Yuppie Belt hit hard - defaults climb 10% citywide (foreclosure in Chicago

[UpInArms]

http://www.wbbm780.com/asp/ViewMoreDetails.asp?ID=31434

Home foreclosures are hitting the city's hottest neighborhoods in the wake of a recession that claimed thousands of white-collar jobs.

Once a phenomenon confined largely to the city's poorest neighborhoods, foreclosures are rising rapidly in places such as Lakeview, Lincoln Square and the Near North Side. Many of these areas have seen a rise in home building, which brought an influx of transient, single homeowners who worked in jobs in sectors hard-hit by the tech bust and the stock market's collapse.

Overall, home foreclosures in Chicago increased 10% in 2002, heaping another bad year on top of a 23% spike in mortgage defaults the year before, according to data just compiled by the National Training and Information Center, a Chicago non-profit group that lobbies on fair-housing and community development issues.

...more...

[tsipple]

1. There Are Lots of Overextended Professionals

It's amazing how many jobs have been lost, the collapse in family net worth, and how many professionals spent way too much money on housing. That's having a ripple effect in the real estate market which is falling apart right now.

[SemperEadem]

2. and now they have their own reality tv show showing their stuff

getting reposessed... they, too, have arrived.

[kysrsoze]

5. Chicago is quickly becoming unaffordable

If you live in the city, you can't help but spend way too much. Average cost for a 2BR condo in these and other areas of the city is upwards of $350K. 3BR condos are $400-450K. Most people here only dream of owning a house. There are areas where prices have gone up well over 100% in less than 5 years.

I managed to keep my job but have been hit hard on my salary. I've had to refinance twice just to keep things under control. Luckily I got a great rate, or I would have had to sell by now.

The only consolation (well, not really) for people who've been foreclosed is that rent is really cheap due to the interest rates.

[chasqui]

13. Rent.

Right now it isn't an owner's market in Chi-Town. I rent a one bedroom in a pretty choice area of Lincoln Park, $800 a month with DePaul only a few blocks away. This is a renter's heaven, and landlords are falling all over themselves to retain tenants.
People that bought homes with the thought that they would be a good investment are now stuck with that investment, and they have to pay taxes, condo association fees, and are also heavily leveraged with loans. Too many liabilities, too few assets, and overly dependent on a job not disappearing.
This is a tad off-topic, but if you homeowners were interested in the house as an asset, didn't you give some thought to the risks involved before you purchased? Or did you all just jump on a bandwagon, a symptom of a lack of a critical mind, the failure of a university to truly educate?

[Media_Lies_Daily]

18. Most people capable of "critical thinking" never expected the...

...economy to go from a massive budget surplus to a massive deficit in less than three years. Add to that a massive erosion of civil rights and the beginning of a war that appears to have no end in the forseeable future.

The people truly lacking in the ability to think at all are the twisted rightwingers that got us into this mess.

One observation about your post...you sound almost like you're enjoying the fact that so many people are suffering. Why is that exactly? Did you predict this kind of economic collapse, or did you just happen to get lucky?

[RaRa]

20. Hmm. here's a little math lesson from the "University"

We used to live in your neck of the woods (where $800 month THEN would get you a tiny studio). So, now our mortgage is about $1500 month (instead of the $1500 we were paying in rent). We now can write off almost all of that at the end of the year (so we actually pay maybe $50/month=$600 year) How about you? Hmmm, $800 x 12 = $9600 in donations to your likely asshole landlord. We actually OWN something. So, we'll stick with our critical mind, thank you. We also don't live in the aforementioned neighborhoods. In the South Loop, the vast majority of properties were vacant spaces or empty warehouses. So no gentrification like in Wick Park, etc. Plus, since we live downtown, we shop there, bringing in tax revenue for the schools that the city will be building in the coming years. Developers are assholes, yes. But let's not shoot every buyer trying to get by. And, yes, we now have 2 kids and plan to get the hell out before they reach school age. I'll support public schools financially ("no" on vouchers), but as a parent, I will NEVER apologize for trying to give what I think is best for my kids. And for us, that means a smaller town away from this city and it's congested suburbs. Perhaps even home schooling.

[kysrsoze]

23. So umm, why did you bother moving to the city in the first place?

Actually, your kids might not do so bad after all if you opened your mind a little. You just have to search out the good public schools. They most definitely exist. My daughter's 5th grade test scores are at the 99th percentile. She gets all A's and B's on a grade scale that requires 93 for an A and 85 for a B. She does loads more work than I did when I was her age. She sings in a very talented choir and plays volleyball. The Park District has incredible, affordable activities for kids.

She also goes to an integrated school where there are many kids of various races and social status. There are a number of kids on public aid going with middle class and rich kids. They all generally get along very well. She appreciates what she has and feels true empathy who those who have very little. She also isn't racist and isn't afraid kids of other backgrounds.

And don't act like you're so fantastic because you didn't "gentrify your neighborhood." I live in Wicker Park and we have LOTS of government housing and cheap apartments. We also have a homeless shelter a block away. Our church welcomes everyone and they come. They also have shared services with Spanish-speaking churches in Logan Square.

