Lakeview Vintage 2/2 Listed for 25% Below the 2004 Purchase Price: 421 W. Melrose
This vintage 2 bedroom unit in The Eddystone at 421 W. Melrose in Lakeview just came on the market as a Fannie Mae property.
The building was completed in 1929, as the Depression was just beginning, and was really the last of the magestic vintage apartment buildings to be completed in that era. It was supposed to be two buildings originally, but the Depression intervened and the second building was dropped and never completed.
The listing for this unit says “close by Dec 31, 2010, seller will offer 3.5% seller credit.”
It has hardwood floors throughout and what looks to be the original crown molding.
The kitchen and baths look intact (from the pictures.) The kitchen has white appliances.
There is no central air, in-unit washer/dryer or parking.
But at 1600 square feet, is this a deal for the square footage and location?
Rakesh Parikh at Keller Williams Lincoln Park has the listing. See the pictures here.
Unit #8C: 2 bedrooms, 2 baths, 1600 square feet
- Sold in November 2004 for $342,500
- Fannie Mae owned in May 2010
- Currently listed for $256,500
- Assessments of $1043 a month (includes heat, gas, cable, doorman)
- Taxes of $4496
- No central air
- No in-unit washer/dryer
- No parking
Holy Sh……..! We paid almost $140K MORE for our vintage walkup 2/2 (+den! +plus sunroom!) but no c/a or parking just a few blocks up-and OUT of Nettlehorst district- from this place. Yes it’s much nicer but, um, it wouldn’t take $140K to make this place much nicer. Augh. Man, 2006 was NOT a good year to buy…
“There is no central air, in-unit washer/dryer or parking.
But at 1600 square feet, is this a deal for the square footage and location?”
For $1,418/mo before the mortgage nut no, its not a good deal. Not a good deal at all.
“The building was completed in 1929, as the Depression was just beginning, and was really the last of the magestic vintage apartment buildings to be completed in that era. It was supposed to be two buildings originally, but the Depression intervened and the second building was dropped and never completed.”
Awww…its the SoNo of a prior era.
I would never, ever, EVER live on Melrose East of broadway… NO FRIGGIN WAY!
but thats just me
Why Sonies?
Why is the asst so high? Even buildings with a pool and the same amenities don’t cost that much. If it weren’t for the giant asst, I’m pretty sure this place would be gone by next week.
What do you think of offering a credit to get it closed by the end of the year? Has anyone seen something like that in the listing make a difference it getting a unit sold?
Woah assesments. Didn’t see those. Ouch!
Dear crappy photographer, please turn on flash when photographing windows during the day time. Thank you.
beautiful vintage details like the setback around that archway then the cabinets. Come on guys, even if you’re just home depoting it can’t you find one or 2 taller, deeper or shallower ones to put in to create a focal point/visual interest? Am I alone in my annoyance with upper cabinets that do not reach all the way to the ceiling (at least reasonably) and are just a flat line across the top with MAYBE some crown molding?
ug, no A/C and no laundry not for me…
nice pic of the middle of the street
“Why Sonies?”
lets just say that when I did have a car a long time ago, a garbage truck, the JCC parents and melrose st. had a battle with my patience
All banks are going to halt all foreclosures starting next week.
Stop paying your mortgage this month! You’ll be able to live for free for YEARS!
Run for the hills boys!
“All banks are going to halt all foreclosures starting next week.”
It may not be all that bad – with foreclosures being halted, real estate prices should start to stabilize and begin their ascent. Most of us saw this coming a mile away. A few people, however, held on to the hope that there would be a glut of foreclosures flooding the market and a HUGE real estate collapse – this is never going to happen (especially in good areas).
The way to feel better about paying your mortgage (while many of your neighbors slide by and live “for free”) is to realize that you are a responsible person and are helping by not contributing to this overwhelming problem. When I started paying well into the 6 figures in taxes every year, I was livid, angry, psychotic and wanted to kill everyone. You can’t be that way – you will become a mean, dark person and ruin your personality. Just find a mental way to be comfortable with it and move on….. that’s the best advice I have (and I felt I had to share because I can palpate the anger of many CCers with regard to these mortgage deliquencies).
Why such high assessments: round the clock doorpeople. Onsite engineer. Old building.
Lived in this neighborhood 30 years ago and really liked the proximity to lake and quick bus into downtown. Even with the high assessments this looks like a good deal to me.
““All banks are going to halt all foreclosures starting next week.”
It may not be all that bad – with foreclosures being halted, real estate prices should start to stabilize and begin their ascent. Most of us saw this coming a mile away. A few people, however, held on to the hope that there would be a glut of foreclosures flooding the market and a HUGE real estate collapse – this is never going to happen (especially in good areas).”
