Selling for a Profit? 1864 N. Fremont in Lincoln Park
Steve wanted to chatter about a seller actually making money in this market so he brought up 1864 N. Fremont, Unit #2 in Lincoln Park.
It is currently under contract after a little over 2 months on the market.
Will this seller make money?
Here’s the listing:
No Assmt!! Prime Lincoln Park 3bed/2.1bath Duplex-up. Has Presence & Feel Of Sfh! Private Front & Back Entrances, Tree Top Views, 2 Sep Stairwells, Extremely Spacious, High/ Vaulted Ceilings.
Main Level Feats: Pwdr Rm, Granite Kitchen With SS Appl Open To Large Family Rm & Outdoor Deck W/ Retractable Awning, Formal Living/Dining Combo W/Fp. Dramatic Mstr Suite, Closets Galore! Everything You Need …
Dana DiPasquale at Baird & Warner has the listing. See more pictures here.
Unit #2: 3 bedrooms, 2.5 baths, duplex up
- Sold in October 2000 for $750,000
- Sold in November 2001 for $722,500
- Sold in October 2005 for $900,000
- Originally listed in July 2008 for $1.089 million
- Reduced
- Currently listed for $999,000
- Under contract
- Taxes of $9928
- No monthly assessment
Even IF it closes at the last list price (and what knifecatcher would pay full price?) it is already a loser in real terms.
Toss in the months of losses vs what a similar place would have rented for, and this seller blew a lot of money by “owning” in LP.
Now let’s see if it closes.
Good example. Nicely presented, good description (Although I Loathe Title Case). Missing sqft is an annoyance, and oddly enough the description doesn’t mention the garage. Both Brown and Red lines have stations within a couple of blocks, and the tracks are about a block away.
That said, I can’t figure out why this sold at anything like $1M. I’d guess the unit to be in the 2000-2500 sqft range, which makes this at least $400/sqft. Taxes seem low for $1M, which suggests that the assessor is valuing this more like a $800K property (matching my guess). Personally, the exterior looks like too many ugly new townhomes and that location seems liable to be terribly busy.
Given the rate of price cuts, I wouldn’t be surprised if the closing price is below $900K, where this starts to make sense…
Side comment — when I showed the exterior to my wife (fishing for a snarky description), she asked whether this was one of the places behind the Dominicks, like along Goethe between Wells and Sedgwick. I.e., where we seem to encounter the more crazy homeless…
I’m shocked this wasn’t marketed as a penthouse.
People have this irrational attraction for these top floor duplexes. We’ll definitely have to check on the closing price.
Kevin… If what you say about 800 assessment is accurate it is what happened to me. Sold a place and was assessed lower and bank wouldn’t finance for buyer. Now that is an awful feeling.
IB, The bank went by the County’s assessed market value? Maybe you are referring to the bank’s appraisal?
The assessor has homes in at about 65 cents on the $1 according to sales ratios.
at least $50,000 in transaction costs on this deal. Probably break even, which will be outstanding. Watch out for the stock market today. It will be another thrashing.
G.. thanks for clearing that up. Yes you hit it on the head. BTW 2 days ago I said watch that 907-909 area on the SPX. Yesterday afternoon they ran it up to 908 for the close but couldn’t get it above. This morning is the result of that. If this does not hold that 7500 area in the Dow be prepared for a 4-5k Dow.. there is nothing underneath this thing. I am speechless.
Best of luck.
I agree. I think luck has already been determined by preparation at this point.
G,
Honestly, last October I was on a plane and had a bad dream. I ALWAYS pay serious respect to my dreams on markets. 2 days later I sat there thinking where to go on this. I puked all my equities and started liquidating properties. Unfortunately I came up with there is no safe place to go. Foreign currencies at the time.. ridiculous.. Commodities at the time .. ridiculous. Cash in bank.. worst of all. Gold I have always been convinced is for idiots. Treasuries.. safest but not really sure in the end I will be given my money back or what it will be worth when i get it.
Basically bend over and see where this goes and remember there are much more important things in life!
G.. It was also that week that I decided America with it’s sense of entitlement could become a very scary place if it hit the fan and decided I was going to ex-pat for good. That argument weighs against my too fat and too lazy to do anything theory though.
Amen to that.
Yes.. I really do wish everyone the best. Amen!!
Time to go play some volleyball! Ciao!
