IDK was it predatory lending or borrowers not wanting to be accountable for their decisions that led to the last crisis? 

Specifically he relies on technical analysis of real estate prices rather than the more traditional fundamental analysis of local economic conditions.   

This compression is directly correlated with several extrinsic variables such as interest rates, demand, inventory, economic expansion etc.Even if rents were to, theoretically, stay the same, it would be the extrinsic variables that would ultimately cause the valuation of your property to increase or decrease.In the end, cap rates are simply a starting point in valuing a property because the true value of your property is set by the amount of money that someone is willing to of for it.

In other states, termites are no big deal -- just a routine problem that comes up occasionally and can be dealt with economically.

I would expect a general economic recession to come before a real estate specific downturn. 

Even taking into account economic vacancy you shouldn't be that high.Go research current rents.Taxes (from seller): $1,674 - Look at tax records. 

This was the time of the "energy Crisis".

In my opinion, it's going to become unsustainable given the current economic situation in Chicago.

Then they have an incentive to economize on the duration of the shower. 

Price of the Unit.This one is pretty obvious, but it bears some further explanation.Quite simply, if your rental price is low, people want to stay—clear value economics.