Trying to Sell the Newer Construction Lakeview Condo: 3535 N. Reta
This 2-bedroom unit at 3535 N. Reta in Lakeview is a property that was commonly built throughout many neighborhoods of the North Side during the housing boom: a luxury condo within a 4 unit building.
This unit is more upgraded than some of that era, however, with crown molding and tray ceilings.
There are also solid core doors and a more luxurious appliance package in the kitchen including Bosch and Sub-Zero. There is also a wine fridge and 2 plasma televisions, which are included.
The baths are natural stone and there are hardwood floors throughout.
This unit was originally listed in January 2010 and has been reduced.
It’s now listed for $40,100 under the 2006 purchase price.
Is this a deal at this price?
Matt Garrison at Coldwell Banker has the listing. See more pictures and a floorplan here.
Or you can see the unit in person at the open house this Sunday, June 6, from 12-2 PM.
Unit #2: 2 bedrooms, 2 baths, 1 car parking, no square footage listed
- Sold in May 2006 for $480,000
- Originally listed in January 2010 for $475,000
- Reduced
- Currently listed for $439,900 (parking included)
- Assessments of $150 a month
- Taxes of $6620
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 17×12
- Bedroom #2: 12×12
8% decline in price since May 2006. I’ve got to think the market has fallen further than that. Especially since you can assume new construction = no upgrades done by the owner.
I do like the place, though. $420K probably gets it.
I agree with CSAL in that I like this place. This unit will sell the closer it gets to the 400K.
What do you guys think about having to walk through the kitchen to get to the back end of the unit? See pictures at:
http://tours7.vht.com/Viewer/PhotoGallery.aspx?ListingID=1261521&Style=IDX
I wouldn’t mind walking through the kitchen to get to the rear of the unit. I like the look and the layout.
I recently sold my 2/2.5 in Lakeview for 6% more than the current ask on the featured property. My old place had more character (at least to me and my buyer), but the finishes/appliances in this unit are significantly nicer. Solid core doors are nice at this price point. They add a “feeling” of luxruy that few other finishes can provide. Taxes are comparable and assessments here are 50% lower than what I paid. As cookie cutter condos in Lakeview go, this looks to be about as nice as they get and the price seems reasonable.
While this isn’t my dream condo, it’s nice to see appropriate finishes at this price point. I’m so sick of seeing the same basic GE stovetop/oven with no hood and crappy cabinets in condos priced $400k all the way up to $700k. The quality of finishes throughout Chicago are really poor in this price point.
My goodness. Another baby’s crib. On some level, I feel sympathy for these FB’s. They put 20% down but they just bought at the wrong time. They bought into the ‘real estate never goes down’ or ‘buy now and be priced out forever’ mantra. If they just had a little patience, 24 or 36 months patience (especially since the little one was in existence or on the way) they could have rented, saved an even larger down payment, and be in a better financial position to buy today. Instead they’re going to lose a big chunk of their down payment. May $60k (after fees and costs) of the $97k they put down. Good bye equity. And my calculations show that they’re paying roughly $2,750 per month (assuming 30 y fixed at 5% – which may be a faulty assumption given the ARMS and OPTION ARMS of Chicago’s summer of financial love – 2006). Ouch, $2,750 is high monthly rent – especially when the exit clause costs another $60k!
But Matt I know you’ll get this sold. You’ve got a knack for selling, heck, more than a knack, you’re quite good. Convincing them lower the price below the ’06 price is a large positive step in the right direction. This unit will sell but the sellers will be lucky if they walk away with any of their down payment.
At prices like theses, it makes you wonder how other new construction developers in less established areas have a chnace.
Seems like a very nice place at a reasonable price. However, I am really surprised by the price drops I am seeing in Lakeview, a prime neighborhood. I wouldn’t think a place like this would go for less than the ask, but I believe that we are going to go into severe overshoot on the downside because of what is happening with our credit… which the bailouts made worse, not better. Far from saving our economy, the bailouts and ongoing assistance to banks and borrowers may have set us up for the most complete failure of our financial system, to the point where it might not recover in our lifetimes.
I am seeing large, beautiful places at fine vintage buildings in Lakeview offered at “giveaway” prices, or at least they seem so to me. The astonishing thing is that a huge 2 bed at 421 Melrose, the beautiful Eddystone, is being offered at $159K, which is unbelievable. Meanwhile, a new 2 bed rehab in Rogers Park, way too close to Clark St, is being offered on a special for $199K. The place would almost fit into my living room.
