-- 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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As I said before our homes are only ATM machines for all the taxing bodies. They have not figured out (gladly) how to take money out of our bank accounts directly. The $1Mil home gets the exact same services as a $200K home but at 5 times the cost which to me makes property in part an asset tax which is not legal in Illinois. Why should it cost 5 times more in tax’s to call the fire or police to your $1mil home vs $200K home? Personal property tax’s were abolished years ago maybe we should take another look… Read more »
The extremely high property taxes of those $1M+ homes scare away most people; that’s the main reason it takes so long to sell these homes and the asking price continues to drop.
Sure, you could buy one of these homes for $800K after it dropped $200K and think you were financially savvy. You wouldn’t be. You’d still have very high property taxes that would continue to increase. Also, what reason would you have to expect your property would start appreciating again?
Exactly. You have no reason to expect a turn-around out of the blue. Until the pension liabilities are dealt with, and the crushing public servant compensation brought into control — it’s only going to get worse.
An Illinois bankruptcy might actually turn things around, too. Once everyone senses the bottom has been reached, all sorts of people will be in buy mode. Everyone likes to be a speculator when it looks like the storm has passed.
Yes, I agree, but when would this buying surge occur: in 2-3 years, 5-10, or never? Many IL residents didn’t wait and already moved out of state; many others won’t wait, either. Also, as I said in previous comments, one shouldn’t be naïve to think that once IL goes bankrupt or defaults, taxes and user fees will drop significantly. For example, do you think the doubling of the gas tax would be repealed? I don’t think it will. Furthermore, the reason that taxes and user fees will remain very high even after bankruptcy or default is because all of that… Read more »
Agreed, but the business community thrives on certainty. Right now the reason for the collapse in luxury home sales is mainly due to these folks leaving town or getting out. Most of these people are business people. If and when Illinois suddenly appears to not have these outrageous public servant liabilities, businesses and real estate investors will calculate the bottom line, and then be willing to buy at that price. Then the market will move. It’s not the total dollars they care about, it’s the uncertain dollars. They will always pass on the costs, but they need to know what… Read more »
The demographics are not on their side either. Home ownership is no longer a high priority for the millennials. Downsizing is a wonderful thing once you do it. Big houses are if you have a lot of people, not for a wealthy couple or small family. A properly organized small place is actually “bigger” than a house with dramatic but useless foyers, and rooms.
Good points.
If you absolutely have to live in IL, buy a small abode to lessen your property taxes and minimize the money you’ll lose as your property value stagnates or decreases. By “absolutely have to live in IL,” I mean that you should have a very strong reason for staying. The excuse of staying because you don’t want to pull your young kids out of their school(s) and away from their friends should be used less and less, because desperate times call for desperate measures.
The problem is that small abodes in IL are expensive due to high demand and the taxes are outrageous everywhere.
“Agents say the drop-off in sales at $1 million and up comes from affluent people taking a wait-and-see attitude toward new leadership in both City Hall and Springfield, and toward the rumblings that a recession may lie ahead for the national economy.”
That’s a nice way of saying that “only the truly insane consider buying a million dollar home in this state.”
Precisely, debtsor! I was looking around at homes in HIghland Park a couple years ago (I did not buy), just thinking maybe an upgrade would be nice. What I noticed was surprising: the value for your dollar was actually really high. What were once $1.0mm homes were now going for $799K and lower, as time went on. I told my wife that “something is up,” because markets don’t act that way in a normal situation. I always follow the smart money, and there’s a lot of smart money on the north shore. If prices are going down, something is very… Read more »
It’s truly becoming a bloodbath. Unbelievable prices on some of the classic, old mansions in places like Kenilworth.
Houses that are decades old, need major renovations and have taxes that are tens of thousands a year. The north shore has gotten too old, too grey and too progressive in recent times. Heck, Prairie Ave. used to be where all the gilted age wealthy lived 100 year ago; today virtually nothing is left. I’m not saying the north shore is collapsing, but, it has lost much of its prestige with age, and it’s desirability has dropped significantly.
And its schools have been taken over by woke authoritarians.