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Tuesday, February 25

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Fuel

eep / November 14, 2007 10:31 AM

I just bought. The price of a townhome was too good to pass up. And with a loan from my future in-laws, everything worked out great.

My parents, however, have had their house on the market for several months. Almost EVERYTHING has been upgraded, and they still couldn't unload it. They are finally signing the papers to sell for much less than what the house is worth, just because they can't afford to wait it out and see if the market improves.

Needless to say, I'm glad I was able to buy now, because things were definitely in my favor.

Andrew / November 14, 2007 10:54 AM

I'm frankly amazed at how many condo conversions are taking place in my neighborhood, considering how many unsold condos still exist in the area. It's pretty ridiculous.

mucifer / November 14, 2007 10:56 AM

i just bought last year and am so happy i did. will be sitting tight for some time, and my steal in rogers park is just getting better.

Nuke LaLoosh / November 14, 2007 11:00 AM

Renting in Lincoln Square; I want to buy, but the lack of funds for a down payment will force me to hold off for AT LEAST one year. Probably more.

On the plus side, I'm low-debt (except for low-interest student loans) and have a reasonable income.

I could have done 0% down a year ago, I guess. But then I would have been buying in at the market peak. I read somewhere that you should "buy low and sell high." Or something like that.

skafiend / November 14, 2007 11:50 AM

Man, the concept of owning property is so far off my grid right now that I can even answer this questions... which I guess I sorta just did... Hell, I was late with the RENT this month, so THERE!

rachael / November 14, 2007 11:55 AM

I'm waiting. A market peak combined with relatively cheap rents? I don't see any reason to buy right now. I'm just saving.

I've also heard horror stories about quickly renovated / new construction condos. With the market booming like it was, I can see how there'd be fast construction & mistakes slipping in. I'd be interested to hear other's experiences concerning this. Good experiences? Bad?

wackpuma / November 14, 2007 12:39 PM

I want to upgrade to a house and have the funds for that, but won't be able to unload my current condo in the current market. Come on first time buyers! This is the perfect time for you. Buy my starter place.

Carrie / November 14, 2007 1:07 PM

I bought a place about a year and a half ago. Cute little gut rehab. I like it, but... the whole deal of them not knowing my property taxes prior to me moving in and the bank not taking out enough to cover them really screwed me. Imagine the fun of coming home from vacation and seeing that your mortgage has doubled!

And yes, thanks to a shady developer, Rachael, I have plenty of horror stories. The main fun has been the pipes freezing and bursting in the winter. Imagine my dismay when the second night in my home, water starts flooding into my sister's place (she bought above me) and then trickled down into my place. Reason? No insulation around the pipes! Yay for lazy shady developers!

Anyway, I'm going to hang onto my place for a couple of more years, most likely. I have to see what next year has in store for me and then go from there. If I move to another city (good chance of it) I'm just going to rent my place out until I return (I'll rent in the new city). It's a good little starter home and when the pipes are insulated someone will be happy and lucky to have her, I think. But I know plenty of people who also have great little homes who have finally had to give up and stay for awhile or rent their place out b/c they went ahead and bought another place. One girl and her husband are asking nearly $50,000 less than they bought their place for a few years ago. That's got to hurt.

Shasta / November 14, 2007 1:14 PM

First of all, I'm not all that sure I want to own a home. Ever. Right now, I'm making more investing in stocks. If I were to buy, I think I'd hold off a bit. I'm not convinced things have it bottom.

Steve / November 14, 2007 1:28 PM

We're a year and a half in on the great home-owning experiment -- we've made 5 percent of our mortgage payments (18 of 360) to winnow the principal down by all of 2 percent, even with throwing a little extra in each month. Zillow claims our house is worth 10 percent more than we paid for it; I suspect we'd be happy just to break even despite the $25k worth of improvements we've made.

