The Andersonville Single Family Home: 1655 W. Hollywood
We’ve chattered a lot about renting versus owning. Here’s a single family house at 1655 W. Hollywood in Andersonville that you can either buy or rent.
Which is the better deal?
Here’s the listing:
This Brick Andersonville 4 bedroom, 3.5 baths home was built for the chef and entertainer in you. The kitchen has an 8 ft island, 6-burner Thermador stove, prep sink, full wall of cabinets and opens up to a breakfast room with oversized glass patio doors leading to a huge outdoor deck. The separate dining room, formal living room, and kitchen are all wired for sound.
The 2nd level has 3 generous sized Bedrooms plus a den or office, two full bathrooms. The all marble master bath has a separate shower with body sprays and a Jacuzzi tub double vanity sinks.
The walk out Lower level is all opened for a huge family room, rec-room, wet bar wine refrigerator, game room, 4th bedroom, full bathroom, also wired for sound.
Other features… Dual system heating and cooling systems, Hardwood floors, and custom window treatments throughout, oversized 2 car garage, landscaped yard.
This home sits on a quiet tree-lined residential street. Move in ready.
Joe Green at Coldwell Banker has the listing. See more pictures and a virtual tour here.
1655 W. Hollywood: 4 bedrooms, 3.5 baths, 2700 square feet, 2 car garage
- Sold in September 1997 for $165,500
- Sold in January 2004 for $340,000
- New construction in 2006
- Originally listed in August 2008 for $775,000
- Reduced
- Currently listed for $749,000
- Taxes of $5457
- Central air
- OR you can rent it for $3500 a month
I really like this place! the finishes seem to be pretty nice. Does anyone else think $3500/month is cheap rent?
Nice to see the classic brick two-flat look being used in new constructions. (Or am I wrong to assume the entire house was rebuilt? Maybe it was just a gut rehab?)
Sellers always have realistic rental rates because that is an immediate concern (hence they price it close to market) while they have unrealistic asking prices because they can “wait out” the downturn (though i think this will soon change). I think the rental rate is about right and if that’s the case this should sell for around 650K.
Nice place. I’m not familiar with the area but this is one heck of a property for 750k if its a good area. 650k and this would sell quickly. I’m not convinced it wouldn’t sell at or near ask, however, I could see this selling for 700k-750k.
If $3500 is appropriate rent, why wouldn’t appropriate sale price be more like $500K? Though actually, I do think $650K sell price sounds reasonable–so my thinking is that $3500 a month is actually a steal on the rent.
Great looking house. can’t afford rent or mortgage either way but it definitely looks better than 95% of the McCondo/houses on this site.
“If $3500 is appropriate rent, why wouldn’t appropriate sale price be more like $500K?”
Because of the owner-occupant tax bennies and (presumed) slight premium over rent equivalence.
Taxes are low, even with the homeowner exemption–expect them to rise after sale, regardless of the actual closing price.
I don’t know the neighborhood enough to comment.I like that kitchen.
I am also a bit puzzled by rent-buy comparisons (thanks, Sabrina, for bringing the issue up repeatedly). I’ve seen some houses/townhouses listed in Hyde park/Kenwood for $700 – 800000 that are also available for rent from below 2000 to $2600…And this for sellers that bought recently. Should be a good signal to the seller that they are waaaay overpriced.
I want that kitchen!
anon (tfo), even given those things, a 200X rent multiplier for an owner-occupant strikes me as way, way too high, especially in this market. This is especially so given that almost anyone that could afford to buy a house at this price, likely is at an income level where the tax deductibility of mortgage interest is phasing out for them, and/or they are subject to the AMT.
I’ve heard in a bad market, the multiplier is more like 120X, and I was being kind of generous and saying about 150X might be reasonable despite it all. That puts the price at 500-525,000. IF, that is, $3500 is really market rent, and not too low.
“I’ve heard in a bad market, the multiplier is more like 120X”
That rule of thumb is for a cashflowing, investment property. Or if the high (jumbo) interest rates are the new reality.
“at an income level where the tax deductibility of mortgage interest is phasing out for them, and/or they are subject to the AMT.”
AMT isn’t too much risk in Illinois, unless you have an abnormal amount of dedcutions (like if you buy too much house). The phase out might hit some, but it wouldn’t be much at ~$250-275k for a married couple.
“That puts the price at 500-525,000.”
If that’s the case, then the $500k condos are only worth $250k, which, if using 150x, means the rent is way too high. I think this is more an example of the (relative) lack of demand and comparability of SFH rentals in the city. It’s (1) not a true market, b/c of supply/demand issue and (2) at a certain rental price, anyone interest will buy instead.
It’s really a simple excel spreadsheet. Figure out all costs and divide. A static number of 120x rent causes a problem because a mortgage at 5% and one at 10% is a huge difference in monthly expense.
You were being generous with your GRM. 200X is bubble thinking. Just wait a few years and there will be no premium (besides tax consequences, although prob not with this prop due to AMT as you point out) on owning. I would go so far as to say they will be selling at a discount to renting before any recovery will occur.
Andersonville is included in Edgewater in the mls. There have been three single-family rentals for over $2500 in the last 3 years. They leased for $3750 in 9/07, $3450 in 6/07 and $2500 in 8/08. The subject house does seem to compare well with the two high rentals from last year, but that was the economic equivalent of a light-year ago.
Excuse my geographic ignorance but what kind of neighborhood is this in? Safe, good school district etc…?
It is a decent neighborhood, but the schools aren’t very good.
