It’s Confirmed: Belgravia’s 565 Quincy in the Loop Reduces Prices
There have been “teaser” ads in the Tribune the last few Sunday’s about something “big” coming at 565 Quincy, the new Belgravia building in the Loop.
It should come as no surprise that the news is price reductions.
You’ll recall that in November, Belgravia’s CEO had this to say to Crain’s about the downtown market:
“2010’s going to be a better year than 2009,” says Alan Lev, CEO of Chicago-based residential developer Belgravia Group Ltd. “Nothing new is getting built. It seems as though things are stabilizing.”
Here’s the reductions that I have seen so far (from the 565 Quincy facebook page):
Junior 1 Bedroom:
- Was $201,000
- Now $164,000
1 Bedroom/1 Bath:
- Was $312,900
- Now $219,000 (includes a parking space)
2 Bedrooms/2 Baths:
- Was $441,900
- Now $331,000 (includes a parking space)
On the MLS, the listed units are various prices- but it looks like all of them have been reduced. There will be more info to come in the next few days.
Are these price reductions enough to move the units?
You can see pictures of the model unit (and the bowling alley) here.
A search of the public records shows 60 units have closed out of 241 total units.
@Properties is teaming with Belgravia Realty to handle the sales.
Welcome to reality Belgravia. This is long over-due.
Welcome to people thinking twice about paying ridiculas prices and assessments for a high rise building in a terrible location. I would not pay $250,000 for one of these 2 beds. I can’t imagine they rent for more that $1,500??? The 2nd bedroom is 10 X 9. That is an office and not a bedroom at all.
Are people still this dumb?
Moves the prices from fantasy-land to at least in the ballpark. Belgravia has a good rep for quality – no? Biggest negative I see is have the Safer Foundation around the corner — nothing like having a bunch of ex-cons hanging out on the corner.
11×19 LIV/DIN combo??WTF?? The ‘bonus’ room is another great BS creation from the bubble days.
The listing description is boasting that this unit comes with hallways:”100 SF IN HALLWAY. “- that I have never seen before.
$319,000 to go back 15 years and live in a college dorm in a crappy location. no real bedroom with window.
Maybe they could sell the entire thing to DePaul or UIC?
Wow, what a poorly designed and executed project. I’m surprised this developer is still in business. No wonder only 60 of the 241 have been sold. What is the target demo for these units? Near the financial district? Are they looking for the young hip trader who works all day and bowls all night? Maybe the biglaw lawyer who works all day and then sleeps in a cubicle at night? This is the definition of a bubble designed and conceived property. Let the lender foreclose the building and sell them to section 8 investors.
this taken from their website: http://belgraviagroup.com/565quincy/blog/article.php?id=117
“Third, select a developer that works to protect the value of the building. Some developers will lower prices as buildings near completion, instantly devaluing the previously sold properties. Belgravia Group offers a 565 Price Guarantee which promises that once a unit is sold, no identical unit will be sold for less than that amount. This guarantees that homeowners’ properties will continue to increase in value, as more homes are sold in the building. ”
take that for what it’s worth.
“$319,000 to go back 15 years and live in a college dorm in a crappy location. no real bedroom with window.
Maybe they could sell the entire thing to DePaul or UIC?
”
Not sure what kind of dorms you were living in, but I had to share a 12×12 room with another dude. I would have killed for a place like this (not that I’d buy it for what they’re asking).
lol. Higher than Vetro prices a year after auction. What alternate reality is the developer living in??
I’ve been in the building…it is comparable to RD659. Its next to Kent Law School and Union Station- people will snatch these up just like they did RD 659 when they reduced pricing- with parking including for 1200 sq. ft. the condos are a good deal with nice upgrades.
Maybe they’re aiming to sell these condos to the droves of unemployed law students from the classes of 2009, 2010, 2011 and beyond?
HD,
You’re surprised that Belgravia is still in business? They’ve been doing business for 50+ years in Chicago. While they might have missed the mark on this one, they’ve added a tremendous amount of quality housing to this city. This isn’t some fly-by-night developer who didn’t have a track record. Also, do you know a lot of “hip” traders that are in bowling leagues in the wee hours of the night? And is there a correlation between bowling, trading, and purchasing homes that don’t meet your expectations? Please expound. Lawyers don’t sleep in large bedrooms? What? You think someone is going to buy an individual unit here and need to rent it to someone carrying a Section 8 voucher? Are you serious with yourself? There’s plenty of stuff around there.
I’m not as familiar with this blog as some, are you an unemployed lawyer who didn’t get a job out of one of those graduating classes homedelete? Where would you suggest to buy a 2 bed 2 bath condo with floor to ceiling windos 1200 sq. ft. within walking distance of the loop for $350K with parking included?
I’d love a suggestion.
btw homedelete, 60 have closed as listed in public records… the building is over 50% sold.
“Also, do you know a lot of “hip” traders that are in bowling leagues in the wee hours of the night?”
funny thing about doing all that blow, means you need somethign to do 🙂
CR: You can comment all you want about HD’s legal education, but what school did you graduate from that taught you 60 closings out of 241 units represents “over 50% sold”?
“Belgravia … [has] been doing business for 50+ years in Chicago”
Their website claims 60 years, but it also claims Buzzie as a “Founder”, and I’m pretty sure he’s not 70, and also pretty sure he didn’t start Belgravia as a 3d-grader (altho, I guess it’s possible).
“Snatched up”? LMFAO! Thanks for the laugh CR & plz pass the pipe. I hope you have enough to share with anybody stupid enough to buy a condo downtown any time soon. Do you even know what an absorbtion rate is?
Someone please post downtown inventory, construction coming online & recent condo selling rates so we can calculate how quickly these will be “snatched up” (8 years?) CR you are a Realtard(r) extraordinaire.
“While they might have missed the mark on this one, they’ve added a tremendous amount of quality housing to this city”
they got greedy like all other developers and jammed as many units as possible, threw in some chessey “amenities” and hoped for the bubble idiots to hand over their money to them.
what is different here than all the others the sprouted up in the loop and South loop?
there are a number of factors that play into why the number in public records is less than the total number under contract with closings to come later this year- one is the installment sale plan that they had… which requires buyers to go through two closings (only the second of which will be public)…they are also still finishing some of the units (so those people haven’t closed).
You really got me though Norm, nothing like a insult to start out my day… uunfortunately my law school did not teach me remedial math… I better go bill some hours before I have to find a job in real estate- where division is a key skill.
The remaining may never close. A contract may have been signed and executed but transfer of title will probably not occur. If the closing hasn’t happened before today it probably won’t happen now that there’s been substantial price cuts.
“#CR on January 13th, 2010 at 9:25 am
btw homedelete, 60 have closed as listed in public records… the building is over 50% sold.”
“what is different here than all the others the sprouted up in the loop and South loop?”
Belgravia has a track record of not building crap–construction-wise. If you were going to be stuck with a SoLo condo, you’d rather it have been built by Belgravia than Stan & Jerry Construction (or just about anyone else in Chicago).
Which isn’t defending the layout of the units or anything else about the building, just that one would be less likely to have construction-related issues down the road.
I think Buzz is in his mid-60s. I could be wrong. We’re getting kind of nit-picky here… Groove, legit point although I disagree that everyone that purchased a home during a period of appreciation is an idiot. I think this location/stock is different. Easier for home buyers to get their arms around the location.
AaronERG, Kimball Hill also built homes for 50 years, hell, they built my parent’s home, and look where they are now.
CR, I have a ‘real’ lawyer job. I just got back from court, actually and I have to leave again in about 10 minutes.
this place is ugly
G on December 24th, 2008 at 8:45 am
Alan Lev, the head of Belgravia, stated this past spring that they will never lower their prices in their developments. I laughed when I read it. We shall see.
Joe Zekas on December 24th, 2008 at 10:03 am
Lev’s position is more nuanced than G suggests, and likely to survive G’s ridicule. If you want to understand Lev’s actual approach, watch this video (price discussion begins at about 3:45):
http://www.youtube.com/watch?v=nz9EdXloihQ
Did I miss the nuance of Lev’s position? Did it survive my ridicule?
From Groove77
“what is different here than all the others the sprouted up in the loop and South loop?”
I think that is really the key question for real estate. What is it that attracts you to a home. The fact that it is near to work? Has parking? Central A/C. etc.
For example, the place on 70 W Burton. Maybe you don’t have a car or its a pied-a-terre and you don’t need one. Heck if it is a pied-a-terre, then you don’t care about having W/D in unit.
so back to this building. What does the units have over units in other buildings?
Proximity to work. Same as in the other buildings. View? Not… Price…getting there.
What makes this place stand out? I don’t know.
I enjoy reading G’s ridicule of ridiculous developers. It makes me laugh and brightens my day and puts a big smile on my face.
G, your vid is “private”
Honestly, homedelete, or anyone, if you have a good answer to my question I would love it:
“Where would you suggest to buy a 2 bed 2 bath condo with floor to ceiling windos 1200 sq. ft. within walking distance of the loop for $350K with parking included?I’d love a suggestion.”
I am not a relator, just looking to possibly buy … will buy for the long term (at 6+) years… have seen a unit I like in the condo tower of 565, that is now listed at less than $350K with a parking spot… so, if you can tell me a better unit within walking distance to the loop that is a better investment… please enlighten me.
“Groove, legit point although I disagree that everyone that purchased a home during a period of appreciation is an idiot”
I over simplified my statment sorry, i purchased in 2002 and that would be default make me an idiot too. but i am an idiot for other reasons 🙂
the idiots i am speaking of are the flippers/specuvestors/ect. they BOUGHT a 1br apartment!!!!!!!
i am being harsh but because of that mentality…well you see what happened
Most all developers are going BK. This was the biggest boom & bust of the past 80 years. No new conrtruction is selling now.
CR:
http://www.redfin.com/search#lat=41.88266199999987&long=-87.62778949999999&market=chicago&max_num_beds=2&max_price=350000&min_price=300000&num_beds=2&sf=1,2,3,4&uipt=2&v=5&zoomLevel=15
2/2’s $300 – $350k in or near the loop.
Trust me, there will be plenty more to come. If you think there are deals today, there will be even better deals tomorrow.
homedelete, I have court at 11:30. relax.
I owned a Belgravia-built townhouse in the early 90’s and wish my suburban “luxury” home was built half as well. They build a decent product, and are pleasant and reasonable to deal with. In fact, I was shocked when Buzz moved into the Townhouse development–not many developers want to be neighbors with their buyers!
CH, that was Joe Zekas’ vid. I wonder why it is private now? Maybe it is available on the yochicago site?
Chichow,
“What makes this place stand out? I don’t know”
i guess the price after a second reduction will be its shining point. plus as other have stated the builder does good work.
for me i will always RENT an apartment.
Has anyone been in the building? I like Belgravia products… just wondering how the condo units show before I pass this on to clients. Looking at the prices on MLS for square feet, it seems like these are priced with the market.
The funny thing about former RE boom denier Joey is he stopped denying the boom only after all his advertisers went teets up. My fav YC vid is a tour of a SFH at 3303 S Throop in 2007. Its still listed for sale. “Snatched up” indeed…by crickets
I visited this building a couple years back. When I was looking it was over $300,000 for a one bedroom with parking. The saleswoman tried to convince me this was a “great” deal. She said they would never sell a similar unit for less than what I paid. I still passed on the “deal.”
How is Belgravia going to deal with going back on their promise not to sell similar units for less than what was paid by other buyers?
Jenny- I guess that offer expired when people closed on their units. But I am sure there are some not too happy buyers.
In response to CR’s comment,
“Honestly, homedelete, or anyone, if you have a good answer to my question I would love it:
“Where would you suggest to buy a 2 bed 2 bath condo with floor to ceiling windos 1200 sq. ft. within walking distance of the loop for $350K with parking included?I’d love a suggestion.”
I am not a relator, just looking to possibly buy … will buy for the long term (at 6+) years… have seen a unit I like in the condo tower of 565, that is now listed at less than $350K with a parking spot… so, if you can tell me a better unit within walking distance to the loop that is a better investment… please enlighten me.”
CR, I recommend you check out River North (60654). At $350K (list) you can get a 1400 sf place with 2BR’s that have windows and comparable finishes to this Belgravia joint… parking might be listed as extra, but I bet you could end up buying some of these for $350K with the parking included. And personally, I think you’re probably better off buying north of the loop, where there is a smaller possiblity of supply-side inventory killing your resale value. Take it from a guy who’s been looking for the same stuff… its out there.
Coffee is for closers, Jenny.
http://www.builderonline.com/sales/survival-instinct.aspx?page=1
““I don’t think you can time the [housing] market any more than the stock market,” says Alan Lev, president and COO of Belgravia Group, a Chicago developer. All that companies like his can do right now is be smart and conservative and, as he adds, “don’t do stupid things,” like overbuild or not pay enough attention to customers during the selling process.”
“Lev points out that just having its own salesforce puts Belgravia Group “miles ahead” of most other Chicago developers that don’t. And with so much unsold inventory on the market, builders see selling as the one skill, above all others, they must do well to survive.”
Jenny, I believe that the price guarantee only applied to similar units sold while you were still under contract. Once you closed, the guarantee ended.
I seriously doubt that Belgravia anticipated too many current contracts closing at original pricing for them to lower prices now. They likely closed everything they could already.
Seriously, a putting green in the basement is actually pretty awesome. I’d use it twice a year, which is more than a rooftop pool I’d guess.
WOW A REC ROOM!
that would be cool if I was 14 years old… I would imagine the assessments in this place are going to be at least $600 a month…
Good to see prices coming down to reality, and it appears priced properly for a 1(or 3 lol)/1.5 place within walking distance to the jobs in town.
http://www.bestchicagocondos.com/blog/price-guarantee-at-565-quincy/
“If you purchase a condo loft at Quincy, you’ll receive a written price guarantee which states that if the price on a similar condo is lowered before you close on yours, your unit price will be lowered as well.
This guarantee assures buyers that the value of their condo will remain steady, no matter when you buy during the construction phase. Belgravia president Alan Lev believes this is very beneficial to home buyers because it can be frustrating and financially unsound to purchase a unit in a Chicago real estate development early on only to have similar units be sold at deep discounts as the building nears completion. Having what he calls “price integrity” maintains resale value and helps when trying to get financing for a unit.”
ha! I actually would probably use the rec room and I’m 31…sad? maybe… but I would like (and use) pool, bowling, and table tennis in my basement.
Why would assestments be $600 a month?.. all that should be added really is cable/internet.
nsarch: http://belgraviagroup.com/565quincy/blog/article.php?id=117
“’Third, select a developer that works to protect the value of the building. Some developers will lower prices as buildings near completion, instantly devaluing the previously sold properties. Belgravia Group offers a 565 Price Guarantee which promises that once a unit is sold, no identical unit will be sold for less than that amount. This guarantees that homeowners’ properties will continue to increase in value, as more homes are sold in the building.’
take that for what it’s worth.”
Exactly – the developer is now emphasizing that the price guarantee was only until closing – so it really meant no unit will be sold for less until after you close!
“no matter when you buy during the construction phase”
They never anticipated completing construction with so many unsold units. It was an anti-“closeout pricing” guarantee.
Sabrina & Co.: We just posted the new price ranges for the various styles of lofts and condos at 565. http://yochicago.com/belgravia-rolls-out-new-prices-at-565-quincy/13608/
“Where would you suggest to buy a 2 bed 2 bath condo with floor to ceiling windos 1200 sq. ft. within walking distance of the loop for $350K with parking included?”
I never really understand why people want to live in the loop – it’s an absolute ghost town after 6 o’clock and everything shuts down super early. Live in the neighborhoods.
River North is a good start for what you’re looking for CR… I bought in march of 09 and paid about what you’re looking for
What a dump, looks like the boilermaker’s shanty at the Braidwood nuclear plant.
I understand the reality of the situation and the risk that early buyers took, but in light of Belgravia’s position change on pricing at this building compared to all the comments they made in the last year, I know that I will be weary to refer anyone to them in the future – though I guess they are not much different than any other developer in the end.
you guys are forgetting something very important…Al’s beef is opening up where west loop cafe use to be! Al’s beef and a lil bowling. HOLLA!
According to the price sheet on yochicago – the old prices vs. the new prices do look to be about 20 percent. But the developer is saying that the parking is not free parking – in other words, the new pricing includes the discounted pricing on parking as well. But the math doesn’t seem to equate – unless the old prices listed include the $30,000 – $35,000 parking value. They didn’t even offer the remaining parking spots to current owners at the discounted prices – though obviously the parking being thrown in will help sell the remaining units.
the loop is one thing, outside of the river is a little more active on weekends. A lot of my clients who want to live close to the loop have lived in lakeview/lincoln park (in rentals) and are sick of the commute/don’t like what thay can afford there. If you are a young professional who works 60-80 hours a week it makes sense to live close to where you work and “commute” to your weekend activities. 2 days a week on the El, versus 5 or 6.
