When are Assessments Just Too High?
There is a lovely vintage building at 1255 N. State Parkway called The Churchill which is in a great location right in the middle of the Gold Coast.
The units are large, have the crown moldings and some of them have interesting interior terraces, not visible from the street.
Prices in the building have been steadily rising, along with the housing market, the last several years. But when do prices rise so high that when you combine it with a high assessment it becomes a hindrance to buying the unit?
Unit 2J: 1 bedroom, 1 bath, 1000 square feet with a 12 x 8 terrace, no washer/dryer in the unit
- Currently listed at $339,000
- It is “under contract”
- Previously sold in 2004 for $278,000
The assessment and taxes, however, add up to quite a bundle:
- $817 a month
- Taxes of $304 a month
The assessment covers everything except phone- but what does that mean exactly? Cable, heat, maintenance of the building etc. Does that add up to over $800 a month to you?
Your taxes and assessments are basically a mortgage payment unto themselves.
Let’s say this buyer gets the condo for $320,000. If they put down 10% and get a 30 year fixed mortgage on the $288,000 balance at 6.25%, their monthly payment is $1773.
Add on the taxes and assessments and you have a monthly payment of: $2894
And $800 of that is not a help on your taxes. If you have a car and need parking, you can add on another $250 for a total well over $3000 a month.
Again, this building has some really nice units. Unit 2J has a great terrace. But $3000 a month for a one bedroom?
It would make more financial sense to rent it instead. But that is why housing is an emotional purchase. Many times, even if it doesn’t make any financial sense, buyers go forward anyway.
Still, the high assessments have to be a hindrance to selling many of the units in this building. Unit 8AC, a 1825 square foot 2 bedroom, 2 bath unit, is also for sale, with no terrace but it does have the washer/dryer, for $699,000. The assessment on that unit is $1845, plus $654 for taxes.
Hefty premium indeed.
So interesting to read about the Churchill. I sold in 2006 after living in the building for many years. It is fascinating to watch the price cycle begin to repeat itself. We bought a studio for $38,000 in early 90’s. Sold years later for mid 60’s and moved to one bedroom on higher floor for $80.000, then sold it in 06 for $285,000. We were lucky to get out when we did. You really only have a phone bill, electric, gas, cable, everything is included, but it is a killer high number in a down market. That and the almost continual special assessments for exterior maintenance make it a really pricy spot, but the building is amazing, great staff and well managed. I just sold because I was nervous about the market and wanted to cash out. I still miss the building, just not the assessments. Renting a studio now and waiting for a good deal.