Gold Coast Coach House Reduced Another $30K: 1234 N. Dearborn
Our favorite Gold Coast coach house at 1234 N. Dearborn is STILL available and it’s been reduced another $30k.
This is a foreclosure and went back to the bank months ago.
Just to refresh your memories, here is the listing:
Coach House Part Of An Assoc. Great Investment/ Property Being Sold In ”as-is” Condition/ No Survey Nor Disclosures/ Proof Of Funding Must Accompany All Offers/ Pre-approvals Not Pre-qualifications/ Ernest Money Must Be Certified Funds. Fax All Offers To Office, No Emails
Area Wide Realty still has the listing. See more pictures here.
1234 N. Dearborn #CH: 2 bedrooms, 2.5 baths
- Sold in June 2000 for $395,000
- Bank owned
- Was listed in May 2008 for $450,000
- Reduced
- Was listed in June 2008 for $437,000
- Reduced
- Currently listed for $407,000
- Assessments of $335 a month
- Taxes of $3308
- No central air
- No parking
great staging of the rooftop deck. Area Wide must be a top notch outfit.
You would think whomever took those photos would have at least picked up the chairs!
“great staging of the rooftop deck”
Look at the rest of the pictures–that’s pretty much the best one.
Question with all of the REO–are the banks offering to finance the purchase?
Obviously the bank does not want to sell the unit. Anybody who won’t even bother picking up those deck chairs or cleaning the kitchen obviously is disinterested in marketing the property in a professional manner.
of the 3 pics above, I’d say the deck is the worst. but looking on the listing site, wow.
$200K.
I agree with Jason. Maybe 230. Everything is in a freefall.
It appears that most of this complex has been for sale in recent months. I believe that I’ve seen at least three different realty signs in the front building, which is bad given there are only about 5 units. Someone with MLS access might be able to confirm this.
If you click on the link above for the prior Crib Chatter post- you’ll see Unit #3F was on the market last June. It has been withdrawn (with no sale.)
The garden apartment is the only other unit currently on the market.
Yet another mystery to me (I spend much of my time in a state of bewilderment about how the world works). My experience with realtors handling foreclosures is that they just don’t give a damn – as evidenced by the photos here and on other units. They don’t return phone calls. You can’t get them to even allow you to present an offer. Once you present the offer you can’t speak to them until they tell you someone else got the place. I have no confidence in the process.
My question is how are banks picking these bozo brokers? Clearly these guys are not acting in the banks’ best interests. Yet another set of players contributing to our banks being in trouble.
Gary – I have been buying these bank owned properties for the past 3 years. It is like taking candy from a baby. They pay you 3.5% to buy the property at 70% of its value. You can throw it back up at 90% of FMV and walk away in less than 30 days. These banks hire realtors from the southern suburbs to sell a property in the Gold Coast. The realtors only goal is to get 5 -7 offers in the 1st week. This is not fmv but a rush by buyers to get a property at a discount. Banks give money away and there is so much opportunity to take advantage. That is if you know what you are doing…
Let’s remember that fmv all has to do with rental rates. You can base a property’s value on yeaterday’s rantal rates, but what will rates be in 2009. I think this melt down has put a big ? in what rents will be going forward. Therefore, the fmv value of a property is pure speculation at this point.
Uh….I don’t think it works quite like that at all. If it were so simple then everyone would be doing it. “If you know what you are doing.”. Please share you infinite wisdom with us.
It is as simple as that. You must not know what you are doing. Buy a $300k property and get paid up front $10K. sell it for $350k in under 20 days and pocket another $35k after paying the buying realtor commission.
You can’t teach it, you just have to know it…
Steve Heitman on October 10th, 2008 at 11:08 pm
Let’s remember that fmv all has to do with rental rates. You can base a property’s value on yeaterday’s rantal rates, but what will rates be in 2009. I think this melt down has put a big ? in what rents will be going forward. Therefore, the fmv value of a property is pure speculation at this point.