Al’s beef + Mr Gyro = Rush Hospital. This place truly has location, location, location.
bob will love this quote from golden boy Jamie Dimon from the hearing today…
“Dimon said a crucial blunder was “how we just missed that housing prices don’t go up forever.” “
That quote killed me! And these are the guys who more or less control the economy of the country/world.
bob will love this quote from golden boy Jamie Dimon from the hearing today…
“Dimon said a crucial blunder was “how we just missed that housing prices don’t go up forever.” “
Ok, so, posters on this board are smarter than Jamie Dimon. It’s just a crying ass shame some of us could not monetize that prescient wisdom over the years…
Is everyone on this board telling their clients that the market will drop more… and not to buy?? I highly doubt it. Was anyone on this board telling their buyers not to buy in 2005? 2006? NO.
you have to be smarter then him to criticize his comments?
The fact that a guy who runs a near 200 billion dollar company somehow “forgot” that real estate doesn’t go up for forever is just flippin insane and it didn’t take a genius to know that basic truth… so criticizm is certainly warranted
I’m fine with the criticism. I’d just like to have seen more people get rich off the knowledge…
After all, this isn’t a moral issue (where criticism for criticism’s sake is worthwhile), it’s a business issue. And, because its a business issue it’s just a shame that people who knew better, demonstrably so through everyone’s posts, didn’t profit from that knowledge.
Either that, or they didn’t *really* know better. But, I am willing to give the benefit of the doubt.
Dimon was just playing to the pony show. Dimon got JPM out of subprime back in 06 & their losses were minimal. He`s the only fatcat who earned his keep legithmately. Unlike Blankfien who threatened to destroy the country if not made whole re:AIG.
“Either that, or they didn’t *really* know better.”
Or their fear of losses overwhlemed their certitude.
Recall that JPM moved big into Jumbos–to be held–in the 2d half of 2007. Which–whatever else one might say–is a little late in the game to retrospectively say “hoocoodanode?”, isn’t it?
I met Dimon once & he is personable and can talk to any audience & tailor his words accordingly. Make no mistake his words were tailored to joe sixpack (or congress) but in reality hes not nearly as stupid as that quote makes him sound.
sorry bob but you’re not aloud to say that quote sounded stupid unless you got rich taking the other side of it.
“in reality hes not nearly as stupid as that quote makes him sound”
Of course not. And I suspect that whoever suggested getting out of subprime has been moving up in the bank and whoever suggested moving into jumbos in ’07 has not been.
” it’s just a shame that people who knew better, demonstrably so through everyone’s posts, didn’t profit from that knowledge.”
Its much harder to time the market than you think, irrational behavior can go on much longer than your short margin positions can… or option contracts last… (ain’t that usually the case)
“irrational behavior can go on much longer than your short margin positions can”
The phrase is “the market can stay irrational longer than you can stay solvent”, no?
The bubble went on for a long time. You would have had to be seriously committed to your strategy to really profit from it. And you would have really profited in the end if you stayed solvent, but you would have been down serious money along the way.
I was very sure of the housing bubble but believed there was at least a chance things ending with stagnant or modestly declining prices over a long time. I didn’t think the economy would crater the way it has. The most I was willing to do based on my beliefs was to avoid buying a house and limit exposure to equities.
I don’t think people buying in this building are buying for an “investment”… or at least they shouldn’t be- its a new market. Buy somewhere where you can and want to live!
Im gonna upgrade my lifestyle off someone`s broken dreams in this bust via buying a nice foreclosure in 2014..thats how I`ll profit
“The phrase is “the market can stay irrational longer than you can stay solvent”, no?”
You tell me, I ad libbed it
From the Sun-Times today:
Belgravia President Alan Lev said about 120 of the 241 units have been sold, but 90 sales had been reported 2.5 years ago when construction of the 18-story building began.
Interesting article:
http://www.suntimes.com/business/roeder/1987269,CST-NWS-roeder13.article
Thanks for the River North suggestions- I have been looking there as well, but I haven’t found something with a good view/corner unit and parking in the price I want… I will keep looking there as well, but I like how close this building is…
In terms of not understanding why someone would want to live in the loop- I don’t want to live in the loop- just outside of it… and what drives that? Getting rid of a commute and my deep hatred for the CTA. I live in the city (Wrigley) and it takes me as much time to get to the loop as people who live in the suburbs.
CR,
But Wrigley is far better than any suburb. Yes the commute stinks, but I don’t think RN compares to Wrigley. Different strokes I suppose..
Well folks, I bought a 2/2 here at $367k a few years ago. Ha ha, what an idiot! Obviously hating life right now, at this point I just hope the building doesn’t fail. Ay Carumba!!!
At least apart from the financial mess I do enjoy living here, can’t beat living 2 blocks from work. I used to live in Presidential Towers and had to get the hell out of there, couldn’t stand it another day.
Yikes, some of the floor plans are unique. Looong hallways in the loft units and tiny living/dining rooms. My living room is 13 X 19 without a dining room. Dens look kinda claustrophobic.
“irrational behavior can go on much longer than your short margin positions can”
The phrase is “the market can stay irrational longer than you can stay solvent”, no?
also known as: Right in the long-run, dead in the short-run
From Belgravia’s press release:
“It’s obviously a different market today than it was when we started this development. 565 Quincy was a great value back then, and we need to make it a compelling value now. Buyers have always loved the product and the location, and now they will love the new prices even more,” says Alan D. Lev, president and CEO of Belgravia Group, Ltd., which is managing the development for Quincy Condominium LLC.
I marked the Belgravia video re the price guarantee private to avoid any possibility that current buyers would assume it’s still in force. I did that about 2 weeks ago, when I first learned of the impending price cuts.
Anyone who does any homework at all will quickly learn that Belgravia has long been one of Chicago’s best and most reputable builders. You can see some of the history in this video interview with Buzz Ruttenberg, Michael Supera and Richard Zisook, shot at 600 Lake Shore Drive:
http://www.youtube.com/watch?v=bNC7rf2nl28
Disclosure: Belgravia / Quincy is an advertising client of ours.
“I marked the Belgravia video re the price guarantee private to avoid any possibility that current buyers would assume it’s still in force.”
Perhaps the “nuance” you claimed was not actally present on the tape? It looks like you don’t want that “no price cuts while under contract” guarantee to confuse the current round of knife-catchers before the next round of price cuts.
“Anyone who does any homework at all will quickly learn that Belgravia has long been one of Chicago’s best and most reputable builders.”
It’s a jungle out there, folks. Even “the best” (and their hired shills) will lead you straight into danger.
“Anyone who does any homework at all…”
How much more will they find is no longer available?
“It’s for their own good,” says the shill.
It IS for their own good, G. It just happens to be the developer whose good it’s for.
Its more than a jungle its a jingle. Repeating it enough times doesn’t make it true.
G, Bob
What can I say but “thanks for the memories.” I worked in a psychiatric hospital for 4 ½ years in my youth, and then spent 4 ½ years as a social worker. You guys take me right back to those days.
I’ve been inspecting homes in Chicago for the last 12 years….I would not hesitate to buy a Belgravia built home.
Belgravia stands out from other large developers in their attention to detail and overall quality of construction.
As a ‘loan-owner’ or ‘home-debtor’ with a 2/2 just a few blocks away I’m amazed at the new low prices! It’s a kick in my pants but it’s good for folks in the market. Like others have said, it’s about time for realism to kick in.
Anybody know anything about the 208/212 W. Washington buildings? Seems to me that if you want to live IN the loop, that would be a better choice than Quincy.
Jim, which floor plan did you get at 367? The 2/2 I’m looking at is currently listed at $364 (an 09 on a high floor). Despite your likely hard feelings about the price drop, would you buy in the building today?
EJ- I work right by the 208/212 buildings… and I come in to work on the weekends often. It really is DEAD right there… like I can’t find any lunch other than to go to CVS or order.. at least by Quincy there are open starbucks, dunkin, potbellys, subway, etc. (this is likely due to the proximity to a law school and train station)
I too work near 208/212 Washington and it’s not DEAD. Jimmy Johns is (or used to be) open on the weekends; and Qdoba is open until at least 8 or 9. And the 7-11 is right there on the corner. so it’s not DEAD but it’s not as lively as the Quincy area where there is more residential.
jimmy johns… thats actually a good tip for me homedelete.
You’re also right next to Stocks and Blondes for a nice liquid lunch (or if you’re truly adventurous, eating their food).
“irrational behavior can go on much longer than your short margin positions can”
This gets esoteric and uninteresting, but you did not have to be short to make the trade. I am not expecting this audience to be experts on this (neither am I), but there are others who were and few, if any, had conviction in their views.
There was plenty of solvency and liquidity to make the trade. That is not the issue.
“I am not expecting this audience to be experts on this ”
Yet you ask the group why none here got rich from knowing there was a bubble?
“Biggest negative I see is have the Safer Foundation around the corner — nothing like having a bunch of ex-cons hanging out on the corner.” — EJ
EJ should go take a tour of Safer Foundation. He’ll find, like Lou Mitchell’s found out years ago, that Safer Foundation is a great neighbor and a great ‘citizen.’
I actually know a few guys who made a decent amount of money shorting home-builder puts back in 04-06. A lot of people had hunches back then it was going to pop, but it didn’t happen quick enough or hard enough and these guys raked it in.
The guys I’ve read about that made the big money on the burst,(Michael lewis profiled one, the young buck down in dallas who was on 60min, the pot smoker in cali… for example) Sounded pretty sophisticated.
AND I bet they’d all agree that dimon was blowing smoke with that statement.
“Jim, which floor plan did you get at 367? The 2/2 I’m looking at is currently listed at $364 (an 09 on a high floor). Despite your likely hard feelings about the price drop, would you buy in the building today?”
I bought an 08 on a low floor CR. Smaller sq foot than the 09, I think. And 367 didn’t include parking.
Hell, I *wish* I were buying in the building today. I am happy living there, though obviously galled by the price drop.
Staff is good, the standard master bath is really nice, Q room is a cool place and great for guests (despite a distinct certain cheese factor). Walls seem thick enough in the condo tower — I was nervous when I saw my new neighbor having a piano delivered, but I’ve only heard it a few times, and barely. And finally its nice having your own A/C unit, instead of a four pipe or (god forbid) a two pipe system.
“Yet you ask the group why none here got rich from knowing there was a bubble?”
Not after the responses I got back, no. I am not a trader or a profressional investor, but I do know enough to know it was very easy to profit from all the convictions people claim to have had through the years.
Obviously, I think the absense of anyone profiting generally speaks to a lack of conviction and/or a hindsight 20/20 situation. I won’t claim to have been as smart as the others who post here — I thought RE would stay flat for some time but not plummet the way it did. Of course, I wasn’t really focused on it as I am today.
My comments were meant as a general observation of fact. That very few profited from it shows me precisely where the sentiment shook out.
Thanks for the insights Jim…. its good to hear from someone who lives there rather than the Sales staff. I agree with the Q room- totally cheesy, but who cares if you use it occasionally and you/guests get enjoyment out of it. According to public record someone paid $464 for 1606. (and someone else paid $462 for 1506)… while I assume that is with parking, its still 100K over the prices now- So there are a lot of other people in your position-hopefully they can get the building sold at this price point, get some more retail on and around the block in the coming years and you can get some of your equity back! Its still a well built building with nicely done units by a reputable builder, and I think if you can hold on to it for a long time, it will be a good investment.
“I do know enough to know it was very easy to profit from all the convictions people claim to have had through the years.”
“Obviously, I think the absense of anyone profiting generally speaks to a lack of conviction and/or a hindsight 20/20 situation.”
I agree that with the benefit of hindsight, it is much easier to be confident about your beliefs. And people start to say they were 100% sure when in fact they were 90% sure.
But I don’t think it was easy to have made serious money without being willing to (a) have been down serious money during the run up, (b) essentially bet your financial well being on being 100% sure you were correct, and (c) incur the small (but I think nonzero) risk that you would have run out of money to implement your strategy before the bubble burst.
You can’t make serious money unless you are willing to put up serious money and you have to know the right time to put up that money or be willing and able to keep putting it in. Suppose you thought in 2002 or 2003 that prices were starting to get out of whack. What should you have done at the time? The ease of implementing a strategy also depends on if you believed primarily in a housing bubble or in the broader economic effects.
“have been down serious money during the run up”
That isn’t a requirement nor was it the case. This isn’t like “shorting” a stock. If if it were, you can simply buy a put and not have unlimited risk.
“Suppose you thought in 2002 or 2003 that prices were starting to get out of whack. What should you have done at the time? ”
Easy, you could have bought credit default swaps and sold them when they did not go up in value (no harm no foul). The certainly didn’t get cheaper at the time since they were dirt cheap to begin with and no one was worried about defaults in any event. Asymetrical returns exist in many derivative products, as they are with this relationship.
There is always a way to hedge, or isolate out, systemic risks you do not want exposure to. Convergence-divergence trades, commonly called paired trades, employ this notion all the time. That is essentially where hedge funds get their name from.
I’m not suggesting anyone on this board had the financial sophistication to do so, but if I could predict the future I would certainly try to figure it out.
By the way, all this is meant to say is I call BS on the level of conviction people claim to have had in say late 2007.
However, if you always hold the same view, sooner or later, you’re going to be correct. When is the world ending next? 2012?
I saw that @properties is now working in conjunction with Belgravia on sales for the remaining units – anyone know if this is unusual for Belgravia since they have their own realty agency? Of course, I assume it’s because they want to sell off the remaining units as quickly as possible.
“Easy, you could have bought credit default swaps and sold them when they did not go up in value (no harm no foul).”
I’ll happily admit I don’t fully understand how CDSs are priced, but you surely have to pay something for the insurance you are buying during the time you are hold that insurance. And if things don’t move in your favor, you are out that money. If things moved against you, I assume your CDS contract would go down in value and you’d either take the hit or you’d have to keep paying the basis points for insurance.
Same with buying options. I don’t know what the duration is of thickly traded options (and if you were betting on housing rather than broader market, you would need the right options for that), but you would need your bet to pay off during that time. Your downside is not unlimited but you can lose all of what you put up. You could put more in of course…
There also counterparty risk in CDS, but I suppose the government will take care of that.
“I saw that @properties is now working in conjunction with Belgravia on sales for the remaining units ”
@ has started/expanded a division to work with developers/lenders/etc in dealing with closeouts/foreclosures in large blocks. I would expect that the relationship is not a standard developer/broker marketing relationship and that the commission structure is v. non-standard, tho any speculation by me on the structure would be completely baseless.
BS – nobody here on this board has enough money or access to personally invest in CDS swaps.
It’s extremely easy to say “you weren’t 100% sure because you didn’t make any money” but as explained above not everybody had the cash, access or desire to try and gamble in stock market.
The best and easiest and most obvious way to ‘profit’ in that sense from the bust was to stay out of the housing market all together. Anybody who could fog a mirror could get a loan, and you know they did. The renters without the wherewithall to invest in CDS swaps who took years of abuse from friends and family members and refused to take the plunge, they’re the ones who remained solvent and continue to have the unblemished credit. I was 100% sure this was going to blow up by 2004 or 2005 and I consciously chose to rent even though many people around me were encouraging me to buy and I had the income to do so. So I profited in that sense that I stayed out of the market, paid off a good chunk of student loans and saved some cash for a large downpayment when the market returns to normal.
“Easy, you could have bought credit default swaps and sold them when they did not go up in value (no harm no foul). “
And my decision puts me farther, and in some cases, much farther ahead of those who took the plunge and bought during the boom. Hell, I even took steps at work to get into the bust related businesses, and it paid off for me, i’m still employed and my w-2 has been my best ever. so again, i call bs on making money off the bust by investing in crazy ass derivatives, the average person can’t do that, which explains why so few people made big bucks off the bust, but plenty of smaller people fared very well and weathered the bust just fine.
“The renters … who took years of abuse from friends and family members”
Abuse? Really? And you still consider these people “friends”? (family you can’t do anything about).
Battered Renter Syndrome? Would explain much.
“I actually know a few guys who made a decent amount of money shorting home-builder puts”
CH – shorting puts is a bullish strategy and isn’t going to make you much money. I’m doing that a lot now as a cautiously bullish strategy going forward.
Buying puts on the other hand, that’s how you make money when you know something’s going to crap out in a certain time period.
homedelete: If someone has the cash for down payment- and the income (which they are reasonably sure will continue)and/or security of two large incomes- why not buy now? Assuming that you can stay in for 8 years, even if you sold for the same price in 2018, the interest and taxes paid (minus any tax $$) should be less than you are currently paying in rent…Plus you get a low interest rate now and $8K from the federal government.
Not to mention, you should be saving at least 10% of your income on top of your mortgage payment and other expenditures-so you save that put it in CDs or whatever else, and you are not SOL if your place doesn’t turn out to be a good investment- but you have a place to LIVE.
While buying may not be right for you, that doesn’t mean that it is not the right decision for others. It also doesn’t mean buyers are all or idoits or that they will be envious of you and your CDs.
Sonies I know. My convoluted point was a lot of people were betting against the housing market but never got paid. Buying puts in homebuilders wasn’t sophisticated enough, the risk was priced in pretty well.
CR – knifecatcher should buy now if only for the purpose of setting comps on the way down.
Wow, the shills are getting battered in this thread. You’d think a guy advertising for clients would take the high road and keep it professional, but looks like he resorts to insults on a public website. Hard to believe developers actually want this guy pitching for them. They must be desperate.
“Anybody know anything about the 208/212 W. Washington buildings?”
Close to work, somewhat cramped and the bedrooms don’t have windows. Good for rentals or college roommates. Every time I check the listings, there have been price reductions.
