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* From CBS Money Watch…
Using data compiled for CBSNews.com by a real estate analytics provider, we looked not only at cities where home prices have the farthest to go to climb back to their pre-bubble peak, but also where prices are still declining.
* At the “top” of their list are two Illinois cities. Ranked second least likely to recover from the real estate crash is Rockford…
Growth needed to match peak: 31.5 percent
Growth this year: -3 percent
And number one is Kankakee…
Growth needed to match peak: 39.2 percent
Growth this year: -3.5 percent
* Back to the narrative…
Residents of two cities in Illinois have the bleakest prospects of seeing home prices rebound. The state’s high unemployment rate is the biggest factor restraining prices. At the peak of the recession, Rockford’s jobless rate shot up to a whopping 20 percent unemployment rate, and it remains high at around 10 percent.
Kankakee faces a similar problem as Rockford, Ill. The population is stagnant and its unemployment rate hasn’t been below 10 percent since mid-2008. Even selling the city’s many foreclosed properties is unlikely to boost home prices much. Unless the city sees a serious economic turnaround, it will be nearly impossible to recover that 39 percent drop in home values.
Oy.
posted by Rich Miller
Wednesday, Sep 25, 13 @ 8:38 am
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Extending Metra to Kankakee is one of the easiest, fastest and most cost effective ways of turning things around there. Kankakee’s only hope is to draw itself closer to Chicago. On its own, it can’t grow enough to make a difference.
Comment by 47th Ward Wednesday, Sep 25, 13 @ 9:01 am
47th Ward: Legitimate question, and I don’t know the answer, but your point makes me ask; is Chicago growing at some rate that will result in people pouring all the way out to Rockford?
Comment by in absentia Wednesday, Sep 25, 13 @ 9:12 am
The problem usually gets compounded when foreclosures are bought up at low low market prices to become rentals for section 8 housing. Employment doesn’t really matter to the new non-owner occupants, home values stay low and these real estate values never turn back up. They become just more shades of Detroit.
Comment by Tequila Mockingbird Wednesday, Sep 25, 13 @ 9:20 am
47th ward is right. Lots of families would appreciate the good housing values if there was an economical way of commuting.
Comment by Phineas J. Whoopee Wednesday, Sep 25, 13 @ 9:23 am
I’ve lost 45% of the value in my home since 2008 and there’s no sign things are going to improve in the future. I live in northern Lake County.
Comment by Wensicia Wednesday, Sep 25, 13 @ 9:38 am
The commute from Kankakee to Chicago would be at best 1:45 and more likely over 2 hours each way by rail. The current cost of a monthly pass between LaSalle St. & Joliet is almost $200. Who knows what tickets back and forth between K3 & Chicago would cost but one would have to weigh in on the savings in housing expense versus time & expense of commuting. Not sure how feasible this would be.
Comment by Stones Wednesday, Sep 25, 13 @ 9:49 am
I think people need to come to grips that in many places, home values are NEVER going to return to its “peak values”. Those values were artificially high due to the fact that ANYONE was able to get easy money from lenders. Needless to say (at least I hope) lenders are a little bit more responsible than it was during those times.
Thats not to say there won’t be a recovery in many places. I just think that comparing current values to pre-bubble peak values is just not a very helpful comparison. I would be much more troubled by the negative growth in those areas.
Comment by Anonymous Wednesday, Sep 25, 13 @ 9:50 am
We cannot leave certain pockets of people or geographies behind if we are to revive ourselves and become healthy again as a state.
This is frustrating news.
@47th’s suggestion concerning Metra is a good idea, but it’s also going to take much more than that to inspire confidence and stimulate long-lasting, permanent economic growth once again.
In economic terms, our “fundamentals” are all kinds of screwed up.
Comment by Formerly Known As... Wednesday, Sep 25, 13 @ 9:55 am
The commute on metra between Chicago and Woodstock is about 1 hour & 14 min and tons of folks do it. Kankakee is the same distance, so it should be the same commute time.
Comment by Phineas J. Whoopee Wednesday, Sep 25, 13 @ 10:00 am
Monthly commuter bus service from Kankakee to the University Park METRA stop appears to cost $60 and the ride takes 30 to 45 minutes
A monthly METRA pass from University Park to downtown Chicago appears to cost $178 and the ride takes slightly less than 60 minutes.