– SH, one of your most reasonable posts. The truth is INCOMES drive rental rates and INCOMES used to drive housing prices until it became untethered during the housing price bubble (for reasons I could explain in detail but includes creative financing that was available for home purchases but not for rents, housing became a source of income itself which fed house prices, etc.). Now that house prices will once again return to the mean it will be tied to incomes again. So you don’t need to look at incomes-rents-housing prices. Just look at incomes-housing prices with traditional lending standards. Simple, you just need to figure out incomes in a recession. That is also why rents will come down. Lastly factor in an over correction due to record high inventory levels. And viola, there is your price… 🙂
John – I can’t say I agree with you. Housing will always be a factor of rents vs expenses. You can argue that the rent part is tied directly to incomes but again you have to factor in the area you are considering. As long as the world is not coming to an end, LP will be the preferred area for the higher income people to look to live. This has always been true and will contiinue to be true. It depends how this all shakes up and whether incomes really come down or not. If they stay flat, I don’t see how my calculation of fmv would change from where it is today. The overall affect on housing will again come from a change in required yields by investors.
Regarding record high inventory levels. We’re not there yet. I just completed an update on market conditions in 5 communities and only one of those looks scary:
http://lucidrealty.com/chicago_communities.htm
However, I have not gotten around to the communities that I know are in trouble but have chosen to look at the more centrally located ones.
As for rents, they’re 60% of the cost of ownership in Chicago. I don’t think they’re coming down. Unemployment may rise to 8% but incomes aren’t coming down either. What needs to come down is the price of investment properties. 5% cap rates are insane for a risky asset that is vulnerable to entropy and causes headaches.
Steve,
Just to be technical. You left out taxes. I don’t even waste my time looking at investments in pre-tax dollars. Essentially meaningless. Always amazes me that people think stock returns are linear.
Who has been saying LP has been doing great. People dismiss me as a realtor talking my BS but I think the numbers speak for themselves.
Gary – Wait until you see Oct #’s. Nothing is moving right now. No one is even scheduling showings. You could drop your place 10% (Coldwell Banker’s scam from last week) and still get nothing. There is currently NO market for housing.
The SHill claims “I have been buying these bank owned properties for the past 3 years. It is like taking candy from a baby. They pay you 3.5% to buy the property at 70% of its value. You can throw it back up at 90% of FMV and walk away in less than 30 days.”
Then the SHill claims, “Let’s remember that fmv all has to do with rental rates. You can base a property’s value on yeaterday’s rantal rates, but what will rates be in 2009. I think this melt down has put a big ? in what rents will be going forward. Therefore, the fmv value of a property is pure speculation at this point.”
So, the SHill obviously miscalculated his speculative purchases over “the past 3 years,” because we know he didn’t question rents and values going forward even two months ago.
http://cribchatter.com/?p=5060#comment-13029
Steve Heitman on August 28th, 2008 at 8:46 am
HD – I said I make more than $350k. Don’t assume I make so little
Looks like the economy is in better shape than all have suggested. Growing economy in the face of a financial crisis? Looks like your prediction for a crash in pricing has little merit.
I think this will end with 2006-2009 being remembered as a soft overall Chicago market with lessons to be learned about over paying for new contruction.
Any thoughts from the “world is ending” crowd?
More form the SHill “There is currently NO market for housing.” “Who has been saying LP has been doing great?” Well, that would be you, SHill, and you would be wrong.
please be nice to Steve today. I missed him on here. And 1 of 6 things he says is usually actually credible.
“Yet another mystery to me (I spend much of my time in a state of bewilderment about how the world works). My experience with realtors handling foreclosures is that they just don’t give a damn – as evidenced by the photos here and on other units. They don’t return phone calls. You can’t get them to even allow you to present an offer. Once you present the offer you can’t speak to them until they tell you someone else got the place. I have no confidence in the process.
