Distress Sales Continue in Millennium Center in River North: 33 W. Ontario
How many years will it be before the distress sales are finished in Millennium Center at 33 W. Ontario in River North?
They are still occuring on a pretty regular basis.
This 2/2 on the 38th floor is the latest listing to hit the market. It is a Fannie Mae property.
The listing says there is new carpeting in the bedrooms and the unit has been professionally painted.
From the pictures, it also appears the kitchen and bathrooms are intact. The kitchen has cherry cabinets, black appliances and granite counter tops. The bathrooms are white.
The unit has central air, washer/dryer in the unit and parking is included.
It is listed $75,000 under the 2007 purchase price.
In October, a 1325 square foot 2/2 on the 54th floor sold for $339,900 but it didn’t include the parking.
Is this a deal?
Angel Aguilar at Re/Max Platinum has the listing. See the pictures here.
Unit #38F: 2 bedrooms, 2 baths, 1225 square feet
- Sold in January 2004 for $445,000 (included the parking)
- Sold in November 2007 for $425,000 (included the parking)
- Lis pendens filed in January 2010
- Fannie Mae owned in September 2011
- Currently listed for $349,900 (includes the parking)
- Assessments of $709 a month (includes heat, a/c, gas, doorman, pool, exercise room, cable)
- Taxes of $4833
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 12×15
- Bedroom #2: 12×11
Seems like a fairly good deal. Although, I would have thought the bathrooms would have been nicer.
Today’s subject properties are a lesson for anyone considering buying a 2/2. 95% of them should be rentals. I wouldn’t touch one above $200/sf in the green zone and much, much less in other areas.
What’s the issue with 2/2s? Is it just that there are so many? I want to buy, I plan on living/keeping the condo for 6-8 years and we are a living in sin couple, no kids, work in the city. What should I be looking at if not a 2/2? Thanks.
“Today’s subject properties are a lesson for anyone considering buying a 2/2. 95% of them should be rentals”
The consensus of Chatterers seems to be no one should buy a 2/2. They should just rent. But does that mean that all the geniuses on this site either own SFHs or are renters?
How do I get to be as smart as all of you?
“What’s the issue with 2/2s? Is it just that there are so many? I want to buy, I plan on living/keeping the condo for 6-8 years and we are a living in sin couple, no kids, work in the city. What should I be looking at if not a 2/2? Thanks.”
1) How old are you?
2) When do you THINK you are going to have kids?
“I plan on living/keeping the condo for 6-8 years and we are a living in sin couple, no kids, work in the city. What should I be looking at if not a 2/2?”
Sounds like the ideal situation to rent. If you’re living in sin and only want a 6 year commitment you should rent. After 6-8 years say you want to move to the west coast for a better job? Or you change your mind about kids and need a 3 or 4BR? Maybe you tire of say River North and want to try Lakeview or Wicker Park or Andersonville? Who knows.
Sounds better than the countless 2/2 owners I see on here with the crib in the second 10’x10′ bedroom and the 30% underwater mortgage.
Let some west suburban doctor buy here and subsidize your cost of living by renting to you at a measly 3% cap rate.
Given the current environment, this actually looks like an okay price, though I wouldn’t really call it a “deal.” I’ll go out on a limb and guess the place sells within two months for approximately $330k. (Now we can all come back in 61 days and mock me.) Over the long run, I agree that the prices for 2/2’s in River North will continue to fall, though who knows where the bottom is.
MJ — the issue is that there really aren’t a lot of people in your situation, especially people who know they want to live in a 2/2 for 6-8 years. As chuk implies, once you have kids you’ll need to move, and chances are that will happen earlier than 6-8 years from now unless both you and your partner are committed to never having kids.
Sad_at_Plaza440 is right. This will sell for $330. There is still a demand for Big Ten Alumni Housing.
In 5 years though, $230.
