2 Years Later “Good Bones” in East Lakeview Finally Sells: 522 W. Briar
We chattered about this renovated vintage unit at 522 W. Briar in East Lakeview several times.
See our prior chatter in November 2008 with the pictures here.
After more than 2-years of being on (and off) the market, the unit finally sold.
It had an upscale kitchen with Wolf and Viking appliances and new custom lighting. The unit also had central air but no deeded parking was available.
Some prior guesses on sales price. Before it sold, it was last listed for $550,000. Its 2003 sales price was $276,000.
- “It is NOT worth more than it was in 2003, and that’s the price I’d give.”
- $475,000
- “something more than 2003” price
- $425-440k
- “This place likely needs to be in the low 5s, upper 4s with perhaps one-year of pre-paid parking thrown in.”
- “I’m not going to pick a selling price on this one….for a unit like this there’s always a greater fool, a greater FB, who will come along and overpay.”
The unit sold for $540,000– or $10,000 under the last list price.
Unit #3: 3 bedrooms, 2 baths, no square footage given
- Sold in August 2003 for $276,000
- Sold in May 2005 for $385,000
- Originally listed in April 2007 for $599,000
- Canceled in June 2007
- Re-listed in June 2007 for $624,900
- Canceled in December 2007
- Re-listed in February 2008 for $599,999
- Was still listed in May 2008 for $599,999 (no parking)
- Reduced again
- Was listed in November 2008 for $569,000
- Reduced again
- Was listed in December 2008 for $550,000
- Sold in June 2009 for $540,000
- Assessments of $516 a month
- Taxes of $3569
- Randy McGhee at Koenig & Strey had the listing.
I am curious what kind of financing was used for this purchase. I’d be willing to bet they didn’t have 20% down.
“While further reduction in market prices is basically a given no matter who you ask… While lending standards are certainly on the rise, people with good credit and a decent down payment can indeed secure loans in gross excess of their yearly incomes. For qualified individuals willing to front their own money, this isn’t a bad thing. I’ve even heard anecdotal evidence that 0%-5% down payment loans are still available, depending on your credit. Those loans may dry up (which is probably for the best), but unless we see a total collapse in the world economy, mortgages with payments far in excess of 35% take-home will continue to be made to qualified buyers.
If this is correct, your 10% figure in regard to those who can afford 400k+ homes in Lakeview is wildly off. To be frank: it’s all about lifestyle. Many households would have very little problem being within the statistical definition of “house poor.” Those households live within their means and value their residence more than extravagant goodies. The market–and banks–continue to understand this and treat generalities like “3x your yearly wage” as exactly what they are: relics from a bygone era.”
I found this to be the wisest comment from the previous chat, esp this part of the last paragraph:
“Many households would have very little problem being within the statistical definition of “house poor.” Those households live within their means and value their residence more than extravagant goodies.”
It seems to be a great and correct answer to all those who entertain themselves thinking how stupid and poor the people are who they feel ‘overbuy’ above their income levels. There are still sensible people out there who value their homes and do not view them as only a money making investment a few years down the road.
That old thread is a grade A example of what goes on here.
Persistence finds the idiot.
Mortgage amount is $417k or the buyer put down 23%.
You guys are really funny. Hey Bob, spend less time posting and more time working and maybe, maybe you will be able to buy a place soon. 🙂
“generalities like “3x your yearly wage” exactly what they are: relics from a bygone era.”
And therein lies the reason for the current debacle!!!
whaddya know, jp barnum found his man. makes me feel better about the lakeview place i bought just a few blocks from here. it’s bigger, nicer, and i paid less. oh, and i also had parking.*
* do we know if parking was included, even if not deeded? sometimes parking is owned by the association, and it is “leased” back to the condo owner as part of the assessments. i’m not sure there is a big difference – you pay the taxes on your own or as part of the assessments (and assuming everyone gets the same number of spots, it’s no difference). that situation would explain the relatively high assessments on this place.
er, um, that is “pt barnum.” the mortgage talk must have had me thinking about chase bank.
see, you had me thinking the realtor was named jp
Re: parking. It was a pure rental situation–across the street, but covered. They had 2 spaces and were, as of a few months ago, offering to transfer the leases.
