Suburbs w/ highest and lowest property taxes (Chicago, Aurora: middle-class, foreclosures)

[numberfive]

Originally Posted by My Kind Of Town

My point was that despite very low property taxes in Oak Brook real estate prices are not recovering nearly as fast as say Oak Park (very high property taxes) so property taxes alone do not make or break a local RE market. If they did, wouldn't you expect the two recoveries to be flipped as Oak Park property taxes steadily increase while Oak Brook's remain relatively low?

Sure... it all boils down to a perceived "best value". Right now the perception is there's a better value in the North Shore vs certain Western suburbs, and the prices area dictating that.

"Best value" could be a tangibles like lower property taxes, sure. It could also be intangibles like proximity to work/family too.

[My Kind Of Town]

Originally Posted by numberfive

Sure... it all boils down to a perceived "best value". Right now the perception is there's a better value in the North Shore vs certain Western suburbs, and the prices area dictating that.

"Best value" could be a tangibles like lower property taxes, sure. It could also be intangibles like proximity to work/family too.

Huh? How are prices in terms of recovery from pre-recession prices indicating that in review of the other thread I copied in? If anything, the recovery in the North Shore is slightly lagging that of the western burbs. I won't dispute that there is a greater wealth of affluency along the North Shore.

Also pointing out that property taxes alone aren't holding back certain areas relative to other areas in the Chicago metro even though there is a common belief that this is far and away the most important driver of RE prices. Property taxes are one part of the equation but less important than say employment opportunities, which I believe to be the biggest factor if I had to pick one.

[numberfive]

Originally Posted by My Kind Of Town

Huh? How are prices in terms of recovery from pre-recession prices indicating that in review of the other thread I copied in? If anything, the recovery in the North Shore is slightly lagging that of the western burbs. I won't dispute that there is a greater wealth of affluency along the North Shore.

I'm talking about recovering (year over year trend). You're talking about recovery (pre-2008 prices).

Originally Posted by My Kind Of Town

Also pointing out that property taxes alone aren't holding back certain areas relative to other areas in the Chicago metro even though there is a common belief that this is far and away the most important driver of RE prices. Property taxes are one part of the equation but less important than say employment opportunities, which I believe to be the biggest factor if I had to pick one.

Sure, that's what I mentioned earlier in this thread -- it's "perceived value", each person has a different priority list in what they find most valuable. Your #1 appears to be employment opportunities. That's way down on the list for me, since I can work remotely from anywhere and still draw a low six-figure salary.

[My Kind Of Town]

Originally Posted by numberfive

I'm talking about recovering (year over year trend). You're talking about recovery (pre-2008 prices).


Sure, that's what I mentioned earlier in this thread -- it's "perceived value", each person has a different priority list in what they find most valuable. Your #1 appears to be employment opportunities. That's way down on the list for me, since I can work remotely from anywhere and still draw a low six-figure salary.

I still don't see it in the numbers that real estate prices in the North Shore are "recovering" faster than the western suburbs though.

[chet everett]

One should not assume that "recovery" from the historic COLLAPSE of 2008 era housing melt down is really the most relevant data point. It is well accepted that a HUGE part of the problem that precipitated the collapse was utterly unqualified borrowers -- the shake-out of subprime lending meant that folks that had no understanding of what sorts of income may have been falsely submitted on their applications were among the first to get evicted. The unpleasant reality of towns like Oak Park, that many naive folks otherwise stuck in the much worse parts of Chicago directly east clamored to be home-owners, was a key factor is both driving prices too high and then seeing a free-fall of prices as those unqualified buyers defaulted. For investors or better qualified home buyers the ease with which they swept in to take advantage of affordable buying opportunities was a key factor in helping prices recover.

In contrast, the sorts of buyers that "pumped up" prices in more costly towns had a different set of problems -- more than a few of them were tied into not just the collapsing real estate prices BUT also worked for financial firms directly or indirectly connected to places like AIG, Bear Sterns or Lehman Brothers. The destabilizing effects of the meltdown in that sector triggered cutbacks that had a domino effect in making certain levels of salary that once supported literal mansions a thing of the past. For folks with the wherewithal to find new employment they may have had to relocate or been forced to put some of the funds that they would have earmarked toward housing into their own business ventures. While such a shift of resources is probably healthy in terms of the overall economy and prudent for folks that probably had become complacent on a "gravy train" of unsustainable BMS and credit default swaps, the net result was to "defroth" parts of the upscale housing market that had gotten out of hand...