I will go out on a limb and say that this is under contract at $965,000. My point is that someone who purchased this unit over the past 8 years has made money on each sale. This is the worst market in a long time and even the person who purchased in 2005 will end up breaking even. Not the end of the world and at least this person will get their down payment back. Lucky he purchased and did not stick his money in the equity markets. Ouch!
Gary,
I don’t know if their attraction is irrational. Anyone who has lived below a loud yahoo knows what impact lack of sleep can have on your life/schedule/wellbeing. I’m sure people desire and are willing to pay a premium to avoid the risk of living below a loud yahoo. Maybe with concrete lofts there isn’t this issue but even in my well sound insulated apartment building there are always the loud neighbors above and below.
Below neighbors can be a problem too but not nearly as much (no noises from walking). My favorite story is one below me had an industrial grade alarm clock: as in it sounded like 90 decibels. And he had a habit of leaving it set and not being home a few times. I’d imagine I wasn’t the only one raising hell with him and the LL.
(always the loud neighbors should’ve read occasionally the loud neighbors who move in and cause noise issues until they move out)
What does this show you about buying new construction? It never pays so just stay away…
As I have said before, we are obviously facing very difficult times and I would not be a buyer of anything right now. My point about LP has always been that it help up for the past 2 years as the rest of the country sold off. Any real across the board drops in LP will be the result of the global market crash we are experiencing now. If you predicted this global outcome then you were ahead of the game. Most believed that housing prices would come down and the economy would slow. Congrats to those who predicted, and profited from this worst case we are experiencing…
“Any real across the board drops in LP will be the result of the global market crash we are experiencing now. If you predicted this global outcome then you were ahead of the game.”
The global market crash is, in large part, because of the irrational run up in housing in places like, but not limited to, LP.
Many people predicted this global market outcome, mostly those NOT associated with real estate.
Predicting a decline based on overvalued RE was easy enough. Predicting a market crash like this I think very few saw.
What essentially happened is the banks could not longer continue to lie about their financial condition. People finally got wise after being burned X number of times by buying into new share issuances that the banks were not being forthright regarding their balance sheets and recognition of losses. This was exemplified yesterday when Wachovia disclosed a 23B loss. Do you think they would have had a loss of this magnitude if they hadn’t already found a suitor to acquire them? I doubt it. Loss recognition in GAAP accounting is about as objective as a beauty pageant or dog show–its all at mgt’s discretion.
I told you the SHill would blame “the economy” for his leading people to bad RE buying decisions in the bubble. Ken correctly notes that it was those same decisions that helped wreck the economy in the first place.
I’m certainly not buying it, but I am sure the SHill hopes his recent “clients” do.
SH said: “I will go out on a limb and say that this is under contract at $965,000”.
i want to go out on a limb and say that it sold for 925K or less. In any case, after realtor costs, maintenance, opportunity cost of DP, and inflation this is a clear loss so to answer Sabrina’s question: “No”.
also, please don’t hate those that profited from the down turn, we are merely correcting the excess greed brought on by the government, borrowers, bankers, and realtors. and yes, many saw this global recession coming… the hard part was that most of us “doom & gloomers” thought it would come earlier. personally, i think i’m on the more optimistic side by thinking that 2002-2003 prices will be the floor (at least in Chicago).
SH.. you are so full of shit sometimes it is frightening.
“Predicting a market crash like this I think very few saw.”
Bob, there were plenty of respected people like the Nuriel Rubini, Paul Krugman & Dean Baker’s of the world that were warning of this.
IB,
The RE bulls, inexplicably, still won’t admit to a national housing bubble, it took years to get them to admit there were even regional bubbles, so they blame the global credit crisis. As if the credit crisis, global financial crisis and the housing bubble are somehow not related. They pimped housing for to long, to hard to now admit they knew not of what they spoke.
They were wrong then, and they are wrong now. At least they are consistent.
Consistently wrong, that is.
At least give Steve credit for not disappearing. Those who were overly critical of the “doom and gloomers”, such as Deacon Blue, have conveniently disappeared from the site.
Maybe Deacon can’t afford the internet anymore?
I will again ask that you point out losses that have occured in LP. There are some but the majority are gains. Show me…
First you ask us to show losses in LP…
“I will again ask that you point out losses that have occured in LP.”
“Then you admit there are losses…
“There are some but the majority are gains.”
Then you ask us to show you losses again.
“Show me…”
Apparently you are aware there are losses so ther is no need to show you any.
this may have been said before, but i’m convinced at this point that “steve heitman” is sabrina just trying to stir the pot and add some spice to the conversation. the comments are too ridiculous otherwise.