Very few people sat out of the market prior to 2006 because they knew the market was going bust. I am sure there were a few, but from what I have seen, people who could buy did so and those that couldn’t didn’t. People who didn’t buy generally couldn’t afford to buy what they wanted or simply weren’t in a position to buy due to other issues (job or life instability usually).
After 2006, it was easy to see things were going down hill fast, so I don’t think sitting out the market is all that indicative of Nostradamus like skills.
To me this is like people thumping their chest about all the money they made during the dotcom boom due to dumb luck or NOT losing any money at all after it burst because you were too broke to invest in the first place.
A lot of things got out of whack during the bubble. Inventory was low for a good period of time driving up prices until developers overbuilt a lot of areas. Demographic shifts drove up prices. Easier financing drove up prices. Speculation drove up prices.
At some point, things will get back in line. From my vantage point, the good thing is that nothing new is really coming on line so we will get worked through all the inventory which will help pricing in the future.
Russ, you have selection bias – you’re a mortgage broker, you only see people who want to buy homes and apply for mortgages. I along with millions of other people did not bother visiting a mortgage broker or realtor or developer during the boom. So you would not know that I and many others were predicting the demise of the housing boom. You and I damn well know that anybody who could fog a mirror could get a mortgage. I personally have a client who was two years out of bankruptcy, had an income of $40k a year and bought 4 investment properties and he was a renter who didn’t own his primary residence! And this was 2007! You guys can call it dumb luck but me and millions of other renters with good credit and lots of cash are going to pick up some ‘deals’ off the people who were truly dumb.
“from what I have seen, people who could buy did so and those that couldn’t didn’t. People who didn’t buy generally couldn’t afford to buy what they wanted or simply weren’t in a position to buy due to other issues (job or life instability usually).”
Lil ole russy is stuck on playa hatin.
homedelete- when is it that you plan on picking up these deals? Since you seem to be able to predict the future- please enlighten us… when will we see the bottom? Or is that just something that you will know when you see it?
CR – sounds to me like you’re still drinking the kool-aid. The question isn’t ‘why not buy’ the question is ‘why buy at all?’
Your assumption that holding a condo for 8 years is better than renting is flawed. If you buy too high today you are doomed to lose money forever. And as we’ve seen with the properties on CC many of them are still priced way too high. CC doesn’t cover any of the deals in other city neighborhoods or even in the suburbs. There are deals out there, homes that are reasonably priced with mortgage payments that families can sustainably make. Those properties tend to be in working class or mixed income neighborhoods; the bottom has only started to fall out of teh CC neighborhoods. Buy now and buyer beware, that’s all I’m saying. But hey, we need knifecatchers to set comps on the way gone.
“#CR on January 14th, 2010 at 12:58 pm
homedelete: If someone has the cash for down payment- and the income (which they are reasonably sure will continue)and/or security of two large incomes- why not buy now? Assuming that you can stay in for 8 years, even if you sold for the same price in 2018, the interest and taxes paid (minus any tax $$) should be less than you are currently paying in rent…Plus you get a low interest rate now and $8K from the federal government.
Not to mention, you should be saving at least 10% of your income on top of your mortgage payment and other expenditures-so you save that put it in CDs or whatever else, and you are not SOL if your place doesn’t turn out to be a good investment- but you have a place to LIVE.
While buying may not be right for you, that doesn’t mean that it is not the right decision for others. It also doesn’t mean buyers are all or idoits or that they will be envious of you and your CDs.”
CR – The easiest answer is when you see nominal 1999 prices. The more nuanced answer is when foreclosures return to pre-bubble levels, when the shadow inventory has cleared, when all option arms and alt-a’s have reset, those foreclosure have worked their way through the system. I predict the bottom, of pricing that is, not sales volume, which has likely already bottomed, will be in the winter of 2012-2013. Some are predicting 2014; i take a wait and see attitude toward these things.
“CR on January 14th, 2010 at 1:52 pm
homedelete- when is it that you plan on picking up these deals? Since you seem to be able to predict the future- please enlighten us… when will we see the bottom? Or is that just something that you will know when you see it?”
I’ve just done the math for my own personal situation. If the place I buy (in my price range)never increases in value, I am still in a better position than renting (based on my current rental which is not as nice as the places I am looking to buy).
If the market free falls and never recovers maybe I will lose a little money- but I will have other savings and have enjoyed living in my condo. And if the marked hasn’t recovered when I am ready to upgrade, I just rent the place.
CR,
There are over 60 distressed (underwater) units in the bldg, not to mention over 100 available units. The distress story is the same in every new bldg in the vicinity. It is even worse where more units were sold at bubble prices. There are abundant rentals already available with more “investors” snapping up condos and new apt bldgs under construction. Rents are going nowhere but down for the near to mid term. Locking in your housing costs on something that you can rent instead isn’t a good investment right now. Come to think of it, your taxes and assmts are sure to rise, so you aren’t locking in your costs at all. You are just locking in your purchase price.
HD:
I know a lot of people outside of the real estate business and virtually anyone who could buy a home did, even the people like your dumbass specuvestor clients. The folks I knew who didn’t buy chose not to because of other reasons, not because they saw the crash coming. Are they better off? Probably. However, that is still dumb luck.
I just don’t buy that all of you were brilliant forecasters of the impending doom. Please share with us the next bubble and when it might pop. Some of us have money laying around we would like to put it to work.
G, don’t know why you think I am hating. I could careless if someone chooses to be a renter. If it works for you great. Just don’t hate on the people that chose to buy either. Different strokes for different folks. At one point, you threw money away renting. Right now, renters have the upper hand.
“security of two large incomes”
CR, I’m curious how you will qualify for dough4dumps?
“For sales occurring after November 6, 2009, the Act establishes income limits of $125,000 for single taxpayers and $225,000 for married couples filing joint returns.”
I am married to someone who works for the government… Our income in 2009 was slightly below 225K – for our age (28 & 27) and future income potential I am fine with that… I guess I should say Large enough incomes for buying a $350K place in my mind.
So you’re saying “the folks I knew who didn’t buy chose not to because of other reasons, not because they saw the crash coming.” and
“People who didn’t buy generally couldn’t afford to buy what they wanted or simply weren’t in a position to buy due to other issues (job or life instability usually).’
your disdain for renters is coming through. anon(Tfo) this is the abuse i’m talking about. renters are losers who can’t afford to buy (at bubble prices of course), or they can’t hold down a job or they have other ‘life instability’ issues.
the straw men are marching today…
“I take a wait and see attitude toward these things.”
This might guarantee a certain appearance of omniscience, but of course it also guarantees you never, ever, beat the market.
CR, I’m with you on this one– my only answer to “why not buy now?” would be “If you can’t get a great place for a great price.” (I do not think these particular units are either, but that’s opinion).
Otherwise, if you’ve got that 20%, job security, the savings, there’s no reason not to buy (and no reason to ask “why buy at all.”). But hey, I’m just one happy homeowner.
HD, not sure how you aren’t getting what I am saying how you are making that illogical conclusion about renters.
People who didn’t buy 1) typically had some really jacked up financial issues. Given the availability of credit to outright deadbeats, I mean really jacked up. 2) Everything you wanted was out of your price range. Couldn’t find the upgraded 3/2 in LP with parking and CA for $250k so keep renting. or 3) Life isn’t stable enough to justify buying. I.e., layoffs at work so don’t want to risk getting canned after buying a place. Maybe just started a new job. Maybe considering getting married in a year.
I would venture 99% of people fell into one of those three categories in terms of why they didn’t buy. The fourth category of “I am all knowing and can see the future” doesn’t really exist in my mind.
“anon(Tfo) this is the abuse i’m talking about.”
I didn’t realize you considered Russ a friend.
I see your point, hd, but I think you’re the one interpreting “can’t afford to buy” to mean loser. One need not have been a loser to be unable to “afford” to buy a $600k house–at least without commiting fraud.
I completely understand why someone would never consider buying an apartment (unless you live in NYC) and why someone unmarried and w/o kids wouldn’t want to move to Suburb X.
Oh just you guys wait, HD is going to have so much more money than you all in 72 years when his 1% CD’s finally double in value!!!
I’m a renter and don’t particularly notice any disdain but then again I don’t really much care what other people think.
FWIW, and I’m just some guy on the internet, I chose not to buy because I thought everything was overpriced. I could have paid (overpaid) for what we are looking for but chose not to. The only one of Russ’s reasons that could arguably apply to me is that we did not yet have our kid and, but if prices had not been inflated, I would have bought then.
Well, maybe the impossibility of finding the right CPS neighborhood school would have stopped us.
HD, if you are really comfortable you have made the right decision, well, then, just be comfortable with it.
One didn’t have to be Dr. Doom to have a pessimistic view of the housing market in 2005 and to know that these sorts of things won’t else well. I don’t know if people predicted DOW 6000 and 40% CS price drops but the first newstories of increased foreclosures and ridiculous housing prices and people camping outside of pre-construction condo towers was a warning sign to a lot people. It was common sense. I’m sorry for you who missed it but then again when your livelihood depends on it…
and furthermore, even if people didn’t see the nonsense on the macro scale, they saw it on the microscale: everyone has a friend, relative, neighbor, etc who bought a house too expensive, or an investment condo, or a property to flip, and I bet you at least told yourself “this will not end will for my Brother-in-law or father=in-law/neighbor, whomever”; mulitply that individual’s story by millions and you get the crazy housing crash.
“I would venture 99% of people fell into one of those three categories in terms of why they didn’t buy. The fourth category of “I am all knowing and can see the future” doesn’t really exist in my mind.”
I know a couple people who could afford to buy in 2005, but didnt want to spend 500k on a place they could rent for 2k a month. Dont think they saw financial Armageddon coming down the tracks but they did think things were out of wack.
All anecdotal evidence. I too rent but never felt pressured. though it got annoying at a Christmas party a few years back where many in attendance owned near joanie cusacks house and each one had wanted to talk about how much their home had appreciated. I suspect that was more the fault of their bland personalities than some anti renter bias.
“people camping outside of pre-construction condo towers”
Wow, this actually happened?
In some markets. The first run up in prices circa 98 to say 01 seemed to be due to a lack of inventory in some markets. I remember people having to get into lotteries because there simply wasn’t enough on the market in some parts of California. Then the financing got loose and speculation started in combination with developers over building at which the supply side finalyl significantly exceeded demand and here we are.
Russ: “I would venture 99% of people fell into one of those three categories in terms of why they didn’t buy. The fourth category of “I am all knowing and can see the future” doesn’t really exist in my mind.”
Upton Sinclair: “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
I was at a closing in 2006 and the realtors, the other lawyer and the broker were berating me for not being on the property ownership ‘elevator’. Who’s laughing now.
Oh gosh, the rent or own thing is as about tired as my school district crap i am spewing on here.
we all rent or own for different reasons. Will HD and Bob buy at the exact bottom of the market (if the do buy) heck no!!!! but if or when they do buy it will be because they will FEEL they got a great deal.
that deal is there motivation.
CR wants a place close to work and will buy a condo this year mostly likely will catch a knife but will be ok with it cause he makes 225k anually.
His motivation is proximity to work
Jim Straw bought a year ago got screwed cause of the crash and over developments but at the time bought what he wanted at a price he liked.
his motivation is it sucks to loose the value but he is happy where he is at
DZ is lookin for a roscoe village north center top school district.
What ever he pays he will be happy for years to come in his new home.
His motivation is School district.
Sonies bought in 2009 and since then lost value on his place, he could give a crap cause he like where he is at despite the silver blocking part of the view.
His motivation is He thinks RN is the epicenter of greatness.
as you see the majority motivating factor is not Price.we all wish to get the best price possible, will we ever? nope! we just need to be happy with the price ad what fits our needs
So if you like renting, rent my brothers rent
if you want to own, own my sheep own.
“I was at a closing in 2006 and the realtors, the other lawyer and the broker were berating me for not being on the property ownership ‘elevator’. Who’s laughing now.”
Your landlord.
I laugh when people view home ownership as a purely financial decision. There are SO many other considerations — stability, community, the ability to modify even – wait – fearlessly nail holes in the wall, the list goes on.
My landlord isn’t laughing, he’s needs to own 18 units to turn make any real money after taxes and maintenance, and he’s got another business on the side. The profit he’s making off me, which is probably not a whole lot, is far less than the interest I’d be paying on my prinicpal balance.
“#Jon on January 14th, 2010 at 3:10 pm
“I was at a closing in 2006 and the realtors, the other lawyer and the broker were berating me for not being on the property ownership ‘elevator’. Who’s laughing now.”
Your landlord.
I laugh when people view home ownership as a purely financial decision. There are SO many other considerations — stability, community, the ability to modify even – wait – fearlessly nail holes in the wall, the list goes on.”
cant speak for HD but my landlord is not laughing. he has taken a beating.
In my view, the biggest financial benefit of home ownership is enforced savings in the form of your mortgage payment, for people who would otherwise not save. The other financial stuff is a bit of a wash. Mostly because of the tax code you avoid paying taxes on the implicit income (i.e. avoided rent) from your home.
The rental market for SFHs is also a bit of pain to negotiate.
Meant to say besides enforced savings, the main additional financial benefit of owning is not being taxed on the implicit income. And comment meant to apply to a non bubble world.
I don’t view home ownership as a purely financial decision. I also don’t see a condo as a home, just an apartment.
Channeling lil russy here: I laugh when people who bought in the bubble now play armchair QB with 20-20 hindsight. I’d say that 99% of those who now claim that it wasn’t all a financial decision to buy only justified the “premium” at the time by reassuring themselves that they would “still make plenty in the long run.”
Those rewriting history are the FB’s.
It’s a forced savings plan ONLY if home values stay flat or increase. If home prices are decreasing then it’s no different than throwing your money on rent and in fact its actually worse because when you want to move you have to pay closing costs, taxes and realtor commissions.
I will buy, eventually. I will buy a home in a nice area for a reasonable price and I will have a mortgage payment that I can sustainably pay for the life of the mortgage. I will not pay above the nominal 1999 price. I refuse to directly bailout some bubble homedebtor’s poor financial planning.
“#DZ on January 14th, 2010 at 3:19 pm
In my view, the biggest financial benefit of home ownership is enforced savings in the form of your mortgage payment, for people who would otherwise not save. The other financial stuff is a bit of a wash. Mostly because of the tax code you avoid paying taxes on the implicit income (i.e. avoided rent) from your home.
The rental market for SFHs is also a bit of pain to negotiate.”
How annoying to have to time the purchase of your home with the perfect alignment of the financial stars. Suze Orman would be so proud of you!
JMM: “By the way, all this is meant to say is I call BS on the level of conviction people claim to have had in say late 2007.”
Darn, missed “late 2007” by 2 days (but I was saying the same since I started posting here in 2007):
G on January 2nd, 2008 at 2:41 pm
Good point, Valasko. The current market downturn is not stopping soon. Just plug in 3-5% (downtown condos probably more like 5-10%)price drops for the next few years and see what that calculator does.
Only a ‘greater fool’ would buy now. Rent, bank the savings, and then buy what you are looking at for less in the future. And always remember, the drop will overcorrect (due to fear) just like the rise did (due to easy money.)
http://cribchatter.com/?p=1256#comment-825
“How annoying to have to time the purchase of your home with the perfect alignment of the financial stars. Suze Orman would be so proud of you!”
“perfect alignment of the financial stars”? More like ignoring the supernova overhead. Alan Greenspan would be so proud of you!
“I will buy, eventually.” +
“I will buy a home in a nice area” +
“I will not pay above the nominal 1999 price.”
does not necessarily compute.
If you are waiting for a home in a nice area to sell at nominal 99 price, you *may* die waiting. All to save $50k, spread over 30 years. Whatever you do, HD, don’t hold yourself to that hard target.
I was thinking the same thing myself anon(tfo). Imagine if you held to that mantra and wanted to live in the now pretty decent Kingsbury/Division area, or maybe University Village area. You couldn’t pay people to live there in 99!
Nominal 1999 is a particularly bold strategy as it means an ever decreasing real price. It will really pay off if it comes to pass.
Uh-huh. I can find quotes all over the internet of people claiming first that there was no bubble, then that prices have permanently plateaued, then that home prices will drop only a little bit, then that home prices will rebound quickly in a V shaped recovery…and then capitulation. Now I have great quotes of posters saying my checklist will never happen and that I will *die* waiting.
My reasoning is sound. What the bubble hath given, the bust shall take away. Incomes, rental metrics and financing standards are basically back at 1998/99 levels. Housing prices will be the last thing to follow.
I haven’t bought now because there is so little inventory in good/safe/upper-middle class neighborhoods that is decently priced, such as 2003 pricing. we still see plenty of 2005 pricing plus appreciation. Market listings still have yet to reflect market reality. If we haven’t even reached that yet, how can we even be anywhere near close to the bottom??
“If you are waiting for a home in a nice area to sell at nominal 99 price, you *may* die waiting. All to save $50k, spread over 30 years. Whatever you do, HD, don’t hold yourself to that hard target.”
“My reasoning is sound.”
I have no reason to think it’s not. When you think like a renter you shall be a renter. Self-fulfilling prophecy. Some folk will be lifers when it comes to renting and that’s fine. Just don’t protest so much.
Just as self-fulfilling being a perpetually underwater home-debtor.