My question is how are banks picking these bozo brokers? Clearly these guys are not acting in the banks’ best interests. Yet another set of players contributing to our banks being in trouble.”
The process of buying foreclosures is also a mystery to me. I bid on multiple foreclosed properties with cash offers, yet always had the same result. I got the feeling that my offers were used as a basis for the willing bid (a few thousand more).
“willing” should be winning.
Don’t worry, dd. If there’s that much action on a foreclosure it just means there will be lots more of them down the road.
Sit tight on your cash. You’ll be the only qualified purchaser soon enough when prices are MUCH lower.
Well, here’s what I’m wondering. Are the brokers presenting all offers to the banks or are they pushing through offers from their cronies? After all, this is Chicago. Can you get the sellers to sign that they rejected your offer?
dd – maybe the winning bidder follows the property through RealtyTrac (a subscription website that tracks lis pendens, foreclosure and other status for distressed properties) and prepares their bid before the property hits the MLS. Once it hits the MLS, they submit their bid, and by the time people like you and I call the listing broker, the property is under contract.
Actually if you know the building you just submit an offer the day it hits the MLS. Put in a cash offer with a 14 day close and they will take a serious look. It takes the banks a couple of days to review the offer and to respond. During the waiting period you can go over and actually get a look at what you put a bid in on. If you don’t like it, you simply cancel the offer before you sign their addendum. Early bird gets the worm…
I will admit that I did not expect the collapse of the financial system but then again noone really did. What I ahve said about LP what 100% accurate and if the market stabalizes next week we will still be strong. Invesntories are actually down but right not there is no activity going on.
“maybe the winning bidder follows the property through RealtyTrac (a subscription website that tracks lis pendens, foreclosure and other status for distressed properties) and prepares their bid before the property hits the MLS. Once it hits the MLS, they submit their bid, and by the time people like you and I call the listing broker, the property is under contract.”
Perhaps, but my “experiments” were such I let one offer sit there for more than a month. One does not need to use RealtyTrac to get accurate information, as the foreclosure process is public. In fact RealtyTrac has quite a bit of outdated information. I’ve seen houses listed for less than the outstanding loan as viewed on RealtyTrac. No big deal in either case, as the point was to only buy if the figures worked. I was looking in January-April, so things may have changed since then.
Steve,
A lot of people have been predicting it, just not people you know obviously. This was a long time coming.
SHill says what now? “What I ahve said about LP what 100% accurate and if the market stabalizes next week we will still be strong.” HAHAHAHAHA. The SHill must be sweating now about all the marks he led to ruin and wants to blame it on the stock mkt.
“Invesntories are actually down but right not there is no activity going on.” A SHill to the bitter end. New listings were down about 10pct YOY and sales were down 40pct (LP condo/TH). That was Sept, before the stock mkt crash, when the SHill was annoncing here that the time was right to buy the Dow at “2005 prices.”
I knew this would get very amusing. Just wait for next year, the SHill will be asking for advice on here.
G – Again you can’t blame a stock broker for helping you buy a stock that went down. Please don’t blame the realtor for housing prices declining. Our job is to show our clinets the available properties and then ensure that the price they pay is fair compared to comps from the past 6 months. The requirement to be a realtor is a high school education and not a doctrine in world financial products like CDO’s. If you want to blame someone, blame the investment banks that packaged these loans in a non-transparent investments and then sold them with AAA ratings. It was a scam fromt he highest level. There is a place for sub-prime lending in the market. These loans should be balanced with interest rates that reflect the risk. Instead, many sub-prime loans were mixed in with conformaing loans and sold as low risk products. This is why noone can get a handle on the problem. Noone really understand what they own and what the value of the mortgage backed investments are.
G,
While sales are down a lot apparently there are a lot of cancellations that are offsetting the new listings. That’s why inventories on a months of supply basis are down or flat.
Steve is right. We can’t blame the realtors any more than we can blame stock brokers for the dot-bomb bubble.
