After Nearly 3 Years On The Market, The Old Edgebrook Queen Anne Finally Sells: 6239 N. Lundy
We’ve chattered about this 4-bedroom Queen Anne at 6239 N. Lundy in the Old Edgebrook neighborhood of Forest Glen numberous times over the last few years.
In October 2012, we chattered about whether or not this house would finally sell in 2012 after being on the market nearly 3 years.
See that chatter here.
In October, it was listed at $729,000 and I asked if it would sell in the $600,000s.
At least one of you thought the answer would be yes.
But we were wrong. The house recently sold for $714,000.
If you recall, this Queen Anne was built in 1896. It still had many of its vintage features including its oak staircase, lead and stained glass and pocket doors.
The kitchen had a stainless steel refrigerator and dishwasher as well as granite counter tops and white cabinets. It had a front turret, a double parlor and a finished basement. There was a 3-car garage and central air.
The houses in the district are on larger lots and this one is no exception- having been built on a 111×164×65×158 lot.
Did someone get a deal for the neighborhood?
Irene Yungerman at Baird and Warner had the listing. You can still see the interior pictures here.
6239 N. Lundy: 4 bedrooms, 3 baths, 3 car garage, 3510 square feet
- Sold in March 1986
- Sold in December 1989 for $492,000
- Originally listed in February 2010 for $998,000
- Reduced in May 2010
- Was listed in October 2010 for $949,000
- Reduced
- Was listed in July 2011 at $859,000
- Reduced
- Was listed in November 2011 at $799,000
- Reduced
- Was listed in October 2012 at $729,000
- Sold in December 2012 for $714,000
- Taxes now $13,499 (they were $12,588 in November 2011)
- Central Air
- Bedroom #1: 15×14 (second floor)
- Bedroom #2: 17×12 (second floor)
- Bedroom #3: 13×12 (second floor)
- Bedroom #4: 14×14 (third floor)
Love this place, hope the new owners enjoy it!
Just for shits and giggles, a simple comparison with 30 yr mortgage at 100% LTV including points:
12/1989 $492,000 9.87% 2.01 pts = $4,356 PI + $404 T + $40 I = $4,800 PITI ($8,763 in 2012 $’s)
12/2012 $714,000 3.60% 0.2 pts = $3,253 PI + $1,125 T + $80 I = $4,458 PITI ($2,442 in 1989 $’s)
It’s all about the debt.
I think the area has such a limited amount of houses, especially from the queen anne era. It takes a while to find the right buyer, but the low rates I’m sure helped out. Does anyone have predictions on the amount of property that will be listed in 6-8 weeks? More than in early 2012? Life moves fast.
Low interest rates is an important component, along with the willingness to borrow such extraordinary amounts of debt. Borrowing a lower dollar amount at higher interest rates, with additional principal payments, is easier to repay than higher debt amounts with lower interest rates. It’s not like people are making all that much more money today than in 1989, but they are willing to borrow far larger amounts of money. Our society is built on debt, and most households (other than the top 5%) is merely just an income support a thin veneer of wealth.
“It’s all about the debt.”
G, your posts are always awesome. What do you mean by that? please elaborate…
’12/1989 $492,000 9.87% 2.01 pts = $4,356 PI + $404 T + $40 I = $4,800 PITI ($8,763 in 2012 $’s)’
Very interesting G. For what it’s worth, I took out a mortgage for my place right about this time. But, interest rates for anything over $250K were at 11.5% + 2 points in early ’89 (the absolute best that was out there regardless of what was advertised, even with stellar credit/credentials/salary). After putting down a mandatory minimum of 20%, my 360K’ish note @ 15 yr fixed gave me monthly payments of $3400ish; I always paid $5K a month and exhausted the loan after 10 or so years. Property taxes were not included in my monthly payments, and I did refinance during the 10 years… first to 9% and then to 7.5%.
‘It’s not like people are making all that much more money today than in 1989…’
Absolutely correct HD. A typical higher yuppie salary then (established MD, attorney, businessman) was in the $280K to $320K range, give or take naturally. I knew a lot of people making less, and a handful making more (maybe up to the lover $400K’s). Sure there were always the really big earners out there, but for friends, neighbors, and associates whom you thought were doing *really* well, this was pretty typical for someone buying a $450K – $750K house in the city. Also the cost of living in the city was less compared to what you were actually bringing home. A few thoughts down late 80’s memory lane:
-my property taxes were around $3000 a year.
-great Blue Cross/Shield coverage had monthly premiums (for just myself) at $52.
-dinner for two with drinks at the Elbow Room (was cool and popular then) was $45.
-car insurance for a new German car was $400ish a year
-crappy cable TV with HBO etc (alderman give the contract to a no-nothing relative or someone like that) was $40 a month.