I have used car analogies before, and it really is not that different than what happens when super-exotics or "one of one" type collectibles/ artworks are acquired by the handful of "uber wealthy" bid them up to extreme levels -- when that foolish owner decides to get rid of the plaything there is marked fall off and sometimes prices never really match the record UNTIL a new era of "prosperity" is fostered. It is quite clear that there is now no such "mass posperity" with Illinois shaky economy...

[numberfive]

Originally Posted by My Kind Of Town

I still don't see it in the numbers that real estate prices in the North Shore are "recovering" faster than the western suburbs though.

Me neither. Like I was saying earlier, the growth rates are all currently very similar.

[numberfive]

Originally Posted by chet everett

One should not assume that "recovery" from the historic COLLAPSE of 2008 era housing melt down is really the most relevant data point. It is well accepted that a HUGE part of the problem that precipitated the collapse was utterly unqualified borrowers -- the shake-out of subprime lending meant that folks that had no understanding of what sorts of income may have been falsely submitted on their applications were among the first to get evicted. The unpleasant reality of towns like Oak Park, that many naive folks otherwise stuck in the much worse parts of Chicago directly east clamored to be home-owners, was a key factor is both driving prices too high and then seeing a free-fall of prices as those unqualified buyers defaulted. For investors or better qualified home buyers the ease with which they swept in to take advantage of affordable buying opportunities was a key factor in helping prices recover.

In contrast, the sorts of buyers that "pumped up" prices in more costly towns had a different set of problems -- more than a few of them were tied into not just the collapsing real estate prices BUT also worked for financial firms directly or indirectly connected to places like AIG, Bear Sterns or Lehman Brothers. The destabilizing effects of the meltdown in that sector triggered cutbacks that had a domino effect in making certain levels of salary that once supported literal mansions a thing of the past. For folks with the wherewithal to find new employment they may have had to relocate or been forced to put some of the funds that they would have earmarked toward housing into their own business ventures. While such a shift of resources is probably healthy in terms of the overall economy and prudent for folks that probably had become complacent on a "gravy train" of unsustainable BMS and credit default swaps, the net result was to "defroth" parts of the upscale housing market that had gotten out of hand...

I have used car analogies before, and it really is not that different than what happens when super-exotics or "one of one" type collectibles/ artworks are acquired by the handful of "uber wealthy" bid them up to extreme levels -- when that foolish owner decides to get rid of the plaything there is marked fall off and sometimes prices never really match the record UNTIL a new era of "prosperity" is fostered. It is quite clear that there is now no such "mass posperity" with Illinois shaky economy...

Good post, and this is why I like to gauge the health of a suburban market by consistent growth vs a specific price point that may or may not be inflated. And overall, many of the Chicago suburbs are staying flat or gaining slightly.

That's not great when compared to a lot of metro areas or the country overall, but it could be worse.

[My Kind Of Town]

Originally Posted by numberfive

Sure... it all boils down to a perceived "best value". Right now the perception is there's a better value in the North Shore vs certain Western suburbs, and the prices area dictating that.

But you said this here so I'm confused. I disagree - the prices on a recovery percentage basis relative to historical prices for those areas aren't dictating that.

If anything, the affluent sections of the western burbs appear to be slowly closing the gap between the two areas.

[numberfive]

Originally Posted by My Kind Of Town

But you said this here so I'm confused. I disagree - the prices on a recovery percentage basis relative to historical prices for those areas aren't dictating that.

If anything, the affluent sections of the western burbs appear to be slowly closing the gap between the two areas.

So you're confused but you disagree anyway. Got it.

[My Kind Of Town]

Originally Posted by numberfive

So you're confused but you disagree anyway. Got it.

I'm confused with your previous responses because they are contradictory. I disagree that buyers are perceiving the North Shore to be a better value because if that were the case it would be seeing a quicker and better recovery to pre-recession prices than the west burbs.