$181K Price Reduction on Lakeview House: 1114 W. Wellington

A lot of properties are still sitting on the market that were first listed last spring. This 4-bedroom house at 1114 W. Wellington in Lakeview is one of them.

1114-w-wellington.jpg

It has had $181,000 worth of price reductions since last April. It is available to buy OR to rent.

Here’s the listing:

New Price! 4,800 sq ft home with an floor plan, wonderful light from exposure on three sides. 10-foot ceilings, hardwood floors throughout. First floor: enormous great room/kitchen leading to large deck. Front room with woodburning fireplace.

Second floor: three large bedrooms and two full baths. Third floor: Huge master suite with skylights, woodburning fireplace and luxury bath. Versatile lower level with full bath. Five outdoor spaces, two car garage, two blocks to El.

 1114-w-wellington-kitchen.jpg

1114-w-wellington-great-room.jpg

Lindsey Stewart at Rubloff has the listing. See more pictures here. See the property website here.

1114 W. Wellington: 4 bedrooms, 3.5 baths, 4800 square feet, 2 car garage

  • Sold in December 1994 for $533,000
  • Originally listed in April 2008 for $1.05 million
  • Reduced several times
  • Currently listed at $869,000
  • Taxes of $11,994
  • Or- you can rent it for $4200 a month
  • Central Air

61 Responses to “$181K Price Reduction on Lakeview House: 1114 W. Wellington”

  1. Sure is pretty! What’s wrong with it? Besides being about 3x more house than I need… 🙂

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  2. It has “an floorplan”? Really, real estate agent? Maybe “an OPEN floorplan”? Why can’t these people proofread?

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  3. I think people have gotten carried away with the open floor plan concept. From the pictures it looks like the entire first floor is a shell. Great for a bowling alley.

    Oh….and once again renting trumps buying.

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  4. Gary: I agree.

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  5. At least the taxes are only $12,000 a year.

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  6. BTW we’re back at ’02 pricing in Rogers Park. I’m looking at a contract on my desk as I write this. K price is the same as the 7/02 purchase price. Amazing. Absolutely amazing.

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  7. About one of the best locations for a SFH in the city. I think this will sell at or near ask. Taxes need to be appealed though. 10k/year sounds more like it.

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  8. Another interesting thing about this house: they bought 14 years ago and have NOT even doubled their money.

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  9. “About one of the best locations for a SFH in the city. I think this will sell at or near ask. Taxes need to be appealed though. 10k/year sounds more like it.

    Yeah, if you want to overpay to live in a congested, drunken college student frat party like overpriced neighborhood. With $12k a year taxes. Sign me up!

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  10. The list price of $869K is a 3.5% annual gain from the 1994 purchase price. According to the BLS CPI calculator, $533K in 1994 is equal to $788K today (2.8% annual increase.)

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  11. Robert Shiller has the data to prove that in the long run house prices only go up with the rate of inflation. But then you have to deduct for the annual cost of entropy.

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  12. it looks nice enough. in june I briefly looked at sfhs in lakeview and most everything in this price range was depressing.

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  13. “The list price of $869K is a 3.5% annual gain from the 1994 purchase price. According to the BLS CPI calculator, $533K in 1994 is equal to $788K today (2.8% annual increase.)”

    So, G, you’re saying that this current price reflects longterm sustainable appreciation (per C-S index, the pre-98 real return was 0.7%/year)? So, assuming it wasn’t overpriced in 94 (reasonable, if not necessarily correct, assumption), that asking price is a decent approximation of value, which also doesn’t imply that it won’t decerease further with the coming overcorrection.

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  14. “live in a congested, drunken college student frat party like overpriced neighborhood”

    What do you know about this block or the immediate neighborhood HD, or are you just spouting your hatred of LP and LV again?

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  15. Gary – Once again I disagree. Purchase at $830k with 20% down. After a tax savings of 25% your monthly housing exp is roughly $3,450 per month. Take the $160k down payment and compound the purchase price over 10 years at a 2% appreciation rate and your return on the $160k is roughly 7% per year. So you monthly housing expense is almost a $1,000 less per month purchasing and you can expect a 7% return on your downpayment at a very low expected appreciation rate.

    So if you think housing is going down for the next 10 years you should rent. If you think housing will appreciate by 2% annually over the next 10 years you should buy. Historically a 2% appracitation rate is very low. I know I know real estate is dropping 50% and everyone should rent.