The taxes don’t seem right. That is probably the semi-annual tax amount due but not the yearly tax amount if ~1.35% of sale value is a rough approximation.
I live right near here and rent. I still can’t believe my cost of housing is below 1/4 of what theirs will be if they used 100% financing (and mine includes parking, central air, cable and internet included). They have a $1,100/month nut before the morgage note even, and 2,200 on the morgage at 417k, and forego the opportunity cost of 123k in cash.
I am still dumbfounded they paid 540k. I guess if you can wait it out long enough the right maroon will come along. HD was right in his comment that there will be FBs to pick up the pieces on the way down.
Bob – I am sure your place is a dump if youa re paying what you say you are paying.
Bob:
They would have had to put 20% down. Good jumbo financing requires 25-30% down these days. Although, we just had one lender go back to 90% financing on jumbos but I am sure there are some catches as to what properties/borrower’s qualify for it.
As I have mentioned in the past, if you want your place to sell, it has to be priced where the borrower can put 10-20% down and cap out the mortgage at $417k which according to Heitman is what these borrower’s did. Second mortgages are largely unavailable, so breaking up the loan isn’t really option either.
Properties priced higher than this are going to have a very tough time selling as the buyers who can afford the monthly nut usually do not have the liquidity available to make the required down payment.
Stevo,
It is very small but livable. But you’re welcome to come clean it for me if you think its a dump 🙂
Russ I agree with you regarding mortgage availability, but it wasn’t properties like this I thought would be occupying the ceiling level of those still available with conventional financing. I’m really taken aback this sold for 540k.
I would’ve thought someone diligent enough to save the 100k+ for a 20% downpayment would demand more property for their buck but I guess not. Guess Chicago condos will still sell for 550k because the government won’t stop subsidizing mortgages up to 417k.
So I guess the real deals will be those outside the realm of government susidies, in the over 550k segment.
Bob:
Some folks just have to live in LV/LP regardless if there is more bang for the buck in other neighborhoods. Herd mentality. I never understood it myself when I live in the city, but whatever floats your boat. I had more amenities, a larger place, and a much smaller mortgage when I lived in Andersonville (before most people figured out Irving Park wasn’t the border of Wisconsin). However, my buddies swore I must have lived 20 miles outside of the city when in reality it was only about five extra minutes north on the Red line.
The best deals are going to be the properties priced around 550-750k because there aren’t too many people who can get financing, but plenty of sellers. Prices have to come down. Properties priced higher generally have buyers with the liquidity, so financing doesn’t become as much of an issue, although those buyers being able to sell definitely is a problem.
Lots pof banks will sttill go up to 85% CLTV on their 2nds. This allows flexibility with financing through the jumbo range.
All of that is included in your rent Bob…and it is BELOW a 1/4 of their monthly costs?
Are you sure you aren’t in CPH? Even if I were struggling to make ends meet I could not live in something that would be that cheap. I mean, there has to be a quality of life denominator that would encourage you to take that leap of ownership. No?
Regardless of the sales price, don’t you all think a buyer should comfortably have at the very least 20-30%? Even if that amount was not required by the bank, I think it is a good idea to have that amount ready for any changes…special assement costs, unforeseen major repairs and just to be able to do what you need and want to a place to make it yours.
For those who have recently purchased, do you follow this theory? Or did you basically just have what the lender required you to have?
WL,
My rent is $930 and its not CHA. $755 rent and $175 for the parking spot. No quality of life denominator making me take a leap into ownership as I can always rent a nicer unit. I would be in one by now if not for the economy clouding my employment situation in the future.
From reading this site I get the impression that very few buyers have the 20% down. It really is difficult to save up the 20% in expensive housing markets like Chicago and takes either a dual income couple of a few years of diligent budgeting and savings.
^^^^
Also WLleo, I get the impression you don’t know too many median wage/wealth consumers. Most Americans are incapable of saving a substantial sum or budgeting very far out. Thats why we have interest only mortgages, rolling car note balances into those of new cars and offering terms of up to 84 months.