Sad,
Those are valid thoughts and I respect them re. how long such a couple might stay in a 2/2. In my own experience, it made sense to buy a 2/2 (which my wife and I did in the late-90s before we had kids), even though we planned to have kids. We knew that with one kid we could stay a while in the 2/2, and that we could find a bigger place once we planned on having a second kid. That’s how it worked, and at the time, it was smart, because prices were going up. We ended up making a 50% profit on the 2/2 and using the profit for a downpayment on an SFH in the early 2000s.
Nowadays, it’s such a different picture, because there’s no guarantee prices will go up, and in fact they may have further to fall. All of a sudden, a 2/2 purchase is not a realistic way to build equity. That’s why renting is probably a better idea now. I feel sorry for young couples like this one, because it points up how hard times have become. And even if they put the money they would have spent on a 2/2 downpayment into the bank, or the stock market, hoping to use it 4-5 years down the road to buy an SFH, it’s hard to grow it and quite possible to lose it.
“What’s the issue with 2/2s?”
No issue, it’s just everyone here believes people only live there for a year or two and then move to the suburbs. At only 6-8 years I’d probably just rent though, financially it could go either way.
$110/mo before the mortgage & insurance monthly nut & some of you monkeys are still anchored to peak bubble pricing & think this is a deal cuz its 100k off that.
Reminds me when I went into a dept store to get new bedsheets on black friday and they informed me I saved 90$ off those 120$ (30$) sheets lol.
You dumb consumerist monkeys with your dumb opinions about how this is a deal should be precluded from buying this by requiring a sizeable downpayment but aunt Fannie via homepath opens the door to any schmoe with a tax refund so someone will buy it.
Err $1110/mo
you can raise (one) kid in a 2/2 easily unless you or your wife is an unsufferable person to be around or you never go out and do anything
plus the cribchatter rule is to never buy a 2/1 or 1/1, sopoor is just being a drama queen troll
Alsi if you need to weave a story with a bunch of conditionals as to who might want to live in a property generally the more conditionals = the smaller the market = the lower the price.
“What’s the issue with 2/2s?”
A rental segment transformed into a condo segment so the real estate industry could make their 6% grift on the increased transaction volumes.
Simple math. Renting this place out would bring you ~$8250 of net annual income (after taxes, assessments, and management fees). Discounting at 6.25% results in a value of ~$127,000. Even at a 5.25% discount rate gives a valuation of just $157,000. Anything over $200,000 is bubble pricing.
I don’t see anything wrong with buying a 2/2 if you don’t plan on having kids or are in your mid-20s or if you are retired. The only people who shouldn’t buy a 2/2 are those who plan on having kids in the near future or at least consider kids a possibility. There are plenty of childless people or retirees who would prefer to buy a 2/2 condo than deal with owning a house or deal with landlords and renting.
“A rental segment transformed into a condo segment so the real estate industry could make their 6% grift on the increased transaction volumes.”
More like a rental segment turned into a condo segment when the landlord industry realized they could monetize their 7% (or whatever it was in the late 90s) annual return at 2x fair value.
“There is still a demand for Big Ten Alumni Housing.”
This area is not post-collegiate Big Ten alum territory. It’s a full-blown diversity hodge-podge, a mini-UN type of clientele. At least you’re close to Portillo’s. I would expect almost anyone to tire easily of living in this location and submarket, you’re not going to have anything in common with your neighbor, and I doubt there is much “community” in these buildings.
My post from an older thread (btw, is there a way to link to old posts?)
Here is my scenario for a 2/2 (although not this unit, due to it’s high price):
1) Graduate college at 22
2) Parents help you with putting down 10% on a $250k 2/2 at the age of 25.
3) Live there with girlfriend/wife for 5-7 years.
4) Have first kid at 30-32.
5) Suffer for 12-18 months with baby in your 2/2
6) Move to SFH
chuk: sounds about right for the GZ. Problem is with #6, because it’s a big step up to the $700K minimum needed for an acceptable GZ SFH. Or as Sabrina says it’s to the ‘burbs. (For a $450K house in Glenview.)