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  16. Homedelete – Your posts suggest that you are relatively young having just graduated law school. Your dislike for young drunk college and professions suggest that you are a dork. Just my 2 cents…

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  17. I’m a relative real estate bear but I think this will sell around ask (which is different from whether it’s wise to pay the ask at this time). It seems priced lower than other listings. Not sure if there is something wrong with it or whether sellers are desperate.

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  18. I agree with Steve on his basic calculations. Unless you think housing will be lower 10 years from now, buying this property is more economical than renting.

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  19. “anon on October 14th, 2008 at 8:24 am
    “live in a congested, drunken college student frat party like overpriced neighborhood”

    What do you know about this block or the immediate neighborhood HD, or are you just spouting your hatred of LP and LV again?”

    anon do you even live in LP or LV? If you do, do you walk around the neighborhood with your eyes closed? Seriously, google maps, 10 bars within 4 blocks, and congestion, congestion, and more congestion. I’ve lived in half a dozen neighborhoods in the 15 years I’ve lived in this city and you’d have to be right out of college or a chicago transplant to think the area was cool. Only because both groups of people don’t know any better.

    http://maps.google.com/maps?f=q&hl=en&geocode=&q=bars,+1114+w+wellington,+chicago&sll=41.872117,-87.648754&sspn=0.029783,0.073128&ie=UTF8&z=15

    I don’t hate LV or LP. Its just not the greatest place on earth. (It’s like Madison, Bloomington and Ann Arbor combined!!!)

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  20. anon,
    I guess we can rule out that there was a “new paradigm” due to gentrification that justified additional appreciation in Lake View. What else accounts for this? The overcorrection isn’t here already.

    I see the SHill still refuses to comtemplate what happens to his “expert” calculations when a potential buyer just waits for the price to go lower. There is no gain to acquiring a depreciating asset.

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  21. According to the post, this house has been for sale since last spring. There are now 2 people in this thread that have said they think it will sell at the asking price. Why think that? If the home has been for sale for this long, it starts to look like the sellers are chasing the market down with all their price reductions. Have the sellers finally got out in front of the decline?

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  22. Tipster, if there is now a sale it will most likely indicate knife-catching and not that the seller got out front at all.

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  23. G – I again said purchase based on where you think real estate will be in 10 years. Where is the bottom? I bet you have no idea…

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  24. Stevo:

    1. $750 is not “almost $1000”.

    2. Where are you getting this great rate? x-.25x=3450 means you have a total payment of $4600–less $1000 for taxes leaves $3600. Using Chase–lowest sure rates I can find–the payment on a 30-fixed ($664,000 at 7.625) is $4700/month, with 2 points upfront. Or did you decide to ignore the taxes?

    3. So, the real comparison is $5700/month, less about 25% (for the sake of argument)–or $4275. Or, rough parity on an annual basis. And the other excess expenses can be considered the cost of ownership.

    4. Thus, it seems like a fair asking price considering the current lending environment, if that rental asking rate is reasonable (not sure).

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  25. The seller is a solo PI attorney. From what I’m hearing insurance companies have not been willing to settle cases PI because they have no cash. The biggest issue with solo attorneys is cash flow, especially if you work on a contingency basis. I don’t know if that’s why he’s selling but maybe that’s something to do with it. Of course that’s pure speculation but it adds a measure of urgency, hence the large $141k price reduction since april.

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  26. “#
    Steve Heitman on October 14th, 2008 at 8:28 am

    Homedelete – Your posts suggest that you are relatively young having just graduated law school. Your dislike for young drunk college and professions suggest that you are a dork. Just my 2 cents…

    You’re a real piece of shit and the day your karma catches up to you in the form of a heart attack will be a happy day for me.

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  27. Anon – There are more banks out there than Chase. Who is the world would pay 2 points and take a 7.625 tax rate when you could do one of the follwoing. finance the whole thing with a 7/1 arm at 6.375% or breask it into 2 loans with the 1st at 6.125% and the 2nd (loc) at prime + 1/2 (currently 5%). The 7/1 Arm would save you $58,100 over the 7 years compared to your 30 year fixed.

    Why is a 30 year fixed so important when no one lives in their home for 30 years?

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  28. HD:

    Yeah, the kids partying at Berlin have a lot of influence on the environment for this house. And the drunken sots quaffing whisk(e)y at Delilahs. You’ve *really* proved your point, haven’t you.