Its been all about credit for the past decade or so. No real earnings power behind it just maintaining a standard of living as long as possible with credit while the fundamentals/earning power deteriorates.
Hey if this buyer wants to over pay it’s her prerogative. She apparently has money to burn; it must be nice. You know its like the children who inherit a few hundo from the ‘rents and then proceed to spend every penny of it within a few years on new cars, vacation homes, dinners, vacations and a pool for the backyard, and before you know it there’s nothing left. What I think is hilarious is that this buyer took the largest possible loan she could without having to resort to a high interest rate jumbo. Howmuchamonth?
Re: 20% down payments: I wouldn’t be surprised if a significant number of “1st-home” purchasers of LV/LP/GC (etc) homes in trendier neighborhoods receive some or all of their down payment amounts from their parents, even if their combined income otherwise meets the conventional underwriting requirements. Many of these purchasers have been (and will continue to be) subsidized by their parents. (Same with private school tuition payments.)
Re: “nicer neighborhoods”: We lived in Edgewater in the early to mid 90s, and feeling like an urban pioneer at times for the relative lack of amenities (decent grocery store, restaurants, retail, parks, etc) despite the supposed gentrification that had already occurred prior to our arrival in 1991. We readily acknowledge that “lifestyle” amenities in LP and LV are still significantly greater than in Edgewater and other “up and coming neighborhoods”, much less the ordinary neighborhoods further west.
$755 for a one bedroom in LP/LV?
Would you consider where you live equivalent to college student housing or just starting out
Having financed a lot the purchases and getting to look at a lot people’s financial information, I can say with confidence that a statistically signifcant amount of the buyers have fairly substantial assets relative to their ages. It is not uncommon to get substantial gifts to use for down payments, trust funds, or inheritances. Must be nice…
Its a studio and its equivalent to college housing/’just starting out’. Although for me college housing meant shared restrooms so its a step up.
You can get rents even cheaper in LP/LV than me, but you’d be hard pressed to find designated parking on site and internet+cable included.
The building is not luxury but is not a dump either: the landlord is very professional and things are fixed quickly.
Again check craigslist and you’ll find that RE valuations in LP/LV are nowhere close to their rent equivalent yields. They’re just still very very bubbly.
Of course for all my monetary savings I couldn’t brag over this weekend’s BBQ that I “owned a place in LP/LV”, but these days in this market thats becoming more of a scarlet letter vs a status symbol, methinks.
“What I think is hilarious is that this buyer took the largest possible loan she could without having to resort to a high interest rate jumbo. ”
Why is that hilarious, that they did a financially prudent move? The lesser the monthly nut the better is it not?
How old are you Bob if you don’t mind me asking?
It’s like maxing out the credit card buying furs and dinners on the Chase card and saying “but it’s financially prudent because I could have bought more with my Capital One card that has higher limits and higher interest rates.” At the end of the day the buyer borrowed as absolutely as much as possible within conforming limits. But then again, the buyer is most likely an LP trixie with cash to burn and a sense of entitlement so la-ti-da its her prerogative to whatever.
Wow, who took a dump in your cheerios this morning?
Sorry Sonies, nothing personal, somebody at work wrecked my day.
When mortgages can be had at 4.5% and the interest is tax deductible, it’s not exactly a questionable practice to max out the available loan amount in order to maintain cash flow for other investment opportunities.
“Sonies on July 7th, 2009 at 12:02 pm
Wow, who took a dump in your cheerios this morning?”
This morning? More like 24/7/365…
Bradford.. should be dependent to some extent on your Debt/Equity ratio now shouldn’t it?
Besides, I agree with you to a large extent but you need to remember that those other investment opportunities ARE taxable. Keep apples to apples and it does get harder.
“When mortgages can be had at 4.5% and the interest is tax deductible, it’s not exactly a questionable practice to max out the available loan amount in order to maintain cash flow for other investment opportunities.”
True. But let me play devil’s advocate here: its true only if the savings from the low interest rates isn’t instead used to buy more house. Which it typically is as we’ve seen RE valuations drop in higher interest rate environments (from a financial literacy standpoint ‘how much a month?’ is all many seem to grasp)
I agree its smart and financially prudent to maximize the taxpayer subsidy on financing up to 417k as the after deduction interest costs are likely below 3%. What I think isn’t smart is paying 540k for this.
