Waiting 9 Months for a Buyer in Roscoe Village: 1918 W. Melrose
This 4-bedroom single family home at 1918 W. Melrose tells the tale of what has happened to the Chicago housing market, and the economy, since spring of 2008.
In May of 2008, when this house was first listed, prices were holding fairly well on the north side of the city.
9 months later, this home is still waiting for a buyer and has been reduced by $175,100.
It is now listed for $60,100 under the 2006 sales price.
Is this home a “deal” at this price?
Ken Jungwirth at Rubloff has the listing. See the pictures, virtual tour and a floor plan here.
See the property website here.
1918 W. Melrose: 4 bedrooms, 3 baths, 2 car garage, no square footage listed
- Sold in May 1993 for $230,000
- Sold in April 2002 for $534,000
- Sold in June 2006 for $810,000
- Originally listed in May 2008 for $925,000
- Reduced several times
- Currently listed for $749,900
- Taxes of $10,754
- Finished basement with wine cellar
- Air conditioning
- Loft
- Media room
The 2002 price sounds about right for now.
thanks for posting this one. i’ve noticed this listing before and it seems too nice for this price. there has to be a catch.
The stock market crashed 50%, the economy is melting and they think they only need to take a less than 10% haircut from the peak?
Yeah 2002 price is about right. Had they not been greedy and listed at 750k a year ago it might’ve sold. Beautiful house, though.
Ah yes, looks like Ethan is forcing his parents to move to the suburbs. Kids need grass I tell you, GRASS!
Its in some parenting handbook that if a child doesn’t have at least a half acre of grass, they grow up to be serial killers.
lol I know some guy who recently had a kid and moved to the burbs once the baby was born..he’s an early 30-something. Well him and the wife finally figured out that you don’t need to move to the burbs until the kid enters school and are moving back. Fortunately for them they are renters so have that flexibility.
Nice place, I like it a lot and the neighborhood isn’t all that bad either. I lived a few blocks away a few years ago. Anyway there are a few things that are a little weird:
1) the buyers purchased for $820k in 2006 just to flip 22 months later? Did they think it would eventually be worth $1,000,000????
2) That loft thingie is a little weird, and what the heck is a hammoc doing up there?
3) doesn’t appear to be much natural light in the kitchen;
4) Again, the price is prohibitive. how many young couples can afford $749,000 with large down payments?
The verdict: $480k at or near the bottom – whenever that is. that’s a 40% decline from 2006 aka peak pricing. (as opposed to other ‘hoods which won’t hold up so well like Roger’s Park in store for losses of 50% or more).
A few thoughts:
1) I think this is in the Jahn attendance area–a school that hasn’t turned the corner yet.
2) The layout is … quirky. Only three bedrooms up is odd, especially with 3 stories.
3) It has 4 “living/sitting/TV” rooms and only 4 bedrooms?
4) The taxes seem high. Are they using the homeowner exemption?
It would sell *immediately* at the ’02 price–that’s a conforming loan with a little more than $100k down. It would have sold last year for something close to asking if it had a more “traditional” layout. $750k isn’t crazy for what it is, but with the state of the market, they need to find someone who likes it pretty much as-is. Which (imo) would be easier if they “neutralized” the breakfast nook and got rid of the hammock in the loft–which could be a really nice master suite if there were (1) more privacy and (2) a double sink in the bathroom.
FYI HD, the apex of the market was OCT 2007, not 2006. but yeah, these ppl are crazy
$600K and someone will snap it up
My sources show the 20 city CS peaking in July 2006 although arguably Chicago probably peaked later
http://www.doctorhousingbubble.com/wp-content/uploads/2008/04/case-shiller-20-index.jpg
The CS for Chicagoland peaked in 9/06 at 168.60, the latest (12/08) is at 137.16.
Here’s a link to the source: http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_022445.xls
Thanks G
Yeah one of the developments I’ve been following has either a short sale or foreclosure who just cut their ask to 440k. It sold for 540k in 2004 and 685k (!) in 2007. Of course the idiot that bought for 685k can’t pay her mortgage, so now we have short sales setting the comps.
