Local real estate
May 11, 2026
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–From the latest Doomberg, just prior to this week’s Trump/Xi meeting:
Ultimately, the sanctions weapon is an elaborate confidence game. Global players need to be held to account if they run afoul of sanctions, but if everybody runs afoul of it all at once, a run on the bank of US financial power could occur.
–The quote refers to sanctions Bessent placed on 5 Chinese energy companies.
On Saturday [May 2] the Chinese Ministry of Commerce issued a notice prohibiting the recognition, enforcement, or compliance of U.S. sanctions against five Chinese companies accused of participating in Iranian oil transactions. The ministry said the sanctions “constitute improper extraterritorial application.” (NBC news)
Not sure what the implications are, but this week’s meeting may be critical.
–Yields eased a bit Friday in a flattening curve. 2/10 edged to a new recent low 47.5 (2y 3.89, -2.5 and 10y 4.365. -2.6). SFRM7 was +4.5 to 9626. 3y auction today, followed by 10s and 30s Tues/Wed.
–Last week I mentioned a story about a data center builder paying 10x the farmland asking price for a 300+ parcel of farmland in Illinois. Since then I have heard several – related? – stories about real estate in the Chicago area. All anecdotal and likely specific, but surprising nonetheless. A couple of months ago I was talking to a neighbor about crazy prices for houses in my area (Wilmette, IL). My neighbor is a wealth mgr for lack of a better description, and he said it’s caused in part by boomer parents borrowing against their portfolios and paying cash for houses for their kids. Apparently the rate to borrow on a portfolio (according to YZ who researched it further) is something like 2.5%. But this weekend I heard three other stories, all in the context of new lows in consumer confidence: First, a guy said his daughter was trying to rent an apartment in Chicago near the viagra triangle (gold coast). He said they were being taken on first visit and some going above asking rents. Bidding wars for APARTMENTS! Another friend from the trading floor, now a realtor, Bob Royals, sent me this note: “Two very nice vintage condos around the corner from me just closed for $75K over list price- 15% higher.
I have heard that people are offering significantly higher rental prices than what the landlord lists.” This in Oak Park, first suburb west of Chicago.
–Finally, my brother is friends with a classic Irish real estate investor. Came here in his twenties with nothing and started buying apartment buildings with his brothers by scrimping and pooling whatever money they had. Now personally owns 300 plus units in Chicago in Wrigleyville, Logan Square etc. He just told my brother that even HE is amazed by soaring rent prices.
–Again, this is just the Chicago area, and in fairly popular locations. I guess the upper part of the K population. I have also seen airbnbs being sold with slashed prices in vacation spots, and large price declines in former boom towns like Austin. Real estate is local, just like the AI boom….
Near me…teardown house purchased for about $950k.
https://www.zillow.com/homedetails/526-Linden-Ave-Wilmette-IL-60091/3375433_zpid/
