MARKET BREAKDOWN
REGIONAL SPOTLIGHT: CHICAGO
Regional Spotlight: Chicago, Illinois THE MARKET IS POISED FOR STRONG GROWTH, BUT THERE'S A CAVEAT.
by Linda Liberatore and Carole VanSickle Ellis
H
taxpayer to help it make up its debt personally, each individual would have to pay more than $50,000. While it’s unlikely Illinois residents are going to receive such a bill in the mail anytime soon, Yun noted that if the state resolves its budgetary woes by raising taxes, the move could instigate a population exo- dus. Chicago has already raised proper- ty taxes multiple times over the past few years, and residents are responding by looking elsewhere. “Chicago was the only major U.S. city to lose population in 2016, and its population has been dropping for three years in a row,” observed Forbes contributor Ely Razin. He noted that the drop included a significant departure of residents who originally immigrated from Mexico and who played a key role in the city’s growth during the 1990s, when these immigrants made up 105 percent of the total population growth in the metro area according to the Chi- cago Council on Global Affairs. Chicago demographer Rob Paral wrote, “More than any other large American city, Chicago has depended on immigrants, particularly Mexican immi- grants, to offset the sluggish growth of its native-born population.” Since the early 2000s, however, that population's immi- gration to Chicago has declined substan- AMASS EXODUS, OR A MINISCULE ONE?
ow can a city be both one of the potentially hottest housing
markets in the country for next year, yet have a housing market that is “stuck in the mud,” as one local discount real estate broker described it in a recent blog post? Well, most couldn’t. Chicago, Illinois , however, has never really done things quite like other cities, and it does not appear likely that the “Windy City” will assume a conven- tional market position now. National Association of Realtors’ (NAR) chief economist Lawrence Yun probably summed up the market’s unique posi- tion best at a recent address to Chicago’s Main Street Organization of Realtors, which boasts about 18,000 members in the suburban counties surrounding the Chicago metro area. “The Chicago-area housing market should gain some strength in 2018,” he said, forecasting a 10-percent increase in sales volume and sales prices for the city and surrounding areas. Unless, he added, the state of Illinois’ ongoing debt meltdown spirals out of control. At last public accounting, Illinois reported it had about $25.5 billion to pay its debts, owing approximately $235.9 billion. The city then implemented a new account- ing rule that required the state to report pension debt on its balance sheet. Of that $235 billion, nearly $117 billion is pension-related debt. This number does not include retirement healthcare debt. If the state were to require each
Lakeshore Drive extends from the south side of Chicago to the north end. Along its route, the spectrum of housing stock diversity in the metro area is clearly apparent.
44 | think realty magazine :: january 2018
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