“I haven’t bought now because there is so little inventory in good/safe/upper-middle class neighborhoods that is decently priced, such as 2003 pricing. we still see plenty of 2005 pricing plus appreciation. Market listings still have yet to reflect market reality.”
I think you’re woefully disregarding that “market reality” in desirable neighborhoods could very well reflect a nominal gain over your supposed pre-bubble, in a vacuum 1999 pricing. Everyone and their sister wants to live in LP/LV or north shore communities or any of only a handful of good, safe, upper middle-class areas. So the bubble might not be entirely artificial, in that there is actual increase in demand and a limit in supply (the ol’ adage that we aren’t making any more Earth or however it goes). I know that LP (as an example) hasn’t been immune to drops in real estate prices (and is on par with most other areas in the… area), but there is still a human element you’re completely disregarding.
“I can find quotes all over the internet of people claiming first that there was no bubble, then that prices have permanently plateaued, then that home prices will drop only a little bit, then that home prices will rebound quickly in a V shaped recovery…and then capitulation.”
How about this one HD:
“anon on January 2nd, 2008 at 12:23 pm
…I think that 1/1/2010 sale prices will be flat with current prices.”
http://cribchatter.com/?p=1256#comment-820
No, I don’t think I’m disregarding the nominal gain over the pre-bubble, in a vacuum 1999 pricing. From what i’ve seen, there were just as many, if not more, alt-a and jumbo IO little down payment loans in LP as anywhere else, its just that those buyers have been able to drag out their negative financial situation longer than those at the middle and bottom of the income scales. That’s all that it reflects. The number of SFH home sales in ‘good, safe, upper middle-class areas’ like LV and LP are at or near GENERATIONAL LOWS. Home prices are still too expensive and the only solution is lower prices. LV/LP/RV/ETC won’t be cheap for everyone to live but there’s no way it will continue to carry the premium it does now.
Nice catch G.
Remember the trend is your friend and we’ve had a nice downward trend for a while now…I expect it to continue…Gary might disagree, he’s on the record as calling the pricing bottom…I’ll bookmark this thread and revisit it on January 14, 2012 and we’ll all have a good laugh.
“The number of SFH home sales in ‘good, safe, upper middle-class areas’ like LV and LP are at or near GENERATIONAL LOWS. Home prices are still too expensive and the only solution is lower prices. LV/LP/RV/ETC won’t be cheap for everyone to live but there’s no way it will continue to carry the premium it does now.”
Why wouldn’t you think that? LP/LV has been THE place to live for a long damn time now and there’s nothing to indicate that it won’t carry on that way. The Big 10 is still pumping out 100k+ grads a year that all want to try their hand at the post-college Chaz/Trixie dream and plant their butts as close to John Barleycorn as they possibly can. Sure, a lot of them will end up fleeing to the burbs within a number of years, but plenty of people will be purchasers and then lifers, and there will be more every year. So unless LP as a whole starts bashing down all the real estate that contributes to making the area desirable to live in in the first place to set up huge condo towers, prices will trend upwards (to a degree) with the population.
I’m not claiming that $500k 3br shitbox vintage condo pricing at the far reaches of LP is sane and will continue, but I have to believe the truly desirable neighborhoods will stay above your dream of nominal 19999 pricing for the foreseeable future.
HD: “Nice out of context excerpt G.”
Fixed that for you.
Or does “hypothetically” need to be added to everything to avoid selective quotation by G sometime in the future?
Keeping the faith in LP really pricing is a lot like the belief in God. Despite significant scientific and empirical evidence to the contrary, the faithful and pious continue to believe and the adversity just makes their faith stronger.
G, add 100k a year big 10 grads to the list of imaginary market saviours along win boomers, rich foreign nationals and trust fund babies.
“Remember the trend is your friend and we’ve had a nice downward trend for a while now”
You sound like a realtard, circa 2005, but in bizarro world. Did Suzanne research that for you, HD?
““anyone who assumes a faster rent appreciation rate than price appreciation rate needs too check themselves.”
Over the long term, sure, but do you really think that, on a 3-5 year timeline starting today, that sale prices are going to go up more than rent? I think that 1/1/2010 sale prices will be flat with current prices. Do I need to “check myself” if I also believe that rent rates might increase 1%+/annum?”
How did the context change your assertion, anon? Your rent prediction was clearly hypothetical, but certainly not your price prediction.
“Your rent prediction was clearly hypothetical, but certainly not your price prediction.”
C’mon. Your reading comprehension is better than that.
Or are you assuming that I actually take time composing and editing my posts?
But, sure. Why not. G-1; anon-0. You got me big guy.
“BS – nobody here on this board has enough money or access to personally invest in CDS swaps.”
Not true. My neighbor in KW has a CDS fund which offers investment options for naked swaps and covered swaps (covered by fixed income products upon which they are written). Duration is just actively managed.
Granted, it’s not place to park your entire 401(k) but it is absolutely available to individual investors. But only those with conviction about their prescience on the housing market!
“G, add 100k a year big 10 grads to the list of imaginary market saviours along win boomers, rich foreign nationals and trust fund babies.”
Aren’t most big 10 schools state schools? I didn’t realize Enterprise Rent-A-Car was starting their U of I class off so well these days.
JMM… I graduated from a Big Ten School (although one of the better ones) and although I went on to law school, I would say on average my friends made 70k when they graduated (some at 55, some at 100), but by the time they are ready to buy 4 years later or so… yes they are at least making 100K.
“My neighbor in KW has a CDS fund which offers investment options for naked swaps and covered swaps (covered by fixed income products upon which they are written). Duration is just actively managed. ”
and you don’t need to be a QP* to invest? Interesting.
*yes, I know there are ways around it.
Comment #1: How many of your friends still have their jobs?
Comment #2: Post-MBA salaries in most corporations barely crack 100k, and that is in a good economy.
Your sample set is either off or includes a bunch of investment bankers, consultants and overpaid private equity folks. Again, see comment #1.
I know QIBs and I know AIs, but I don’t know QPs. Suitability is the same as qualifying for options. You need not meet those tests.
Besides, practically every big 10 grad makes over 100k now, so what is the big deal.
homedelete you are so Schaumburg bound its hilarious… you aren’t going to find 1999 nominal priced homes in the city except for fringe neighborhoods that are just as long of a commute as living in the burbs near the metra. But keep dreaming… not that you care, you’re probably going to buy in OIP anyway.
As for my view groove77 … yeah the silver tower is an eyesore, but my view still owns 🙂 There’s more view to the west but stupid photo stitcher wouldn’t put together more than 4 pictures and i suck at photoshop.
bon appetit (this picture was taken about 6 months ago)
http://img191.imageshack.us/img191/9650/pano.jpg
“I know QIBs and I know AIs, but I don’t know QPs”
working from recollection, QP rolls AI into a more comprehensive concept in a newer SEC rule and was the first thing that popped in my head.
“Suitability is the same as qualifying for options.”
Sounds like a recipe for litigation, if the fund does poorly. Hopefully they have an airtight arbitration agreement.
hhhahahaha… you got me JMM…lots of private equity, ibankers, and consultants. All still have their jobs, or new ones, or are getting thier MBAs. But I have friends in other industries doing well… maybe not 100K but close enough.
Unless they are a teacher or a nurse- and those people are happy so who cares what they make–can’t speak to the average salary of all Big Ten Grads, sorry. Either way you don’t need 2 incomes of 100K to buy in LP or LV. The point is a good one- tons of people still want to own in those neighborhoods.
“homedelete you are so Schaumburg bound its hilarious”
I was thinking much the same thing. He’s teh CC’s #1 Fan of the NW ‘burbs*. And he certainly will be able to find a nice house in a nice part of AH/BG/Sb/Whatever for something approximating ’99 nominal pricing–hell, I spent a couple minutes on redfin looking at AH, and found a handful of houses that only need drop 10% more to get to their last sale prices in 98 or 99.
*And I’m unsure if there is a #2.
LP was still expensive in 1999 just not at the same insanely bbubble pricing it is today. God’s you guys need to put down the koolaid. And of course the economy is just fine for people in LP. The worldis perfect and the grass is greener in LP.
anon, didn’t mean to offend you, although I could see why that is a reflex to my typical comments. I do remember you being much less bearish back then, so when I saw that comment I did take it at face value and did not see it as out of context.
Sonies, do you think homedelete will invite us all over to his above ground pool in Schaumburg in 2019?
G–no offense taken, but that one was a concrete example to refute JKD’s “check yourself” nonsense which turned out to (most likely) be a reversal of what he actually meant.
HD–please know that my “you may die” comment was directed at waiting for a specific property, or any market-wide median/average, to trade at ’99 nominal. Undoubtedly there will be many houses that will, for a variety of reasons, in a variety of places. But if you’re set on 123 Fake Street, you might die before I let you have it for only the 99 nominal $ price.
“JMM… I graduated from a Big Ten School (although one of the better ones) and although I went on to law school, I would say on average my friends made 70k when they graduated (some at 55, some at 100), but by the time they are ready to buy 4 years later or so… yes they are at least making 100K.”
CR: You left out the part about them all having $150 to $200k in school loan debt.
It’s virtually impossible to incur that much debt from a Big 10 college. The only possible way is if you were on a 5 year plan, lived out of state, lived off-campus, and never worked at all.
Law School, of course, is another story.
If you went out of state at Michigan- isn’t it around $45k a year? (for undergrad?)
But that’s not the point I was making. He was discussing his law school friends who took jobs from $50k to $100k but a few years later were all making $100k. He left out the huge debt loads most of them likely have (just from law school alone.)
Just looked it up. $46,000 to $49,000 a year to go to Michigan out of state as an undergrad.
Doesn’t seem like it would be very difficult to graduate with $100k to $150k in debt at all.
Ok so it’s at least extra $93,112 to attend U of M, in terms of out of state fees.
Let me be the first to point out that this is no barrier, based on current MI R.E. prices.
You could have bought 2690 Dexter Rd. in Ann Arbor, little 900 sq ft 3/1 SF, for the closing price of $38,900 last spring.
You come out almost $55k ahead by buying the land for the in-state tuition.
Wow, I had no idea Michigan was so ridiculous. I went to a Big Ten school in Indiana in the late 90’s and it was like $18k/yr at the time.
If Michigan is anything like Indiana, you had to have been a resident for a fair amount of time before being able to get in-state tuition, so that might not be feasible unless you feel like putting off your education for a while to live and work in Ann Arbor.
Oh, it wouldn’t actually work unless you had a job, and you’re in Michigan so have fun with that idea (the tuition requirements have nothing to do with owning property).
It was just for fun (though there’s a place for $67k cash now, right by the university. . .).
Michigan has always been the most expensive out of state tuition in the Big Ten (excluding Northwestern which is private.)
It’s nearly impossible to get in-state tuition at Michigan. It’s not about owning property or “living” there for 6 months. I have a friend who went there whose father worked for a Michigan company but was based in Hong Kong (AND they owned property in the state for several years) and they wouldn’t give her in-state tuition.
So-no- just buying a piece of property isn’t going to cut it.
By the way- if you’re out of state at IU, just tuition alone is now $26,000 a year. Add on living expenses and you’re probably around $38,000 to $40,000 a year.
Michigan- good guess friends. Or did I write that?
Anyway, while some of my friends have law school or MBA debt- none have undergraduate debt.
Well prepared parents to thank for that…
You have to graduate from an in state HS to get in state tuition. (Not just own property).
Start saving for your kids now!
“You have to graduate from an in state HS to get in state tuition. ”
That’s not sufficient. Check it out; it’s the most restrictive residency requirement I’ve ever seen. It’s almost impossible for undergrad unless you have a parent who is a full-time resident of Michigan.
http://ro.umich.edu/resreg.php
right. And in fact, that parent has to claim you as a dependent- meaning, if you have a parent who lives in Michigan, and one who lives in Ohio- the one who lives in Michigan must not only pay Michigan taxes, but they must be the one to claim you as a dependent.
“Sonies, do you think homedelete will invite us all over to his above ground pool in Schaumburg in 2019?”
Ahahaha I doubt it, he’ll be up to his ears with whiney kids and busy talking to his neighbors about what he missed at the latest PTA meetings.
also,
Muck Fichigan
I graduated high school with about 4 dozen kids that went to U-M and I’ve never heard of anyone having trouble with in-state tuition. So I guess their rules does what they are supposed to do, get in-state tuition for true legitimate residents and avoid tricks and loopholes for out of staters. Sure there will be a few bad cases like the one Sabrina mentioned but I bet those are uncommon and the strict policy provides the university with a lot of money.
Oh, and if this nonsense was true about the average big 10 grad making $70K and $100K after 4 years then somebody owes me a big check and a raise soon! I can think of 20-30 friends that graduated from MSU or U-M and only two are probably making at least $70K (ibanker for citi and a friend working at his uncle’s small biz). My highest earning friend graduated from Oakland and sells mortgages for Quicken. I feel lucky to be making over $50K
that JKD guy in the old thread was pretty prescient..”Also, IMO, there will be government intervention (I mean REAL intervention, not baby-steps in Fed Funds) once the reality of lower prices sinks in. I expect interest rates back to 1%, no limits on GSE purchases, Fed purchasing MBS directly even. I don’t think reality is anywhere near sinking in yet, these yahoos are still talking about a second half rebound in 2008.”
wonder if he’s rich enough now to impress JMM
btw, nice view sonies. probably really cool at night.
“wonder if he’s rich enough now to impress JMM”
If he’s not, we all know he couldn’t have *really* believed what he posted.
“lots of private equity, ibankers, and consultants”
This is Chicago which is basically a backwater market for the first two professions There aren’t “lots” of these people in the city to begin with so obviously this set is completely skewed (not good or bad, just is — not many of these people running around). Having (and having kept) one of those jobs plus zero school debt puts you in a small, very select group. I can recall the days GS started their lowly analysts at 30k plus maybe a 50% bonus in NYC. Good times.
“If he’s not, we all know he couldn’t have *really* believed what he posted.”
There might be one or two. Point is, not many at all. I rest on preponderance as example here proves the rule.
And if the world ends in 2012, there will be a few people who were dead right about that too. Though they probably will have trouble profiting from it.
Gosh, the good old days. The basic package for Goldman, Morgan Stan, Smith Barney et al when I got out of college was $35k base, $5k signing bonus, and year end bonus was typically around $30k or so I believe. I remember there being a huge protest action on the part of analysts to get the banks to bump the base salaries to $50k. Heck, McKinsey was paying $38k base I believe with $5k signing bonus.
Morgan Stanley used to brag in their recruiting brochures about analysts working 100 hours per week in M&A. Cute little picture of Joe Analyst, his name, undergrad school, and then how many hours he worked per week. Dead serious.
High $50s gets you a decent selection of undergrads from U of C and Northwestern these days.
I recall bases went to 50k circa the dot-com mania 99/00 cycle.
That sub-40k base analyst class was the last of the true Gen X’ers on Wall Street. They worked hard for decent pay and were just happy to be able to lay claim to the Gordon Gecko-esque career path and not get yelled at too much.
They were succeeded by kids who grew up getting a trophy from their overzealous parents just for showing up to the game. Soccer-mom raised, they wanted their “opinions” to be heard and respected. Unheard of crap like 360 feedback emerged in the workplace.
Gen-Y is probably the same group that keeps LP condo values where they are today.
“High $50s gets you a decent selection of undergrads from U of C and Northwestern these days.”
How about: any job gets you a decent selection of undergrads from any school this days?
MBAs too — the hotshots who parachuted out in 2008 are back groveling for their crappy jobs they eschewed not 18 months ago…
Yeah I just now realized that I was mistook for “100k+ grads a year” meaning salary, not volume.
I bought a 1br here. I overpaid, and I knew it. I’ve been regretting this purchase for a few years, but hey, I was SOLD on the price guarantee. And I can tell you that there was no one who said the words “at the time of closing.” It was always a straight up price guarantee. I am new to home buying, but I’m wondering if we the buyers have any legal rights in this situation? Can we go after Belgravia in a class-action suit for the value lost (that was guaranteed?) Any lawyers out there willing to give someone some advice? I’ve been sick over this. It’s so wrong what they did.
“Any lawyers out there willing to give someone some advice”
HD, JMM, Anon
can you guys chime in and help a brother out. (im curious as what this owner can do, i see it has no recourse)
If it isn’t in writing, it doesn’t exist. Start by looking through all your paperwork.
I’m an ex-lawyer and familiar with the general terms of the 565 price guarantees by virtue of the fact that Belgravia advertises with us and I’ve previously reported on the guarantee. The guarantees were in writing and made part of the contract.
Regretful Owner can find out what his rights are by reviewing his contract and consulting his attorney if he doesn’t fully understand it.
If my recollection is correct the guarantee was to the effect that Belgravia would not sell a comparable unit at less than the contract price at any time prior to the closing of the unit that was the subject of the guarantee. If prices were reduced prior to the closing the purchaser would get the benefit of the lower price. The guarantee, by its terms, had no effect after closing.
On a separate note, Belgravia is reporting that it signed 13 contracts at 565 Quincy in the past week. I was at the property over the weekend and sales office traffic was heavy.
“I recall bases went to 50k circa the dot-com mania 99/00 cycle.”
55k or 60k actually. Lets not forget those analyst bonuses which paid for more than a couple b-school tuition bills.
“Gen-Y is probably the same group that keeps LP condo values where they are today.”
