Steals and Deals: 3180 N. Lake Shore Drive
Maybe you’ve seen this Craigslist ad too. It’s been posted for what seems to be months now.
It has a title that reads: $399900 Lake Shore Drive 3 Bed / 2.5 Bath Priced $191K Under Market
Who wouldn’t at least click on the post, right?
Here is more:
Lake Shore Drive 3 Bed / 2.5 Bath Priced $191K Under Market
Unbelievable Price! 3 Bed / 2.5 bath LSD Below Recent 2 Bed Sale Recently Showcased on WGN as Deal of the Week! Lake Shore Drive!
This unit was originally priced at $570,000 has now been reduced to $399,900!
3180 N Lake Shore, Unit 4A was recently showcased by Dennis Rodkin from Chicago Magazine as being one of Chicago’s deal of the week. Dennis spoke about this property this morning at 8:40am on WGN.
Check it out!
http://www.chicagomag.com/Radar/Deal-Estate/November-2007/This-Week-on-SpikeaNovember-14-price-cuts/
THIS IS A NO BRAINER! My client has just authorized another price reduction which prices this unit $191,000 LESS THAN THE LAST COMPARABLE 3 bed / 2.5 unit at 3180 N Lake Shore. Now priced less than a 2 bedroom / 2 bath unit which sold this year for $405,000!
My client’s significant price reduction has created an unprecedented opportunity to purchase this knock out 3 bedroom, 2.5 bath 1,800 square foot Lake Shore Drive condo substantially under market.
The last 3 bedroom, 2.5 bath condo at 3180 N Lake Shore Drive, Unit 13H was listed for $599,000 and sold for $590,000!
Are the claims in the Craigslist ad true?
First of all, 3180 N. Lake Shore Drive was built in 1952 as an apartment building and converted in 1974 into condos. It is 23 stories and has 175 units.
1. Was it originally listed at $570,000?
False.
The unit was originally listed in January 2005 for $519,900. It was withdrawn after about 6 months and then re-listed in January 2006 for $515,000 (if at first you don’t succeed, try, try again.)
That listing was also withdrawn after several months, and after several price reductions, which took the price down to $459,000.
In April 2007, the listing re-appeared at $570,000. The price was lowered numerous times throughout 2007 until it was listed at $419,900 in January 2008.
Finally, that listing was withdrawn and it was re-listed for $419,900 and then recently lowered to $399,000.
The owner has been trying to sell this condo for three years.
At one point, this unit WAS listed at $570,000- but not “originally.” (thanks to the tipster who sent me this information.)
2. Is it priced less than a 2/2 that sold for $405,000 in 2007?
True.
Unit 5E sold in February 2007 for $405,000. It was the second most expensive unit to sell in the building out of 9 sales in 2007. However, Unit 5E was also among the most expensive units to sell in 2006.
- Sold in February 2005 for $570,000
- Sold in June 2006 for $598,500
- Sold in February 2007 for $405,000
And no- I don’t understand what was going on with that unit (Foreclosure? Short sale? Or just the market changing?)
3. The last 3 bedroom, 2.5 bath condo at 3180 N Lake Shore Drive, Unit 13H was listed for $599,000 and sold for $590,000
True.
Unit #13H: 3 bedrooms, 2.5 baths
- Sold in April 2007 for $590,000
- Sold in February 2004 for $327,500
The last three bedroom to sell before #13H was in 2006. Unit #21H sold in November 2006 for $610,000. Previously, it sold in May 2001 for $340,000.
As for Unit #4A that is in the Craigslist ad: 3 bedrooms, 2.5 baths, 1800 square feet
- Sold in November 2004 for $283,000
- Listed in January 2005 for $519,900
- Listed in January 2006 for $515,000
- Listed in April 2007 for $570,000
- Currently listed at $399,900
- Assessments of $917 a month
Is this a deal? Is this truly “$191K under market”?
Even the listing says: “Market Conditions Dictate New Price.” Thomas Hall at Rubloff has the listing.
Sabrina, that was a nice bit of “investigative reporting” you did and thanks to the tipster who helped.
I think most potential real estate purchasers (unfortunately though not all) are sceptical of what real estate brokers have to say about specific parcels or the state of real estate generally, particularly ones who rely so heavily on exclamation points, all caps, and superfluous adjectives. I am cautiously optimistic that it is one of perhaps many reasons why that unit remains unsold. So far, you have shown that hard cold facts help educate buyers and sellers, and it is why I hope your site flourishes.
Assessments of $917 month! Isn’t that a bit higher than normal? As a recent transplant from California, I am still suprised by the assessment costs here. In San Francisco, except for buildings like the St. Regis, a normal assessment on a $800,000 condo is about $450 a month. I have noticed in Chicago that some buildings are way higher than others, which has made me strongly consider buying a large loft since those types of units have low fees. (I just looked at a $690,000 loft with an assessment of $175 a month)
I’m with you, Morgan. Assessments matter to me A LOT. anon pointed out that $400 a month in assessments is equivalent to $85K in price.