S&P, Moody’s and (maybe) Fitch should be investigated by the authorities. If a grand jury does not agree with their methodology, assumptions or processes for rating these CDOs/MBS as AAA then they should be criminally indicted.
The ratings firm’s abdicated their fiduciary responsibility to accurately rate risk. Their entire business model should be re-evaluated since they did not do their job. What happened at the ratings agencies and why is congress not calling for their heads is beyond me.
Were the rating agencies negligent or criminal? I think negligent.
Heard a great suggestion on CNBC the other day. Do away with bond ratings all together. The system is flawed – the rated pay the rater – and the ratings give a false sense of security. Stocks aren’t rated.
The banks were the ones handing this state / stated and no doc crap off with the true full doc files. There was no seperation and everything was lumped together and stamped with the old “AAA” mark. Do you know countrywide used to pay their loan officiers / brokers double for a loan file if it was stated compared to full doc? Less underwriting work for the banks allowed for more loans to be processed and sold in less amount of time. These loans were then combined with 1,000’s of other loans and sold off to pensions, investors, and insurance companies with “AAA” yield.
This was a scam from the top to the bottom.
And… what is frustrating is that I work in neighborhoods (GC, LP, LV) where none (almost none) of this shady lending went on. The people that live in these neighborhoods can afford their payments and made sizable down payments. There was very little new construction and little speculating from investors. That is why this area was holding up just fine. Overall declines in the economy and jobloss rates will determine the future on valuation on these areas.
SH said “And… what is frustrating is that I work in neighborhoods (GC, LP, LV) where none (almost none) of this shady lending went on. ”
My question to you is how do you know this? As a realtor how are you privy to your client’s uniform mortgage application? Did you review your client’s mortgage docs prior at the closing? Do you keep the copy of the RESPA from every closing? I’m being serious about this. When I went to a closing I went though every document; I saw the mortgage app and the person’s declared income, I saw the mortgage docs so I knew the terms of the mortgage i.e. toxic or not. I had to explain the terms of the mortgage to the client so they understood what they were getting themselves into. Realtors are not paid to do this; I am. Most closing I went to the realtor showed up late, or someone else showed up on the realtor’s behalf to pick up the check. The realtor didn’t see the docs, they didn’t communicate with the mortgage broker, they didn’t know diddily squat. All the cared about was pushing the deal through so they could get their one-half of 6% of the sale price. So I’m going to call you out about the non-existent shady lending in every neighborhood. I analyzed a building on Poe st. a few months back where 3 of the 4 units had 95% or greater financing with toxic terms. It existed everywhere and I repeat everywhere. Nowhere is going to be immune to this mess.
SH – The high income earners are getting hit esp. if they are in the finance sector. LP will go down like everything else. It went up with the “creative” financing and it will go down with the return to traditional financing. LP may be the last holdout but they can hang on to the side of the boat all they want but the boat is going under. This is going to be a nasty recession and will be known as the refi-madness and consumer spending decline recession. Unemployment will be 8% on average soon and won’t peak until maybe 2010 if we are lucky. 10%-12% is not out of the question and 16% can not be ruled out at this point….I hope it doesn’t get that bad but with nearly all asset classes declining and the record federal debt a collapse could occur. Over half the mortgage brokers are gone and the realtors aren’t far behind. People are also rethinking how much house they need going forward…or houses as the case may be. Housing will return to its income tether just like rents are since the “house as a source of income” is dead dead dead and the only income to afford the house will be the one you earn.
“G – Again you can’t blame a stock broker for helping you buy a stock that went down. Please don’t blame the realtor for housing prices declining.”
Hilarious. I blame the realtors for their part in inflating housing prices. The correction is a sign of a working market.
“Again you can’t blame a stock broker for helping you buy a stock that went down. Please don’t blame the realtor for housing prices declining.”
What about a pump and dump scheme?