I would be very nervous about buying anything new right now -- prices for just about every type of building material have jumped significantly over the past year, and you've got to assume there's more than one builder/rehabber out there doing things on the cheap as a result.

fluffy / November 14, 2007 1:45 PM

Even when I was married I never owned a place. My ex always wanted to - I resisted. Maybe it's from moving so much as a kid, I don't know, but the concept of owning a place never appealed to me and still doesn't. The less I own the happier I am. I think some people think of buying a place as a rite of passage into adulthood. I think knowing what you want is more adult.

freepy shwirtel / November 14, 2007 2:53 PM

My wife and I are shopping suspiciously. We have a nice down payment but everything still seems pricey. This discussion is a good argument to hold off a lot longer. All the data regarding foreclosures points to disaster, plus the fact that banks are only lending about half what they were lending a year ago, leads me to believe that unless someone wants to accept a lowball offer of 20% under asking price, we can wait it out. There are so many condos still half-built that there will be a huge onslaught next year. Even if you aren't shopping for a condo, other properties are sinking with them. If anyone wants to hear the opposite of this perspective, just mosey on over to yochicago.com where everything is just swell. Those free counter tops they are throwing in ought to make you shiver with glee.
My final statement- it hasn't even gotten close to ugly yet. Look out.

Hm. / November 14, 2007 3:44 PM

They say if you rent you can own... but whoever said that didn't go to a small liberal arts school on their own dime.

katie / November 14, 2007 3:47 PM

I'm in the same spot as freepy schwirtel. My husband and I have been actively looking for a good portion of this year, but are currently taking a short break during the holidays. About a month or two ago, we found a place, made an offer, and then backed out because when we had a building inspection done the inspector found some seriously shady, shady shit!!!

Everyone we asked advice from told us to wait, wait wait!! The market is pointing towards everything getting worse and worse. There is already a glut of condos and homes on the market, plus a ton of the ARMs are going to readjust really soon, so I imagine there will be even more stuff out there and buyers will have a ton of negotiating power.

johan / November 14, 2007 5:16 PM

Agreed Katie. I've had my place for a little over 3 years. The value went up initially. However recently I've been trying to refinance on my home equity loan and the drive by appraisals having been coming back at basically what I originally paid for it or 10-20K less.
If you are first time buyers, I'd think it wiser to wait another six months until we're in the true bottom of the market. I'm betting it'll be foreclosure galore. If you really want to buy now, make sure it's a place that'll hold its value, like a neighborhood that's still has active commerical development going on. I'm looking for a single family home now and hoping that even if I wind up having to sell my condo for less (which I kind of doubt will happen) I'll get such a good deal on a house that it'd be worth it.

Erica / November 14, 2007 5:18 PM

Buying and selling, Yikes! It's too early to say how we feel about the market. People seem to like our place. We have a couple coming in for their second showing this weekend. Hope they bid. It's an amazing place. Whoever buys it is lucky.

Carrie / November 14, 2007 5:47 PM

Erika-- I love all the colors your chose for your place- it looks awesome!

Carrie / November 14, 2007 5:48 PM

Um... that you chose, not your

kate / November 14, 2007 6:54 PM

Eons away from being able to own a home.

I like renting though, gives me the option to skip out on a neighborhood if I don't like it after a year.

C-Note / November 14, 2007 8:25 PM

I'm dealing... numbers a little too gaudy; too disgusting to share. And it's easy -- I learnt in in Miami a few years ago.

Leelah / November 14, 2007 8:32 PM

I had a cute little house in the wild wild hundreds, but with the help of my parents, I now have a cute (albeit much smaller) condo in Logan Square, and I couldn't be happier.

JasonB / November 14, 2007 10:47 PM

I've been putting my place on and off the market for the past two to three years. It just ain't happening. Anyone wanna buy a two-bed/two-bath loft in the theatre district?

Meanwhile, I've been scouting Evanston for a new place (which I'm pretty sure is the only suburb I'd ever live in).

And remember folks, if you're contemplating taking the leap -- as much as society says "BUY A HOME" it's really not as necessary as they make it out to be, nor is it always a luxury(email me for horror stories).

flange / November 14, 2007 11:57 PM

i'm with fluffy, kate & jasonb. no need to own. the two reasons to own are a retirement fund and an inheritance. neither is an issue here.

