actual technical realization. Please bring arguments to this discussion and not complaints about how someone who disagrees with you expresses him- or herself incorrectly in your view.
Amen Peter.
Don’t you think that for the miserable pay they have, they at least should retire with dignity?
Not if it takes money away from educating children, which it does. They should be paid better up front, and have less benefits at retirement, like most of America.
You can’t blame the weather, either. Winter was much warmer than usual and this was the nicest spring Chicago has had in the ten years I’ve lived here. Usually there’s no such season as “spring”.
Rents have shot up a but recently, though.
‘14,232 condominiums on the market in the city. Of those, 3,206 have been listed for sale since March 31. In Chicago alone the number of single-family homes on the market jumped to 6,040 as of Tuesday from 4,220 on March 31.’
Wow, rushing the exits for sure!
oh, thats where that 29,823 number comes from! Either way, those numbers are crazy.
Oh, and Chicago (the city) has gone back to LOSING population, as of 2004 or so.
Yes, but the supply of “desirable” areas is dwindling fast. They are not making anymore “desirable” Chicago areas. To bring back an oldy but goody - “Chicago is desirable area locked!”
I thought Cabrini Green was an up and coming neighborhood?
They have to tear it down first.
My 14th-floor apartment has a nice west view of what’s left of scenic Cabrini. I wonder whether anyone’s ever considered converting a project to condos.
LOL! That would be the official top of the bubble!
Glenview teachers, like everywhere in the northern suburbs, do pretty well for themselves. I doubt she makes anything less then $80K/year. With tenure she’d be well over six figures. She can EASILY rent.
Even at 100k, she’s talking 7.5x annual gross. For a condo no less. I see stupidity reigns amongst school teachers.
Yeah, my point was she’s choosing to get screwed; affording to live there isn’t the problem.
I’m not sure what kind of *condo* up there costs three-quarters of a million. You can get a very nice 3BR condo downtown, high floor with a lake view, for that much if not less. And that’s the CITY.
I think you make a great point in your post. Basically the new motto for buyers going forward will be ,” I can afford to be screwed!”
Of course that is until they can’t afford it anymore!
Yes, affording is a problem, even if she makes 100K.
She must have about a 50% down payment, from having a rich family, big divorce settlement, or maybe she found a sucker in selling her last home.
“On Tuesday Michael was showing North Side condos to Karen Cole of Glenview, who was on the first day of her house hunt. ‘She’s looking in a saturated price range, $750,000 to $999,000. There is so much in that price range right now,’ he said.”
5 years ago these prices were only for rich people. Now they’re for anyone willing to borrow a lot of money and take on huge ARM risk.
ziprealty shows over 65,000 listings in the Chicago area:
http://www.ziprealty.com/registration/register.jsp?cKey=fg6l53hx&metro=chicago
“Cole said she hoped the inventory would work in her favor. ‘I’m hoping that because there are a lot of condos available, the prices won’t be astronomical,’ said the North Side schoolteacher, who on Tuesday was scheduled to walk through 10 of the 14,232 condominiums on the market in the city. Of those, 3,206 have been listed for sale since March 31.”
If she saw 10 condos per night, everynight, assuming no new listings, she could have a new hobby for the next 3.9 yrs.
but they are influenced by mortgage rates. ‘There’s a little bit of wonder and fear that interest rates are going to continue to rise and buyers had better get in and do something before it gets worse,’
This is absolute crap. In my area, the mortgage on the median home doubled in five years, despite falling then flat interest rates. Monthly mortgages have risen because house prices have skyrocketed. The drop in interest rates could not counter the massive increase in prices.
What this tells me is that buyers should WAIT, because a one or two point increase in rates is MORE THAN COMPENSATED for when prices fall 10-20% or more.
What really matters to your monthly “payment” is the selling price, not the interest rate. Wait until the bubble pops.
Exactly. A friend of mine was playing the “if-you-don’t-buy-now-you’ll-pay-more-because-rates-will-go-up” card with me last November. I still have the e-mail I sent her on 11/2/05. It reads,
“I’m still better off with lower prices at higher rates. This is P&I only, but pricier homes also have higher taxes.
$ 665.30 a Month + NO PMI ($100K mortgage at 7%) ~ assume a $130K house with $30K down
$ 899.33 a Month + PMI ($150K at 6%) ~ assume a $180K house with $30K down
$ 1,073.64 a Month + PMI ($200K at 5%) ~ assume a $230K house with $30K down”
Come on 40% drop!!!…
I agree. I’d rather pay a higher interest rate on a properly valued home than a low rated on an overvalued home. At least with the higher rate, you could refi if you so desired if rates dropped significantly.
Comment by Notorious D.A.P.
2006-04-26 11:42:00
I agree. I’d rather pay a higher interest rate on a properly valued home than a low rated on an overvalued home. At least with the higher rate, you could refi if you so desired if rates dropped significantly.
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BINGO. But try explaining that to drones and robots suffering from tunnel vision and acute stupidity.
OT, but look at how much faster this blog would run if it supported compression like the old Blogger site did:
March California Home Sales Fall 15% (with 140 comments):
http://www.pipeboost.com/GetReport.asp?URL=http%3A%2F%2Fthehousingbubbleblog.com%2F%3Fp%3D560%23comments
File Size Reduction: 78.84%
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Euro to US$ is at 1.245 and looks to go further. Gold looks ready to jump resistance to $640+.
These articles are 99% propaganda… Look at how this is worded:
I’m hoping that because there are a lot of condos available, the prices won’t be astronomical,” said the North Side schoolteacher, who on Tuesday was scheduled to walk through 10 of the 14,232 condominiums on the market in the city. Of those, 3,206 have been listed for sale since March 31
Chicagoland condo sales were up 3.2 percent in March, to 4,512 units, and median sales prices were up 5.2 percent, to $215,734.
***
Here are the key phrases:
“14,232 condominiums on the market in the city”
“Chicagoland condo sales were up 3.2 percent in March, to 4,512 units”
**
The Sales number are coming from “chicagoland”- which is a Huge and undefined area, while the number of Condo’s given (14232) is coming exclusively from the city proper.
How many of those sales were in the city? If the median price was only 215k, I’d have to say not many. 215k doesn’t get you much in the city unless you want to live where nobody else does, or are looking exclusively for a 1 BR in a N Sheridan or Far North LSD highrise…
If we give the article the benefit of the doubt, and 3k of the 4k condo sales were in the city (and I doubt it with the median price so low) you are looking at an almost 4 1/2 month supply of condo’s on the market.
Anyone know where you can get the raw numbers?
I pull from Northern Illinois MLS, but when I started keeping figures my error was in limiting from 200K to 500K. I therefore have a built in error because I did not take ino account that people dropping prices from 500+K to 499K do not equal people dropping prices from 200+K to 199K. On January 9th the listings on Northern Illinois MLS were 29,432 April 25th they were 43,527. This is not just Chicago but its suburbs.
We have found a Sucker and he is Us.
Centex down 6% after hours
http://finance.yahoo.com/q?s=CTX&d=t