“I will again ask that you point out losses that have occured in LP. There are some but the majority are gains. Show me…”
Do your own research, Stevo. Unlike you, no one else has boasted (5 winners for every loser? A winner each day?) and not followed through.
I list winners all the time. Let’s see some evidence of a falling market in LP. Show me stats that shows LP has declined in value over the past couple of years.
moving to chicago….. you might be right.
Its really steve against the world on this blog. Without Steve there would only be bears feeding on each others negativity.
LP median attached condo/TH median sales price:
September 2007 = $430,750
September 2008 = $387,500 (-10%)
The precursor to sales price declines are declines in the number of sales. Check the sales collapse out for the month of September:
1988 = 104
1989 = 111
1990 = 72
1991 = 93
1992 = 109
1993 = 128
1994 = 140
1995 = 141
1996 = 132
1997 = 149
1998 = 119
1999 = 116
2000 = 130
2001 = 111
2002 = 136
2003 = 170
2004 = 182
2005 = 213
2006 = 104
2007 = 124
2008 = 73
Here’s how the first 3 quarters of each recent year compares:
2005 = 1,493
2006 = 1,077
2007 = 1,227
2008 = 781
Finally, here are the new listings in the MLS for Sept and first 3 quarters of recent years:
2005 288 2,446
2006 262 2,338
2007 202 2,217
2008 181 1,872
The trend is not the SHill’s friend.
Moving to Chicago… I always wondered the same thing.
Btw.. enough with the apartment measurements… what do you think Sabrinas are 🙂
I’ve got a major LP stinker for you. 1217 W. Wrightwood. A 3 flat purchased for $995K in November 2005. Just sold for $790K as a tear down and the buyer was being generous.
As for the markets. I knew housing was in a bubble and I knew the stock market was overvalued. Thought I had myself covered with 35% cash and 23% commodities and international. Never thought the commodities and international would crash. I would have been better off owning a house.
Gary, I was thinking about that spin recently.
Next NAR advertisement.
“Housing might suck but it’s better than the stock market”! *
* Does not apply for California, Nevada, and Florida
Good idea. At least they would have more credibility with that!
“I’ve got a major LP stinker for you. 1217 W. Wrightwood. A 3 flat purchased for $995K in November 2005. Just sold for $790K as a tear down and the buyer was being generous.”
Lots west of halsted are not worth more than $800k. This has been constant for the past 3- 5 years. If it was a standard 25×125 lot the guy who purchased for $995k simply overpaid. There is a very clear market for buildable lots and it is no secret what they are worth. The guy over paid…
G – Again you are now looking to median pricing when you dismissed it for the past 12 months? Remember your reasoning from before. I think it went like this … “The median price continues to increase in LP because more high end units are selling while low end units are sitting because of the 1st timers can get loans”.
Here are the real #’s for LP during Sept. The median is down because there were 4 studios, 21 one bed, 32 two beds, 13 three bed, and 3 four bed units. Looks like the weighting on the smaller units may have something to do with the median pricing. What do you think G? Honestly, do you know anything about stats?
List Price Sold Pr Approx SF Beds Baths MT LMT
Minimum $159,900 $140,000 0 0 1 1 1
Maximum $1,449,000 $1,439,000 2900 4 4 477 477
Average $443,738 $432,873 1321 2 2 97 71
Sold properties closed averaging 97.55% of their Final List Price (FLP).
This reflects a 2.45% difference between property sale prices and their FLP’s.
Why waste time trying to beat Steve up, really? Not productive.
Steve,
“Lots west of halsted are not worth more than $800k. This has been constant for the past 3- 5 years. If it was a standard 25×125 lot the guy who purchased for $995k simply overpaid. There is a very clear market for buildable lots and it is no secret what they are worth. The guy over paid…”
In 2005 this was sold as a 3 flat with tenants. It was not a buildable lot. The new buyer decided to level the building.
“The median is down because there were 4 studios, 21 one bed, 32 two beds, 13 three bed, and 3 four bed units. Looks like the weighting on the smaller units may have something to do with the median pricing. What do you think G? Honestly, do you know anything about stats?”
I’ve been saying this about the RISING median price stats for months now. They’re totally bogus because they are heavily influenced by mix. But every time I brought this up you dismissed it. Now that it works to your advantage you are embracing the criticism.