Maybe a coalition of city officials and local realtors could offer a promotion — give one or two years of “free” bus and train passes to first time Kankakee home buyers and to anyone who moves from outside the area to Kankakee and buys a house.
Advertise this deal together with sample home prices at the Chicago commuter stations.
Comment by Bill White Wednesday, Sep 25, 13 @ 10:10 am
Phineas -
The commute between Joliet / Chicago is over an hour on the express train, about an 1.5 hrs on the “milk run”. Granted Joliet is a somewhat NW of Kankakee but it is a good half hour’s drive away. It would come down to how many stops and which line? If the train is routed directly South, a stop at Peotone and perhaps Manteno would make sense, if it is routed out of Manhattan there might be very few stops along the way.
Comment by Stones Wednesday, Sep 25, 13 @ 10:11 am
@in absentia: I grew up in K3, so I am more familiar with that area than Rockford. I think there are some differences between the two though, including the fact that Rockford is a much bigger city and has a more diverse economy than Kankakee.
As far as Chicago growing to Rockford, if you look at the suburban and exurban areas between Chicago and Kankakee v. Chicago and Rockford, it is clear that the northwest corridor is significantly better off economically than the southern corridor. O’Hare has a lot to do with that, which is an advantage for the Rockford area that Kankakee lacks.
Adding Kankakee County to the RTA is the first step. I don’t know if Amtrak service could be improved to make it more of a commuter link, possibly all the way to Champaign. Given the ridership issues, I don’t know if that is feasible. What I do know is, a lot of people commute from Kankakee County to Chicago. Some drive all the way, some drive to University Park to take the Metra electric line. Manteno is already a fast growing bedroom community. No reason Kankakee shouldn’t try to tie itself closer to Chicago and market itself accordingly.
Comment by 47th Ward Wednesday, Sep 25, 13 @ 10:34 am
47th, I’ve been by the K3 Amtrak station during early weekday mornings and have seen lots of people taking the train to Chicago. It’s a real pain, but it can be done.
Heck, I know people who live near Clifton, which is 15 miles south of K3’s southern border, who drive to Chicago to work every day.
A better connection would most definitely improve things.
Comment by Rich Miller Wednesday, Sep 25, 13 @ 10:38 am
Thanks Rich. Yes, Amtrak has service to Union Station from Kankakee, but looking at the current schedule, Amtrak service leaves a lot to be desired. The City of New Orleans is supposed to depart K# at 7am, but is often late, sometimes way late. And the return on the Illini doesn’t leave Chicago until 8pm. That isn’t exactly commuter friendly.
My dad used to drive to his office in the loop or to University Park and then get on Metra. University Park, which is about 30 miles from Kankakee, is the end of the line for Metra. It shouldn’t be terribly difficult or expensive to extend the line further south.
Comment by 47th Ward Wednesday, Sep 25, 13 @ 10:50 am
Wensicia makes a good point. There aren’t many places that will recover value to pre-2008 levels. Metra extension will make a big difference and there’s plenty of support for it here. The airport and the Illiana will also help, since that is just a few miles to the north of the county line.
However, locally, we need to focus on workforce development and job training. There are jobs here that pay a living wage that local people are not trained or qualified for. Many people commute from the south suburbs to work these jobs. We need to make sure people here can get these jobs so they can afford to purchase homes. I’m sure this is a challenge for other communities too.
Comment by K3 Wednesday, Sep 25, 13 @ 10:54 am
To quote from a from a September 8th article in the Wall Street Journal, “This beaten-down factory town (Rockford) has the highest share of upside-down mortgages in the nation”. The article is titled: “Welcome to Rockford, Il, the Underwater Mortgage Capital of America”. A rather bleak prognosis for Rockford’s housing.
Comment by Dan Wednesday, Sep 25, 13 @ 11:44 am
I’m all for better transit, but many of the people in the Kankakee area who would use transit are already using it, via the previously mentioned River Valley Metro/Metra connection that is already in place…or they drive to the UP Metra station. Unless you’re talking about an high speed express service that would take you downtown in 30 minutes, you are talking about spending a lot of money to barely move the needle. BTW, that bus stops in Manteno, and whizzes by Peotone and Monee on its way to the station. Maybe Will County could chip in a little bit and get the bus to stop there, too.