Cinnamon / November 15, 2007 12:18 AM

Refinancing and crossing our fingers that we'll be here for a very, very, very long time. Love the neighborhood and our neighbors and I hate that so many of them are leaving so developers can gut rehab all the buildings around me. But the initial assessment is that our place is worth 12% more than we paid for it 3 years ago.

paul / November 15, 2007 8:51 AM

I'm waiting for The Spire to be finished. By that time the market will have disentegrated so badly that I'll be able to afford what they'll ask for rent. Although by then, it'll be mostly Section 8.

In Evanston, there's an empty, for-sale house on either side of me, and another down the block. They've been that way all summer, and one of them much longer (brand new building, asking way too much, like Spire-too-much).

Hugh G Rection / November 15, 2007 8:52 AM

I'm terrified to get into the market (were I able) given so many of these comments. The focus by and large is on profit, which is understandable, but apparently not wise. I would no sooner max out my credit cards to buy stocks than I would get a mortgage to purchase an "investment." To continue the analogy, it's seem foolish to believe the housing market can support an unending amount of "flipping," where huge profits are realized seemingly overnight. Like stocks, which I'm told you should purchase with the long term in mind, housing (for me) is something you buy and hold on to. Further, people should keep mind the difference between what your house/condo is worth and what it will garner on the market. This simple lesson seems lost on many, to their own financial tragedy.
You can point to your friends who made a mint on their condo-I have them too. But I also have friends who made a mint on dot com stocks, purchased ultimately by someone who lost a fortune no doubt.
It's a wait-and-see attitude for me.

Ryan / November 15, 2007 9:03 AM

We rent in a live/work space in the Fulton Market area and have watched it exlpode full of new condos (conversions and new builds). We have about 2300 square feet and pay almost nothing. We're almost in a position to buy, but with such low monthly rent, its hard to justify, especially since we both work from home and most of the upgrades we've done to the place (the luxury of live/work zoning) are tax-deductable. I'm signing a 5 year extension to our lease to lock in our rate.
We're also contemplating purchasing a more inexpensive vacation property instead of purchasing in the city.

printdude / November 15, 2007 9:09 AM

Not gonna sell.
Not for quite some time.
We bought to stay, and stay we will.

It is nice, though, that we have a "sellers insurance" from the Southwest Side Homeowners Association, where we have a guaranteed low selling value that was done with a thorough evaluation.
the sad thing is this program was introduced to eliminate white flight.

stella / November 15, 2007 9:39 AM

By some miracle we managed to sell our condo last June (in 1 week!) and made a $40,000 profit (we lived there for 3 years). We bought a 2 flat in Logan Square that we are converting into a single family, live/work space. With this market I just feel so lucky to have unloaded that condo!!!

Sam / November 15, 2007 9:48 AM

I just got out of school a year ago, and I'm not entirely sure if I want to stay in Chicago, but everyone keeps telling me "buy a condo, buy a condo". Two of my coworkers (25 and 27) both bought houses in the suburbs with their siblings, but I just can't do it. Too much commitment. So instead of saving for a down payment, so far I've just been paying off my student loans. Maybe in another year I'll feel differently.

KevinB / November 15, 2007 11:00 AM

JasonB:

Shoot me an email. I'm looking for a 2bd/2ba and as long as its close to rail or close to downtown and reasonable I'be be interested.

I'm a pre-approved, first time buyer :)

bncent@att.net (my spam catcher address)

Andrew / November 15, 2007 11:19 AM

Sam, that sounds like the most responsible thing to do. This is not a market to jump into if you're not ready.

Spook / November 15, 2007 11:25 AM

I'm happy.After being gentrified out of four apartments in Buck Town/ Wicker Park,
I brought what I could afford at the time, a dirt cheap 1,600 ft, condo with few frills in a rough patch of Logan Square.

When the housing market took off I some times regretted my cheap choice. People were buying urban palaces, because then income didnít matter for a mortgage. But I stayed put with a fixed 6.1% interestís rate and plugged away to pay down my mortgage. I knocked it down to comfortably fewer than 900 dollars, lower than most folks pay rent for a three bed room.