I also prefer not to pay for things I don’t use/don’t want: cable, 2 doormen/”concierges”, a pool, etc. And, I’d rather pay heat/air conditioning myself; when owners don’t have to pay for their own individual use, they use more than they otherwise would. Classic “public goods” problem that drives prices up for everyone. Unfortunately, once a few places start making all these extras standard, other places feel they have to, too (which I don’t understand.)
The expectations about what should be in an assessment are likely–for no good reason other than chance–just different in SF than they are in Chicago, leading us to pay more.
Also keep in mind that quoted assessments are sometimes deceiving. Many developers estimate low assessments in order to inflate sale prices. Same goes for property taxes. In addition, conversions especially are notorious for seeing rapid assessment inflation, or special assessments, in order to correct problems that were ignored by the developer. Of course, the developer is always an LLC and by the time the problems arise there is no LLC around to pursue for damages.
The only way to ascertain if an assessment is “correct” is to review the association’s books. During the recent panic buying years the request would have been ignored since a bigger fool could be had that didn’t believe in “due diligence.” However, in the panic selling years to come it shouldn’t be difficult to obtain the documents.
FWIW, the assessments include literally everything, electricity, water, heat, etc. (except phone). To me this is a little off-putting as I doubt that I use more water & electricity than the average user. I’d feel like I’d be subsidizing those non-CFLers, leave on computer 24/7, winter thermostat @ 80 degrees-types.
That being said, I hate the term “below market” as if a unit as been on the market as long as this one and after $$$$$ reductions, this IS the market.
Personal take is that there are a lot of sellers who would be “upside-down” on their mortgage/home equity loans so they refuse (can’t afford?) to lower their price to reflect the obvious reality of current market conditions (even if you adjust for the fact that it’s the dead of winter).
just my 1 cent.
Thanks for the comments regarding my listing at 3180. As the agent faced with the challenged with getting this unit sold – the last 3 bedroom unit in the building did sell for $590K with an additional 3 bedroom unit before that at $600K. While 4A is on a lower floor, it is hard to justify that there is a greater than $190K difference between the 4th floor and the 13th – however, simply put – the market has stated otherwise.
The building is a well managed, well maintained building with long term owners – many of the units that have recently sold have not been updated – some in original condition. It’s a building that will continue to see turnover. Some units are a great buy because they are in original condition. Unit 4A – the unit I have listed has been very nicely updated – new kitchen – requisite stainless steel and granite.
One of the criticisms of the building – and hence the unit I have listed is that the assessments are high. True, however, you need to educate yourself on the assessments of comparable 3 bedroom units – 1,800 sq ft – in the neighborhood along Lake Shore. This building is not comparable to a vintage 3 bedroom unit or a new construction unit in Lakeview. There are few truly comparable buildings. 3150, 3180 and 3200 LSD all have 3 bedroom units. Assessments at 3150 avg roughly $900 to $1000/month for a 3 bed unit. 3180 just under $1,200 and 3200 in the range of $800 to $900/month.
3180 has one bill a month for essentially everything – some people like it, some don’t – plus a portion of the assmt – $253/month is allocated to building reserves – this is to build a reserve to offset a potential future special assmt. Every building manages the expenses differently – in the case of 3180 – they have chosen to set aside a portion of the monthly assmt to build a cushion.
From my perspective – an agent who deals with real estate daily – it is difficult to tell as a seller that his/her unit – a 3 bedroom unit – is now priced below what other 2 bedroom units have sold for in the same building within a reasonably short period of time – ie 12 months. However, as others have commented – it is the nature of the market currently. Ultimately, it is worth what a ready, willing and able buyer is willing to pay.
The good news – we’re finally at a price that has generated a great deal of traffic. So much for the past $590K – the market has told us otherwise.
Tom: Thanks for posting. We appreciate an agent’s perspective on the listing and the assessments.
Do you have any insight as to why the two bedroom sold for $405,000 when it had a prior sale of $598,000 only the year before? That seems odd. Was it a short sale?
Please send us a follow-up when the unit finally does close. We’d like to know that there was a successful sale.
Sabrina – you bet – this is a great site. Just to clarify, unit 5E was a highly upgraded unit with contemporary kitchen and hardwood – it closed for $405,000. Unit 5EF closed for $570,000, not $598,000 – it is a combined unit – however, the unit numbers may not be entirely accurate in the MLS. I do know however it is two combined 2 bedroom units.
Another small comment regarding my ad in Craigslist – while the comments may be superfluous, it clearly got someone’s attention. What I think is great is that buyers realize they need to do their homework. It is tough to convey all of the nuances of a property in a short blurb on Craiglist or any other medium – hence superfluous language sometimes does the trick.
My 2 cents for what it’s worth…
It has a title that reads: $399900 Lake Shore Drive 3 Bed / 2.5 Bath Priced $191K Under Market
—
How do THEY know where the market is?
FWIW, #7A @ 3180 came on the market for …………….
$399,900
so is the market for now.