Homedelete – I do review every RESPA, every 1003, and every closing doc. I serve as my client’s attorney as well as their realtor. So I do a little more than you HD, and I do get paid a lot for it…
I have the movie Boiler Room and it is hilarious. However pump and dump really wasn’t that common on individual investors.
Blame the investment banks for pump & dump IPOs, and I can assure you the institutional salespeople are a different breed than retail brokers. The institutional salespeople have MBAs from top schools and most live in NYC. Retail brokers are locals who are salespeople first and foremost, with not nearly the financial wherewithal of wall street people. They are privy to conference calls where issues are discussed, but they’re not that connected to the central machine. They’re like field service sales reps.
Also IPOs were grossly oversubscribed during the boom–investors were begging their brokers for shares mostly. Only their best/highest net worth/favorite customers got shares. Broker malfeasance was not a factor. The investment banks did employ their equity trading desks to support the lofty valuations of the IPO for a period of time, which was somewhat ridiculous.
Now things are just getting ridiculous. You’re babbling nonsense. Put down the bottle of Marker’s Mark, brush your teeth and go to bed.
“#Steve Heitman on October 11th, 2008 at 8:42 pm
Homedelete – I do review every RESPA, every 1003, and every closing doc. I serve as my client’s attorney as well as their realtor. So I do a little more than you HD, and I do get paid a lot for it…”
What about auction rate securities sold to individual investors? Brokers sold them and said it was like holding cash. Low and behold the market froze up and became worth crap. Can we blame those brokers? Yes we can and so have attorney generals around the country, essentially forcing brokers and brokerage houses to repurchase the securities. It’s not stock like the example but they were securities and the brokers got all the blame.
“#homedelete on October 11th, 2008 at 7:31 pm
“Again you can’t blame a stock broker for helping you buy a stock that went down. Please don’t blame the realtor for housing prices declining.”
What about a pump and dump scheme?
On auction rate securities sure. But there were very few individual investors and NO middle class investors that had access to the ARS market. The ARS market was for government departments, institutions and the _very_ wealthy who wanted an above market rate yield.
Sorry but I’m not crying for them. If some government department thought they wanted to play the wall street game and earn extra yield they should have damn well known what they were getting into. The fine print was widely available with ARS. No broker likely said they were risk free.
At the end of the day the “victims” of the ARS market collapse are very similar to the “victims” of the foreclosure crisis. It was greed that led to their downfall. For less than a percent they probably could’ve invested in much safer securities, but they wanted more money.
the SHill,
“Homedelete – I do review every RESPA, every 1003, and every closing doc. I serve as my client’s attorney as well as their realtor. So I do a little more than you HD, and I do get paid a lot for it…”
Not any more he doesn’t. And even if he did during the bubble, he added nothing of value to the economy. At least he has his speculative RE investments, lmao.
How did an all-around expert (hasn’t he claimed a CPA here, too?) miss such an obvious correction to the bubble?
How stupid are his clients to believe the claims of a SHill?
Seriously, does anyone here know what Steve Heitman does for a living? One would think he’s a realtor and a lawyer. G just pointed out prior indications of him being a CPA. I think he should just tell us and end the mystery.
We’re not out of this anytime soon until at least 2011.
http://www.charlesarthur.com/blog/?p=1072
Oh it gets better: theres a second bailout. A stealth bailout if you will. Paulson is ordering Fannie and Freddie to purchase $40 billion of subprime/AltA MBS per month.
This does not count toward the $810B bailout bill.
http://www.marketwatch.com/news/story/fannie-freddie-told-buy-40/story.aspx?guid={E12BEB1C-85D5-4B43-91CD-B6A4AB87F630}&dist=hplatest
The market for these particular MBS dried up because private investors finally realized they are garbage. Unfortunately Joe and Jane taxpayer are going to bail out the purchasers of these crap bonds.