“because it’s a big step up to the $700K minimum needed for an acceptable GZ SFH. Or as Sabrina says it’s to the ‘burbs. (For a $450K house in Glenview.)”
Yup. And that’s what determines how your life will go. How did you do from 25 to 32? Have you got a good paying job? Move up to some level of manager? Making 100k+ each? Did your condo go up in price (yeah, yeah, I know). If so, you buy the 700k GZ SFH. If not, you are headed to the ‘burbs…
I doubt SFH pricing can be maintained in much of the GZ. Just the other day 500k newerish SFH listed in north center.
Why do you have to buy a $700K GZ SFH? A 3BR condo or TH can be had well below $700K if you know where in the GZ to look.
Behold! The $700k GZ house. http://www.redfin.com/IL/Chicago/1673-N-Bissell-St-60614/home/13350394
Not bad. Under $200/sf no less! And 10% below the the 2002 price. GZ SFHs probably haven’t bottomed.
Oh and chuk a 200k “power couple” are not buying & living in a 700k SFH without unsustainable financial wizardry combined with skimping everywhere else in the budget to the point of not being possible (childcare? luxury suv payments?)
Increasingly, future Big Ten alumni are graduating with no jobs or poorly paying jobs and a shit ton of student loan and credit card debt. If Mom and Dad’s investments have tanked, there might not be even much parental help as there was in the past. This will not be good for entry-level housing.
Example of a GZ family home (not SFH) for under $500K:
http://bradlippitz.com/property/chicago/07896114.cfm
Re. my previous post:
Obviously, a look at the photos tells you the TH has some issues. A kitchen renov is probably necessary. But even then, you’re still paying well under $700K.
I still don’t get why a family of 3 cannot live in a 2/2.
I agree – a family of 3 can live in a 2/2. But it would get tight with a second kid. I knew a lot of people who grew up with two parents and a sibling in 3/2s in Lakeview/LP. But calling them 3 BR was a stretch, because the 3rd bedroom (which the younger kid usually got stuck with), was often built as a maid’s room and was about 10X10 and stuck behind the kitchen. And of course these condos had huge living rooms, gigantic foyers and no family room, so the kids had to watch TV in their parents’ bedroom (assuming they didn’t want a TV in the formal living room, which would have messed up the 1920s appeal).
Take a look at this:
http://www.hoover.org/publications/hoover-digest/article/6798
It seems while fewer 2 parent families are around these days, a lot more older folks and empty nesters live on their own. I think 2/2s make very good purchase option for these folks.
Also there are a lot more single parent households. I would think many of the unmarried women (1 out of 4 white women and nearly half of black women) might only have one or 2 kids if any and they might be ok with a 2/2 or just not be able to afford a larger place. Honestly given the shift in demographics, I for one am not convinced condos are dead and SFHs are in.
No one has even noticed yet that when this sold last at $425 it was bank owned. So, bank owned sale to bank owned sale again. Will the next sale be bank owned again?
Rental grade 2/2s are getting killed. Way too many were asking luxury prices when there really was nothing luxury about them. The lipstick on the pig is wearing off.
Miumiu, people’s attitudes have changed. Every kid needs their own bedroom and bathroom or else it is considered child abuse. Small condo purchases should be made with extreme caution. Way too many people aren’t being honest about their future plans and needs. I am seeing a lot of people who would have normally took a 2/2 looking for duplexes, town homes, and legit 3/2s.
“Oh and chuk a 200k “power couple” are not buying & living in a 700k SFH without unsustainable financial wizardry combined”
Well, I said 100k PLUS each, and a profit on their 2/2. You could probably do that on 250k HH income.
“Just the other day 500k newerish SFH listed in north center.”
Where? I can’t find it. Hope it’s a secret listing next door to me!
“I still don’t get why a family of 3 cannot live in a 2/2.”
Because there is no room to “entertain”… or Mommy really wants a master bath with a double vanity and a walk in closet… or they buy their baby so much shit they have nowhere to put it all… or they went out and bought a minivan and now need a garage to park it in… or they want a backyard for junior to play in because public parks are for the poors
Its senseless and often times unfathomable, but thats America for you.