Affordability is coming, just ignore listings where the owner bought within the past 6 years and aren’t in distress yet.
Prices will have yet given up their artificially high gains in some of the nicer Chicago neighborhoods. It will probably take another 18 months for prices to reset to 2003/2004 levels. Once that happens, heaven help all those who have to move, because they will be taking a loss.
As ChiGuy said, once this property his the $600 – %650 range it will sell.
I think it’s a mistake to use this house as a proxy for the market. I’ve seen the house.
Dan,
The 2003/04 prices are already here for “good” neighborhoods. Take, for example, the most recent sales (with prior sales since 2003) for detached single-family homes in Lincoln Park/Lake View:
2214 RACINE 1/13/2009 for $1,365,000 7/30/2007 for $1,400,000
1705 Dayton 1/27/2009 for $760,000 3/24/2004 for $800,000
529 WRIGHTWOOD 2/4/2009 for $915,000 1/23/2004 for $869,000
952 MONTANA 1/14/2009 for $1,050,000 12/24/2003 for $1,000,000
3449 PAULINA 2/4/2009 for $600,000 10/14/2003 for $585,000
Here’s another:
2219 LAKEWOOD 2/20/2009 for $1,900,000 1/27/2006 for $2,495,000
“3449 PAULINA”
C’mon, G, that’s not a good example. It’s a non-neighborhood, smashed b/t Ashland and Lincoln.
“952 MONTANA”
I think that one set the comps for an acquaintance who bought in 04 and sold for the same price (thru a relo co) in late 06 (I think). Montana b/t Lincoln & Sheffiled was exposed v. early in the bursting.
And, notwithstanding that all these folks did, in fact, lose $$ net, 60% of them would push the CS index **up**, not down. And only 20% are at 03/04 prices (and that one also sold for $675k in 01).
Suspended ceilings in the lower level…tacky.
“2219 LAKEWOOD”
But Zillow sez it’s worth $3,663,000.
The $2mm bracket is a killer, with all of the still-owned-by-the-developer properties.
Also, re 2219 Lakewood–the property brochure is still findable. Looks nice enough, but basically like every other new construction 3+ story, 5000 sqft LP house. The layout makes it more of a 3 BR house, tho, as the 4th is in the bsaement and the 5th is more of a den/office with roof access, instead of a top floor master with 3 br on the 2d.
So, to tie into this house, “weird” layouts are about 24% off ’06 prices, making my price target for this one ~$615k, maybe a bit higher b/c there are many more buyers at $600k than at $2mm.
anon, those are all of the resales in LP and LV. They aren’t “examples” at all, they represent all of the most recent resales without extensive rehab or new construction.
Now, for splitting hairs. What was appreciation in 2003/2004? You might want to take that into account when considering the accuracy of the proof for my statement that “2003/04 prices are already here for “good” neighborhoods.”
529 WRIGHTWOOD 2/4/2009 for $915,000 1/23/2004 for $869,000
(CS 2/04=138.10, 12/04=148.85, +7.78%) 12/04 equivalent of $937K
952 MONTANA 1/14/2009 for $1,050,000 12/24/2003 for $1,000,000
(CS 1/04=137.65, 12/04=148.85, +8.13%) 12/04 equivalent of $1.08M
3449 PAULINA 2/4/2009 for $600,000 10/14/2003 for $585,000
(CS 11/03=135.91, 12/04=148.85, +9.52%) 12/04 equivalent of $641K
I believe there is enough support above to call the return of 2003/2004 prices in LP/LV detached homes without extensive rehab/new construction.
Samish said: “I think it’s a mistake to use this house as a proxy for the market. I’ve seen the house.”
Fill us in Samish, what is going on with this place?