At the low end surely. At the higher end its corporate transplants. Seriously. Just today I heard of someone wanting to talk to another corp transplant about “Lincoln Park”. They hear about it from some HR or Relo Agent flooze and the tradition continues. I’m fine with that actually–I don’t want them invading my hood en masse. Next thing you know they’ll be complaining about the noise from the bars, etc.
Regretful owner again….
I’ve spoken with my lawyer who helped me with the closing and looked through my paperwork, but I was a very early buyer and I just don’t have anything in writing to combat against the guarantee. It was all verbal to me, which I know means nothing when you come down to it. When I bought, there was no sign the market was slowing down. From everyone I’ve spoken to about this, “I’m screwed.” So much for wanting to buy a bigger place in the next 6 months. Excuse my french but fuck Belgravia.
Not to be a dick, but this isn’t really their fault. The only person you have to blame is yourself for not fully understanding something as important as that price guarantee. Which isn’t to absolve them of any “blame” whatsoever, but expecting them to honor a verbal agreement for some indefinite time period is quite a stretch.
I have to second Barry… you have to read the language in your contract. Whats more, I’m sure they wanted to keep at the same prices, but they had to face reality–if they don’t sell the rest of the units in your building, your unit is worth Nothing. Selling in 6 months is certainly not a good idea.
Regret: You may want to consider walking away depending on whether you have a second mortgage and how large your down payment was, and what other sorts of assets you have. I guarantee you won’t be the first or the last of the early buyers to head for the exit. Just as a side note, how much is your monthly PITI (principal interest taxes and insurance)?
When you think about it, there’s no way a developer can guarantee a minimum price in a falling market. No developer really wants to reduce prices, but the market will force their hand. The alternative is to have lots of unsold units remaining on the market overpriced to the comps, which doesn’t help anyone.
homedelete, how does he walk away? he owns the place. Plus- belgravia is a sophisticated player… I doubt they make it easy to walk away (even if regret hadn’t closed). If you really need more space, rent your place, and then find another rental with more space for yourself.
1) “how does he walk away?”
– He packs up his belongings and leaves prior to the Sheriff evicting him 18 months from now if he stops paying today.
2) “he owns the place.”
– that’s noting a judicial sale can’t fix
3) “Plus- belgravia is a sophisticated player… I doubt they make it easy to walk away ”
– What does Belgravia care? They got their money from his mortgage lender, that’s why they couldn’t give a rat’s ass and turned around and lowered prices; he owes his mortgage lender and they’ve made it extraordinarily easy to walk away, especially in Cook County
4) (even if regret hadn’t closed).”
– Please read above, he said ‘I’ve spoken with my lawyer who helped me with the closing ‘
5) “If you really need more space, rent your place, and then find another rental with more space for yourself.”
– It’s not about space, it’s about being underwater in a terrible financial decision for years and years to come with little to no prospect of ever being able to recoup your losses. Why continue paying a mortgage 30% higher than your upstairs buyer just because you bought 18 months to early.
The issue is how much he put down, how much is his second mortgage, what sort of asset/job does he have. If there’s no second mortgage he can probably walk away from the mortgage with nothing more than a ding to his credit. If he has a second mortgage like national city, HSBC or Citifinancial, they’ll sue him for non-payment. It’ relatively uncommon but has become more common recently in the last few months.
“gts on January 20th, 2010 at 8:58 am
homedelete, how does he walk away? he owns the place. Plus- belgravia is a sophisticated player… I doubt they make it easy to walk away (even if regret hadn’t closed). If you really need more space, rent your place, and then find another rental with more space for yourself.”
fair enough HD, I personally don’t want a forclosure on my credit report–plenty of employers check credit… but maybe regret doesn’t care. Hopefully he didn’t put 20% down if he wants to go that route…
So, I’ve read all of the convos that occured since the Qunicy price drops… I’m a first time home buyer whose been looking in the city and burbs for almost 2 years now! It’s been 2 years, because there was a brief period when I was supposed to get laid off because of the economy, but I worked my ass off and I was one of the lucky ones who got to stay.
To give a little background… I work downtown off of Michigan Ave and currently live in the burbs (1 1/2 hour commute each way). Like I said, I’ve looked in all around the city and burbs for a while and at different price ranges and different options, e.g., 2br/2bth, 1br/1bth. I even put an offer on a short sale townhome in the burbs, but the seller refused to sign the papers (trying to avoid the whole situation) so I withdrew my offer.
Every place I’ve looked at in the city was either out of my price range, not newer, high assesments, no parking, etc. However, the 1br/1bth at Qunicy SEEMS to me like a good deal, especially since it includes a parking spot. It seems like a good deal cause I’m fairly young, that unit is in my price range and it’s close to my work.
I guess I trying to say, I’ve read all of these post, but haven’t seen any confident answers on whether or not Qunicy would be a good deal for someone in my situation.
You are all the experts…
1) Do you see assements going up after they sell all of the units? If so, how much?
2) How safe is the neighborhood?
3) Everyone has told me it’s hard to resell a 1br/1bth, do you think it would still be hard to sell 4-5 years from now? If so, what about renting, do you think it would be hard to rent a unit there?
4) Soon, my g/f would be moving in with me. Is a 1br/1bth at 765 sq. TOO small for two people?
I guess those are my biggest questions/fears about Qunicy. Again, I’m a first time home buyer, but always do my research before I make a big decision. I appreicate any advice or feedback.
Thanks!
First timer… there is a one bedroom on craigslist in the building w/ parking for $1600. You could rent, see how you like the neighborhood and make a decision after that… since you have never lived in the city may not be the best idea to commit to the neighborhood?
But if you are confident you want to live there, and really think that you can live there for 5 years–it might not be a bad idea. The problem with most one bedrooms is that people don’t stay that long- and 2 people are even less likely to stay a long time. And of course the tax credit sounds good right now…
What is the price of the one bedroom you are looking at?
This building won’t sell out at current pricing. There are 60 units already upside down here and they will create distressed sales for years to come. Toss in that there are several other nearby bldgs in the same situation and there is a glut of rental bldgs in the area. 5 years is not enough time for this bldg to stabilize.
Of couse, the salespeople and shills will tell you to ignore all that as if it doesn’t matter, LOL.
“there is a one bedroom on craigslist in the building w/ parking for $1600. You could rent, see how you like the neighborhood and make a decision after that… since you have never lived in the city may not be the best idea to commit to the neighborhood?”
the best advice yet on Crib Chatter!!!!!!!!!!!! rent or do a month to month lease see if you like it in the building and neighborhood.
gts get your head out of your a$$ this is not the time to buy a one bed, especially given what G says, you can rent for a year or two and save a lot of money over a purchase price.
2 people in a 765 sq ft place is pretty tight. Most people fitting two people into a 765 sq ft place isn’t by their own choice but instead to try and save money.
You’ve obviously got the itch to buy if you’ve been looking for 2 years coming off the crest of the largest bubble the world has ever seen. Please, please please, Turn off HGTV, put down the RE in the trib and stop searching redfin. Rent, focus on life and your gf and rent a one bedroom for a year or two and then reassess the market.
I’m involved in RE in a couple of different ways that’s why I tend to follow it a bit more and yet I don’t have the itch to buy today.
I think this area is much better off than the south loop at this point… of course there are empty units, but way less than in other areas. But I’m a fan of the west loop and live there myself so maybe I’m biased. Of course, RD659 soaked up a good number of the potential buyers for this particular area of the west loop (I consider anything west of the river west loop).
At minimum buy a 2/2, if you can’t afford one, rent. Also rent in different neighborhoods before you buy since every hood is so different you may like one and hate another.
I agree with the 2/2 comment- maybe you and the girlfriend can buy this together- combining your incomes and allowing you to buy a 2/2? That would certainly help you to stay longer. You can always work out percentage of ownership if the down payment would be all yours.
Sometimes you have to stretch to reach that falling knife.
I wouldn’t reccomend buying a place based upon 2 incomes with anyone but a ‘wife’
C’mon, Sonies. What gal doesn’t want to plan for the breakup?
Anyone that buys a house with a girlfriend/boyfriend that they can’t afford by themself is a dumbass
Sonies for the first time ever I agree with you! Buying a condo with the lucky gal you’re shacking up with usually doesn’t end well.
“Sometimes you have to stretch to reach that falling knife”
GOOD STUFF G 🙂
I will stand buy my insane opinion that 1br apartments are TO RENT not to buy.
Thanks for all of the advice thus far!
GTS: The price is listed around $240k, which includes a parking spot. I guess I’m drawn to this particular place because of the parking spot and finishes on the unit. I’ve looked for a long time and have not come across a place with those high quality finishes, e.g., wood work, applicances, etc.
homedelete: I do have the itch to buy! I’ve been looking with a great/pateient realator for 2 years and I’ve thought about renting also, but I guess I just want to actually own something for a change, since I have the money for a 20% downpayment, ya know?
Because of my work/life style (working 50-60 hour weeks), I wouldn’t be spending a whole lot of time in the unit, just a few hours at night and sleeping – at least that’s how I’m trying justify the small living space. Plus, the Q room seems like a good escape if I need to get out.
GTS: I can’t afford a 2/2 that includes a parking space. Again, all of the units I can afford, it’s an additional $35k for a parking space. I need a parking space, because of resale and my g/f works in Bolingbrook, so she would have to drive.
It would be great if my g/f could pitch in for a 2/2, but her money is tied up paying off student loans. Plus, she’s a teacher and it’s possible that a few teachers at her school might get laid off later this summer, but then get rehired back on a few weeks… idk that’s messed up!
So, it sounds like the worst that could happen is the value of the unit could still go down and I’d be stuck with this place 3-5 years from now, not being able to sell it for the same or more than $240k or rent it for $1,600 +, is that correct?
Oh, I also forgot to mention that I’ve been wanting to move downtown for a while and my g/f of 5 years hated the idea of living DT (She’s a suburan girl, plus her communte to bolingbrook), but she absolutley feel in love with this place. She also hates the idea of renting
Now, I know I’m going to get some flack from some of you, but my g/f is the one, not just a girl that I will be with for a couple year… this is the only unit that my g/f and I actually agree on. I guess, now will be my last chance to live downtown for a few years, before moving to the burbs and startin a family, at least that’s the plan.
So, that’s another reason why I’m really considering Qunicy – b/c my g/f and I finally agree on a place DT.
first timer,
if your girl is a teacher and you plan on getting married, wait till you get married and get the teacher home buying help thing.
disregard what i said i realized she is a teacher in boilingbrook not CPS.
“I guess, now will be my last chance to live downtown for a few years, before moving to the burbs and startin a family, at least that’s the plan”
dooooode bad plan if your going to buy and stay a few years….bad plan!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
First Timer: sounds like a great time for you and your gf – mired in student loan debt, possible layoffs, want to spend little time in the biggest purchase of your life and not income for a 2 bed with a parking space!
Thank you for catching this falling knife! Future buyers will thank you for setting lower priced comps on the way! You can always rent out the unit and lose money or just walk away! I’ll nominate you for a Nobel Prize!
So the gf doesn’t actually want to live in the city but likes the place, and you only plan on living there a few years before cashing in your chips and heading out to Plainfield?
Just rent. I give it a matter of weeks/months before she complains about that commute (which is a dooooooooooozy) and makes you regret the decision.
I forgot to mention that your gf will LOVE the rush hour commutes to and from Bollingbrook. You must qualify as the smartest most sophisticated buyer ever. Awesome. She’ll definitely marry you now.
Why stop at one unit? Why not buy 2 or 3? Like they say about children, the more the merrier!
dooooooode again i need to say bad plan!!!!!!!!!!! if you are to buy a 1br and resell 2-3 years later?
take the money you would spend on your monthly mortgage, rent a place with a kick azz view for 2 years take your down payment money invest 1/2 and the other half blow on “downtown” fun with your G/F.
I don’t know how easy your 20% dp was to save, but your “worst case” does not seem to ackowledge that the money will not be available to move on in 3-5 years.
Like I said, there are already 60 FBs in this bldg, many of whom will represent distressed sales in your timeframe. The bldg will not stabilize in that time. Considering mortgage costs and transaction fees, you will be 7% in the hole the day you buy it. Poof, there goes 1/3 of your dp.
I don’t know… you are looking at the same monthly payment… ($1600) with everything… Mortgage $1030, assestments $219 +$45 for parking (according to Rednfin); 1.5% taxes $300. Plus you can deduct your taxes and mortgage interest. If you guys really think you can sit for 5 years… I think there are advantages.
do you hear that faint echo of maniacal laughter in the background; its G counting your tears of future re misery
even for bears these guys are telling like it is; 5 year min. for a condo cause of assessments, excess inventory, and general pessimism. Try the commute and the neighborhood for a few months.
Seriously ‘First Timer’ you are making a HUGE mistake if you go forward with this plan…
YOU THINK WRONG. THERE ARE NO ADVANTAGES. HAS THAT EVER CROSSED YOUR MIND??? HAHAHAHAHAHAHAHAHHAA
“If you guys really think you can sit for 5 years… I think there are advantages.”
Of course, I still think you should rent in the neighborhood before you commit to live there for 5.
First timer,
You have not done enough reading on cribchatter! Your circumstances are classic for a short sale/foreclosure in the making. And you might lose your girlfriend in the process (not a city girl, looooong commute).
http://cribchatter.com/?p=8123
Here go rent this for a year (or any of a number of similar properties)
there is nothing wrong with buying a place to live, but buying with the intention of moving in 2-3 years is a recipe for hurt unless you are well informed or have some good cash reserves.
Rachel points out all your ingredients lead to a FC or BK. not saying it will happen to you but she is correct that it has been the recipe for whats going on.
i say rent, only because you are planning doing the flee back to the burbs so soon.
I agree with Grove… ‘nothing wrong with buying a place to live.’ Plenty of people buy starter homes, but I would not buy anywhere that I wouldn’t live for at least 5 years- hopefully longer.
homedelete will never tell you to buy–which is totally fine. Not everyone who owns a condo is a moron though, there are good financially sound reasons to do so… don’t try to time the market, just determine when you are ready and have found the right place that is well built and has the finishes you want…and a payment that you are 100% comfortable with.
I will be surprised if first timer doesnt buy. he wants it bad, logic be damned, and a smooth talking salesman will get him. 20 bucks says he does it, any takers?
Rent, do not buy.
If you decide to sell within 2-4 years you could lose your entire downpayment. You may not lose it, but the possibility is there. Of course, you could make money too…..but most people here are telling you that you have a higher chance of losing your downpayment than making money.
Hey again,
Thank you so much for the feedback. I know it’s my fault for not looking over the contract closely enough. I trusted them and was in my mid 20’s when I bought and was probably so excited to be making money for the first time in my life I couldn’t wait to buy a place of my own!
The question of my monthly payment came up and if I could walk away with only a ding to my credit. I closed over the summer and pay approx $2100 a month principle and interest. I have a 30yr fixed loan only, excuse my naiveness if I don’t have the terminology completely correct here. I put 10% down. My question is what would happen if I walked away? I have great credit right now, but don’t want to see it drop to a scary level if I walk away.
“they’ve made it extraordinarily easy to walk away, especially in Cook County” and “If there’s no second mortgage he can probably walk away from the mortgage with nothing more than a ding to his credit.” – what do you mean? Has anyone else done this and what has been the result?
Thanks again guys! very very helpful.
Is your attitude best described as ignorance, arrogance or hubris? Do you think that you’re smarter than the real estate market, do you just not care, or do you think you’ll be OK even if everyone suffers major losses?
Regardless of which mindset you have, all three are terrible when purchasing a home.
The only thing I can advise is an overabundance of patience and caution.
There is a right time and a right place to buy in this market. In fact I often point out good deals on this board and I sometimes even post links to good deals.
This however, my fellow poster, is not a good deal, and for you based upon the conditions which you have described, is an especially terrible deal.
But I doubt you listen to anyone about anything so I highly doubt you’ll listen to me.
I have a childhood friend who asked for my advice about RE. I advised him in his particular circumstance NOT to buy. And today he has defaulted on one home, is about to on a second, his income has been reduced, and he’s coming in for his bankruptcy next week.
My college roommate ended up in the same situation as you. They were even engaged when they bought a place together. They stretched to make the payment on a unit they didn’t really want. The eventually broke up, he’s stuck with a crappy condo in an outlier location, he cannot sell because he’s underwater and now his income is reduced. OH did I mention the student loan debt doesn’t help either?
Go ahead, jump into the market. Your relator and mortgage brokers need their commissions. They have underwater mortgages too, you know.
“don’t try to time the market, just determine when you are ready and have found the right place that is well built and has the finishes you want…and a payment that you are 100% comfortable with.”
If you must buy, at least go for the FHA loan with minimum down. That way you don’t limit your options later. When it is time to sell you can then make the decision if you want to pay to sell it or just strategically default.
Revassal, “faint echo?” My laughter is boisterous and front and center, as it has been for years.
I am in full agreement with the calls of “nothing wrong with buying a place to live.” Same with buying anything from a car to a toothbrush, really, as long as you don’t consider it an investment – just an expense.
“Is your attitude best described as ignorance, arrogance or hubris?”
Cognitive dissonance sums those up nicely.
