Updated: Feb 21
This article is important. This article brings up points I have been addressing with buyers and sellers for the last 18 months. But before I can explain why, lets first have a little English lesson based on the article’s title.
Schadenfreude is a real word. It is not made up as it turns out. According to the Oxford Dictionary, schadenfreude means “pleasure derived by someone from another person's misfortune”. Well, that’s lovely, isn’t it?? But also, think quietly for a second. We all do it.
You drive through a yellow light and make it through the intersection. You look in your rearview mirror and watch the car behind you have to stop at the red light. They don’t make it across. “Ha”, you think quietly in your head. That “ha” is you feeling schadenfreude.
Now that we have our English lesson out of the way, let’s have a quick money management lesson.
Sold in multiple offers Fall 2022.
If you ever speak to a financial planner, their number1 piece of advice will be to diversify. All your money can’t be in startups, or in high-risk investments the stock market, it’s too volatile. You may win big one day, but you’ll likely also lose big the next. You need your money to live in many different types of environments so that if one environment is on its turndown, you have money somewhere else that’s doing great. Also putting the majority of your money in the high-risk investment sector might end well for a small amount of people, but most will get burned.
Let’s apply this concept to real estate. There are cities, like Phoenix that have had 30% growth across a year’s time. To put that in dollars, you buy a house for $500k in Sept ’20 and in Sept ’21 that house is valued at $650k. That’s insanity. However, what comes up ALWAYS comes down. And the faster it goes up, the faster it goes down. In Phoenix, the growth from Sept ’21 - Sept ’22 was only 12% compared to the previous 30%. It will likely continue to fall rapidly in the coming months. We call this a correction. This is like investing in a startup. Huge upswing, and a potentially equally huge downswing.
Then there are the “safe” investments, the stable ones. They are the “slow and steady wins the race” types.
Chicago’s growth from Sept ’20- Sept ’21 was 11.8%. From Sept ’21 – Sept ’22 it was just above 10%. That’s great. When other city’s growth in 2022 is decreasing by 60%, Chicago’s decreased by 16%.
Bold statement time – those figures indicate Chicago’s housing market is nearly, RECESSION PROOF.
Remember our new vocabulary word, schadenfreude? This is why this article is titled, “It’s ok to be feeling a little schadenfreude, Chicago-area homeowners”. Chicago is the tortoise, Phoenix (for example) is the hare.
There are a lot of reasons for how and why Chicago has maintained its stability, mostly they start and end with an inventory issue, but that’s for another blog post. Today’s blog is some good news. Chicago homeowners, you bet on the right horse, or tortoise, this time. Congratulations!