Oh… and as others have mentioned, this unit is rental grade.
Wow this unit looks nearly identical to the condo I rented in Joffrey Tower! EXACT same finishings in every room… the kitchen, bathroom, bedroom, living room; differs only slightly in the layout.
I’d say it’s a little better than rental-grade, but it definitely cookie-cutter!
“Where? I can’t find it. Hope it’s a secret listing next door to me!”
MLS 07912347.
Now is where you rationalize how it isn’t a valid comp and doesn’t count. Comes back on Ziprealty as North Center and a SFH, even if possibly arguable on both (I could live there!).
“Example of a GZ family home (not SFH) for under $500K:”
You want a townhouse in the GZ for under $500k? There are PLENTY of those. It’s a little harder to find the 3/2 under, say, $450k. But if you’re willing to go up to $485k or even $500k you can easily get a 3-bedroom townhouse with outdoor space and a garage for that price. That’s why the 3-bedrooms sell pretty briskly. You could have more than one child in them and actually live there for quite some time. Many usually have some kind of family room as well (unlike some 3-bedroom condos.)
“Yup. And that’s what determines how your life will go. How did you do from 25 to 32? Have you got a good paying job? Move up to some level of manager? Making 100k+ each?”
The key to this statement is “making 100k+ each.” How many women make $100k or more a year?
The last I saw it was just 2% of the female population (though the recession might have reduced that some.) So if your wife makes $100k or more you should consider yourself very, very lucky (and unusual.) That’s why there really aren’t that many of these couples buying in Chicago right now.
More normally you have the guy who makes $80k and the wife who makes $60k. Or the husband who makes $100k and the wife who makes $50k. And combined they make $150k. It’s a good lifestyle in Chicago before they have kids and/or they have to pay childcare or the wife quits working to stay home with the kids. And then suddenly the lifestyle isn’t sustainable on just the $80k or even the $100k anymore.
Raising a kid in a 2/2 is waaaaaay different here vs Unicorn territory
Don’t know where else to put this, but
As of 2012, you won’t even be able to take the mortgage insurance premium deduction. 2011 is the last time homeowners with joint adjusted gross incomes of less than $109,000 will be able to deduct the cost of mortgage insurance on a first or second home.
So perhaps we are slowly on the way to removing housing related deductions
“As of 2012, you won’t even be able to take the mortgage insurance premium deduction. 2011 is the last time homeowners with joint adjusted gross incomes of less than $109,000 will be able to deduct the cost of mortgage insurance on a first or second home”
yeah unless our spineless politicians vote to keep the handouts train comin
“Where? I can’t find it. Hope it’s a secret listing next door to me!”
MLS 07912347.”
Isn’t this a condo and NOT a house?
“The key to this statement is “making 100k+ each.” How many women make $100k or more a year?”
I would guess approximately the same number as 700k SFH’s.
“So perhaps we are slowly on the way to removing housing related deductions”
LOL yeah just like with those FHA limit very minor reductions..which were promptly reversed via lobbying from the NAR.
“Isn’t this a condo and NOT a house?”
Its not clear from the listing. Although the letter after the address is a clue that it’s not an SFH.
Discussion is missing the other 2/2 market: downsizing empty-nesters selling their SF suburban home to move downtown for pre-retirement years. One bedrm/bath nominally used by such couple, and other bedrm/bath in unit for visiting adult children or snoring spouse. This is the market that drove the downtown condo market, and if white-collar SF home resales weren’t so weak that market demand would remain despite weakened job market.
@ Architect, I agree. That is what I was saying a few posts up.
“Discussion is missing the other 2/2 market:”
The problem with 2/2’s right now is there are too many of them. Just like there are too many 1/1’s, 1/2’s & 2/1’s. And try selling a 3/3 or 3/2 condo right now. They can no longer be built for what the market prices are. Many (condo) buildings are in situations where it is difficult to gain reasonable mortgages. So, since prices are lower than the cost to build one now, why would it be a good time to buy? Wait until the market revives and buy then, when they are higher. (??) I don’t follow the reasoning.
