Monthly Archives: July 2012

Confronting our Agoraphobia, Part I: Carefully Taught

Fear of the marketplace

“Let us never negotiate out of fear. But let us never fear to negotiate.”

— John F Kennedy


“In North America and Europe bargaining is restricted to expensive or one-of-a-kind items (automobiles, jewellery, art, real estate, trade sales of businesses) and informal sales settings such as flea markets and garage sales. In other regions of the world bargaining may be the norm even for small commercial transactions. In Indonesia and elsewhere in Asia where locals haggle for goods and services everywhere from street markets to hotels, haggling is a strong cultural tradition that even children learn from a young age.”

— Wikipedia, “Bargaining

There are some places in the world where to get a bargain means that you’ve used your market savvy to nick some of the vendors’ profit back for yourself. It’s a win in the game. In America, getting a bargain generally means the vendor had decided to lower her list price on a certain item for a short period of time. There is a “win” involved, but it’s more like winning at slots than winning at chess. You’d not believe it from looking at the crazed shoppers waiting out front of Wal-Mart on Christmas Eve, but American-style bargain hunting is a far more passive experience than it is elsewhere.

I have a hypothesis that Americans are afraid of haggling. It’s a carefully taught agoraphobia – in the true translation of the term, “fear of the marketplace.” It has a twofold basis. On one side, the dogma that only the most clever can successfully negotiate a deal. On the other, the forced separation between buyers and sellers. Transactions are automated and anonymized. The pace is quickened to limit a consumer’s ability to research actual value.

This is a pretty major topic, so I’ll be doing this as a multiple article series over the next couple of weeks. To give you an idea of where we’re headed, I’ve provided this handy timeline.

Spiffy, no?


Weekend Links for July 7, 2012

Today I bring you the history of property tax in Illinois. Because I am a giant dork.

Hope everyone had a great 4th of July! Here’s some of the stuff that kept me entertained over the holiday.

  • Hey guys! I found the history of property taxes in Illinois! Tea parties, barbeque parties and Tupperware parties aside, the history of property tax law can be pretty interesting. With taxes go the rise and fall of the public infrastructure. Check out this really cool survey of the history of property taxes in Illinois, courtesy of
  • Demystifying FICO. There’s a lot of myth and fear around credit scores. Get to the truth of the matter. Check out this breakdown of the components of a credit score from
  • Eviction of the week. Rather than an actual eviction story this week, here’s a thought-provoking analysis of the morality inside the “barbaric practice” of modern eviction. Author Mario Salazar sidetracks through the history of evictions, but focuses on the “blame the victim” mentality of shame. After all, dumping someone’s belongings out on the street is pretty darn medieval.
  • $140 billion in debt – who’s to blame? Cook County Treasurer Maria Pappas has made public the financial statements of the assorted county tax districts. This includes their debt and their tax increases going back 10 years. If you know your property’s PIN number, head over to the Taxing District Search and find out where your taxes are going. It’s also worth knowing how much debt your neighborhood is carrying out of the $140 billion currently owed by the county. (If you don’t know your PIN, head over to CookCountyPropertyInfo.comfirst to get your PIN and then head over to the Taxing District Search.)

    CHA’s “Lathrop Homes” development of 920 low-income housing units sits about 80% empty.

  • Everybody’s got to live somewhere. Angela Caputo of the Chicago Reporter broke the story this week that 20% of the CHA’s rental property is sitting empty even though the administration is still receiving funding from HUD as if all of the units are occupied. Held “offline” to repair damage, modernization or simply due to sluggish turnaround times, these units could be occupied by low-income residents who are instead being sent into privately-owned homes.
  • Pretty and flexible. Good in a Yoga instructor and in an apartment.