Putting up with other owners can be a hassle, but our association went with a Management Company which cut problems down and being on the board gives me more control. I like that I canít be forced out, which is great as I create and collect art, vintage found furniture, plants, etc. I also have a huge dog. I want my own house with a garden and more dogs, but my current place is so cheap, that I will be able to keep it as income earning property. One day Iíd like to move to a warmer climate, but itís nice to consider having a place in Chicago as well.

jen / November 15, 2007 11:38 AM

before i got married, i toyed with the idea of attempting to purchase a condo. notice i say attempting. once i started researching the web and talking to people, i got scared away. and this was 2-3 years ago.

the truth is, until me and the husband know what city we see ourselves in for the long-term, we're fine with renting — of course, we get bummed knowing we can't paint or make real improvements to our rental. but that's not enough of a reason to take the plunge.

my student loans will be paid off this year anyway, so maybe then we can concentrate on saving for the market when the time is more suitable. or not.

Andrew / November 15, 2007 11:46 AM

I'm saving for a down payment, and have been for about two years now after paying off college-era credit card debt. It's hard because, as a graduate student, my income is extremely low, but I've been plugging away and have more in the bank than friends who make twice as much as I do. At this stage I'm unsure whether or not I'll be able to buy before I finish the PhD (due both to the shifting market and the wisdom of buying to stay), but it's nice to know that at the very least I'll have a sizable down payment for wherever I'm able to find a professorship upon graduation.

spence / November 15, 2007 12:00 PM

In the end, it's a trade-off between stability and flexibility. I'm still kinda young and the last thing I need is an anchor.

kelly / November 15, 2007 1:31 PM

I bought a 2 flat in pilsen a few years ago and am lucky to not have to cover much mortgage thanks to the 3 bedroom rental unit we have. We're almost ready to move though - so the hope is that the market will bottom out next year, and we can hold on to the 2 flat and get something else in a new neighborhood.

ksy / November 15, 2007 3:01 PM

my husband and two neighbors and i are ready to buy a two-flat--we even found a great deal in our neighborhood (andersonville). but we're worried that we're going to have a tough time selling both of our 1 bed/1 bath units in this market--especially now that the holidays are approaching.

we're too scared to buy the two-flat without selling our places first--can't afford the double mortgage!

Poppy / November 15, 2007 3:07 PM

My husband & I bought a Lincoln Square two-flat about three years ago that we're rehabbing (slowly because it's almost all been DIY). Finally nearing completeion and all the really expensive stuff - hardwood and drywall. But, once that's done we can move upstairs and rent out the first floor which will be a huge financial relief. We're definitely holding on to this house for the forseeable future.

Jill / November 15, 2007 3:51 PM

Like Jen, I toyed with buying a condo before I met the husband. I ended up taking a class right around 1999-2000 and found out (a) I didn't have enough money in the bank--this is right before they were just giving away money, and (b) all the new construction/gut rehab condos were pretty much crap.

Now I'm a little afraid to buy--everything just seems way overpriced thanks to the big boom and trend in flipping. I don't trust that I'd get a newly renovated property that was decent (and without a frickin whirlpool tub), and just from browsing through Craigslist from time to time, even fixer-uppers think they deserve about the same prices as new properties.

Spook / November 15, 2007 4:16 PM

p.s,

I know yall might think Spook is crazy and....., well you're right, but on this economic issue and about Chicago's future, I'm right.

If you plan on living here, you should buy something in the next few years when the market tumbles more.

Because, Chicago's gonna be a more drastic version of Paris, poor and working people won't be in the city,
but unlike Paris they will not be welcomed.

If its a house, buy old brick, condo, the same. Old was built to last.