MLS# 06775987 (no pictures yet, can’t tell if 7A is rehabbed v. original)
my main problem with 3180….no pets allowed. a shame as mini-doggie beach is across the street. 🙁
Thanks to everyone for in the information regarding assessments in Chicago. This has been a real education for a recent transplant from California. As a frequent traveller, having utitlities included is not very helpful for a single guy who currently has only a 45 dollar electric bill and 50 dollar cable/internet utility bill. (I am renting a 2bd condo downtown in a “luxury building”, and the owner’s assessments are high as well)
I have not looked at a lot of older buildings, but maybe I should give them a chance? I am still thinking that a loft might be best for my lifestyle.
Great comments regarding where the market is now – honestly, in pricing this unit when I orginally listed it in April, 2007, the market determined that the last 3 bedroom, 2.5 bath at 3180 Lake Shore was worth $590,000. There have not been any other 3 bedroom, 2.5 units on the market since the last sale. In all fairness – $570,000 was a fair assessment at the time.
Needless to say, no one bought it at $570,000 – and now after several price reductions we are now at $399,900. Lake Shore Drive buildings are different animals in comparison to other properties in Lincoln Park and Lakeview.
Unit 7A is not as well updated as 4A. The kitchen in 7A is not opened up. It does have an unobstructed view of the lake. In light of recent 2 bedroom sales in the building currently:
Unit 5C – listed at $310,000 – moderately updated but not new
Unit 7F – listed at $369,000 – recently reduced from $379,000. Again, nicely updated but not new
Recent 2 bedroom sales – within the last 12 months
Unit 4D – sold for $263,500 in 04/07 – obstructed view – clean, but in original condition
Unit 10B – sold for $275,000 in 11/07 – modestly updated
Unit 8G – sold for $290,000 in 03/07 – modestly updated – original kitchen
Unit 6D – sold for $290,000 in 07/07 – dated – has been updated but not currently
Unit 16D – sold for $315,000 in 07/07 – modestly updated
Unit 5F – sold for $365,000 in 10/07 – stunning finishes – contemporary rehab
Unit 16E – currently pending to close at $352,500 – nicely updated – relatively current finishes.
Tom: Thanks for posting the additional information. Hopefully any prospective buyer will now have some additional information on which to base an opinion as to whether the unit is appropriately priced in light of the current market. Nevertheless, I must ask, in light of the additional facts, and what Sabrina uncovered above, why is the craigslist ad still published without any changes/corrections/clarifications?
I used to live about a block from this building. That little part of East Lakeview is a fantastic area; one of the best in Chicago. However, condo prices have always been “low” because all of the buildings in that area have very high assessments. It seems to be the accepted practice in that neighborhood.
Norm – thanks for the note. In haven’t had the time to update – take a look now – I just updated the comments including the recent building activity.
Tom,
I keep noticing buildings built within the last 8 years (West Loop, South Loop, Printer’s Row, Lakeview, LP, Bucktown) with rather High Assessments. I understand the older buildings on Lake Shore cost more to maintain regarding (high assessments) but some of these New Construction Buildings are not too far behind because the Developer always underestimates the cost to run a building or doesn’t finish the building the way it should be finished (so the new unit owners increase assessments to avoid a special)
Don’t forget- with assessments there are other things that matter:
1. Size of the building
2. Is there a doorman? This ALWAYS adds on a huge cost
3. Is there a pool? This is a HUGE cost
4. Any other “special” features that might cost a lot to maintain and have high insurance rates also push up the assessments
I know people who won’t buy in a building with a pool (new or old construction) because it can add on so much to the assessment and they didn’t use it enough to make it worthwhile.
Tom: Thanks for trying to explain to us what your thought process was in listing it at $570,000 last spring. I understand you were going off of the other comp.
But the unit was on the market for the low $500,000s during the “peak” period of the housing boom in 2005 AND 2006 and didn’t sell either of those years (and it was on the market a LONG time) so what made you think that 2007 would suddenly be different?
Only that one comp?
I also understand that many sellers would see that one comp and say, “see, I CAN get over $500,000 so let’s price it that high.”
I realize it’s hard to get the pricing right in this kind of market.
Sabrina – again – I really love your blog – what a great opportunity to interact and discuss real estate. Great question regarding pricing – from my perspective, trying to determine price is both art and science (the comps). There were 2 recent 3 bedroom sales at 3180, one at $590K and one at $610K. 2 units are tough to peg a good comp so I went to 3150 – a similar building in terms of ammenities, views, similar demographics – that building too had a few 3 bed units north of $500K. My client did spend a good deal of money updating his unit so we thought, let’s see if $570K works.
In the case of this unit – the view by far has had the biggest impact on price. Bottomline, buyers seeking LSD addresses want the view. 4A does have lake views, but they are obstructed by trees.
In terms of assessments – it is always important to compare what the assessments include. In new developments, developers generally require buyers to pay into the reserve 2 or 3 months when closing. While everything may be new, larger developments still require maintenance. Don’t be fooled by a low assessment – particularly in a building with a fitness room, a doorman and ELEVATORS! Elevators require maintenance. It is important to make sure the building has a cushion even when relatively new things break.
$917 assessment? I asked my agent about this place and was told that the assessment is actually over $1100. That’s practically a whole mortgage payment in itself. Did they just increase it?