I don’t think First Timer need all this excess ridicule for his opinion. He wants to buy he can go ahead and buy. If the bears (myself included) are right I’m sure it will be nothing to him compared to the financial situation he could potentially wind up in.
And we don’t really know his situation–could be he buys and winds up happily ever after and marries the gal/etc.
That being said Calculated Risk had a chart of Case Shiller recently against both stress test scenarios. It shows housing hasn’t declined nearly as much as either scenario had envisioned. Whether this remains true after the stimulus runs out remains to be seen.
HD you and I agree on more than you think!
G “Revassal, “faint echo?” My laughter is boisterous and front and center, as it has been for years.”
its only faint echo cause I am far away, I am sure people in your office hear you loud and clear.
Alright, alright, alright! I greatly appreciate all of the advice.
A few things I’ve learned from this…
homedelete is brutal! He/she is the Simon Cowell of Cribchatter. You are brutally honest, but I greatly appreciate it. Thanks for all of the advice.
CH: I wouldn’t be surprised either, but after reading all of the advice today, I have a lot to think about and discuss with my g/f and family.
GTS, Barry, and Bob: Thanks for standing up and backing up my opinions and questions! Barry, thanks for your rental suggestion.
Rachel: Thanks for the female perspective and for looking out for my g/f’s best interest.
G: No need to LOL. Give me props for asking questions instead of jumping into a purchase. Note: I have not purchased a home yet, b/c I knew it wasn;t the right time to buy.
I guess like most first timers I would like to buy a place in time for the tax credit, but if it’s too risky… it’s not worth the $8k.
HomeDelete: Since Simon is leaving Idol next year, I think they will have an opening….
I dont quite understand your resistance to renting. you could find a nicer place to rent for what you’ll be paying a month to buy on quincy. Lots of really nice condos up for rent.
maybe they have dogs or something? hard to find a good deal on rent if you’re a dog owner
just to rile up the natives “I dont quite understand your resistance to renting. “
he was so nice about it , dogs is more likely
“Note: I have not purchased a home yet, b/c I knew it wasn;t the right time to buy. ”
I assume you mean due to the market and not personal circumstances. In that case, what has changed? Oh, I see, you think dough4dumps is a good thing when it is really just a baited hook from the govt intended to get you to personally contribute to the bankers’ bailout plan. Same with MBS purchases to lower interest rates. Many young people are falling for it, too. That’s odd to me since the youngsters have the most to lose in seeing housing prices remain at artificially high levels.
Perhaps you should consider what the direct banker bailouts will cost you in future taxes before you decide to contribute more?
First timer,
I really dont want you dropping 40k on a down payment and then stretching to fill $2000 a month (principal, interest, association fee, insurance, taxes). i understand the need to buy to feel grown up (i did that myself) and i understand the need to live downtown (i am waiting for a cheap in-town rental @ OMP).
Just to give you a perspective, when we bought our HOUSE we bought way below our means, planned to stay for about 7-10 years, kept in mind my wife and i could “grow into” the place if we didnt want to move or couldnt so we picked a place that would allow that. i also didnt want my monthly nut to hinder “having fun”. my monthly nut is LOW, if i were to get laid off right now unemployment would be able to cover the mortgage utility bills and food. (we also dropped more than the standard 20% on the DP.)
“I guess like most first timers I would like to buy a place in time for the tax credit, but if it’s too risky… it’s not worth the $8k.”
I think that when the 8k goes away price listings will adjust accordingly.
i wish you luck and hope you take all of these crib chatter opinions as just that opinions, to help to decide what YOU would like to do (may that decision be renting)
I reread my above post and notice how i talked about “we” and “our” when picking the house but when it came to paying for it i went to “i” and “my”
First time,
I wish you luck, keep us informed on how it goes. feedback can help other first timers!!!
First Timer: Thanks for your carefully thought out questions. You are not alone in your dilemma about buying versus renting.
But I concur with many others here. You still get the finishes and the location if you rent. Heck, the landlord will probably be willing to sell you the place in a year (or the developer will do the same) if you still believe that it’s really your dream place and you’re going to continue living there for another 4 to 5 years.
Take it from someone who also rents a condo- no one in the building knows you’re not an owner. And yes- I’ve even painted the walls just as if I owned it.
Please do let us know how things turn out. And good luck.
Regretful owner. Do you have a one bed or a two? Your monthly payment at 2100 is a bit higher than what others in the bjuilding will pay. Since you have a 90pc 1st mortgage and no second you could walk away and suffer nothing more than a severe hit to your credit and the loss of your down payment, which is really a non-issue because you’ve already lost. It anyways with the price reduction. The ? Is how long do you want to stay there as an underwater owner? Its going to be a longtime and you may have to bring money to the table to sell. If you stratigically default you could get easily a year or 18 months mortgage free. However, always pay your assessments bc the association will evict you in a matter of monthd if you stop payimg those too.
“So much for wanting to buy a bigger place in the next 6 months. Excuse my french but fuck Belgravia.”
Above it looks like you’re just placing blame. Especially given you are already looking at a bigger place. Its common knowledge, but one that was forgot in the bubble, that owning isn’t for short time horizons like under five years. Even these days planning on owning for seven years or longer could even run into problems when its time to sell.
“I know it’s my fault for not looking over the contract closely enough. I trusted them and was in my mid 20’s when I bought and was probably so excited to be making money for the first time in my life I couldn’t wait to buy a place of my own”
This sounds closer to reality. You can walk from the mortgage but take advantage of the free living for as long as possible and save up a large amount of that as a deposit to a landlord if you go this route. Most are forgiving of bad credit profiles if you show them a lot of cash up front in the form of prepaid rent and/or an outsized security deposit. You won’t be able to own again likely for around seven years from the date of foreclosure is my understanding.
Can someone tell me what it’s like to live in the near north neighborhoods? Like what kinds of things make it so great to live there?
I have the time and cost of my work commute to think of (in loop), and getting groceries. I do pretty much all of my other shopping online. I’m kinda cheap\poor, I don’t think it’s worth going out to restaurants more than once a week or so. Trying to figure out if I should bother looking there. I’m from a pretty rural area so I don’t know if there are some other great benefits I’m not thinking of or something 😛
Most of the benefit of living in the RN area is in local entertainment options and quick commute to work/play downtown and entertainment in LP/LV/other northside neighborhoods. If that isn’t your bag, it’s really not worth paying the big premium.
Alex, find a place near carols on clark and leland. though I believe they’ve raised the price of a bottle of busch substantially, it still has more of a rural feel than just about anywhere on the n side.
Regretful, what is your job situation? consider that before you make this choice. If you plan on moving jobs, credit checks are commmon–and you don’t want to put yourself at that disadvantage. I disagree with some advice on this forum that this is the best option- while its necessary for some people be very careful before walking away. You put 10% down- they discounted 15-30%… what unit do you have? do you know what its on the marked for now?
Commute does not seem any faster than south loop, west loop, or of course IN the loop. It seems like it’s only a few minutes faster than living near a metra station in the not-too-far ‘burbs.
So that leaves the entertainment, right? Bars, restaurants, concerts, and theater… am I leaving anything out? I would love to go to these things more but I just can’t justify the prices. Are there any good cheap kinds of entertainment here?
I feel like I’m still missing something, because even with entertainment it seems like the loop would be the best choice – you can take an L directly to whatever neighborhood you want without transfers.
“Regretful, what is your job situation? consider that before you make this choice. If you plan on moving jobs, credit checks are commmon”
Hell, depending upon his job, he might have problems keeping it if he willfully defaults and the boss discovers this.
agreed anon- I just think its very risky over an anonymous forum to give this type of advise without knowing everything about a persons situation.
Regretful, my thought would be take what is said on here lightly, and talk to someone you trust who is experienced in these matters and who you can disclose all of the facts too…
And I know I will get a lot of *feedback* for this, but there are plenty of people who walked away in previous downturns who now regret it…
“agreed anon- I just think its very risky over an anonymous forum to give this type of advise without knowing everything about a persons situation.”
I think it’s infinitely riskier to take anonymous advice over the internet without doing your homework. Which isn’t to disparage anything specifically said here or the experience/intelligence of the posters, but you never know when someone has a hidden agenda, writes eloquently but doesn’t know jack about squat or is just plain trolling you for kicks.
“Why are you walking away from your mortgage?”
“Oh, some armchair economists on the internet told me to.”
I don’t think they regret walking, they regret buying in the first place. But of course, talk to a lawyer. Nobody in their right mind should walk because ‘homedelete on cribchatter told me it was ok’. I will say that walking away is the best situation over half the time, and if there is only a 1st mortgage and you’re underwater, deep underwater, its best probably 80-90pc of the time.
Thank you everyone for your insight. I’m a pretty conservative person when it comes to finances, so I don’t think walking away will be in my future. I’m too scared to ruin my credit which is over 700 right now. I may rent out the place for as much as I can and for a few more years, then decide what to do. Thanks again everyone, I really appreciate it!
LOL. There is a growing number of bosses joining me in thinking that if you made a purchase like this you won’t get/keep the job.
Who wants debt zombies around? I guess some jobs value sheeple, but not mine.
Alex, the best part about RN is the accessibility to go anywhere in the city quickly. My commute to work is a 5-10 minute bus ride or 15-20 minute walk.
Visiting friends out in Wicker park at Divison/Damen is a 10 minute cab ride. Same with lincoln park, South Loop, and Old town is close by. Getting up to rogers park is a pain for anyone, but I am close enough to the El that its not a big deal.
There is tons of buses, shopping, entertainment is just a short walk away. You can walk to the mag mile, michigan ave, Viagra triangle, Lakeshore path, oak street beach, navy pier, millenium park, the loop, the metra, oh and you need to drive you’re right near the I-94 feeder to pretty much get to anything quickly.
I haven’t had a car for 5 years and wouldn’t trade my current location for pretty much anywhere in the city. Only disadvantage to the building im in is the El noise, but you barely notice it after a while.
I’ve never had my credit score pulled for a job and I don’t think my insurance company pulls my credit either. I only need a good credit score – in case I want to obtain more credit.
Which I don’t, thank you very much.
“Regretful Owner on February 1st, 2010 at 8:41 am
Thank you everyone for your insight. I’m a pretty conservative person when it comes to finances, so I don’t think walking away will be in my future. I’m too scared to ruin my credit which is over 700 right now. I may rent out the place for as much as I can and for a few more years, then decide what to do. Thanks again everyone, I really appreciate it!”
HD if you want to work in the financial industry, I’m pretty sure they check your credit to make sure you aren’t a deadbeat.
At least we don’t get drug tested 8)
Yeah, I realize that. i’ve also never taken a drug test either and virtually everyone I know has taken one at one point or another. It’s like the rules don’t apply to the guys enforcing the rules.
“#Sonies on February 1st, 2010 at 10:10 am
HD if you want to work in the financial industry, I’m pretty sure they check your credit to make sure you aren’t a deadbeat.
At least we don’t get drug tested 8)
My employer ran my credit report and drug tested, so you can get both 😉
I would like everyone to read the following from Joe Zekas, a shill for Belgravia, before considering the reality of the numbers below. This was his response to my comment that he shilled for Belgravia and even subsidized their advertising through his money-losing website in order to get them some suckers.
His boastful response:
“The grown-ups listen to everyone they perceive as being worth listening to and then make their decisions, recognizing that sometimes their decisions take them off a cliff. I can’t make them do anything. Developers and real estate agents can’t make them do anything. But at least they pay attention to us because we know things they want to learn.”
Now, for the numbers.
565 Quincy has 18 units on floors 5-7 (the “loft” units) and 17 units on floors 8-18 (the “tower” units) for a total of 241 units. The tiers are identical within these two divisions. Public records indicate 69 units closed to date. No PINs or mention of any parking are included in public records yet. However, it is likely that many of these sales included parking and some might have 2 spaces (although zero deeds to date included pkg.)
On to the tiers of tears:
514 now asking $338,320 w/pkg
614 closed 4/15/2009 $436,611 mortgage $391,149
1401 now asking $237,750 w/pkg
1501 now asking $239,250 w/pkg
801 closed 10/30/2009 $285,500 mortgage $256,824
901 closed 10/22/2009 $287,000 mortgage $258,300
1101 closed 10/16/2009 $278,500 mortgage $250,561
1407 now asking $342,900 w/pkg
807 closed 7/27/2009 $404,500 mortgage $363,672
907 closed 6/30/2009 $425,500 mortgage $382,722
1007 closed 6/12/2009 $415,500 mortgage $394,706
1107 closed 8/27/2009 $421,500 mortgage $379,167
1207 closed 10/5/2009 $430,500 mortgage $344,255
1607 closed 12/11/2009 $438,500 mortgage $250,000
If anyone wants to see more tiers let me know.
The mls indicates there are currently 7 pending sales and 6 new contracts. That leaves around 159 unsold units. You can judge if that confirms my statement way upthread that this bldg will not sell out at the new prices and will not stabilize for many years to come.
Everything lost value… I am confused as to why people remain shocked that a new construction building, where people signed contracts in 2007/2008 would be any different. Joe Blow’s condo down the street, that he bought in 2004 is worth 15% less than it was worth in 2007.
G- what was your prediction for RD 659? Did you predict the pace of sales for that building, because I think they are doing pretty well.
From the RD 659 post:
matt on February 5th, 2010 at 2:10 pm
just received word from the agent who sold me my unit that there is one unit left for sale … a 2bed / 2bath facing south.
G, I seem to remember you being pretty pessimistic about this building as well?
Part of the problem isn’t selling all of the units at the reduced prices from the developer. It’s what do you do with the 60 or more (depending on the building) owners who bought at the pre-reduction prices?
They will be, for lack of a better term, “vetroed.” (I guess that’s a new verb now.)
Which means- as is happening in the South Loop’s Vetro at 611 S. Wells- those who were original owners- if they want to sell- they almost have to do a short sale since the “new” prices are 25% to 40% less than what they paid (or else they’re going to lose a tremendous amount of money if they actually have enough equity to sell.)
That means the building will ultimately see quite a few short sales/foreclosures unless the original owners end up staying put a long, long time.
Some perspective on real estate losses, from an old friend who died recently:
http://www.youtube.com/watch?v=UQzs33KIHKs
“G- what was your prediction for RD 659?”
There was a discussion here prior to the start of closings where I said it was foolish not to forfeit 5% earnest money since big price cts were inevitable.
After the cuts, I also predicted that buying at the new prices would be knife catching. We’ll see how that works out in the coming years, but given my track record in calling this correction, you shouldn’t bet against it.
G,
Sorry to have to inform you that there continues to be a world out there.
As of today 565 Quincy has sold 49 units since the price reductions were announced.
What’s the point Joe?
Anyone here could tell you that if these high rise developers cut their prices by 30%, 40% or in some cases 50%- they’ll get sales.
It’s happened in every single building that has cut prices.
So?
All the buyers who bought previous to the price cuts have been vetroed and that means bad things in the next few years for those unit owners (and, most likely, those buildings.)
The point, Sabrina, is that sales differ from what G was claiming to be fact just several days ago. And from what other commenters confidently predicted would happen here.
Don’t you want your readers to have accurate info? Or to understand that what’s said on CC doesn’t often reflect how most buyers behave?
The second point is that 565’s price cuts, wich were not as steep as you suggest in your comment, have resulted in very rapid sales. That hasn’t happened in every building that has cut prices by 15 to 30%. Or in every building with even steeper cuts.
A third point is that what anyone here could tell me or other readers is, in my view, generally based on suppositions, speculations and wishes. People would rather have facts and experience.
Finally, the developer’s track record matters a great deal in the ultimate success of a building. Belgravia has a stellar record.
The only experience I’ve had with Belgravia is when they attended a neighborhood group meeting for their Via Como townhomes (where the old Como Inn used to be). I can’t recall exactly, but they were asking for some variance or zoning change (that’s why they were in front of the neighborhood group).
The Belgravia employee, isn’t wasn’t Ruttenberg or Lev, a curly haired guy, said that they were going to keep the Italiante style building at the corner of Ohio and Ogden, as a condition of getting the neighborhood approval. I remember this specifically.
Guess what?
It was demolished. They put in a small brick condo building where today a hair salon occupies the ground floor. I feel that they flat out lied at that meeting.
joe loses again!
Dan,
No one with any sense of personal decency hides behind the mask of anonymity and accuses a reputble business of lying.
” Or to understand that what’s said on CC doesn’t often reflect how most buyers behave?”
Which is a real shame because we probably wouldn’t be in this mess if it was the opposite
The sign says:
DON’T FEED THE TROLL
Ahhh yes, the all knowing crib chatter anonymous contributers with all of the real estate and financial planning answers–lets all behave like them!!!
“Ahhh yes, the all knowing crib chatter anonymous contributers with all of the real estate and financial planning answers–lets all behave like them!!!”
No you’re right, everyone should just listen to realtors and buy now before being priced out forever!! and while you’re at it listen to your mortgage broker and get one of those nifty Option ARMS or Alt-A’s because it’s free money and sure you can afford a $500,000 house on your $70,000 salary!!!!!!!!
“As of today 565 Quincy has sold 49 units since the price reductions were announced.”
“Sold?” Are you sure about that? I provided accurate data on the number of closed units. It is shill-speak to call contracts “sold.”
It’s just more dishonesty from Belgravia’s shill.
G,
You were wrong – which makes you furious.
