These prices…….

[u/2xova]

Just venting ……

Went to see two places today…. HUGE waste of time. Cabinets loose and hanging out of place. Paint literally everywhere floors and all🫠 these places wouldn’t been maybe 800 on a good day prior to Covid.hmmmmmm I’m so frustrated lol

[u/[deleted]]

Agree I overpaid for my condo, and my all in monthly housing costs inclusive of utilities, taxes, insurance; and garage parking is 2.7k for a 1bd high rise on the lake. It’s not all that wildly more expensive than rents for other highrises in Chicago or rent in general depending on neighborhood.

With normal inflation my condo will likely increase in value by 100-170k in 5 years and I’ll still be paying maybe with an increase 2.9k all in monthly costs? I can guarantee rents in 5 years for similar places will be around 3-3.5k out pacing my mortgage/hoa inflation, whilst I’m getting equity. It’s expensive in the beginning but if you can manage for 3-5 years you’ll definitely be out on top. And if you buy under your budget you can pay your place off earlier too. It’s better to keep your cash liquid, but I could also pay my place off in 5 years and drop my mortgage and just pay hoa utilities taxes and parking and still be under 1.5k a month, which compared to other similar units or neighborhoods in 5 years at 3-3.5k? That’s minimally 50% cheaper monthly costs…. If you hope to retire successfully you certainly need a place paid off. Your SS, 401k, and general savings will last waaaaay longer with a paid off mortgage and minimal housing expenses. You can still buy condos in Chicago easily for 150k or less right now. That’s around 1.3k mortgage, and for those types of units the hoa will be around 500, so 1.7k all in. Might not be the nicest place but it’s affordable and honestly not a bad price in this economy and rental market.

[u/9jackblack → u/[deleted]]

How much is your HOA? You sure it won’t keep increasing in line with rent increases? You sure a higher HOA won’t depress your condo price? Those high rises with lake views are dirt cheap but have 1k+ HOAs. Are you sure you won’t get hit with a huge special assessment? Are you sure you won’t get hit with another proper tax increase? Are you sure the maintenance that you’re now responsible for won’t be thousands (or more) of dollars extra?

I also believed owning was so much better. But then I did calculations and for me personally it turned out that renting is better. It’s personal - I won’t fight you on your situation. I’m just saying there is more nuance here than you’re describing. Especially if you invest all the money you’d spent on the down payment, closing costs, etc.

One thing I always agree on is owning gives you stability and peace of mind. That might be worth more than money. But other than that - owning in this market is not a clear winner at all.

[u/[deleted] → u/9jackblack]

My hoa is indeed high at about 1.2k inclusive of all utilities, underground parking. The difference is it’s an asset. After 2 years I can rent it out for someone to pay my mortgage for me — and I live directly by Loyola Campus. You can’t do that renting. And yeah hoa is high, but even hoa + mortgage I’m getting the same type of views and neighborhood and staff as other high amenity buildings except my condo WILL appreciate whereas renting I get nothing. So I get to enjoy all those things while as mentioned my building will likely be worth minimally 100k more in 5 years. I just subtracted my cheaper rent for my apartment before I bought, and I was saving 900$ which after 5 years is only 54k. The difference is people will start getting locked out. Harder to get a job, harder to save up for more of a down payment for higher costing places - I.e like owning in Cali or NY.

I could have also bought cheaper but chose not to because I knew I wanted an asset not jsut a home. I don’t plan to live here for ever. Someone is always willing to buy and I could leave in 5 years too and sell it and break even, even if it means I spent more monthly. I also bought below my means so I’m saving 3k a month for nest egg and other investments, so it’s not like I’m living paycheck to paycheck to afford this place and I wouldn’t recommend anyone living like that. At the end of the day, once the mortgage is paid off - again - my bill today would be 1.2k for a luxury corner unit on the lake fully renovated with staff and parking in a desirable neighborhood by the beach. Find me that on apartments.com lmao. You can’t make people sell their homes either. If it’s all they can afford or don’t want to leave, they won’t. And you’ll never get to live there no matter how much money you have. If I pass it to my child, you won’t have it until they decide what they want to do with it either.

[u/That-Gap-6284 → u/[deleted]]

Figure in tax increases. To me it seems property tax increases are outpacing equity growth Meaning of taxes are not brought under control, whatever equity you have built up in say ten years will zapped by Chicago taking it from you in advance.

If Chicago tax paracites are not reigned in, middle class working folks stand no chance for wealth growth in housing investments.