Oh and anyone doing any construction in the near term. Highly advisable not to have granite counter tops cut in the kitchen. What an absolute mess.
Thought that tax deduction was up to 1.1 mil
Could be but you only get the interest rate as low as below 3% if you’re doing within the conforming limit.
A 30% tax savings on a bloated 7% jumbo rate is still a fairly high interest rate in this environment. Not the same after tax interest rate for a 4.5% or below conforming note.
How shit are some of you pathetic. Are you kidding Bob and HD or are you really that dumb?
HD, did your clerk ruin your day today not finding the cribchatter research you were looking for?
No Stevo, dumb is overpaying 540k for a 400k property because you got a great deal on the mortgage terms.
You’re a funny guy Steve. Hilarious. You’re so damn arrogant and you tend to think that you’re the smartest guy in the room when in fact you are the goof that everyone is laughing at. For god’s sake you sell used homes for a living. Not a whole lot of brain power needed there. Only slightly more challenging than bagging groceries at Jewel. And with volume (or rather lack of it) in LP these days I might toss you an extra dollar or two to pack my groceries into the trunk of my car, just because I know you need it.
Be nice HD, I might just be your landlord someday 🙂
Exactly Steve, since I’m the one putting out the money, will be beholden to me.
HD – it is not hard to be the smartest guy in the room with company lik eyourself, Bob, and G around. You guys should share a studio and cancel the cable, you will be rich in no time.
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homedelete on July 7th, 2009 at 1:36 pm
You’re a funny guy Steve. Hilarious. You’re so damn arrogant and you tend to think that you’re the smartest guy in the room when in fact you are the goof that everyone is laughing at. For god’s sake you sell used homes for a living. Not a whole lot of brain power needed there. Only slightly more challenging than bagging groceries at Jewel. And with volume (or rather lack of it) in LP these days I might toss you an extra dollar or two to pack my groceries into the trunk of my car, just because I know you need it.
This.
“You guys should share a studio and cancel the cable, you will be rich in no time.”
Okay Stevo but remember if the RE market doesn’t turn around in quick course it’ll be rather cramped in our domicile and the pull out couch will already have been taken, so no you can’t crash there. Maybe you can crash at a generous relative’s place who has cable if the market doesn’t turn around soon.
Bob – I would like to let you in on a little real estate industry secret. We don’t care where prices are and only care about volume. My volume is up over the past 3 years so this downturn is having no effect on me, as well as many of the other brokers. Almost 40% of licensed realtors have quit over the past 2 years. This leaves the remaining transactions to a smaller pool of competition and will make many people really rich when the volume picks back up.
I will buy you guys an oversized pillow so you can rest together and think of other ways to not become rich.
“My volume is up over the past 3 years so this downturn is having no effect on me, as well as many of the other brokers. ”
I call BS on this.
“Almost 40% of licensed realtors have quit over the past 2 years. ”
I’d bet a lot of them were marginal handling only a few transactions a year. I know plenty of realtors who did only a few sales a year and when the volume collapsed they were the first to feel the pain.
“I will buy you guys an oversized pillow so you can rest together and think of other ways to not become rich.”
That’s just stupid.
Bob.. you left out the bracket variable. rather important.
One more night of Ramen noodles.. tomorrow I have a kitchen!
And Heitman, making fun of people monetarily is just SO gauche!
You guys are hilarious.
I am completely flabbergasted at the price. I understand why the unit might deserve a premium but really?? Two bidders must have come along at the same time…
It’s not volume that matters. It’s dollar volume that matters. I just talked to someone at one of the large Chicago brokers. Based on the monthly sales meetings, numbers are down substantially. There is no way dollar volume for the industry is up. Maybe you are super-broker, and if so, congrats.
“Ze Carioca on July 7th, 2009 at 4:01 pm
And Heitman, making fun of people monetarily is just SO gauche!”
While normally I’d agree with you, some of the have-nots on this forum are constantly mocking anyone with the means to buy a property over $250M.