Everyone with half a brain knows these are contracts and that there’s nothing dishonest about what I ireported.
I have a long track record of integrity, making me impervious to cowardly attacks from ignorant anonymous creeps.
DON’T FEED THE TROLL
Since the units being sold at the price cuts now include parking, does anyone have any thoughts or insight into how that aspect may affect the early buyers who did not get a parking spot and also paid more for just the units themselves? Mainly I’m wondering about resale value of the units without parking, even if buyers can wait a few years down the road.
“Everyone with half a brain”
Aha! The shill’s target audience is revealed.
“Mainly I’m wondering about resale value of the units without parking, even if buyers can wait a few years down the road.”
With or without pkg, it doesn’t matter. They will sell at huge losses with sellers bringing money to closing, as bank approved short sales or as foreclosures.
It will serve as proof that those with half a brain should be careful about falling for the lies of shills.
Hey Joe Z,
Look at my main example of greedy developers mucking up neighborhoods. on the way and in my Mother-in-law’s hood you will see a common theme, a developer Sergio & Banks tore down many single family homes and put up 3 and 6 unit condos on the the lots. they are 100% out of place and ruin the feel and look of the surrounding streets and houses. you may ask how did the get it rezoned, well it looks as if Uncle Banks the Alderman in the 36th ward used his “chicago way of doing things” to get it done.
Please see the link for a suntimes view on this story;
http://www.suntimes.com/news/politics/1219769,banks-alderman-112805.article
Joe Z i would really like your take on what i presented. I dont know if it will be biased as they most likely are one of your clients.
Groove77,
Sergio & Banks is a client of recent vintage.
I’ve often expressed my strong disagreement with the Chicago way of zoning. But, until the citizens of Chicago change it, it remains the Chicago way. Nothing in the Sun-Times article demonstrates that anyone has done anything legally improper.
Chicago’s neighborhoods belong to the entire city, not just to their current residents. What’s the beef here – that S&B is building what people want in a place they want to live? That zoning isn’t fixed forever despite changes? That planning bureaucrats don’t alwasys get their way? That someone’s aesthetic senses have been offended?
Flame away, folks.
“What’s the beef here – that S&B is building what people want in a place they want to live?”
Sorry but nobody wanted them, most of the sit vacant or are rented out by S&B. I think few were bought and sec. 8 (i need to look into that before i state as a fact). There is no direct link that anything illegal happened but come f’n on, we are smart people here and can see what really went on.
Go take one of your video tours in a hood graced with these ugly out of place crap boxes. wait you probably wouldnt want to, because its not eye appealing at all and would reflect negatively on your client.
Joe also wouldn’t do a video tour in one of those hoods because he’s probably scared his camera would be stolen by a hoodlum. If he sees more than 2 minorities in the same line of sight, he thinks he’s in the wrong part of town and immediately zooms back to his north shore comfort bubble in his Lexus RX400h.
the sign says:
STOP FEEDING THE TROLL
Sonies,
the hood i speak of is not my own it is Jeff Park and Dunning, which is not bad “hoodlum” wise.
HD,
Sorry for feeding how much is the fine 🙂
sonies,
“he thinks he’s in the wrong part of town and immediately zooms back to his north shore comfort bubble in his Lexus RX400h.”
LOL good stuff
Sonies,
No matter how often I encounter the fact-averse preening here, it’s still a bit of a shock.
It doesn’t take much to discover that I’ve shot video and photos in virtually every neighborhood in Chicago. Spent lots of time over many years in many neighborhoods where you folks so confidently say I wouldn’t venture.
It’s easy to make stuff up – but most people are ashamed of doing that.
“It’s easy to make stuff up – but most people are ashamed of doing that.”
Its even easier to be a jerkass, lets use you as exhibit A.
Joe Z,
Just to add to the “whats the beef” builders build what people want and where comment you made.
It just proves that they are greedy and OVER BUILD. Just look at all the condo inventory. As per stats off Gary L’s website and VW’s streeterville website, plus G and his mastery of the MLS and internet.
if builders built to demand, as you say, then even if the bubbley bursty the wouldndt have so much inventory out there and wouldnt need to pull a vetro.
Sonies,
As usual you made a statement that had no basis in fact, when a moment’s checking would have told you tht. When you’re called out on it you simply resort to name-calling.
Groove77,
Are you really as naive and out-of-touch with the realities of business as you appear to be? Do you truly believe that developers knowingly overbuilt to the extent they did?
As to G’s purported mastery of the MLS – if so, how come G doesn’t seem to know the proper codes to search to determine what’s under contract at 565, per his misstatements above? Are you suggesting that G has mastered the MLS and deliberately misreported, as he did?
homedelete,
Do your thing again. Go on kidding yourself that this isn’t about how your knowledge doesn’t match your pretensions.
They overbuilt because RE development is a long-cycle business. When planning units coming online in 2007-2010 it was back in 2004/2005.
They are to blame in that they kept ramping up development plans never even anticipating there could even be a downturn. They were too busy making $ during the boom to think about that.
How many units are coming online in the S Loop these days?
“Do you truly believe that developers knowingly overbuilt to the extent they did?”
Not to the extent it is now, they didnt plan on how bad things got but they still overbuilt when things where good.
Joe my naivety on RE biz is not up for debate as i am not “in the business” as you are. I am a desk jockey in a different industry and I am just saying what i see. i see a duck i will say i see a duck.
Lets stick to my Sergio & Banks Example, They clearly over built cause their crap wasnt selling in 2005, 2006, or 2007 but they kept on buying up SFH and land and turning out out of place crap boxes.
can you tell me in 2007 when things were fine and they could sell the shyt but still kept on going is not OVERBUILDING?
your old age is catching up with you stop by the eye doctor, because you being in the RE biz and all knowing of it but cannot see the crap out there is hilarious to me.
I will say this about G has taught me a lot here and when he has corrected me for being NAIVE he never was a D**K about it.
Joe even w/o you being a grumpy old man, whatever you say is always taken with a grain of salt cause we know where your paycheck comes from and the crap you spout out shows it. it sounds like its coming from a used car salesman trying to make a Geo Metro sound like your lexus 450h.
sorry wrong era for you, *make a horse and buggy with a square wheel sound like a horse and buggy with round wheel.
Groove77,
My old age has taught me to have some humility about whether my taste in architecture matters to anyone else, or matters at all.
This video illustrates the point, and has direct relevance to the market S&B serves:
http://www.youtube.com/watch?v=IA0x4qFAKls
Fair point Joe, beauty eye beholder thing, in the context of tearing down a SFH and building a ugly (to me) SFH.
But they tore down a SFH and put up a three floor/unit condo wear it got rezoned between a row of SFH
Btw that video was rough to watch, was it three Martin lunch for him?
Just one thought- “Under contract” doesn’t mean “sold”- especially in this day and age when mortgages are much harder to come by even in an FHA approved building. G was providing data on what has actually “closed” and what was “pending.” Joe provided data on what “sold.” It’s two different sets of data points.
Joe Zekas would probably defend Barry Kreisler of Matanky too.
Sabrina,
Pending doesn’t represent everything that’s under contract in the MLS. You do know that, don’t you?
If G knows that, he was deliberately misleading. I’m guessing he doesn’t. But now that he’s been called out he can check out what I’m saying and pretend to have known it all along.
Dan,
You got that one wrong too.
All the way back in 1987, in the inaugural issue of a real estate publication I founded, I ran a contest to select the “ugliest townhome in Chicago.” I nominated a Matanky project in the 1900 block of Halsted, wet side of the street. Ugly as hell and, I thought, a blight on the neighborhood. The contest prize: an expensive dinner for two.
My first reader response was a call from Matanky’s attorney, who threatened to sue me unless I printed a retraction and gave them free advertising. I told him to go ahead and sue, in which case I’d print everything I knew about Matanky’s way of doing business. Never heard from him again.
The contest was rigged in my favor: there was no uglier townhome in Chicago and may ot be to this day.
To make my point on G clearer, here’s what he was saying a few days ago in this thread:
“The mls indicates there are currently 7 pending sales and 6 new contracts. That leaves around 159 unsold units. You can judge if that confirms my statement way upthread that this bldg will not sell out at the new prices and will not stabilize for many years to come.”
G’s data was flat-out wrong, and no one here seems to want to take the facts seriously.
there plenty of people with mls access that can confirm the true numbers for both sets of facts.
Joe,
BTW you are doing a good job at keeping this post going and in the spot light for your employer belgravia.
what is going to happen to YoChicago now that building is pretty much at a hault?
will your employers still pay you to spew out rhetoric to help promote the unsold units?
oops i sorry i was going of G’s wrong data, there are no more unsold units.
so what happens next?
Joe Zekas wrote: “As to G’s purported mastery of the MLS – if so, how come G doesn’t seem to know the proper codes to search to determine what’s under contract at 565, per his misstatements above? Are you suggesting that G has mastered the MLS and deliberately misreported, as he did?”
Joe Zekas wrote: “G’s data was flat-out wrong, and no one here seems to want to take the facts seriously.”
The shill-puppet might want to follow the hand shoved up his a$$ for the answer to his problem. It will lead to Alan Lev, Belgravia President and the listing agent for 565 in the mls. Apparently, Mr. Lev doesn’t know which mls buttons to push in order to reflect his shill-puppet’s claim of 49 contracts since the price reductions.
I stand by my reporting of the mls data. Even today it still reflects only 10 contracts signed since 1/1/10 (units 1415, 1106, 1104, 1109, 817, 812, 515, 1004 & 1503.) Heck, there are only 31 active mls listings in the building, including the 6 with contingent contracts (first 6 listed above.)
We all know there are more available units and I don’t doubt that there are more contracts signed. This is the game developers always play with the mls with their listing and contract numbers, oops, I mean “sold” numbers, lol. This allows their sales staff to play loose with the facts based on what hook they need to land a mark. Remember, “coffee is for closers.”
Joe Zekas must be a liar to insist that the 49 contracts are in the mls and it is only my inability to find them that is in question. Big surprise about that, right? As if the realtards here wouldn’t have jumped at the chance to prove I was incorrect in my reporting of the mls facts.
If he isn’t lying, then he should provide the mls numbers, lol. He claims to be all-knowing while ridiculing others so this is a perfect chance to school me. I would welcome actually learning something from him other than his inclinations to bloviate and deceive. I would certainly welcome finding more accurate data in the mls from developers. I have learned a lot here and share a lot of data to increase understanding. I am always eager to learn more.
Are there any places within 1 mile of the loop that wouldn’t be a horrible knife-catching purchase in the next couple of months?
Alex,
A great thing about high rise condo (or many unit condos) is you can easily find a rental in a building an “test out” to see if you like the place. talk to your neighbors and get their opinions and see the building management in action.
if you like it there buy it 🙂 i dont feel there is any knife catching when you plan on staying at a place for 7 or more years. (others will disagree).
plus it will be easy to find a underwater specuvestor do a 6 month lease or even a month to month during the test period. You may even be able to buy the unit your renting.
Sorry, I should give more info – I qualify for the $8k and I really… REALLY hate moving. I’m sick of this transient renting lifestyle. I want to get a real sofa, and a nice bed, and a decent tv. Hang some decorations and install some custom fixtures, you know? I can stay where I’m at for another 8 or 9 months, if I have to, but then I’d really like to buy. So I guess my question is really… is there any place within 1 mile of the loop that isn’t going to depreciate 8k in the next 8 or 9 months or should I grit my teeth until then?
Alex,
Question do you plan on staying for the long haul or doing the average 3 years and move?
also dont you think when the 8k goes away listing price may drop by 6-8k?
also if you buy and not rent you will have less money left for a couch, tv, bed, fixtures.
i dont think anyone will be able to “correctly” predict if a place will depreciate 8k in nine months or so. you will get many opinions on it but its just that opinions.
“plus it will be easy to find a underwater specuvestor do a 6 month lease or even a month to month during the test period. You may even be able to buy the unit your renting.”
To date I’ve not heard of any underwater owners offering a lease to own option due to financing difficulties?
“To date I’ve not heard of any underwater owners offering a lease to own option due to financing difficulties?”
never said lease to own, sorry i probably worded it wrong, i was going for the guy renting it is probably looking to sell it too.
Hmm hehe ok, let me word this differently. Sorry, groove, I know you are trying to help and I respect your opinions very highly, but I really want to buy in the next 9 months, at the most. I have my reasons.
Does anyone have any recommendations for the least stupid places to buy within 1 mile of the loop within the next 9 months (taking 8k credit into account)?
“Does anyone have any recommendations for the least stupid places to buy within 1 mile of the loop within the next 9 months (taking 8k credit into account)?”
Here you go:
Alex, your 9 month timeframe will not work with the dough4dumps $8k credit. To qualify, you must have a contract by 4/30/10 and close by 6/30/10. Of course, it might be extended again in our govt’s ongoing attempt to prop up housing prices & Wall St while wrecking the economy.
Alex,
Let me ask you a couple questions.
1.Are you buying thinking that you will make a quick profit in the next couple years?
2.Are you buying because of the 8k credit?
3.Are you planning on moving in the next 7 years?
4.Will you be getting married in the next 7 years?
If you answered yes to any of the above questions you will probably be better off renting for now.
Alex,
What are you exactly looking for? If i was looking for a condo in the loop i like the metropolitan for the park/lake views and the historical significance. or six north michigan for the wards signif. but thats just me.
I am still waitng for one museum park rents to drop (but thats just to rent for a year)
I had a guy who i played ball with that was i think closing on a unit at 8 monroe which he found the HOA to be sound.
2** E pearson was going for $260 SqFt i think recently
but i dont know if anyone can help guide you to a building without the basic “what your looking for” info. the within a mile form the loop is just to large of a scope.
G,
Having no integrity of your own you find it easy to assail people who have integrity and value it highly.
You want to call me a liar by claiming I’ve said something I haven’t. I said Belgravia has signed 49 contracts since the price reductions, and I stand by that, since the information comes from people with a long track record of honesty and fair dealing.
You made very confident predictions about the fate of 565 based on what may or may not have been a complete search of all relevant MLS codes and purported to represent that what you found reflected sales to date. Now you concede that there are more contracts signed but don’t re-examine your conclusions and have no basis on which to contest the numbers I’ve reported.
You attribute dishonest motives and habits to honorable people like Belgravia’s staff. You’ve never indicated that you have any basis for making that statement – other than your ignorant assumptions about people in the real estate industry.
You claim you want to learn but everything you say shows a systematic inability to learn anything that doesn’t reinforce your prejudices. Come to my office some time, G, or I’ll come to yours, and I’ll give you an education. We’ll do it on camera so people can assess which one of us knows something and which doesn’t; and which one of us is honest and which a pretentious fool.
It’s easy for gutless unprincipled anonymice like yourself to do what you do. Just as it’s easy for people like me to know how pathetic your life has to be for you to do it.
People who are relatively new to CribChatter should wonder about the quality of advice they get in a place that tolerates – even encourages – baseless attacks on honest people who supply accurate information. The regulars here should ask themselves what kind of people they are when they pile on in that kind of attack or are simply bystanders to it.
I see rookie buyers here looking for solid advice. After many years in this business the best advice I can give is to look to a developer’s track record and talk to their previous buyers. If you do that you’re going to learn that Belgravia is one of the very finest builders anywhere. Only a stone idiot treats all developers as being the same and suggesting they’re all bad.
You can now cry “shill” all you want, but it just highlights how little you know about how businesses really operate. If you know anything contrary to what I’ve said, put your name and credibility on the line and say it.
Alex, with your DP burning a hole in your pocket, you want to get in touch with JZ immediately. His evident rectitude and his numerous honorable business associates will definitely help you avoid making a terrible financial decision early on in your earning career.
And if it doesn’t work out, and you lose everything, Youtube is still free–you can go there and watch videos of deceased realtors reminding us that real estate losses aren’t that important and your dog still loves you. After all, you’re a grownup, you shoulda known what you were getting into.
anonymous,
You even need to trivialize and distort the words of a dead man?
http://www.youtube.com/watch?v=UQzs33KIHKs
“Sorry, I should give more info – I qualify for the $8k and I really… REALLY hate moving. I’m sick of this transient renting lifestyle. I want to get a real sofa, and a nice bed, and a decent tv. Hang some decorations and install some custom fixtures, you know? I can stay where I’m at for another 8 or 9 months, if I have to, but then I’d really like to buy. So I guess my question is really… is there any place within 1 mile of the loop that isn’t going to depreciate 8k in the next 8 or 9 months or should I grit my teeth until then?”
Alex: Not sure I understand why you’re going to make one of the biggest purchases of your life simply so you can get a “real sofa” and install some custom fixtures.
I also don’t understand why you say you have to keep moving simply because you’re a renter.
I’ve been renting the same condo for the last four years (and could probably be here 10 years if I so desired.) My landlord had no problem with me painting the walls, hanging decorations or changing out fixtures (with much better ones, I might add.) Yes- I’m not tearing down walls or anything but most of the desires you seem to attribute to buying can also be found renting.
Go to apartmenttherapy.com. Look around at the house tours and how many of those people are actually renters because a lot of them are. See how nice their apartments are. Then ask yourself if you’ll live in the property you want to buy for 7 to 10 years. If not- as someone else suggested- keep renting. Just find yourself a long term rental.
And go buy yourself a good sofa after you do so.