    I’d be more concerned about the damn emergency room at Masonic, down the street. Wellington is a two-way, so there will be ambulances screaming down the street at times. Also, the double-parking on Wellington is a total pita, especially on weekends.

    Finally, did anyone say it was “cool”? Bob said it was “one of the best locations for a SFH in the city”–I don’t know anyone who equates SFHs with “cool”. I asked if you knew anything about the immediate ‘hood. And Stevo (bless his little realtor heart) bascially accused you of being a temperance union member.

    You are the only one talking about “cool” and how this ain’t it. You thus reveal that you **DO** dislike LP and LV, as currently populated–there’s nothing wrong with that, except that it does mean that your judgment about whether or not a particular LP/LV location is generally desireable is, at best, suspect.

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  29. Yeah, I’m a dork and a nerd and a geek and a loser! So f’in what, Steve-o. You’re a shill. I’m comfortable enough with myself that I dont need to lie to people and say, “I make $350k a year”, or “I’m a realtor and a lawyer and a cpa” or “I make so much money as a real estate pro” etc.

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  30. I love you guys! At least I love correcting you guys.

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  31. Stevo:

    FIRST–answer for your total BS calculations–your $58,100 over 7 years is less than 700 a month. So it’s not even the $750/month savings you were touting.

    2. “There are more banks out there than Chase”

    Sure, Wells Fargo will give you a (jumbo) 5/1 at 8.0% or a 30-fix at 9.75%. Or you can go conforming/2d split and get 417k at 6.5% and a 247k 2d at (wait for it) 8.865%.

    3. “Why is a 30 year fixed so important when no one lives in their home for 30 years?”

    Lotsa people live in their homes for 30 years. Lots more like to avoid interest rate and re-fi risks.

    4. “finance the whole thing with a 7/1 arm at 6.375% or breask it into 2 loans with the 1st at 6.125% and the 2nd (loc) at prime + 1/2 (currently 5%). The 7/1 Arm would save you $58,100 over the 7 years compared to your 30 year fixed.”

    For purposes of your bs, consider me a Missourian. Show me. I don’t want to see any interest only loans, either. Apples to apples.

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  32. “except that it does mean that your judgment about whether or not a particular LP/LV location is generally desireable is, at best, suspect.”

    There is no judgment, only subjective opinion. Some people think it’s desirable, others like me think not so much. Either you respect my opinion or you don’t. I respect your opinion and I understand it’s different from mine. nevertheless, I still think it’s naive to think that dozens and dozens of bars within a few block radius have no effect on the environment of the house or the immediate neighborhood. I have spent a considerable amount of time at an apartment nearby at sheffield and belmont and I know what it’s like around there. And as you’ve probably gathered, I don’t like it. But hey, at least I provide a diverse opinion around here to contrast all the LP and LV cheerleaders who think the place is better than Urbana and Madison and Ames combined!

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  33. homedelete,

    I live near this area and I’ve lived in Chicago for four years. Yes I think this area is very cool. Some rich people like to goto the bars too, even into middle-old age and everything is walkable from here. And the leafy streets and access to public transit when the brown line stop reopens means this is a prime location.

    Its not directly next to any bars: about the biggest nuisance might be the occasional broken beer bottle in the street or some noise on the weekends. Wellington is pretty quiet compared to main streets like Diversey.

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  34. Also you can’t compare an apt near Sheffield & Belmont to Wellington! I wouldn’t want to live near Sheffield & Belmont, its a completely different environment with different traffic than Wellington (along with a 4am bar). No 4am bars or liquor stores right near this place.

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  35. To be more specific the apartment was at Kenmore and Barry which just a little more than a block away. I didn’t know Lakeview was a block by block neighborhood. I thought that designation was reserved for bucktown and logan square.

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  36. I find that prices are most realistic for those that have been on the market for awhile and have suffered a few setbacks (no biters, contracts that feel through, or consistent “low-ball” offers). That said, this is close to where there will be buyers. However, I agree with G here; whoever buys now is “knife-catching”. I think this house’s value could eventually hit 750-775K.

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  37. “For purposes of your bs, consider me a Missourian. Show me. I don’t want to see any interest only loans, either. Apples to apples.:

    for purposes of comparing rent vs own you HAVE TO CONSIDER INTEREST ONLY. Why is this so difficult to understand? Do you add a savings rate to your rental amount?

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  38. “I didn’t know Lakeview was a block by block neighborhood. I thought that designation was reserved for bucktown and logan square.”