G – I based all my valuation recomendations on cash flow analysis. Each of my clients were explained my FMV theory and how current rents define it. So basically, all of my clients purchased units that they could turn around and rent covering their monthly out flows. Sorry I did not see a drop in rents in the cards. Everyone here predicted rapid inflation when oil and gold were at their highs. Now oil is headed back to $60 and interest rates are headed to 7%. The lower rents variable was a worst case scenerio of 10 – 12 % unemployment. You can’t live your life on worst case scnenerios now can you? I’m sure all of you predicted a world wide depression, right?
I’m going to go on record saying that unemployment will not exceed 8% and rents will not go down unless home prices drop another 20% in Chicago.
Gary: Unemployment in Illinois is already at 7.3%. In Chicago it is at 6.1%.
Crain’s had an article last week talking about rents in the downtown market. I think it said they weren’t going up due to pressure from 2,500 apartments coming on line and the “shadow” market of all the condos that people are trying to rent out.
Yeah, I don’t think Chicago unemployment will exceed 8%. As for rents, I think they are so low relative to ownership that the only way they are going to go down is for home prices to drop 20% – which is possible but I think a 10 – 15% decline is more likely.
We’ll see.
Sabrina – They should not be going up right now. Incomes have been steady for the past 3 years. Incomes go up, rents will go up. Income goes down and rents are sure to follow.
Just checked. Chicago is currently at 7.1% unemployment (projected), down from 7.3% in July. The highest level it had ever been at in the last 10 years was 7.6% in June 2003. So my 8% cap might be a tad low but not by much.
One caveat. If Obama (he will be elected) decides to really jack up taxes all hell could break loose and we could end up with a depression on our hands.
Gary – You want to assume the next guy will do worse than what we had the past 8 years? Give me a break! I don’t think anyone would disagree that 8 more years of GW would have us all moving to Mexico. Bush is and will known as the wrost president ever. To assume Obama will do worse is a pretty big prediction. Maybe we should elect McCain and deregulate everything. Let the market steal the remaining money they have yet taken from us.
Steve:
Rents go down when there are thousands of units available to rent. (Same with housing prices.) The vacancy rates are softening.
I found the Crain’s article (from Aug 18, 2008):
The occupancy rate in the quarter for top-quality, Class A apartment buildings was 91.6%. That’s flat from 91.9% in the first quarter, but down markedly from second-quarter 2007 when the rate stood at 95.4%, according to a report by Appraisal Research Counselors, a Chicago-based consulting firm.
Effective rents, which include concession packages, were stable at $2.31 per square foot compared with $2.29 in the first quarter. Rents in the second quarter last year were $2.30 per square foot.
Ron DeVries, vice-president of Appraisal Research, says the downtown market has held up remarkably well considering the city is expected to lose 5,530 jobs this year after four straight years of growth, according to an Appraisal Research estimate based on Moody’s Economy.com data.
And while the economy contracts, a record 1,974 apartment units are scheduled to hit the market this year. In 2009, developers will complete as many as 2,421 new apartments — which will be a major test of demand.
“Everybody’s just scrambling to get leased up before the fall,” says Mr. DeVries. “I think the market is going to struggle overall for the next year. . . .We really need to see some job growth.”
Downtown apartment market fares well amid supply surge [Crain’s]
Sabrina – I said the same thing as the article. Income drives rents. It’s not rocket science.
Steve, I didn’t say Obama would be worse than GW. However, if he sticks to his stick it to the rich theme it’s going to be like pouring gasoline on the fire. Given your exorbitant income, I’m surprised you would vote for an increase in your own taxes!
You can tax me until I am blue in the face as long as it benefits the greater society and gives my 3 kids every opportunity in the world to succeed. I like urbans areas and when you live in a dense area your happiness is often quite dependant on the happiness of others in your community. Heck, if you tax me enough I might not work so hard and actually spend some more time with my family. My slacking will give somone else the opportunity to earn what I have passed on.