Gary,
Yes, that is how SHills operate. I posted that median only for the SHill’s love of the median on the way up. I just find it amusing to watch the SHill flip flop around, as you noted.
The collapse in sales numbers is the most reliable stat. New listings are dropping at a much slower rate. Demand has almost disappeared, as the Oct sales numbers will further illustrate. Anyone making offers today that are near “last list price,” are knifecatchers.
There is no RE in LP that will not see large price declines throughout the next few years. There is right now much savings to be had by renting an equivalent place. Why would anyone buy unless they are secure enough to throw away big money?
I just posted the September sales numbers for the Chicago area. They were just released by IAR:
http://blog.lucidrealty.com/chicago_real_estate_statistics/
See second graph on page.
Interestingly, the drop seems to be slowing. Of course, last September really sucked. But you can see the trend and the decline does seem to be slowing.
Oh boy Gary – Everything I said about Lincoln PArk is supported by your statistics. Inventory is not up and market times are not increasing much. Does this support pricing falling dramatically? Just curious how you see the numbers?
Let’s remember – I have always posted in response to those who said LP is falling like the rest of the country. It has not been true to date and the stats support this fact. What happens in the coming months is anyone’s guess but so far it is simply not true.
Do your numbers say something different?
Oh boy Gary – Everything I said about Lincoln Park is supported by your statistics. Inventory is not up and market times are not increasing much. Does this support pricing falling dramatically? Just curious how you see the numbers?
Let’s remember – I have always posted in response to those who said LP is falling like the rest of the country. It has not been true to date and the stats support this fact. What happens in the coming months is anyone’s guess but so far it is simply not true. Flat pricing would mean that 50% of the units selling are losing money and 50% are making money.
Do your numbers say something different?
My experience is that prices have been pretty flat in LP over ast few years (give or take 5%). Currently, nothing is moving so what happends with pricing in the next few months is dependant on the recovery of the financial markets. The top end of the market is frozen and not too much is moving at the bottom either.
Now the SHill claims “I have always posted in response to those who said LP is falling like the rest of the country.”
Who has ever claimed that here? I have never seen anyone claim that.
Typical. All the SHill has is deceit. This will only get more pitiful, folks.
“What happens in the coming months is anyone’s guess.” I love this from the SHill, too. Whocouldaknown? LMAO.
Do you know what would be even more weird? If G and the shill were the same person.
So G… you claim that “no one here” has said Lincoln Park is way over vealued and will crash with the rest of the market? You crazy little man!
Steve,
My numbers do support your claim that Lincoln Park is not falling and I have actually said that here before. However, I also believe that Lincoln Park is overvalued and that it will fall. In addition, my comment above was with respect to the reliance upon median prices which I have always claimed were meaningless. It would now appear that you are agreeing with me on that point – which I appreciate. 🙂
I do agree with you Gary. I am a stats guy and only report on what has happened in the past. I make no claim to know what will happen in the future other than to take the statistical data that exists and try to apply it going forward. Nothing is going under contract right now which is a problem for LP moving into the winter months.
Steve I can support you on your comment. I never said it specifically but I will now. LP will go the way of the rest of the market. correlated markets often disengage but rarely for long.
The real thing to look at is why were those median properties skewed so low. Because banks are broke and nothing can be financed on the high end, and anyone looking at 9.625% 30yr Jumbo ain’t buying.
I once thought these people had more cash than they do. Many are so stretched you would be very surprised.
If someone does not figure out a way to bring down jumbo mortgages than we are screwed. Which is riskier, financing two $417k homes righ next to each other in Humbolt Park, or one $834k home in Lincoln Park? I don’t think you need to asnwer. Bottom line is the financing system is broken and needs to be fixed.
“If someone does not figure out a way to bring down jumbo mortgages than we are screwed.”
You’ve persisted in saying this wasn’t a problem, now it is? What changed, Stevo?
I think Steve is right in that there is certainly a disconnect and a finite cutoff point where financing costs take a huge leap.
If the seller was worried about buyers financing costs they could always drop the price to 417k 😀
Well Anon – It was not a problem 2 months ago as many banks still offered competetive Jumbo rates. Banks in the past 30 days stopped lending (not sure if you received this memo) and therefore it is now a problem. It will not last as the people purchaing many of the jumbo mortgages have a much better chance of repaying their loans then those in conforming ranges. The market is frozen and that is a problem.
Anything else I can clear up for you or your girlfiend (HD) Anon?