What’s the story here? Credit, that’s what. Yes, exotic financing is still out there. The agent at the place in RP showed me how I could put 5% down and get a payment of $668 on an ARM with a 7-year lock in. Never mind how much cash you will have to come up with after that time….. or maybe you will just walk like everyone else is doing these days. Right now, millions of people are buying new places in a glutted market for prices way in excess of comparables already on the market, because of special financing the developers are making available, possible only with FHA backing. These buyers are instant bagholders, and most of them don’t have the incomes to support a 30-year fixed on the places they are buying. When the loans adjust, they will walk. And they will get forgiveness for the deficiencies and will have only a mark on their credit for a few years.
That is why I think we are headed for a really major financial crash, worse than 2008. We have not only kicked the can down the road, but we are adding to the load of inherently high-risk house debt. You will have to come in with a substantial down stroke to buy 421 W Melrose but you can make $40K a year and walk right into a $195K mortgage, at ludicrously low payments, on a rehab in an area where similar units are languishing on the market at prices 40% lower.
Worse, it is now OK to “strategically default”. Tens of thousands of home debtors are doing this, and worst of all, many people borrowing to buy with an FHA loan and 3.5% down are doing it very cynically. I have read many comments that say ” I have the money to buy, but I’m taking the FHA loan with 3.5% down so that if the neighborhood goes into the crapper, I’m not out anything.” In other words, people are now buying with the idea that they might default sometime down the road, if things get rough, even though they have the money to almost cash out on a place.
There’s no way we can have credit if this is the dominant ethos. There is a limit to how much the government can back the housing market and we have reached it. I see a time coming very soon, when you will have to put 50% down to buy a house.
50% was the norm at one time.
“Mortgages came to the Americas
As pioneers moved from Europe to settle in America, they brought their systems with them. As land ownership increased, so did the need for mortgages; so much so that by the early 1900s, they were already widespread and readily attainable.
However, not everybody could get a mortgage. In those days, those seeking to buy property were often required to pay a 50% down payment on a 5-year mortgage. So, to buy a $10,000 house (wouldn’t that be nice today), the borrower had to have a $5,000 down payment and pay interest for 5 years. At the end of that 5 years, the unpaid (and unchanged) balance of $5,000 would have to be either paid or refinanced.
This system continued through to the Great Depression, when lenders had no money to lend, and borrowers had no money to pay. The whole system collapsed with thousands of foreclosures. Mortgages were just not available.”
http://www.thehistoryof.net/history-of-home-mortgages.html
yeah back in the day when “middle class” was doing pretty good and could afford a huge house, car, and lots of crap to fill your house with
Laura,
I love some of the units at the Eddystone but the assessments are big and the 159k unit is 2D which has very poor natural light (electric on in every picture) and is in need of rehab in my view. I don’t just say that from a taste perspective but in order to merit a unit with a monthly pre-mortgage nut of $1200.
I think this really reflects the glut of decent older building that at these price levels are barely economically viable. A friend just rented in one of my favorite LSD condo buildings at 3500 but buying the unit would have made no sense at all.
I share your fears however since the current lending structure is encouraging the worst behavior from the wrong type of buyer. I have 3 units under contract right now and the buyer having the most trouble borrowing is really the only one who should qualify.
It’s ultimately what happens when a society allows elected officials to make important economic decisions. Turkeys don’t vote for thanksgiving and low income people don’t vote for people who tell them they should not be buying a place with 3.5% down, 3% closing costs from the buyer and an $8,000 freebie from the feds.
“So, to buy a $10,000 house (wouldn’t that be nice today)”
In 1947 (much later than the time discussed) the median family income was $3,031. In 2006, it was $58,407. A $10k house in 1947 would have been ~3.3 years of median income; or $192,698.78 relative to 2006 median income. Actual median–near the peak of the bubble–was about $250k.
Yes, neo, I’m aware of the assessment on that unit, and that’s what’s making me back away. I’ve looked at several in that building, and the assessments in this highly-serviced (maybe OVERserviced) building have always been killers. At some point, maybe the people here will realize that they really don’t need a 24-hour desk and will work to realize other efficiencies. I haven’t seen the furnace boiler-wonder how old it is. I am staggered by the number of vintage buildings in Lakeview and Edgewater that are running on 80-year-old coal boilers converted to gas that get 20% efficiency at best. Saw one in a certain Edgewater highrise that was bigger than a house- the old coal burner that the building had to be built around, and was converted to gas about 50 years ago, and thought, do these people not realize that for the price of a new boiler, about $50,000 for the entire building, that they could shave $100 or more a month off their monthly assessments?