I personally love this house! It is well maintained, seems to be immaculate and the area is nice. That said, I have to agree, I don’t think it will sell for more than $625-$675k tops…even then it would be a steal for buyers. I hope it does get buyers who intend to make it their home for years instead of greedy flippers who see it only as a stepping stone to a more expensive home. If I could talk them down to the above pricing, I would by pass a mortgage and banks and snap it up in cash.
Heading down towards 2000 prices
I’m surprised no one has yet mentioned that the owner has a $648,000 mortgage. Yes, there was a 20% down payment, but, my calculations put the monthly nut at a mere $4,781 ($3,885 PI + $896 T at 6%). Which annually is: $57,372. I’d want to sell as fast as possible too if I spent that much money on a house in Roscoe Village.
The super high $925k listing price in May 2008 is par for the course; the seller tried the same tactic on a 2006/7 flip and it likely sat vacant for 7 months, because you know, you can’t just give real estate away (note the listing and final selling price).
205.234.209.173/news/190775-designer-and-artist-move-into-3bd-on-janssen
Here’s a quote from the seller forever memorialized on the ‘tubes; it’s so f’in ironic that the subject property is now listed below the 2006 purchase price. Traders win some and lose some, I guess that’s how it works.
“If your are dumb enough to do it I am willing to pay to see your pain. ” http://www.active.com/donate/run2007/alfDHummel
You’re the dumb one now. Only I get to watch for free…..go ahead, make some popcorn, relax and enjoy the schadenfreude…
Wow, what an ugly looking house. Cheaply built too.
That said, fair value is $350,000.
The best part is because this would require a jumbo loan theres nothing Uncle Sammy is gonna do thats gonna help them.
There is such a huge disconnect between conforming and jumbo loans these days. In fact jumbos are experiencing significant default rates and conforming loans aren’t, yet the government’s policy so far is all directed at conforming loans. LOL! HAHA!
I knew government intervention would be implemented poorly, ineffectual and focused on the wrong areas and that is exactly the case here. Congress doesn’t want to inflame a populist backlash by helping out those living in mansions like this. This seller is toast.
It seems to be a very nice home. I am wondering if the furnishings (and wine) are included in the sales price? I too am thinking the final sale price will be in the low $600’s. I feel bad for the current owner for paying such an inflated price…
I don’t feel bad for the seller. This seller’s strategy was ‘buy high, hold for a few years, sell for a cool million to a greater fool.’ What the hell kind of strategy is that? And the googles reveal that the seller tried this strategy once before on a different property and it didn’t work nearly as well as initially planned. It’s no surprise this seller is probably having financial problems or at least tightening the belt. $57,000 a year for this mortgage (not including tax benes of course) is a heck of a lot of money…for a HOUSE! A single family house near the brown line. My god, people like this guy should lose money; just for the fact that he drove up the cost of housing for everyone else (at least for a few months according to case-shiller data); $810k is ridiculous and he should be ashamed of himself for spending that kind of money and flashing that kind of cash. Keep in mind the only quote for this seller floating around the internet in this guy’s name says:
““If your are dumb enough to do it I am willing to pay to see your pain. ” ” He’s obviously willing to throw around his money for lots of things. He’ll keep throwing it around until he doesn’t have any left.
Agreed with Samish.
This is one of the worst, tackiest flips I’ve ever seen. There’s no furniture in there now and it looks 100% worse than the pictures.
This won’t appraise for 700K.
We looked at this house in Fall 2008. When you pull up, it’s beautiful–bigger than other houses on the street. The first floor has some nice rooms, and the kitchen looks better than this photo. However, it is chopped up very awkwardly. Every room is either too big, too open or much too small. The rooms make no sense. The basement smelled very musty. The main part of the house is too open. The main A/C did not reach the top level/master bedroom and they had this really odd-looking space-age freestanding A/C unit up there. There’s a ton of non-usable rooms/space (thus the hammock?). Parts of this house are really pretty. It has a pretty nice-sized back yard for the area. It is huge, it’s a great street–very quiet and pretty. If it was built out with a different layout and didn’t smell so musty downstairs, it could have sold for $700,000–$800,000.