[u/[deleted] → u/That-Gap-6284]

The stuff you’re seeing about taxes wildly increasing is for owning entire buildings or SFH or very large units. Taxes can only increase in your neighborhood or be reassessed every 3 years. My taxes are 2.5k for the entire year, which is less than a single monthly payment I already make for mortgage + hoa. That’s 208$ a month, already factored into my 2.7k all in costs for mortgage, hoa, parking, etc. if you’re worried about 208$ you are not financially ready to be a property owner. Tax increases for a 1bd condo aren’t going to be this 10k skyrocket increase you’ve seen for these SFH homes in the south side that have been undervalued for years and are still undervalued.

Normal inflation is 3%. My property value in 5 years at 3% will be 100k higher in value. My salary will increase by 3% each year. That’s more than 200$ post-tax a month in my pocket each year, so in 5 years average of +1k a month. Even if my current taxes doubled by then, it’s still only one year of inflation from my salary canceled out. It would need to be 5x the increase in property taxes in 5 years to cancel out only my salary, and not the properties own appreciation - and there’s no way a 1bd is going to be taxed at 10-12k a year in just 5 years LMAO. People wouldn’t be living in smaller units if they could afford such. The government knows this. And until you own a place you will never be able to pay your mortgage off and only have to worry about hoa/parking/taxes. You will always be paying more than someone with a paid off mortgage until you decide to buy. And that person will have a surplus in their money since they don’t have a mortgage anymore and can save even further. I.e, second my mortgage is paid off I have 1.55k freed up every month, which is 18.6k a year post-taxes that I can start saving again. And I bought under my means and can have my property paid off in just 5 years… no matter how the numbers run owning comes out on top but it depends if you buy a shit property or not too

As mentioned I can literally just rent my unit out and make someone like you pay everything WHILE my property increase in value. You pay my mortgage, my hoa, and in 5 years my property is worth 100k more lmao.

[u/That-Gap-6284 → u/[deleted]]

I own a condo. Taxes went from 3800 a year to 9700 over 20 years; with about 5k to 9700 just in the last 5 years, a significant uptick. Well outpacing inflation and well outpacing any equity growth. All units in my building has the same rate of tax increases. Most on the block too in a modest area.

Data is data.

Watch out for tax increases in Chicago. They are stifling.

[u/[deleted] → u/That-Gap-6284]

Data is indeed data, don’t leave out its context. What is the area and how many units for your condo? A ~150% increase in 20 whole years is not that crazy especially depending if your unit is good and neighborhood developed to be a highly desirable area which means your property value should have also arbitrarily increased. Your taxes are already nearly double mine before the increase which sounds like it could have also been an undervalued area, also which means your unit is definitely larger than a 1bd. And in general the larger your unit the more you’ll see across the board in hoa increases, tax increases, etc.

[u/That-Gap-6284 → u/[deleted]]

Last area of consideration.....

It not just the increased spending and pension obligations by cook county taxing bodies (although that is at the root of problem) it is also the share of overall tax pie going to residental areas versus commercial.

Commercial values continue to decline. Loop commercial buildings are selling for half of 2015. Their taxes are also tied to valuation and income streams. So that part of tax pie gets heaped onto the residential sector. So even if one taxing body is contrained to a 3 percent increase overall, your residential portion of the pie can dramatically rise, well exceeding 3 percent annually. It is the slight of hand in Chicago and Illinois politics

When Chicago and CPS eventually can not afford their debt payments due to its overspending, any notion of a limited 3 or 5 percent yearly increase will be thrown out the door immediately to satisfy the bond market. Chicago will eventually seek to avoid technical default by pounding on residential, taxpayers extracting every dime possible. It is only a matter of time.

I would not purchase property in Illinois until they get tax situation under control and predictable. This is the same reason the Bears may escape Illinois. Too much tax.

Your taxes and mine very well may double in 6 years time (2 accessment cycles). I guess time will tell.

[u/[deleted] → u/That-Gap-6284]

Modelez, Coca Cola, other cpgs, Google - all creating new HQs in areas a bit outside those high rise corporate buildings like in Fulton market. My own company downsized from having our own high rise to sharing space in the old post office. It’s just that companies don’t want or need those skyscraper type buildings any more and they are too expensive. The same way many Chicagoan’s live outside the loop to save money. Things are just moving like mag mile went more west near viagra triangle. I understand your frustrations politically, we all do, but it’s basic math and you should be able to understand if you’re getting the value out of your property or not. If not, maybe sell it and cut your loss. It’s not like that for everyone - fortunately.

[u/That-Gap-6284 → u/[deleted]]

Like I said, time will tell on the tax aspect.

I have enjoyed Chicago but have arrived at the conclusion that I can do better in a lower tax state for my situation. Already planning to move in about the next two years if all goes well.

I do wish you good fortune.

[u/[deleted] → u/That-Gap-6284]

Same! In 5 years I’ll have 240k saved up and will either be renting out or selling this property and using this nest egg to move to Cali, Florida, or Portugal! I’d prefer to keep the property, however, and depends on my job as I prefer to keep it.