Barry, did you mean to leave that blank? Are you saying you think all places near the loop are equally stupid to buy? -_-
G, I was particularly hoping to hear from you. I know about the timeline for the 8k, I was saying I can wait up to 9 months, but am able to close and move sooner (and would prefer to).
I basically want to make the least financially stupid move I can that ends up with me owning a place within 9 months.
valasko, FYI – I answered no to the first 3 and maybe to the 4th. I don’t think there will be kids in that timeframe, in any case.
groove – Thanks for the suggestions. Metropolitan is a little out of budget. Want 2 bd/2 ba. I like this one in 8 monroe, wish the assessments were a little lower but it’s on the short list so far. http://www.redfin.com/IL/Chicago/8-W-Monroe-St-60603/unit-707/home/21495535
I don’t know much about the quality of the construction or the financial stability of any buildings downtown so that is primarily what I was hoping for guidance on.
How would you rate library tower? 350k for 2/2 including parking in a relatively nice college area of downtown looks attractive.
Alex: what is your gross household income? What are your monthly debt payments? What is your credit like? How much down payment do want to put down? How secure is your income? I’m serious, answer these questions for us. It’s all anonymous anyway.
You’re jumping seemingly feet first into a very expensive and over saturated real estate market without even dipping your toe in the water as a rental.
If you *must* buy then do so with a sustainable monthly payment after a 10% or 20% down payment.
I pretty confident that after crunching the numbers every which way that you’ll come out ahead as a renter in the loop area. Prices still have a long way to fall before it’s anywhere near rental par.
I assume you’re probably a pretty young guy and all I can say is this: You didn’t contribute to the bubble, you didn’t make the bubble, you’re just living through the effects of it. You have the rest of your life to buy don’t rush things. You haven’t rushed getting married or having children, no need to rush the largest financial decision of your life.
There are 2/2s that are bank owned listed for about $200,000 (or thereabouts) in 8 W. Monroe. You have to move fast, however, because they go under contract quickly. A lot of investors bought in the building originally.
There also is a big difference in the units, in my opinion, between those on the north side of the building and those on the south (windows, ceilings etc.)
Alex, you need to get yourself a good buyers agent who can tell you what is going on in each of the buildings you’re interested in. You need to look at what has recently sold in the building and for how much. Also- how many owners are paying assessments? Can you even get a loan in the building if there are a bunch of rented units or unsold units or if too many owners are behind in assessments? Most likely not. You may need to pay cash.
Thanks Sabrina – that is a pretty cool website. No, I don’t plan on knocking down any walls, but… 4+ years worth of renting and upgrading fixtures, and you have nothing to show for it once you leave – is that really more practical than buying, even in this market? You sound like you’ve had better luck than me with landlords – I feel like the peace of mind from not having a person like that in my life that I’d constantly have to worry about is worth a lot to me. Maybe I need psychological help for that, I wouldn’t discount it. ;-P
Thanks for your concrerns homedelete. (I love your posts, btw.) I do plan to 1) put 20% down and 2) be able to easily afford the PITI(A) on my own, while at the same time having a roommate to make it even easier. I have been renting for a couple of years in south loop so I’m not totally jumping feet first here, but you are correct that I am younger and RE naive. It seems like the crux of your argument against buying is that house prices still have a long way to fall – I guess I am wondering why this will not have corrected itself within 9 months? All of the factors for the nascent price dropping you give are sound – wont people realise this and drop their prices accordingly sooner rather than later, to avoid having their houses sit on the market for months/years?
Alex,
There are numerous valid points on this thread and just to add a few:
1.) You will be missing out on the $8000 incentive
2.) if I were u, I would use a company like Redfin to buy. They will reward you with 75% of the buyer’s agent fee (wish I had that option when I bought my place) so on a $350k purchase they will give u about $6500 after u close.
3.) You are paying down principal as u pay your mortgage, let’s say it’s $300/month so within one year that’s $3600
4.) Dont know what your income tax bracket is, but the first year I bought, my federal and state tax refund shot up by $3600
So, within one year you are missing out on $8k + $6.5k + $3.6k + 3.6k = $21.2k
That’s over a year and a half worth of rent that wouldve otherwise went down the toilet! Everyone on this site is trying to call the bottom, and let me tell u that it is impossible for anyone to predict the future… Otherwise those people who claim to know the bottom should be billionaires! If I knew the Dow Jones would hit 6500, I wouldve bought a bunch of stocks then and I wouldve have been a millionare by now!! Do whatever feels right! Who knows what’s going to happen when interest rates start edging up?! Renting is always cheaper than buying… People on this site think that RENT MUST EQUAL your Mortgage otherwise the place is overpriced.., not true… Buying costs more … Leasing a car is cheaper than buying a car! If u want to buy, u have to hold it for at least ten years to make a return…It all depends what u want to do with your life… With the difference between renting and buying u could lease a car, travel to Europe, use the money to trade stocks, or blow it all on a black Jack table in Vegas!! It’s all about what YOU want to do with YOUR money! Good luck buddy!
“Everyone on this site is trying to call the bottom, and let me tell u that it is impossible for anyone to predict the future… Otherwise those people who claim to know the bottom should be billionaires!”
Help me out here, Mr. Logic. I know that downtown condo prices have not bottomed. I make no further claims about the future. What is the market play that will make me a billionaire?
Buying a downtown condo today is not a good investment since rents and sale prices continue to decline. Both of these facts will create years of instability in pricing, especially in new bldgs like 565 Quincy and others where many previous buyers have been vetroed.
That being said, I agree with Mr Logic’s last point: spend your money on whatever you want, but know that some of what you pay today for a downtown condo will be spent forever.
How can investing in something that is money losing make yo a billionaire? Duh.
G, homedelete,
You and “Sabrina” and other anonymous, obviously paid shills for the apartment rental industry have a problem. You’re just not very good at what you do, and you come across as shrill, one-note, bitter losers.
What you call “the sheeple” are smarter than you give them credit for. You and your paymasters need to learn to be more discriminating in your fear-mongering attacks.
Treating a Belgravia and one of its buildings the same as a project from a rookie developer is a major fail on your part.
G (or anyone else),
i have a question, lets take 565 and assume here. Now if 565 gets to 95% sold at current discount prices and the say about 10 early buyers short sale and another 10 early buyers get foreclosed on. Then do you think that the short sales and reo’s will be at the current list price or a smidge lower? Then would you feel good about recommending Alex the 565 if he were to stay 5 years?
(this is also assuming minimal specuvestor owned units in the building).
Joe,
Good one……. much better than your typical come-back…… this is how you play the game on cribchatter.
“You and “Sabrina” and other anonymous, obviously paid shills for the apartment rental industry have a problem. You’re just not very good at what you do, and you come across as shrill, one-note, bitter losers.”
Well let me tell you, being a shill for the ‘apartment rental industry’ has made me RICH!
““You and “Sabrina” and other anonymous, obviously paid shills for the apartment rental industry have a problem. You’re just not very good at what you do, and you come across as shrill, one-note, bitter losers.””
Lucky you, HD. They cut off my funding when they didn’t like what I had to say about declining rents.
I’m hoping to steal all of Joe’s clients when they capitulate and rent out their condos instead of offering them for sale.
Alex:
why near 1 mi of the loop?
The issue I have with right in / near the loop is the fact that the south loop and west loop were so overbuilt and are the ones that are going to be the Vegas / Miami in terms of hurt for the Chicago area.
“Well let me tell you, being a shill for the ‘apartment rental industry’ has made me RICH!”
I knew you and your girlfriend were apartmentfinders! Hence your lofty 6 figure incomes and swell rental deals you always brag about! (lol)
Sabrina,
Put aside your G / hd / Sonies personas for a bit and let’s just talk shill-to-shill. As a seasoned pro in the shill business I’m just trying to help you out with your lame tradecraft – and you’re just going all CribChatter on me.
Help me out here. Don’t be so reflexively lazy. I need a better foil to do my shilling effectively.
“As a seasoned pro in the shill business I’m just trying to help you out with your lame tradecraft”
It looks like your business isnt doing that well as you are trying to provoke traffic to your website.
and you are spending more and more time on CribChatter yourself (see cribchatter is addictive isnt it!!!)
“i have a question, lets take 565 and assume here. Now if 565 gets to 95% sold at current discount prices and the say about 10 early buyers short sale and another 10 early buyers get foreclosed on. Then do you think that the short sales and reo’s will be at the current list price or a smidge lower? Then would you feel good about recommending Alex the 565 if he were to stay 5 years?”
Would you pay the same for used when new are still available?
Unrelated, but I heard yesterday that Wrigley Field’s land has a 99 year lease that was entered into in December 1913, meaning it would expire in December 2012. Is this lease still going? Original owners of the land that were on the lease were Mike and Joe Cantillion, and Edmund Archambault. Who owns the land today? I couldn’t find it online.
I figure this could stir up more worthy conversation than the shill accusations going both ways.
“Would you pay the same for used when new are still available?”
i was going for would you recommend Alex buying a unit from the developer in that above scenario?
Depends on whether or not he wants a better price for used.
I don’t recommend how people spend their money. But if it is a better deal he is interested in then he should wait.
@chichow re: 1 mile – I like to be able to walk to work, groceries, grant park, movie theater when the weather is nice and I like that I can go just about anywhere direct on public transit when the weather is less nice.
I think I’m missing something here though… when there is a lot of inventory available, the prices drop to meet demand, right? What would prevent that from happening within 9 months? Don’t sellers want to meet demand? Listing a place too high and having it sit there isn’t doing them any good either…
It’s called “extend and pretend” for a reason, Alex. So is “chasing the market down.”
“Depends on whether or not he wants a better price for used.”
I dont know, he has 60k burning a hole in his pocket so he may like the new?
Alex, its very simple, many sellers are underwater they need to list a price at a price to cover their expenses- hopefull thinking on their part. Additionally most of these sellers don’t have the cash to bring to closing covering the shortfall.
So… it’s probably going to take years for prices to level out because of all the homeowners that are in denial about needing to declare bankruptcy, the false demand spurred on by dough4dumps, and the time it takes banks to list foreclosures. And we don’t think the banks will figure out how to get a better turnaround time or that demand will increase by some factor external to inventory, like a higher population or more people desiring to live in the city or some more govt intervention. It is a lot like trying to predict the stock market isn’t it… wonder what would happen if the city offered discount cta cards to people living in the city or something. crazy economics.
Listed at 50k below 2007 price and under K within a week:
http://www.redfin.com/IL/Chicago/537-W-Belmont-Ave-60657/unit-2/home/12631932
Some stuff that has been sitting forever have seen aggressive price reductions and also finding contracts:
http://www.redfin.com/IL/Chicago/3500-N-Lake-Shore-Dr-60657/unit-11B/home/13010533
http://www.redfin.com/IL/Chicago/3422-N-Racine-Ave-60657/unit-3/home/21820003
For this part of the market (around 280-350 for 2-3 BR’s in CC hoods), you probably see some movement, right? Dough4Dumps, as G (?) called it above, has got to be a big factor here
er “city” -> over developed parts of the city
APARTMENT DEALS APLENTY AS SUPPLY OUTSTRIPS DEMAND:
“A record 2,234 apartments will be added to downtown Chicago this year, increasing the supply of rental units at a time when inventory is already outstripping demand.
It’s not that interest in downtown living is on the wane. It’s just that there aren’t enough people for the number of apartments — and increasingly, condos are available for rent.”
http://www.chicagotribune.com/business/ct-biz-0212-apartments–20100211,0,2970898.story
CHA-CHING.
“wonder what would happen if the city offered discount cta cards to people living in the city or something. crazy economics.”
yeah like blago the tool holding funds hostage unless granny gets a free bus pass… like old people don’t get enough free shit already I have to pay for their god damn public transit too
“So… it’s probably going to take years for prices to level out because of all the homeowners that are in denial about needing to declare bankruptcy, the false demand spurred on by dough4dumps, and the time it takes banks to list foreclosures. And we don’t think the banks will figure out how to get a better turnaround time or that demand will increase by some factor external to inventory, like a higher population or more people desiring to live in the city or some more govt intervention. It is a lot like trying to predict the stock market isn’t it… wonder what would happen if the city offered discount cta cards to people living in the city or something. crazy economics.”
Don’t forget unemployment/underemployment, but you’re otherwise right on target.
There are reasons to buy for sure, and there are “deals” to be had and yadda yadda, just make sure you’re going in eyes open and educate yourself as much as possible (certainly not all from anonymous opinion here).
Alex
deal are harder to come by in the downtown/condo market compared to other neighborhoods/sfh/2-4flats. The bears are right in their pessimism, but you seem to have a plan, to maximize your plan, find a good place(s), in the 4-6mo. timeframe(earlier if you want the credit), make an offer(s) and enjoy.
Alex, if i were you, i would look hard to buy in a 15+ year old building that has minimal foreclosures, in a proven location, and if possible buy a unit with views. Old buildings are less prone to have the financial difficulties than newer buildings, and never had the super-high prices per square foot found in new construction.
As an example, 1150 Lake Shore Drive. A blah-looking 1960’s building with reasonably priced units. If you could pick up an east facing one-bedroom unit under 180K i think you’d be getting a fairly good deal. Protected views, upscale location, neighborhood conveniences.
I don’t know anything about the health of the association and that would require some due diligence.
To get the best deal, i’d buy a foreclosure, but those are hard to snap up because it’s competitive when things are underpriced.
Joe Zekas, on another thread where he thought he could hide it, said: “They’re running the rent vs own numbers at 565 Quincy and other discounted projects. Have you done that on a 7/1 ARM or even on a 30-year fixed? On an after-tax basis, even with a low down payment, the numbers are pretty compelling.”
Post the analysis for all to see. It’s probably best to post it in this thread for potential buyers who find this site. That way, they won’t have to accept it at face value from a Belgravia agent or their shills.
I moved this here due to Joe Zekas’ paranoid ramblings from another thread: “I’m guessing you started this here – in a thread unrelated to 565 Quincy – because you’re snivelling little cowards who know I don’t read everything here and who hoped you could get away with some back-stabbing.”
You can pick up the add’l 565 Quincy chatter here:
http://cribchatter.com/?p=8206#comment-64517
See how it is always about Joe Zekas and his masters such as Belgravia? It’s never about the 62 suckers that bought their line of BS and are now hopelessly underwater at 565 Quincy.
Keep in mind readers that Joe Zekas “analysis” means nothing. 565 Quincy only shows 69 recorded closings over at the Chicago Tribune’s website on 2/14/2010. Far below the 240 units originally constructed. Joe tries to use the straw man argument of an imaginary or at least illegitimate metric of “contracts signed” whereas we all know these frequently do not result in closings.
Anyone considering jumping into home ownership should consider the motivations of people such as Joe Zekas whose livelihoods are personally invested in putting people into ownership status either directly or indirectly. They should also consider that Joe has chimed the same tune that its always a good time to buy, even back in May 2009 when they started closings at 565 Quincy. He ignores the financial impact on the people who completed these initial closings who would’ve followed his advice only a year ago.
One year later and he’s still the same parakeet with the cover over the cage singing the same tune.
Joe how did those initial closers fare at 565 Quincy last year and why did you remove a video talking about a price guarantee from the internet? You are an extraordinaire at not only poor salesmanship but also revisionist history, apparently.
By all means, people, follow the link that G provided. But, before you do that, pause to consider G’s description of how the 565 discussion happened on the other thread.
It’s obvious that G and homedelete started it over there with character assassination and unsupported contentions about the values at 565 Quincy.
Bob and G are merely trying to refight a battle they lost badly on the other thread.
Every single one of their lying assertions breaks down upon examination, and they’re hoping you won’t head to the other thread and see that. You have the link. Pay close attention to the analysis I provided and their total failure to come up with anything credible to dispute it.
I’m not going to play their silly game by revisiting the discussion here.
“By all means, people, follow the link that G provided.”
Umm, that’s why I posted it here in the pertinent thread.
“they’re hoping you won’t head to the other thread”
Oh yeah, that makes sense. I guess if you lie enough, you start believing it. Other people? Not so much.
“You have the link.”
Yes, thanks to me.
“I’m not going to play their silly game by revisiting the discussion here.”
Of course you won’t since it would be hard for you to recreate your web of deceipt. This is just another pitiful attempt at damage control, Joe Zekas. Your techniques are as dated as you are.
Joe you have a serious mental illness, you should seek professional help. You got schooled yet you keep coming back for more. You’re a sick, masochistic individual. Put your tail between your legs like a good little doggie and head back home to Yo.
“Bob and G are merely trying to refight a battle they lost badly on the other thread. “
I’d figure I’d just post something from a previous comment regarding RD 659 vs. Quincy.
“P Smith on June 2nd, 2009 at 9:40 am
My son looked at RD and Quincy but after researching the developers he felt more comfortable with the integrity of the people at Belgravia. Having grown up in South Florida it was refreshing to work with people that were not trying to sell out to flippers which in the long run devalues the property. I hope Belgravia is able to take their time and maintain the value of his home. He would not be happy to see a similar unit priced 25-30% less than the price he paid weeks before. Those RD people would be smart to refund money to the early buyers to maintain their reputation. But they might have the same idea as the developers that swoop into Fl and take the money and run leaving HOA’s in a mess with increasing assessments.”
so you think he’s sitting by his mailbox waiting for the integrity check to arrive? 🙂