August 10th, 2010The Great Lake Forest Housing Disconnect
The New York Times just did a great piece summarizing the housing woes in Lake Forest Illinois. It starts with a description of Lake Forest, “the real-life Chicago suburb of Lake Forest is a place where it sometimes seems that all the women drive S.U.V.’s, all the men are C.E.O.’s and all the children have above-average S.A.T.’s.”
So why do Lake Forest residents find themselves at the centerpiece of NY Times article on foreclosure? It becomes pretty obvious when you connect the dots between two key points:
- The per-capita income for Lake Forest residents is $77,000.
- Available records indicate that the average asking price for foreclosed houses in Lake Forest in the first six months of this year was $860,000. There were more foreclosed properties valued at more than $1 million than there were under $500,000.
It doesn’t take a genius to figure this one out. Lake Forest houses, nestled in the footsteps of Lake Michigan, have very appealing curb appeal. The prices went up and up and up, – that is – until they stopped going up. As long as they went up, the housing ATM of the pseudo-rich continued to work. The minute they stopped going up, there was no place to go but down.
How much home can you really afford on a $77,000 salary? If you think $860,000 is a bit much, then you can continue to watch as Lake Forest properties continue their nosedive. Curb appeal or not, the path of least resistance is down, down, down.
Think the housing correction is over? Think again.