-total cost for a DePaul undergrad in the early 80’s, $35K
For some reason I remember what I paid (give or take) for life then, and the one thing we/country/neighborhood/city had was optimism when it came to real estate, whether it was blind or not who knows; that’s certainly something I don’t see today.
“‘It’s not like people are making all that much more money today than in 1989…’”
I have an anesthesiologist uncle who owed a large 5 bedroom colonial in the NW burbs on a .4 acre lot out by woodfield. He had 5 kids and they all went to private colleges. The house sold for $280 in the late 90’s and today zillow says it’s worth about $500,000 today. I could only imagine that his salary in the 70’s and 80’s while he raised his family but he lived within his means. We regularly see doctors today buying million dollar homes in bucktown, and they don’t have five kids. It’s a different mentality these days. Upper middle class has changed. Who said one time it’s expensive to be rich?
‘It’s not like people are making all that much more money today than in 1989…’
“Absolutely correct HD. A typical higher yuppie salary then (established MD, attorney, businessman) was in the $280K to $320K range, give or take naturally. I knew a lot of people making less, and a handful making more (maybe up to the lover $400K’s).”
First year biglaw salary in 1989 was- what- $55,000? Maybe $60,000 in Manhattan?
Now it’s about $165,000, right?
Salaries have DEFINITELY changed since 1989 for the upper middle class.
Biglaw is the exception. Lawyer salaries as a whole have been increasing at a 1-2% rate since the 80s per a 2004 illinois bar association study. Huge influx of lawyers drive down salaries. Moreover salaries for professional have been pretty stagnant too. Accountants consultants engineers architects etc too.
Back in the 80s Biglaw often paid off law school debt (which itself wasn’t as large then) — not usually the case these days.
“It’s not like people are making all that much more money today than in 1989”
Not much different in Jim Baker dollars, sure. But see:
http://www.davemanuel.com/median-household-income.php
1989 nominal median HHI = $27,388
2011 = $49,103 or 79% more.
Salaries for professionals in consulting/accounting have definitely remained stagnant since 2007. There’s absolutely no motivation for companies to bump up more than inflation raises when unemployment is at where it is. Why hire a 30yr old w/8 years experience to an SFA role for 80k/year when you get get a 45yr old w/triple the experience for close to that same price? And everything else is getting any cheaper.
In Chicago it’s better to be connected and just work for the city: you get gold plated benefits, job security out the wazoo, defined benefit retirement plan, and can start work at 18 with no debt vs. trying to climb the economic ladder the traditional way. Of course you gotta know someone to go that route, but just goes to show.
“1989 nominal median HHI = $27,388
2011 = $49,103 or 79% more.”
Labor force participation rate in 1989: 66.6 (November)
Labor force participation rate in 2012: 63.6 (November)
~5% less of the working age population is working. We’re back to 1980 levels.
“Back in the 80s Biglaw often paid off law school debt (which itself wasn’t as large then) — not usually the case these days.”
Biglaw salary’s today also pays off law school debt. Seriously how are people living…
my assumptions (expensive NW degree fully financed) and sticking it out at big law for 4 – 5 years.
“Biglaw salary’s today also pays off law school debt. Seriously how are people living…”
Really? It depends on how much you have undergrad and which city you live in. Live in Chicago and have $2500 a month rent and you can probably get rid of most of the school debt in 5 years or so. That’s what my friends did 10 years ago when salaries jumped up in the dot-com boom. Live in NYC or SF or LA and it will take longer. But school debt was also less. Salaries haven’t really gone up in the last 10-13 years but law school is probably 30% more.
“Salaries for professionals in consulting/accounting have definitely remained stagnant since 2007. There’s absolutely no motivation for companies to bump up more than inflation raises when unemployment is at where it is. Why hire a 30yr old w/8 years experience to an SFA role for 80k/year when you get get a 45yr old w/triple the experience for close to that same price? And everything else is getting any cheaper.”
The unemployment rate for those over age 25 with a college degree is 3.8%. That’s full employment. There are many professional jobs going unfilled. Headhunters for skilled professionals are actually quite busy. You’re not looking at the big picture of the economy Bob. You’re looking only at the headline figures.
The unemployment rate for those without a high school degree is about 12.5%. That’s where you get the high unemployment rate.
“Absolutely correct HD. A typical higher yuppie salary then (established MD, attorney, businessman) was in the $280K to $320K range, give or take naturally. I knew a lot of people making less, and a handful making more (maybe up to the lover $400K’s). Sure there were always the really big earners out there, but for friends, neighbors, and associates whom you thought were doing *really* well, this was pretty typical for someone buying a $450K – $750K house in the city. Also the cost of living in the city was less compared to what you were actually bringing home. A few thoughts down late 80?s memory lane:
-my property taxes were around $3000 a year.”
More proof that the FED has no exit strategy, and will never tighten. What happens then to RE values when interest rates rise???
