Chicago entering a housing bubble?

[Collins B.]

Hi,

I wanted to get everyone's perspective on if Chicago is close to a major housing bubble?

Looks like Chicago is headed towards the perfect storm: an oversupply of housing, crime, and taxes. There are currently 20 billion dollars worth of mega development projects being built or will soon be breaking ground. Everywhere I look in the west loop or near downtown there is a crane building a new towering building. Are there really that many people who can afford half a million dollars or more, sh*tty two bedroom condos?

I live right outside the west loop in Chicago. If you venture a half mile west of me, it feels as if you are in a different world. Shootings happening daily, crack and other drugs being dealt on almost every street corner, and elected officials seem to just turn a blind eye to all the chaos. Close to 2,000 people have been shot in Chicago so far this year alone.

If that wasn’t bad enough it seems as if Chicago and Illinois are choking their constituents with unjustified tax increases. My property taxes have gone up over 30% since 2013. Looks like my property taxes are now going to increase even more. My utility bill which includes water, sewage, and garbage has gone up over 100% since 2015 (this is also really just a hidden tax since this use to be included in your normal property taxes). Chicago also has the highest sales tax in the nation at 10.25%. To make matters worse, Illinois just increased income tax by 32%. The state is losing more residents than any other state. Every 5 minutes Illinois loses a resident to another state taking their money and tax dollars with them.

I was thinking about buying another rental property in Chicago, but now my gut is telling me to pick up my bags and try my luck in another state. Let me know your thoughts!

[Brie Schmidt]

Depends on where you are and what kind of housing. A condo - yeah that has been a bad investment choice for over 10 years. Downtown? I would not go near it, the amount of new housing being created is scary and all those rental buildings can be converted to condos and create even more surplus. Trying to deconvert a 2-4 unit to a SFH on the north side and sell for over a million? That ship has sailed. Try buying a 2-4 unit on the north side, every decent property has 10+ offers in days and going $40k over asking price may not even get you the deal.

Generalizing Chicago is impossible, every neighborhood/area is different and the condo/SFH/2-4 unit markets within those neighborhoods is very different.