    Making the most of a tiny space. As apartment prices go up, available space shrinks. This gorgeous New York apartment design uses clean white lines and long straight furniture to trick the eye. It also makes the most of a single room rental by turning the largest objects into multitasking workhorses. Courtesy of

  • Real life (or a reasonable facsimile). If the real world real estate market is getting you down, there’s always, a site where you can download virtual land, houses and apartments for your Sims in video game “The Sims 3.” The designs featured give an interesting insight into fantasy architecture, and the property descriptions used by the site’s owner could well have been cribbed from our local MLS. It’s almost a pity they’re pixellated.
  • The cost of staying cool. If you’ve got a central A/C unit from before 2010, the cost to maintain it is going up. A lot. Find out why your A/C maintenance costs are getting worse in this Angie’s list Q&A.

Thanks for stopping by!


Rent Bacon: May 2012

A new weighted average has changed the numbers but not the direction of the trends. We’re slowing down, guys.

Moving the Goalposts

I’ve been giving some thought as to how Rent Bacon is calculated, and have made some adjustments. Previously I had been weighting rent and market time equally. To some extent when considering rentals this is valid, especially given that an extra few days at the tipping point between, say, 28 days on the market and 32 days on the market can mean the difference of an entire month’s rent. However, the overall weight of market times as a way of judging the Chicago rental market is truly less important than the rent rates obtained. As such I’ve stopped weighting them equally.

Going forward rents changes will be weighted 3 times more than market time changes when calculating Rent Bacon, but don’t fear! I’ve gone back and adjusted the previous months’ charts to reflect this new weighting of the averages.

Details for May 2012

Well, it was bound to happen. Due to a combination of factors we’ve started to slow our year over year rent growth here in Chicago. For the first time this year we’re seeing rent rates lower than last year in Zone 2 and Zone 3, and only a minimal 3.1% rent increase in Zone 1 – Downtown. Only the shrinking market times are continuing to buoy up Zones 1 and 3 to the point where they are showing positive overall movement. (more…)

Cook County’s early 2nd installment property tax bills: What does it mean for you?

Even shorter version: taxes are due early. Great for schools, awful for homeowners.

The 2nd installment of Cook County Property Taxes is due on August 1, 2012 instead of in the late autumn as they have been for years. This is a total WTF moment in the history of Cook County property ownership and deserves a nice thorough review. The short version is that many Chicago and Cook County property owners are going to have to come up with a bunch of cash very quickly. Read on to find out if you’re one of the lucky thousands, and to learn why we’re in this kind of a pickle.

The Passive-Aggressive County Boards and You.

As I’ve briefly touched on before, the determination of property taxes in Cook County (and by default in Chicago) requires multiple parts of the county government to be singing from the same hymnal. Unlike most US counties where property taxes are paid in two equal parts, Cook County is a special snowflake. Because of a year of tax forgiveness back in the 1930s which may or may not have actually occurred, Illinoisans pay property taxes a year behind. A few other midwestern states do this but it isn’t a national tradition. But for Cook County, this year (2012) homeowners are paying for the taxes that they racked up in 2011. Remember this, it becomes important later on in the story.


The StrawStickStone Late Fee Calculator for Chicago Apartments

This is not difficult, people.

...It just isn't well publicized. This comes up over and over again when working with new landlords and with agents who don't do a lot of rentals. Chicago puts a limit on the late fees that can be charged to tenants who don't pay rent when its due. (Oh, and for the record there is no state mandated grace period in Illinois. If rent's due on the first, it's late on the 2nd unless your lease says otherwise. End of story.)

So if your apartment is covered by the CRLTO the maximum you can charge is:

No rental agreement may provide that the landlord or tenant ... agrees that a tenant shall pay a charge, fee or penalty in excess of $10.00 per month for the first $500.00 in monthly rent plus five percent per month for any amount in excess of $500.00 in monthly rent for the late payment of rent;

Which is the most opaque word-based math problem this side of the SAT. So sit back kiddies, I'm gonna do math for you. Again. And since you've been so good this week and I'm able to write javascript, I've even made a calculator so that you can rely on me to calculate the late fees for you over and over again.