Megan / November 15, 2007 4:40 PM

I'm a licensed Realtor out in the 'burbs and I had to put in my two cents. The market has tanked because people buying during the boom got shady financing (interest only, arms, etc.) on overpriced homes. Now their payments have suddenly doubled and they can't afford them. Buyers can't get financed as easily as they could during the boom, and the ones that can get the financing don't trust the market. I foresee the market stabilizing once W gets out of the house and people start to have faith in the economy again. My advice is this: if you are a buyer, plan to stay for at least 5 years, have enough monthly to cover your principal, interest, taxes, and insurance, and you have 3% of your purchase price to put down, go FHA and you'll be fine. Prices are low and you can find great deals. If you're a seller and you don't have to sell your home now, don't. Within the next two years things will pick up. The buyers will regain their trust, prices will level out and it will become a seller's market again. If you are in dire straits and need to dump your house, drop your price to the absolute lowest point that you can, selling is better than foreclosing any day.

vanessa / November 15, 2007 4:51 PM

I want to buy a place, but like some of you I am waiting for the market to bottom out. I figure with the amount of foreclosures and condos being built, it's only a matter of time before the bottom falls out. And hopefully, I'll be ready.

A side note, my mom has been a realtor for the past 20 years (she just does referrals now). Anyway, she said that if you were to save $10,000 to put on a down payment, you are only saving around $10 per month off your mortgage. So maybe not save so much? I don't know what the answer is, but just putting that out there.

zoenotcool / November 15, 2007 4:57 PM

We want a house, not a condo or townhome. Problem #1: can't afford in any neighborhood in the city that we like ( Lincoln Square, for example). Problem #2: we are undecided on the procreation issue and don't want Catholic education if we do have kids. So even if Problem #1 was solved, the public schools would have to be great, which we all know they are not (for the most part).

We are looking in the suburbs and planning to buy in the spring when our lease is up. We really want a brick Chicago-style bungalow, but don't want to live in Berwyn/Cicero.

A starter home will be full of compromises, but safety and community cannot be two of them. And we aren't big fixer-uppers, so that's another wrinkle.

Mikey / November 15, 2007 6:27 PM

Finally bought and moved into a condo for the first time in February of this year through the CPAN program (my condo is supposedly valued at $275,000, though I only had to take a mortgage out for roughly half that; the other half upon sale goes back to the CPAN program). At any rate, it's a nice and modern new construction condo (stainless steel appliances, huge balcony, etc.) in a decent neighborhood that I otherwise couldn't have afforded on my own...

Of course, during the buying process, I met a wonderful woman with a young daughter--she currently rents an inexpensive apartment in the south suburbs, and is adamant about us moving into a house together in the next year or two, since we decided that's in our future. God knows we can't afford to buy a house in the city, so as a compromise between her Southside and my Northside families, we're considering the Elmwood Park area or another near West suburb...

Anyone know what Elmwood Park is like these days? I haven't spent much time there since my college years in the early 90's...

steven / November 15, 2007 10:09 PM

I want to own badly, but too much debt right now. It's a mess out there anyway, so I suppose its a good time to wait. I'd rather everything settle down before making a move.

freepy shwirtel / November 15, 2007 10:52 PM

Wow. I expected some sentiment along these lines but this is pretty grim. But I think this type of remorse is inevitable after so much unchecked Rah Rah spazzticity. The process took a long time to begin to unravel but it is going gangbusters now. Most of the properties foreclosed on in the last few months aren't even on the market yet, and the biggest re-adjustment in ARMs hasn't hit yet. Yipes.
I had lunch with my brother-in-law and his real estate agent in the early spring and voiced all my concerns and she just looked annoyed and said 'What are you, an economist?' Evidently she just liked to open the door and let you in to walk around once and sign the paper and that's all she needed to know.
Really, all I am is cheap and willing to read the business page in the NY Times every day. You could see this coming for a long time. As much as I want a house, I don't see an end to this anytime soon.

J D / November 15, 2007 10:59 PM

H O L D I N G

Spook / November 15, 2007 11:13 PM

freepy shwirtel

if I might address two of your points.....

"voiced all my concerns and she just looked annoyed and said 'What are you, an economist?"

Heaven forbide you actually pay attention to whats rigth infront of your FACE!

by be being

"willing to read the business page in the NY Times every day."


