-- Connecting the dots between our economy, government and business --
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Chicago has enjoyed much higher home values than collar counties, due to effect of property tax rate capitalization. Chicago property tax rates have stayed around 2% of total fair market home value, while collar counties, having schools less funded by the state and unable to issue alt-rev bonds to fund operational spending, have property tax rates 3%-4% of full fair market value.
Therefore homes outside Chicago have lost 1%-2% of value annually relative to Chicago.
So it is a property value problem not limited to Chicago (where potential buyers must be pricing in inevitable p-tax rate hikes).
A sad anecdote from a friend I was told today. Dont think losses are this spectacular across the board.. He has a 3 bdr condo in Old Town. Two years ago got refinanced and appraised at $845k. Has two kids and wants to get to the North Shore.asap. Broker told him last week he should take anything over $700k. The day it was listed he got an offer for $450k. Obviously a scavenger buyer but scared the heck out of my friend.
Actually, this upside-down trend in home values is something that has been happening for a number of years downstate largely due to economic forces – many jobs leaving the state. Not uncommon to see beautiful ‘not that old’ homes being sold +20% below what they were purchased at. Chicago’s premium locations were able to avoid that till now – the lawlessness in Chicago has made these areas much less desirable, particularly for families. Welcome to the real estate collapse in Illinois. Enjoy fighting with your assessor.
SIGH….much gratitude must be felt by those who have succeeded in exiting without losing their shirt in equity.
They should pat themselves on the back for facing the problem and executing the only rational response…escape.
You can take the loss now, or take the bigger loss later, either way it will be a loss. And don’t think just because your home values are decreasing that everywhere is decreasing as well. There is a Supply shortage in the areas everyone is trying to escape to, which is driving home values sky high.
I’m guessing if you’re still in Illinois at this point there is no point in anyone trying to get you to leave, but consider this. Even during this pandemic large areas of Tennessee are seeing 6% increases in home value. I’m guessing it’s in part due to people fleeing Dem states for safety and financial sanity. That means every month you delay in Illinois will cost you at least a thousand dollars more when you finally can’t take the Illinois &$%# anymore.
And they’re all flooding out to the suburbs and bringing their terrible politics with them 🙁 All I see in the 14th are signs for Lauren Underwood, Joyce Mason, and Biden.
Lauren Underwood rocks!
Rocks between her ears?
Getting rid of Herpes will be easier than selling a home in Chicago or Illinois.
The greed of the Government pension money has taxed out all of the equity in the properties.
Kiss Illinois good bye, it is DOA, a goner. No chance in hell for anything good to happen.
No opportunities for the next generation. Just become whore and drug dealers.
Only Rich people will be the Cops, Teachers and Firemen living in Luxury homes in Florida on the suckers who stay in Chicago.
Chicago is on the exact same trajectory that Detroit was. After the carnage, there may be ‘green sprouts’ but most of us will be long gone.
Chicago is so full up with liens – no wonder do many bankers vote Democratic, that this could be worse than Detroit, i.e., an asset less insolvency proceeding
Bingo.
Probably now called Covid Herpes. No money in plain ole herpes but loads of cash for Covid Herpes.