“whom you thought were doing *really* well, this was pretty typical for someone buying a $450K – $750K house in the city.”
Wouldn’t this mean that if rates started to rise, even approaching one-half of 1989 rates at 12%, that housing would crash big-time?? The doing *really* well house wouldn’t be $1.6 million, but right correct/revert back to, say… $900K?
Would this even matter if you’re locked in at 3.5%?
“Biglaw salary’s today also pays off law school debt. Seriously how are people living…”
Suggestion was that it was common for biglaw firms to pay off the principal, directly, at some point (day of hire? Bar admission? End of first year?). Would have had to be pre-86, when it *might not* have been treated simply as an OI bonus.
“my assumptions (expensive NW degree fully financed) and sticking it out at big law for 4 – 5 years.”
Per website, NWLaw budget is $80k for first year. So that’s 50-60k in *principal* per year, assuming (inaccurately, I think) that interest is 100% deferred until repayment. And the first month interest is nearly $1500. On a base gross salary–if you’re lucky–of $160, so net, pre-bonus, of ~$100k. So the 4 year plan includes ~$75k in p+i, leaving about $2k/mo for living–aka, about the same as the student budget of $18k for 9 months. Have to take lessons from Bob and his cheaper acquaintances.
1 we could not move the goalposts @Sabrina: including undergrad
2 we could do specifics so for today and for CHICAGO @anon(tfo)
Tier 1 school – again NW. 160k
Tier 1 firm – 160k starting. I’m not sure how estimate bonuses – ATL? practice area?
What’s a good blended rate for student loans these days with public/private mix? 2% – I honestly don’t know.
sorry for double post – Sabs will you nuke the first one? and this comment too?
“What happens then to RE values when interest rates rise???”
In the past- nothing has happened. There wasn’t a big crash in the late 1970s as rates rose. What it means is that instead of buying the 4-bedroom house for $900,000 in Clarendon Hills, you’ll have to buy the $700,000 house in Downers Grove. You trade down.
“What’s a good blended rate for student loans these days with public/private mix? 2% – I honestly don’t know.”
Fed loans are all 6.8%, fixed, right now: http://www.direct.ed.gov/calc.html
Sallie Mae variables are 2.25+, and fixed at 5.75+.
“Tier 1 school – again NW. 160k”
How’s your hypo-lawyer getting a free year? 3 years of all-borrowed, including living expenses = at least $225k.
Inflation adjusted consulting salaries are lower than they were 12 years ago (and signing bonuses today are smaller).
If it’s all about the debt, isn’t the best way to get ahead to actually own hard assets out right? Lower percentage rate of return but also much less volatility. I think this house is going to take a decent amount of money just to maintain it over the next 10-5 years. Also, with property taxes about to go up 30-40% in the Chicago suburbs over the next 5 years to pay for the teacher pensions, what will that do to valuations? I think with low rates, it makes sense to get into the market, but long-term holders will be paying way too much in annual dues to be a “homeowner” (property taxes are really just a share of operating costs of the city you live in, which in IL never go down – it’s similar to a country club but with no fiscal restraint at all). I don’t see the new owner making any money on this place adjusted for inflation.
True about the consulting, accounting, and engineering salaries not really going up. Plus, once you get to director or partner level, the buy-in is much higher and the number of units you get are much smaller. New partners may have earned in the $325-425K range in 2007, but now the 2012 crop will be in the $2190-250K range. Not bad but nowhere near where things were. The true payouts are just longer out on the horizon, but overall margins have come down in those industries.
“(property taxes are really just a share of operating costs of the city you live in, which in IL never go down –”
Thats funny because my property taxes have gone down 3 years in a row
Does the city release financial statements that break down the property tax revenue received from SFH and condos, multifamily, and commercial property, and also sales taxes and other taxes? Overall, the city budget is not going down, so someone has to pay for it somehow. If the property tax burden is truly getting smaller, there have to be other taxes closing the gap, unless you have significant population growth, which from 2000 to 2010 didn’t happen.
And yes, even with the low rates, the share of income devoted to housing has increased (PITI and annual maintenance costs) which reduces the ability for that homeowner to save and spend money on discretionary items. It seems like a real negative in the long run. Lock in a low monthly payment with not too high of taxes in a decent school district. Not sure that exists in the Chicago area anymore like it did for my parents’ generation. Something has to change.
“What’s a good blended rate for student loans these days with public/private mix? 2% – I honestly don’t know.”
Fed loans are all 6.8%, fixed, right now: http://www.direct.ed.gov/calc.html
Sallie Mae variables are 2.25+, and fixed at 5.75+.
“Tier 1 school – again NW. 160k”
How’s your hypo-lawyer getting a free year? 3 years of all-borrowed, including living expenses = at least $225k.
*FACEPALM* I did 2 years as in GMATs and MBAs not 3 years for JD. My bad.