    Different considerations–in LV you have drunken louts and in Logan you have gangs. The effects of both are block by block, but the downside of picking the wrong block in LV is a little (understatement) less of a problem.

    Bringing it back to the property–Sabrina posted “Another interesting thing about this house: they bought 14 years ago and have NOT even doubled their money.”

    And that’s NOT considering the money they obviously spent on updating the kitchen and anything else. This is clearly a net loser on a real $ basis, even at the current price.

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  39. Well Barry & Kenmore might be a little too close to a main throughfare is my guess. I’ve walked down Wellington/Seminary/Clifton repeatedly over the years and traffic and noise aren’t much of an issue after the bars close. I would know as I am typically coming back from LP bars cutting through here on my way home. I didn’t consider that the ambulances might be noisy though.

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  40. “for purposes of comparing rent vs own you HAVE TO CONSIDER INTEREST ONLY. Why is this so difficult to understand? Do you add a savings rate to your rental amount?”

    What’s your maintenance reserve percentage Stevo? You HAVE TO CONSIDER ALL COSTS, if you want to stick to exact numbers. Show me.

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  41. Anon – Then you have to consider rent increases over the next 10 years. They should basically offset.

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  42. “Anon – Then you have to consider rent increases over the next 10 years. They should basically offset.”

    “Basically” doesn’t work Stevo. You have a diminishing percentage of your payment deductible. You have the phase-out of deductions, if you make enought to easily afford a $900k house. You have AMT. You have increasing taxes. You have (more frequent, likely) moving expenses if you rent. You have interest rate risk, if we follow your advice. There is the opportunity cost of the downpayment dollars. There are transaction costs on any re-fi and the purchase and sale. There are a lot of variables that go into getting an exact number and you choose to focus on only the ones that benefit your view and berate anyone who points out others. But you know all that and just don’t care.

    Anyway, please explain (1) how $750 is “almost $1000” and (2) how you came up with $750 in the first place. This shoulnd’t be a fraught point, but I bet you either ignore it or lie some more.

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  43. Take is easy Anon – I agree with your $750 as I though the rent was $4,400. My point still being proven. This is a back of the napkin calculation and I understand there are a lot more variables that go into the analysis. I would do the whole thing for you but I am actually getting busy now and must go.

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  44. If you could could figure out the calculation you might not have so many questions 🙂

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  45. Stevo:

    F.O. I can figure out the calculation, I can’t figure out YOUR voodoo calculations which are based on nothing.

    “though the rent was $4,400”

    So, you chose to lie. Again.

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  46. The SHill says “Anon – Then you have to consider rent increases over the next 10 years. They should basically offset.”

    No way they are going to offset waiting to buy at a lower price. But then the SHill doesn’t get a commission today.

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  47. G – I think I was clear that the calculation was based on conservative appreciation rates. I said if you think prices are going down you should rent.

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  48. per anon: “Bringing it back to the property–Sabrina posted “Another interesting thing about this house: they bought 14 years ago and have NOT even doubled their money.”

    And that’s NOT considering the money they obviously spent on updating the kitchen and anything else. This is clearly a net loser on a real $ basis, even at the current price.”

    This is most interesting. Like I said above, what does this say about the supposed effect of gentrification by high-wage earners over the past 15 years in a very desirable area? I have heard it stated as fact that the effect should easily result in higher than typical CS appreciation. That doesn’t appear to be the case and I believe that the trendline has not shifted like the true believers claim.

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  49. Well, what do you think SHill? Are you advising your clients* that prices will not go down?

    * of course, we all know that the SHill only has marks, and even they are hard to find according to the record low numbers of sales.

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  50. “what does this say about the supposed effect of gentrification by high-wage earners over the past 15 years in a very desirable area?”

    The only additional point I would make is that this area was already thoroughly gentrified 15 years ago. You would (guarantee it, at least as of right now) get a different result if you were looking at, say, Rosoce Village and a 20 year period, or Bucktown and the same 15 years.

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  51. David (the first one) on October 14th, 2008 at 3:03 pm

    ^ Agreed with anon. I think there is definitely a point in time wherein gentrification provides a much-greater than market or CPI return, but it’s pretty early on in the gentrification process when the investment still seems risky in terms of whether the neighborhood will improve to the next stage or not – if everyone knows for certain that the neighborhood is improving, then such improvement will be priced in and the only buyers who win are those buying from stupid sellers.