I don’t like taxes but I would rather be taxed highly, like in the City of Chicago, then to have to move to Schaumburg and be secluded in my ’50 X ‘150 lot. Living downtown, my backyard is every park walking distance from house. I count on these parks being well maintained. I love having a free zoo, beaches, and a neighboirhood full of puclic flowers to enjoy. Without taxes these attractions would not exist. The rich are not going to donate their money for the benefit of all (execpt they do for status at the zoo).
Tax me all you want but please make sure it creates opportunity for all…
Taxes rarely create opportunity for all. It creates opportunity for government bureaucrats (see Richard Daley, City of Chicago).
But you said the key: “I might not work so hard”. That’s exactly what I’m worried about. You and thousands like you might just throw in the towel – or move money offshore, or start paying high powered attorneys to cut your taxes. Because people who make lots of money and say they want to pay more taxes rarely do. Instead, they spend money figuring out how to avoid it. Regardless which option people like you choose it will hurt the economy.
So my botom line is taxes are good because they provide general services / protections that prive citizans could never provide. I am very adiment on cleaning up government and getting the lobbyists out of the equation. The government would still be encouraging smoking if the medical evidence was not so overwheling.
People complain about the city of chicago’s sales tax (10%). Let’s not forget that we have a 3% state tax rate and a 0% city tax rate. Our overall tax rate living in Chicago is much lower than New York City. People forget this when the headlines come out that Chicago has the highest sales tax in the country. Sure the politicians are criminal but Daily has done a remarketable job. You have to take the good with the bad.
Rents follow income provided that supply and demand are in equalibrium. Right now I’m of the opinion that there are too many rental and not enough renters. A simple search on craiglists returns a large inventory of rentals, probably larger than the actual supply of renters. I see apartments in the same buildings listed repeatedly with little or no reduction in price. I think that rental prices will slowly creep downwards as more condos enter the rental pool. Too many housing units were built this boom for rents to stay at a plateu.
Yes- income drives rents (and housing prices) but when there is oversupply, the price will fall. As we’re seeing now with housing. Rents will follow as the article talks about the “shadow” condo market that is just rentals now. Several other highrises will also probably try and go the rental route (when it becomes obvious they will never sell enough units.)
Thousands of rentals at $1800 to $2000 a month? Good luck with that.
Sabrina – Saying “Thousands of rentals at $1800 to $2000 a month? Good luck with that.” is so irresponsible. Whether they rent for $1 or $2,000 per month is strictly relative.
I agree with the previous poster. I did a search on craigslist and I got the following results. Craigslist only shows 1 weeks worth of posts:
South Loop: Found: 1312
River West: Found: 380
Lincoln Park: Found: 2633
Lakeview: Found: 3161
Gold Coast: Found: 1729
Lincoln Sq.: Found: 728
Irving Park: Found: 678
River North: Found: 1480
These are rentals that have been posted in the last week for November occupancy. The only thing I don’t know is whether these are unusually large numbers of rentals. However, years ago, before craigslist, I don’t remember seeing 10,409 ads a week in the Reader.
I put my same rental ad up there 3 times per day. I guess you will have devide your number by 21.
Granted some are ads are miscategorized but that’s its small number of ads.
The average seems to be about $2,000 a month for a 2 br. Just thought I’d put that out there.
I’ll make sure to tag your craiglists ads as spam.
Steve reminds me of this guy who owns a Vetro condo. This flipper wants 330k for his jr 1-bdrm even though you can get condos twice the size from the developer for that price. Every single day he posts an ad listing it as for rent and for sale. It has never once had a price reduction in months. I always chuckle when I see that ad.
Seriously he posts it every single day. As if the problem isn’t the pricing or that he made a terrible investment decision but rather nobody has seen his ad. Just put vetro into craigslist and you will always see unit 2508. Its comical.
Exactly Steve. The prices will come down dramatically. Supply and demand.
There is no demand for 1-bedroom rentals at $1800 to $2000 a month. Therefore, they will fall in price.