LMAO, sure SHill, clear this up for me:
http://cribchatter.com/?p=5060#comment-13029
“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.”
The SHill was repeatedly wrong about his predictions of the mortgage situation, as well. As a matter of fact, has he predicted anything correctly to date? How many times did he distort and deceive about mortgage availability when confronted with the obvious, and then denigrate those who have been proven correct (like anon)?
Soon enough, he will be repeating all of the predictions he scoffed at here as if they were his own. Just wait and see.
Stevo:
I was pointing out the increased Jumbo rates two WEEKS ago and you were still maintaining that there wasn’t a problem. Apparently, YOU just got the memo. Working on the McCain timetable, again, I see.
Was the mccain knock really necessary? Look at the headline of today’s drudge report. listen to obama’s 2001 interview with wbez. if he doesn’t scare the crap out of you then the neurons in your head aren’t firing properly His comments are some of the scariest things to come out of any politican’s mouth in quite some time. God help us if this man is elected.
HD – What scares the crap out of me is a 72 year old man and a extremely unqualified running mate with no clue on the economy.
“Was the mccain knock really necessary?”
You drag politics into it whenever you feel like it, so either you knock it off, too, or deal with it. I know that Stevo’s an Obama man, so I pick a dig that hurts.
Besides, it seems you don’t disagree with the nugget underlying the dig, since your only response is “obama’s worse” rather than anything disputing the fact that McCain’s campaign seems to be 2 weeks behind the news.
And, I just figured out how FoxNews judges itself “fair and balanced”–it uses Drudge as the reference standard.
Make sure you vote in favor of the ConCon, HD; we need to be able to change the Con, so we can get rid of idiots like Blago w/o relying on the Illinois Repub Party to nominate someone electable.
Oh, and F.O. on the “neurons in your head aren’t firing properly”.
“Oh, and F.O. on the “neurons in your head aren’t firing properly”.”
Haven’t had your coffee yet this frigid monday morning?
for the record only in the last two or three days have I dragged politics into anything here.
Hey, SHill, since you now claim to “know about stats,” please explain why Sept LP condo/TH sales dropped on a PPSF basis?
You claimed above, in regards to the Sept median price drop, “Looks like the weighting on the smaller units may have something to do with the median pricing.” That could be, but then again the median was the SHill’s favorite on the way up, so why is he dismissing it now? I guess he came around to our way of thinking on that point: the median can be misleading.
We all know that smaller units sell for more per square foot. The SHill claims the Sept median drop is due to “weighting on the smaller units,” so what should the PPSF show us? It should be higher, or at least hold steady, with the “weighting on the smaller units,” correct? If not, it would be a good statistical sign that all units are dropping fast in PPSF. I have also broken down the PPSF by SF range. Let’s see:
stat —— Sep 2007 —— Sep 2008 —— YOY
med —— $430,750 —— $383,750 —— -10.9%
ave —— $453,838 —— $432,873 —— -4.6%
hi —— $1,100,000—– $1,439,000—–
low —— $135,000 —— $140,000 ——
count —— 124 —— 76 —— -38.7%
med psf —— $326.67 —— $297.14 —— -9.0%
ave psf —— $328.76 —— $290.50 —— -11.6%
hi psf —— $538.04 —— $422.73 ——
low psf —— $200.00 —— $187.22 ——
count psf —— 53 —— 25 ——
ave psf >2,000 sf- $291.77 —— $265.78 —— -8.9%
ave psf 1,000-1,999 sf- $338.10 — $293.79 —— -13.1%
ave psf
Sorry, the last few lines did not appear:
————————-2007——- 2008————-YOY–
ave psf >2,000 sf $291.77 —- $265.78 —— -8.9%
ave psf 1,000-1,999 sf $338.10 —- $293.79 —— -13.1%
ave psf
One last attempt:
————————-2007——- 2008————-YOY–
ave psf
I better just write it:
The average psf for under 1,000sf units
2007= $360.48
2008= $322.09
YOY -10.6%
Uh oh, it looks like the PPSF decline was well under way in September, right “statistics man?”
Oh my G – Control that anger! Where do you get Sq ft information from? Only 1 out 5 or 6 properties even list sq ft and it is usually wrong anyway. Some even include deck space in sq ft.
Where do you get it?
Is a cat angered by playing with a mouse?
By the way, the SHill’s statement that “Only 1 out 5 or 6 properties even list sq ft and it is usually wrong anyway” is a lie. Funny, that, since the SHill was proven a liar about this before.