Of course maybe it is better to take your kids to the country where it's all white and possibly school them at home. They'll have all the best in life - mainly shelter from the rest of the world. That's so much better than being really close to art galleries, museums, lakefront activities, fantastic food, etc. Right? Pilsen is very close to you and it's getting to be a great place for the arts, but you wouldn't want that either, would you? BTW - have fun with the terrible delinquency and drug problems out in the sticks where kids have nothing constructive to do. My sister lives out there and they have MASSIVE drug problems.

You're about to abandon the life you thought you deserved so well but couldn't stand to see your kids grow up in. You don't want to make your kids suffer through these brand new schools they're about to build in your neighborhood. Hmm - wonder why. Could it be that you don't want them around a bunch of blacks and Mexicans? Please move as quickly as possible. You don't deserve to live there.

[kysrsoze]

22. You've got a point there on the 'investment' considerations

I was actually engaged, but we split up and she moved out. Then I had to pay her for her portion of the place. It sucked, but I now own outright and can finally afford it.

Funny though - a lot of people went crazy buying up places so they could rent them at high rates. Now rent is dirt cheap and property taxes have skyrocketed. The neighbors next door are having a bit of a hard time. The woman upstairs dates a guy who had bought a Mercedes S500, but he's now going to have to sell some units. It's not pretty these days in real estate.

[Mountainman]

25. Why do some DUers relish the thought of a once well off person hitting the

skids?

I see it all the time here. No compasion for all, just for the ones you feel deserve it which is someone less well off than yourself.

[Gloria]

3. I'm not in the Yuppie Belt....but down here in Las Cruces, NM

we've had a booming housing market. But in today's weekly business section, for the first time, bankruptcies FAR EXCEED new housing permits for the week of Nov. 27-Dec. 5.

Maybe it's the Thanksgiving holiday that slowed the permits...I'll check next week.
But the disparity was HUGE!

[Logansquare]

4. They have also overdeveloped like crazy

In some Chicago neighborhoods, hundreds, maybe thousands of perfectly good old houses and two-flats have been razed in order to put up towering, five unit McCondos. "Slums of the future" as an architect friend of mine says.

[NormanConquest]

6. I used to live in Logan Square

It's generally free of the Barbie Dream Condos that have cropped up everywhere else in the city. The homeowners there seem to have more of a community spirit & put up more of a fight against runaway development.

[kysrsoze]

11. That's changing real fast - don't expect it to last.

My best friend lives on Humboldt Boulevard and they're building like mad just west of it off Armitage. Check it out. There are new condos and single family homes going up everywhere.

Wicker Park where I live was the same way for a long time too.

[kysrsoze]

7. Yes, it's getting nuts in Logan Square, isn't it?

Ukrainian Village prices are out of hand and they've torn down many old, beautiful houses to put up cookie-cutter condos. It's sad, really and your neighborhood is next.

[Logansquare]

9. The neighborhood group is pretty strong there

However, I drive through Roscoe Village and shudder at what they've done to what used to be a cute little neighborhood, and wonder how long we can hold it back. The people buying these properties are very transient, too--they will be back in the suburbs before any of their kids get in into grade school.

[kysrsoze]

12. Yeah, what a bunch of @ssholes. All these people move in....

then have a baby and either move to the suburbs, or if they're rich enough they put the kids in private schools and move to Lincoln Park. I'm proud that my daughter attends a Chicago Public School. As a whole, I can see room for improvement, but it gets better each year and the gifted program is outstanding.

[chasqui]

14. Yeah, I know what you are talking about:

Those condos are about 5 stories high, 2 feet wide.
Come to think about it, they look like dominoes, getting ready to fall...

[prolesunited]

8. And I wonder who stands to gain

from all of these foreclosures?

The elite are reconsolidating their wealth at fire sale prices. They're not worried about fixing the economy. This is exactly what they wanted.

[Logansquare]

10. Yes, I think you're right

It won't happen right away, because real estate is overvalued in Chicago and many other markets. When the real estate bubble bursts, fasten your seatbelts, cause I don't know what else there will be to invest in.

[chasqui]

15. When the bubble bursts is when it will be time to buy Real Estate.

Morons follow fads. Let the morons do their thing, and when they get burned, step in and do your thing.

[ozone_man]

17. True, but it's going to be a long ride down.

Probably 3-5 years or so. It's just getting started now, as the rising foreclosure rate indicates. The debt bomb. Can you imagine if interest rates rise a point or two, what this will look like?

[Beaker]

21. We have a two-flat in North Park-

The value of which has almost tripled since we bought it in 1996. We had planned to stay a few more years, taking our time fixing it up...But now we're frantically trying to get all the projects done by spring/summer so that we can put it on the market before the interest rates go up. I'm thinking that the rates will be held in check at least until the Lil*Dictator is re-appointed.

[Logansquare]

19. If I have any savings left!

:-)

[nothingshocksmeanymore]

24. Just like they did with the RTC a few years back

[bvar22]

16. Opportunity!

Many of these people voted for bush* A soft touch and compassion may help them to support a Regime Change.

No one likes to be FORCED into admitting they were wrong!