Comment by Six Degrees of Separation Wednesday, Sep 25, 13 @ 11:53 am
===but many of the people in the Kankakee area who would use transit are already using it,===
Agreed, but the point is to get more people to move to Kankakee. Given the low cost of housing, faster and easier connections to Chicago would make Kankakee more attractive and ease some of the sprawl of cookie cutter residential development in the cornfields of Will County.
You can get a large, nice home with river views for $100,000 which is a great deal if you could get to/from your job easier.
Comment by 47th Ward Wednesday, Sep 25, 13 @ 12:02 pm
Better to have a solution that involves living AND working in or nearer to Kankakee or whatever community (Cairo, IL? Gary? Detroit? Metro outlier suburb X,Y, or Z?)
Begin with one way tickets from every refugee camp in Jordan or anywhere else in the world to the community with a sponsoring family that gets them into a vacant home on the condition they bring it up to code and live in it for at least a decade.
Pay for rehab loans with money currently borrowed for NSA subterfuge, military occupations, and the Drug War.
Comment by Hans Sanity Wednesday, Sep 25, 13 @ 12:34 pm
Its not helping that Rockford has some of the highest property taxes in the state
Comment by foster brooks Wednesday, Sep 25, 13 @ 12:45 pm
What I’ve seen in multiple communities — including Rockford and Kankakee — is large, if not massive, retail complexes beside interstates and struggling, if not, empty retail property downtowns.
Within a decade or two, the once desirable retail complex by the interstate is struggling to compete with another one 10 to 20 miles away.
Some may like that “free market” solution, but it looks like planning boards are letting the commercial real estate developers do all the planning.
Comment by Hans Sanity Wednesday, Sep 25, 13 @ 12:52 pm
Soccergrandma still lives in her house in Rockford. Zillow puts the current value at about $80k, down $45k from 2006. I’m guessing it would sell for less than that, because of all the foreclosures and abandoned homes nearby. It’s heartbreaking.
And even if the Blackhawk service through Rockford to Dubuque is restored, most of the city’s revitalized growth is likely to be in the northeast quadrant, closest to Chicago. That won’t be much help to the west side, where most of the city’s 2,000 current foreclosures are located.
Comment by Soccermom Wednesday, Sep 25, 13 @ 1:12 pm
Hans, I love your compassion for the refugees and your faith in the American Dream. But I’m not sure how we would create jobs for thousands of unskilled, non-English speaking people in areas that are already hit with high unemployment. And I am not so sure that those refugees would be welcomed with open arms, sadly.
Comment by Soccermom Wednesday, Sep 25, 13 @ 1:16 pm
Their job would be to get their homes up to code, and they’d be do it with the borrowed money, just like the military.
At least there would be something to show for it.
Even if they each can’t work at whatever they did before they became refugees, they still could do what so many immigrant groups before them have done: start their own political organization.
It’s not nearly as far fetched as sending aircraft carriers and bombs around the world.
Comment by Hans Sanity Wednesday, Sep 25, 13 @ 1:35 pm
Why on earth would we consider a return to bubble prices as a good thing?! The speculation that caused the crazy high home prices of the bubble was a disaster.
Comment by cod Wednesday, Sep 25, 13 @ 1:54 pm
South Suburban Airport (if built) => METRA to the Airport (Peotone) => link to Kankakee County.
Comment by Jake From Elwood Wednesday, Sep 25, 13 @ 2:14 pm
Geez, for a media outlet claiming to be “money watch”, they dont seem to know basic 7th grade arithmetic. Their % numbers are way wrong.
To return a house value that dropped 33% from it’s peak in 2006 to that same value today, it would need to rise 75%.
A 33% decline from $100,000 down to $66,000 requires a 50% climb to get back to $100,000. Adjust for inflation of 16% from 2006, and it actually needs a steep climb of 76% to get back to an inflation corrected value of $116,000.
Comment by cod Wednesday, Sep 25, 13 @ 2:32 pm
there is zero hope of this happening…anyone who lives in the south suburbs and has or does commute to Chicago via Metra knows that Metra consistently ignores the south suburbs, refuses to increase availability of services, has the worst station accomodations of any line, and generally treats us like second class citizens…witness Metra chairman’s remarks a few years ago about extending the STAR line from Joliet to Chicago Heights, and the fact that the south suburbs have been trying to get a second commuter line to run through Chicago Heights and up into the city along the old IC freight lines FOR ABOUT TWENTY YEARS…Metra sucks..
Comment by erik stratten Wednesday, Sep 25, 13 @ 5:31 pm