The unit does not need a complete rehab but it could use a new kitchen and bath. Kitchen looks dreadful. But those are things easily corrected in a place with wonderful architecture and huge rooms. On the other hand, you can see a place that is too small and an architectural horror, with pretty new finishes and sleek new kitchens and baths, but what will you have when that stuff begins to date?
It is a really beautiful unit, and at my stage of life, a lower-floor apartment begins to look good, especially in an electrical outage.
You guys are talking about some serious deflation. I really can not see the monetary base contracting that much. However, with the current supply on the over-built market, I do see a time when 40% reductions in some (perhaps most areas) are the norm once banks stop kicking the can with developers/flippers. This needs to happen to return to a healthy environment. A market where there are more rental units that actually cash flow would return Chicago to where it always has been historically. Too many bags not enough holders.
Laura,
Timely discussion since 2D went into preforeclosure today. Give it 7+ months and you might get your unit.
“So, to buy a $10,000 house (wouldn’t that be nice today)”
there have been houses for less than 10k on this site before…
http://cribchatter.com/?p=6570
granted you’ll probably die within a year of owning the place but you can still buy a house for less than 10k today, whether it be in a totally ghetto area or a trailer park out in bumblestank.
This will be snatched up at 425k.
neo, I’m still really amazed that 2D hasn’t sold at this price. This is a 1992 price. I looked at a smaller unit there, the smallest in the building, in 1992 and it was priced around $100K, and similar units sold for $225 at the rampage peak.
Since then, I’ve seen a number of the huge 2 bed 2 bath B tier units for sale for prices that struck me as being really reasonable, but I never thought I’d see a unit like this for sale for anywhere under $200K.
If this unit cannot sell at this price, then it looks like we are poised for another log leg down, especially as all the shaky FHA loans written in the past couple of years (3.5% down, 4.5X DTI, monetize the $8000 credit at the close to make the down payment) default. The current combined delinquency and default rate for all FHA loans is 19%, and for recent-vintage FHA loans it is 24%. FHA will be the next big bailout…. if we can even manage it.
But with government debt at 89% of GDP, we might not be able to manage much of anything when that day comes. 90% GDP is considered to be the “tipping point” for sovereign debt, past which there is real danger of default. Even our Congressmen are getting nervous.
Laura, sovereign debt tipping point really is country specific.
Japan’s number is nearer 200% and no-one is talking default for them yet. America is ultimately too big to fail hence the recent strength of the dollar even though US sovereign debt (as a % of GDP) is greater than the Europe union’s by a long way.
I agree with your FHA point however
In addition to the FHA blowout causing another leg down are the next two contributions: shadow inventory & increased volume. Millions of people have stopped paying their mortgage. millions more are renting their old homes or keeping their current home off the market hoping for prices to rebound.
neo, I’m not sure I believe that ANYTHING is “too big to fail”. Japan denizens are much better at managing their personal finances and slender resources than we are at managing our formerly lavish (but dwindling fast)resources, and our citizens do not have the resiliency of Japanese people since we don’t have the personal savings they do. Believe me, the savings rate in that country is cushioning the blows quite a bit and it is INSANE for their government leaders to encourage more consumer spending, for those savings and the overall frugality and prudence of the citizens there are what is keeping roofs over their heads.
Here, we are extremely wasteful, and in fact our systems are created to waste resources as rapidly as possible. Worse, we have no resiliency as a population. Most people in this country, including high earners, are maybe three paychecks away from destitution.
I’m not sure that we can survive public debt levels of even 100% of GDP. We are refractory to additional taxes, and any significant hike in fuel prices will send our economy off the rails completely. This is not the population that will make the kind of adjustments necessary to live on half the money after taxes and debt service, that people do now.
homedelete, the shadow inventory in this city is gigantic. I count about 8 vacant condos for every one shown on the market. Will the banks be able to horde this inventory and keep it off the market for much longer? This has to drive prices lower.
I like it! I wish they’d rent it to me. 😉
I like it, if it had 3 bedrooms I’d be interested.
Nice location. Not a bad price.
I really hate cut face block and wouldn’t buy another place with it, but as long as you know you need to be shelling out for waterproofing every couple of years, I guess its ok.