How low will they go? I don’t know. I know people renting 1-bedroom condos of about 900 square feet with w/d in the unit for about $1300 a month in Lakeview, Lincoln Park and the Loop.
Don’t forget, there are a half dozen buildings expected to begin closings “downtown” in the next few months. How many rentals will be in those buildings?
If you watch enough of the new buildings- you can see the rental churn pretty clearly (getting a renter in a unit for only a year only to have to rent it again 11-12 months later.)
Steve, I find it humorous that you post the same ad 3 times a day on Craigslist. You certainly are not the only one. In fact, there are so many people that do dumb things on CL that it’s become a fairly useless way to find an apartment. Keep up the good work.
Anyway, there are 4 high-rise apartment buildings under construction within 5 blocks of my apartment. Or maybe it’s 6 buildings. I haven’t walked by those construction sites recently to see if they’ve actually started drilling caissons. It’s simply a matter of supply. Rents will go down to fill those apartments.
When I talk about rental rates being more strictly tied to incomes than home prices during the housing bubble because creative financing was used to purchase homes which focused attention on payments versus asset price, just think for a moment IF rents had gone up like housing prices during the same time. As we know, people would not pay such rental rates. Now, with over supply of rentals (thanks floplords!) rents should go below what they otherwise should be. So, it will simultaneously be a buyer’s and a renter’s market!
“G on February 20th, 2008 at 1:41 pm
Wow, this is really good news for renters. Not only do they save every month versus renting, not only do they not find themselves holding a depreciating asset, not only will they be in a perfect place (nothing to sell) when prices return to historical levels, BUT they also will see rent reductions.”
http://cribchatter.com/?p=2083#comment-2146
I put some numbers to the apt supply problems in the full comment.
“If a grand jury does not agree with their methodology, assumptions or processes for rating these CDOs/MBS as AAA then they should be criminally indicted.”
“At the end of the day the “victims” of the ARS market collapse are very similar to the “victims” of the foreclosure crisis. It was greed that led to their downfall.”
What’s the deal, Bob? You’re *really* inconsistent here. The ratings agencies did a ridiculously bad job, but it wasn’t fraud and you want them going to jail, while brokers LIED about what they were selling with ARS and you think that’s just fine? I don’t get it.
Wow. Reading this thread is hilariously depressing. Now I know who the people are that buy high and sell low. I was buying up the markets on Friday probably from panicked, depressed sellers like Steve Heitman. Thanks man, already sitting on 15% gains in one day.
As for Steve claiming that there was no one calling this precipitous drop, I would please like him to refer to the large number of posts made in the past 6-9 months from users of this site (that he was roundly criticizing).
Finally, please do not claim realtors are innocent in all this. they had all the incentive in the world to jack up the final selling price (and they had, in many cases, knowledge of how flimsy the buyers’ financial status were). I hope this bubble forces a paradigm shift where realtors charge a flat fee instead of grabbing a percentage (to reduce the incentive to keep/drive up prices). Then again, the greedy realtors would fight this to the very end.
anon,
The brokers motives who sold the ARS were known. They are paid based on commission. Have you ever heard the latin phrase “Caveat Emptor”? Of course now their clients are crying foul now that the market disappeared, however I seriously doubt that there was a liquidity guarantee in writing made to the purchasers of ARS. Before I buy a security I known darn well all the fine print and would never trust a salesman to act as a principal to my portfolio. He’s an agent.
The ratings agencies had a ficuriary responsibility to act as principals for the global financial system with regards to properly rating the risk of said securities. They failed, miserably. Brokers aren’t fiduciaries, never have been and never will be.
“The ratings agencies had a ficuriary responsibility to act as principals for the global financial system”
Show me where the “global financial system” ever retained a rating agency *or* what federal law so enshrined them as fidcuiaries and I’ll admit I’m wrong. Until then, you’re just being a crank on this point.
I wasn’t aware we’d had snow last weekend; this has been on sale since longer than June judging from the pics (I’m too lazy to read the rest of the posts to find out).