I think it’s perfectly fair to call them out.
Russ:
…”I can say with confidence that a statistically signifcant amount of the buyers have fairly substantial assets relative to their ages. It is not uncommon to get substantial gifts to use for down payments, trust funds, or inheritances…”
Is it also your experience that along with these high amount of assets that they are employed in upper income jobs as well? This has been my experience in dealing with ppl who have entered the RE market for the first time.
I guess you are right Bob, most of the people I know in a number of cities where I own properties are not median income wage earners. Even my crew could not be considered median income earners either. They all own their own homes, with a couple owning more than two that we picked up at low prices and have rehabbed.
I guess my comments and opinions are based on this fact, but I do realize the people I know are not the majority. The people who have purchased my rehabs are in the median level range though. Only a handful have been/are million $ + homes.
Great point Bradford…on this forum I see that happening more often, not only for buyers of properties but the sellers are regarded with disdain as well…even more so.
Regarding the % of RE brokers/agents who are on a path to being ‘super rich’, not very likely.
I agree with GLS it is dollar value that matters and even the super brokers are feeling some discomfort now…not too many are even surviving.
Over the years I have dealt with a ton of brokers. At this point I would be hard pressed to get a voice at the end of their phone through the agencies. Even those successful ones I know well are suffering…the top of this bunch is lucky if they have per quarter what they used to have per week.
Although it is not good when anyone loses their job, the fact that the RE industry has taken such a hit from unemployment has only been for the better as we are left with only the best brokers and agents. A few of my nephews and nieces are brokers who are dependant in large part on my families business. While we are still experiencing some sales, it is a far cry from what we had a few years ago.
On a brighter note, I had two sales for June and six for my entire family. A fraction of what we used to have collectively.
“some of the have-nots on this forum are constantly mocking anyone with the means to buy a property over $250M”
I thought they were mocking the actual buying of the property. I think it is deserved. And I am saying that as a buyer. This will get MUCH uglier
“I think it’s perfectly fair to call them out.”
If you strive for the lowest common denominator, fair enough. Still Gauche!
Sitting in your gilded Brazilian tower with the eagles, how can you say it is deserved? If a person has the financial ability to purchase a home, what reason do you have for mocking her/him?
Anyone in the market today realizes the risks they are taking, but they are looking at where they will be years from now… actually living in their homes and retaining it for the long term.
It may get a bit uglier over the next year…few years perhaps, but in the long run most who are purchasing now for reduced prices will come out fine in a ten- twenty year period.
I don’t think Bradford is ‘striving’ for anything that resembles your definition of gauche…he is merely telling what is plain to see by reading this forum.
Now go back to cleaning up the granite dust and enjoying your Ramen noodles.
LOL Ze, it is gauche to be living in a home while it is being remodeled…who does that anymore? Rent a luxury bungalow while your place is in transition.
westloop.. you need a dictionary or to learn French. You can rent my place in Paris maybe? Gauche would be renting the bungalow and talking about it. Or commenting on my place in Paris.. see makes me feel icky already 🙂
btw… nothing wrong with noodles.. but in truth I had sushi.
I am anal retentive (not like you though) I wanted to control every millimeter of the project and a nice family wanted my old place ASAP so i helped them out, two reasons that I stayed in the apt.
Not knocking Bradford.. just Heitman.. Now go sign on as Anon again and blast us all.
Oh and never expected renovation to take close to this long. Now off to the beach.. winter here!
Here’s a look at how dollar volume has changed for att and det single-family sales in Lincoln Park for the first half (1/1 to 6/30) over the past several years:
Year Total Sales $ Volume
2005 $480.1m
2006 $469.7m
2007 $492.1m
2008 $345.7m
2009 $216.7m
What’s interesting though is that in this particular Lakeview area, a 2000+ sq foot unit sold for 520k on Hudson in 2007, a 2200 sq foot (unrenovated, no a/c, original bathrooms) unit on 524 w Briar (same building) sold for 500k in 2008 and this unit at 522 W briar sold for 540k (fully renovated) in 2009.
Volumes are low and selling seems to take some time, but those are the facts on the ground.