Tag Archives: affordable housing

Porker’s Index III

It’s been a while since I did a Porker’s Index and they’re always fun.

Since I’ve got foreclosures on my mind lately let’s start with…

… not quite what I had in mind.

The Shadow Market

“Shadow market” in terms of home sales refers to incomplete short sales, pending foreclosures, and homeowners who are at least 3 months behind on their mortgage payments.

Unemployment in Chicago
August 2010: 11.4%
August 2012: 10.3%[1]

Mortgages over 90 days past due in Chicago
August 2010: 10.4%
August 2012: 10.2%[2]

Amazing how little has changed over the past two…

Months’ Inventory of Distressed Property, Chicago Metro Region
August 2010: 30.2
August 2012: 19.4[3]

Wait… what?

Moving right along, one of the main problems with distressed properties (short sales, foreclosures, and delinquent mortgages) is people spending too much on their mortgage payments.

Mortgage Overspending (more…)

  1. [1]Bureau of Labor
  2. [2]CoreLogic
  3. [3]CoreLogic

Chicago Real Estate Stats: Single Family Homes vs Two Flats

In this corner, the Chicago single family home…

The Secret Route to a Cheap 5-Bedroom Home in Chicago

Let’s talk about two-flats. Despite their prominence in some sections of Chicago, They’re often overlooked by homebuyers, existing somewhere in the borderlands between a house and an apartment building. They absolutely should not be ignored. If you’re looking for a large living space with a yard and garage, and are willing to do some work as a landlord in exchange for a lower purchase price, you’re going to find some excellent deals.

Today I’ve taken a quick survey of the last six months of sale prices across an assortment of neighborhoods, comparing the results of two specific types of property. On the one hand we have single family homes with 3 to 4 bedrooms. On the other, we have two-unit buildings where at least one of the units has 3 bedrooms and the other has at least 2 bedrooms.

… And in this corner, the Chicago Two-Flat. It’s the ultimate Chicago vintage property showdown!

The smart reader will realize that this type of two-flat could actually could serve as a five bedroom home if the owner chose to use both units for themselves. Alternately, if rented out, the extra unit could provide some backup income to help with expenses.

A lot of folks think that multi-unit buildings would be more expensive than single family homes. Today’s research will show that this is not really the case. In fact, in most of the neighborhoods I studied, the median price of a two flat was comparable or lower than the median price of a single family, and the maximums were all 35-50% lower on the two flats than the single family homes. (more…)

“Affordable.”

I guess we all get a little nervous when new people move to town.

So this is a practical shelter blog, which means that I’ll be talking about affordable housing quite a bit going forward. People tend to get all up in arms about affordable housing and write me off as some kind of left wing crystal-gripping-mantra-chanting hippie when I use that term so I wanted to take a moment to talk about what it actually means.

“Affordable” does not mean low-income housing. “Affordable” does not mean Section 8 housing. It doesn’t even mean “crappy low-rent vintage housing with leaking windows and creaky porches.” When I talk about affordable housing – in particular, affordable rents – I am talking about housing that costs less than 30% of the average person’s gross income.

So let’s say that you’re earning under $35k per year. That’s a little above the median income for Chicago rental households. According to a 2011 survey by the Depaul Institute of Housing Studies and a recent study from early 2012 from the National Housing Conference, 75-80% of you guys are paying more than is considered affordable. 24% of you are paying more than half of your income in rent.  This does not make it cool or okay to do so. In fact, I’d go so far as to say that you guys are holding us back economically.  (more…)

Hype Dodger: Zillow rent report provokes mass media faux-analysis

New Rent Report Suggests Possible Bubble – CNBC.

That article up there? It’s written with one purpose – to make you panic and buy stuff.  Courtesy of CNBC.com comes some hype about the rental market. Apparently a new report from Zillow shows rents rising in almost perfect proportion to home sale price falling nationwide. They specifically talk about the high year-over-year rent growth for Chicago, as shown in this month’s Rent Bacon.

Investing in the rental market requires a level head that can stay above the hype. If you feel like you’re running to catch up with the investment market, stop and take control of yourself.

Of course, the media will take any statistics on the housing market they can get and turn them into hype. If they don’t provoke your emotions, you might use your logic to make a decision, and that never works out well for them nor for their advertisers. But they are trying to manipulate investors in the rental market by using the same tactics as those that worked to make home buyers and sellers all crazy and depressed.

They’re doing it wrong. (more…)