Sure, if there is a good risk that you will only stay 1-3 years, the price may fall even further, but no one on this site or anywhere, for that matter, has a clue where prices will be beyond that. The rent vs. buy calculation for residents, as opposed to solely investors, skews heavily to the buy option when the horizon is beyond three years, considering the rates availble now. These are the lowest rates I’ve seen ever in my life, mainly due to the fact that cost of funds to the lenders now is virtually zero. Rates cannot go lower. Assuming you can qualify for a market rate loan, you can lock in your cost for 30 years at the historically lowest rates. Rents can, and will, vary from year to year and that bet becomes more risky as the horizon expands.
Sabrina,
Thanks for backing me up. There are 3/2s in the GZ for under 500K if you don’t mind raising your kids in a condo or townhouse. And I’d argue raising your kids in a TH in Lakeview gives them (and you) a far more “city” experience than buying a SFH in a neighborhood like Old Irving Park or Sauganash, which are “city in name only” (CINO).
I think 2/2’s are good to rent for younger couples, and buy in cash for older couples who’s kids have flown the coop and want to downsize. My wife and I will likely move to Chicago full time and live in a 2/2 when our kids are gone (that is, IF they are gone….). So, I think you can make a good case for living in one if you are 25-35, or if you are 50+ empty nesters. That covers a large group of people. And after all, even if you are renting, SOMEONE has to own it.
Clio owns a unit or two in this building. I wonder why he didn’t post at all?
“So, since prices are lower than the cost to build one now”
Do you have a source to back this up? I’m genuinely curious, but my gut tells me this isn’t really true.
My husband and I are out of town – empty nesters looking for a 2/2 condo in Chicago as a second home for our pre-retirement years. I’ve been eyeing this building for awhile because of the location and it has an outdoor pool. Unit 29A – ask price $379,900 – is currently under contract – the agent said he had two cash offers. Unit 33B -ask price $389,000 – went under contract in a couple of days. So it appears that there’s a demand in this building for the preferable tiers. We haven’t actually seen the building yet, but I fear that when my husband sees the construction quality, he’ll nix the building without hesitation.
I went with my brother to look at a large 3/2 in this building on a high floor – might have been a combined unit – but I actually liked the building and the views were amazing- north, west and south views which could see John Hancock all the way around to the Sears Tower and then some. The finishes while pretty standard for the 2000’s, speckled granite, stainless GE profile and cherry cabinets, where still done well. The only thing odd was the ventless fireplace which just seemed so cheesy Id rather just not have one if I couldnt have a real one. Oh and no balcony. It was a bank owned and the realator just said “make an offer”. He was looking in the 550-700 range for ideally a 3 bd w balcony in River North / Gold Coast and chose a spot closer to the lake, ironically a very large 2/2 with 2 balconys and wrap around Lake and city views in a unit that was a combined 2/2 + 1/1 completely gutted and redone. I could see this for $325 with parking all day.
“He was looking in the 550-700 range for ideally a 3 bd w balcony in River North / Gold Coast and chose a spot closer to the lake, ironically a very large 2/2 with 2 balconys and wrap around Lake and city views in a unit that was a combined 2/2 + 1/1 completely gutted and redone”
Nico, can you tell me which building your brother bought his condo?
It boggles my mind how many lux buildings opted for outdoor pools over indoor. I don’t see the increased utility of them vs living near a nice city pool like Hamlin for the 3 usable months a year.
All of this discussion about kids neglects that just 20% of American households are married couples with any children, much less 2+ kids, at home. Sure, the market for 2-bedroom units is currently oversupplied, but the
As for the $200K power couple, I don’t see how a $700K house is at all a stretch. In the pre-bubble, relatively price-stable years of 1980-2000, median house prices across the USA fluctuated around 3.5X median income (from 3.3X to 4X), which puts $700K well within the historical average.