Pierce is the elementary school, from the CPS website: “As of 2007, there are 924 students enrolled at PEIRCE. 32.0% are Limited English Proficient. 85.6% are Low Income. The Daily Attendance rate is 96.4%, the Mobility rate is 16.2%, and the Truancy rate is 0.3%.”
The HS is Senn. From the CPS: “As of 2007, there are 1372 students enrolled at SENN HS. 23.5% are Limited English Proficient. 93.7% are Low Income. The Daily Attendance rate is 83.3%, the Mobility rate is 38.0%, and the Truancy rate is 13.1%.”
Did anybody hear more on the FDIC supposedly working on guaranteeing mortgages if banks cut principle or interest rate to homeowners nearing foreclosure??
Why is everybody getting bailed out except for the conservative savers ? We get screwed. I don’t recognize this country anymore…
There has been a “war on savers” going since the start of the bubble.
There is nothing that can be done to prop up housing prices, but much will be wasted in this quest. Every action by the govt will just lead to further destruction of RE values.
Basically rachel its because most people are not conservative savers and the spendthrift financial idiots votes count as much as ours do. Politics is all about numbers, not about equitable outcomes or equality. If you’re an idiot who digs yourself into a financial ditch but much of the rest of the country does too, politicans will take note of this large segment and pander to them.
Its another example of the safety of large numbers.
Also G I don’t think the government attempts at intervention will ultimately be successful either, but I bet they will delay the housing market from finding a bottom.
G,
I agree… I haven’t completely thought through the implications of such a guarantee – but the incentives it provides to homeowners are astounding: Is there any homeowner out there who would not stop paying his/her mortgage to get a cut in principle or interest rate?? It is beyond me how the govt can’t be thinking about the implication of their plans…Or is the government going to take an ownership stake in every house whose mortgage it guarantees? Lol.
The govt attempts might delay finding a bottom, but they definitely will cause a deeper and longer bottom.
What can the govt really do? Cut interest rates? No lenders will make mortgages again, so cash prices will be the norm. Cut principal? That would equate to price reductions immediately, which seems to go against the real purpose. Govt ownership stakes? This seems like it would keep few in “their” homes because of the guarantee of no future house ATM withdrawals.
The simple fact remains: the homeowners do not want the houses, they want the equity. Problem is, that is lost for good and not even our beloved, helpful govt can bring it back.
One other thing, there isn’t enough money to restore bubble prices. Nothing can get us back there. It was proven unsustainable and it is doubtful that conditions will exist for a repeat for generations, if ever (hopefully.) Anyone who believes things will “pick back up” from here are delusional. The overcorrection will be legendary.
G,
If the government guarantees the mortgage, the bank should be willing to cut interest rates; interest rates incorporate risk – and that risk is reduced with a government guarantee.
There isn’t money to guarantee them all, as the banks well know. Somehow I don’t believe a govt guarantee will instill much confidence going forward. It sure hasn’t happened the last couple of weeks.
Yes, G – that’s may very well be what it will boil down to. The government risks losing all credibility by attempting to guarantee everything, including an individual’s debt. And when that happens – good luck to us all!
Rachel, I am pretty sure there was a law passed some time ago in New York that made it illegal to provide a financial guarantee to lenders. Thus, as you stated previously, interest accounts for the risk involved. If this was not the case, then ALL lenders would have been requiring homeowners to purchase a surety type bond on their outstanding mortgage.
Again, I’m not 100% sure of this, but someone on here probably knows more about it than me.
This is a fricken two-flat with fancy fixtures And the $550k two flat in Andersonville is extremely overpriced too. Expect this to sell for $225k or less after the fixtures have been stolen at or near the bottom of the bubble. And its an ugly two flat.
#1 If this is a fair value for the neighborhood then I think University Village is a better deal. More for less.
#2 The one good thing about helping people keep their homes is that it avoids the legal “friction” of foreclosure. It also avoids vacant homes that deteriorate – which is a shameful waste of resources.
OOHLALA-VELY but lousy timing. Seriously doubt the sellers will get anywhere near their asking price. A’ville is nice but not 750K nice.
This is a good one to watch.
Andersonville is a very cute neighborhood, there are large homes just to the east (Lakewood Balmoral) that are not as updated selling for $800k, there are a bunch of new framed homes built a few years ago by the old Hospital that are getting high $700k. I prefer Brick. Looks like a lovely home, just a soft market.
The rent is too high. I wouldn’t pay it
I am married with a child, and looking for houses just like this to buy soon. We live in a 2bd, 2ba condo with a $200K loan and a $1200 per month mortgage payment.
Because of this website, I’ve considered renting for two years as SF house prices decline further, but why would I want to rent for $3500??? I’d just stay put.
Maybe I’d move (and rent) if the rent were $2500 tops.
I viewed this property at an open house and until you’ve been in it, and seen the neighborhood specifically not generally, it really doesn’t do to speculate whether or not it’s worth the ask price.
It’s a very well done property with great attention to detail in every aspect I could find, and I was critical since I just bought on the same street and am involved in a project of similar scope. They’ve been working on this house for almost four years now I think and it shows. Sure, there’s things I’d like to have seen done differently (no back yard, maybe another room in the basement, slightly different taste) but it’s really beyond what the photos can illustrate. And there are so many things about it that are almost over the top (two 75 – I think – gal. water heaters, sump pump in an area that probably will never floor, new garage) Plus, you can’t really expect to get a feeling for a place until you’ve driven up to it and stood in it.
That said, I’d guess it’ll sell a bit under ask but not much. At least for my sake and for the sake of the eventual sale of my property that’s what I hope.
Sold for $700,000 on 5/21/09