    Lakeview had already arrived 15 years ago; hence the very high ’94 sales price. That was probably roughly equivalent from an investment standpoint to buying one of those million dollar Bucktown McMansions today.

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  52. So I came in to this post this morning and baited Steve but didn’t get back until now to see what damage I had done 🙂

    Actually, a very good debate between Steve and Anon. Both make great points. Here’s where I really come out on this:
    1) Having lost twice my downpayment on a house in NJ in the early 90s and seeing what’s happening now I’m reluctant to count on appreciation.
    2) You do have to factor in rent increases. I would assume 3% a year. And this is a disadvantage of renting.
    3) The tax savings of ownership are a valid consideration but I’ve seen my deductions evaporate so quickly on my computer screen as I plug numbers into Turbotax that I don’t count those either. Between phaseouts and ATM I can’t figure out what is going to happen. Anon brought this up. Not to mention that by not itemizing I get a standard deduction, so the first $X of deductions don’t do anything for me.
    4) Maintenance of a home is non-trivial. I basically assume that over the course of 30 years you are probably going to completely replace the house piece by piece – financially, not literally.

    Some day I’ll actually run a spreadsheet (you know Sabrina has a link on this page to a rent vs. buy calculator) but until then my gut says that if you don’t live in a place for at least 5 – 7 years you might as well rent.

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  53. Oh…and if you pay some realtors 6% to sell your place then you really take a hit. But then who would pay that much?

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  54. David,

    I agree. Without going into financial theory I believe the only way you can get above inflation rates of return on a piece of urban real estate is if you buy ahead of the gentrification curve and I think this line of thought makes sense.

    However I think LV had a lot going for it which may not be replicated by Bucktown or Wicker Park: to the north of LV is Wrigley Field. Every 20-something drunkard wants to live there. Or most without big careers (they goto River North).

    Concerning southern LV there is DePaul right there: ample rental opportunity for the college kids and enough bars in the ‘hood that aren’t N Lincoln nor Wrigleyville scene. I think this area attracts a certain market (ie: me). Ability to walk everywhere applies to all of LV too.

    I don’t know a lot about Wicker Park other than new neighbors complaining about that ‘hood. I think Bucktown has a good chance to retain much of its appreciation due to changing demographics as I understand it. But knowing the area I would never make a big bet on it. People that make a killing on RE appreciation are either lucky homesteaders or those that take huge risks on changing demographics. I’m neither.

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  55. in my first long sentence I meant long-term appreciation.

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  56. Per Rob Stevens, “G – I again said purchase based on where you think real estate will be in 10 years. Where is the bottom? I bet you have no idea…”

    It doesn’t matter where RE is at 10 years from now, it only matters that it will go lower, and it will. Only a fool or a shill believes that there is currently any risk of being “priced out forever.”

    There are only knife-catchers buying now, very few of whom understand the downside risk.

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  57. The building permit for my 1909 6 flat on Logan Boulevard was $33,000. I calculated that to be $750,000 in 2007 dollars. Plus the land, say $1,000,000. I bought it in 1972 for $72,000 which I calculate to be $750,000 in current dollars, a loss of $250,000 in 63 years. I’d say it’s worth $1,500,000 in this gentrifying neighborhood, almost zero return in 99 years. I’ve done very well from real estate, but it’s not from any inherent real growth, but from buying right and selling right.

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  58. DBA was not DOA. Today’s buyer?

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  59. “1972 for $72,000 which I calculate to be $750,000 in current dollars”

    Using what deflator?

    The CPI change indicates that $72k in 72 is about $375k in 2008 dollars. $750k in 2008 is about $143k in 1972 dollars, using CPI.

    Of course, using CPI makes your 63-year-loss point much stronger, but shows you’ve done much better since.

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  60. Those diagonal floors are awful. Looks like it was done by a rehab contractor.

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  61. We looked at this house. For one, there’s a garden apartment attached to the house with a tenant who has a lease. So, you should only look if you want to be a landlord (you inherit the garden apartment and the tenant). Also, there’s no laundry room. There’s an empty closet off the kitchen where it looks like someone literally ripped the washer and dryer out of the wall. I don’t know how they fit them in that tiny closet in the first place. Also, the a/c doesn’t make it up to the third floor (the master bedroom) so you would have to cool your master bedroom with a separate unit. Those were just a few of the negatives. Like all houses, it looks and sounds a lot better on-line.

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