This of course makes you a freak in our modern day society and we wonder why we have the Ppresident we do, he is a reflection of who we are collectively,

but back to mortagages,
care to connect or read the tea leaves between the record foreclosers and the 16 billion we owe to China, 14 billion to Japan, 12 to Britain, or we can say F%ck it, pass me the Red Eye.

I'm telling yall its gonna get deep!

Dolores / November 16, 2007 9:28 AM

Spent yesterday looking at houses. What I heard: Nothing is moving, things are "priced to sell," make an offer. (I don't think this applies to lakefront, but in somewhat out of the way places, can hold true.) This very moment is ideal to buy - horrific market, tons of inventory, holiday period which is usually slow anyway. Some sellers have got to move, for jobs or bad mortgages or other reasons. Make someone a low-ball offer (but don't get too attached to the place) - someone's gonna bite and you'll clean up.

tk / November 16, 2007 9:31 AM

Holding! We bought a "modest" (especially by today's standards) house a few years ago and gutted it. I think I'd always planned on trading in for something bigger, because, isn't that just what you do? The market being what it is, though, has really made me realize that what we have is just perfect for what we need. We may never have a "bonus room" or a basement rec room, but our taxes are lowish, and we're not wasting a ton of energy to heat/cool the place. I feel like we're winning...

Hal / November 16, 2007 9:49 AM

We just bought and sold this past spring and are feeling pretty validated. We needed to move due to space considerations and it was time to buy our "final" house, versus the semi-starter condo our place was.

Thanks to a looming poorly planned development in our old neighborhood in addition to market dips, we expect that values there are going to be dropping more than the rest of the city in general. Our sales price was a little depressed thanks to an incompetant realtor for another unit in our building. Fortunately, our own realtor rocked and was able to sell our place for the reasonable max we could have expected within 8 days.

We bought a gut rehab condo in Andersonville and, while we have had some issues with the developer, overall, it's been a breeze compared to horror stories I've heard. We have the space we needed, great neighbors, the safest beat in the safest district in the city and all the Andersonville amenities within very short walking distance.

But taxes are totally going to kick our ass.

In a perfect scenario, we would have sold when we did to maximize the sale price, rented for a couple years and then bought at a lower price with everything drops more.

But I despise moving and the stress of the sales and moving process literally nearly killed our dog (until this, we had no idea she was so freaking neurotic), so the plan we followed worked out well.

V / November 16, 2007 10:46 AM

Perhaps I am an elitist and tend to think beyond my means, but I will give my opinion here.

I live in Wicker Park and before that, Lakeview and it just seems like everything being built falls into two camps:

1) boring, faceless new 8-unit condo buildings that look like they belong in the burbs...but offered at a price that a younger working couple could actually imagine affording.

2) These "super modern" popups....all the look and feel of a modern, custom home if you dont mind the fact that the other people paying 600k + in the 6 units around you have the exact same home. I have titled these "cookie-cutter custom".

Personally I'd rather save every penny up until im 45 and then buy a lot and build my own custom home. But the truth is even then I wont be able to afford it, as buying land and building a home anywhere remotely id want to live in the city (ie not far north or far west or far south side or suburbs) will never be affordable for anyone short of a millionaire.

Is is arrogant of me to want a home with a "specialness". I dont want to have to walk home at night drunk and in the dark and not know which faceless brick facade and black metal gate is my "home".

Carrie / November 16, 2007 11:44 AM

Mikey, I used CPAN, too. I think the rules have slightly changed since I bought my place (I think current CPANners have to sell through CPAN again, not on their own? I'm not positive though) Either way, for those of you who don't have a down payment (like moi) and are looking to buy, but don't make a ton of money, CPAN is a pretty decent program. You have to go through a few classes to qualify, but it's mostly people just telling you what it's going to be like owning a home or bankers talking about mortgages.

Janet / February 22, 2008 1:12 PM

I'm watching prices like a hawk right now. Want to buy a condo in Wicker Park. I've been using a search engine called Roost http://www.roost.com which lets you view everything and search by neighborhood. I'm seeing a lot of stuff that is starting to look interesting in the $300,000 range

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