This is the worst thing to happen to the housing market since this whole debacle began. Possibly even worse than the beginning of the subprime blowup. I have been thinking for awhile that the next black swan event in the economy would be something in Europe- either Greece or Ireland going completely under. But only today when BAC announced it was halting the foreclosures in all 50 states did it dawn on me that THIS is now the black swan event.
In Chicago- foreclosures and short sales make up anywhere from 30% to 40% of the sales. Yes- even in the “good” neighborhoods. Strip out the short sales and it’s got to be at least 20% foreclosure sales. Those have all been halted. And this could last for months (I don’t believe they can solve the problems that they have uncovered in just a few weeks. And the litigation is going to be massive over this.)
So not only were sales still trending way below last year- but now they will fall even further so if we weren’t going to double dip in housing we certainly will now.
It won’t bring “stabilization” to prices. It will bring more uncertainty and will just put even more distressed homes in the pipeline for when the moratorium does end.
This moratorium will affect a ton of people including the realtors who handle foreclosures, mortgage brokers, the renovators who have been buying these, fixing them up and putting them back on the market, the homebuyers who maybe were just a few days away from purchasing (what will they do now? – wait it out?).
Total disaster. I never imagined anything like this. And now we’re heading into winter where some of these properties will be sitting vacant far longer than they otherwise would have.
Take this property itself. Owned by Fannie Mae. Fannie is pulling many of these properties off the market. It WILL come back on again but when? A month, two months, 5 months? We don’t know.
Again- it’s a disaster for the housing market.
clio – “It may not be all that bad – with foreclosures being halted, real estate prices should start to stabilize and begin their ascent. Most of us saw this coming a mile away.”
You are some kind of goof ball.
“Again- it’s a disaster for the housing market”
Wait a minute – previously everyone on this site was vehemently arguing that it was the foreclosures/shortsales that were bringing comparable housing prices down. Now you think their ABSENCE from the market is going to bring the prices down?!! No, I think that with foreclosures off the market, the buyers who were too scared to buy before or who were waiting like vultures for these foreclosures/great deals to come up will realize that there may be no prize awaiting them and will get off the fence and buy what is available (because they will be too scared that interest rates/prices will go up and also scared and unsure of what the government/banks will do next). Again, it is psychology at work!!! Furthermore, all of these foreclosures, etc. will be written down and much of the debt will be forgiven – those that are vacant will come back on the market when the economy is better and will be snatched up by investors very fast.
So, what about short sales? are those halted as well?
THIS JUST IN IF YOU HAVE A B OF A MORTGAGE STOP PAYING IT!!! THERE IS NO RAMIFICATION….
“THIS JUST IN IF YOU HAVE A B OF A MORTGAGE STOP PAYING IT!!! THERE IS NO RAMIFICATION….”
Wait – who said there were no ramifications? Of course there will be ramifications – try to buy a house after going through foreclosure. also, try getting credit with a foreclosure on your record. and, who knows – maybe the banks will go after other assets. we just don’t know – but don’t count out severe ramifications for those who default on their mortgages.
I don’t see this as a disaster for the housing market…I actually see it as a potential opportunity. As Gary suggested somewhere on this site, this might actually help boost short sales. The best thing the government can do right now is to push banks to become timely and responsive during the short sale process. Short sales are overlooked because they take a long time…if foreclosures are halted and the short sale process can be expedited, these distressed properties would be sold for higher prices (short sales generally sell for higher prices than foreclosures) and that would help to stabilize the market. And even if foreclosures are halted for a period of time, ceteris paribus, why would that be a disaster? Sure, it drags out the process and will delay recovery, but a foreclosure is a foreclosure and in most instances their condition is usually so poor that that they couldn’t get much worse.
Clio — the foreclosures are a problem because they introduce additional uncertainty to the market. Saying that the foreclosures will be written off and the debt forgiven is pure speculation that I think is unlikely to happen. There are at least three possibilities. First, judges will continue to allow foreclosures after BoA, etc. have reviewed their processes. In that case, the current review of foreclosures will just drag out the adjustment of prices, and we’ll see a glut of foreclosures once the banks get their processes straigtened out. Second, if there’s a fundamental problem with the banks’ documents such that they can’t foreclose on properties under State law, then Congress may enact a fix that allows for foreclosures in exchange for certain concessions from the banks (such as grace periods up to a limit for those who are unemployed, not foreclosing on those paying at least 80% of their mortgage bills, etc.). I doubt Congress or the public at large will have much sympathy for those staying in homes without paying anything; indeed, they’ll be outraged and allow their homes to be foreclosed on. In this case, the foreclosure process is dragged out even further, and buyers will become even more hesitant because home prices will be even more uncertain. Third, your apparent scenario where there are serious problems with the banks’ documents but Congress does nothing and so banks simply cannot foreclose on those who are not paying. In that scenario, a lot of people will simply stop paying their mortgages, the banks will be put under severe financial stress and will tighten up lending standards or simply stop lending as they go into restructuring. This last option likely would trigger another recession or massive bailouts, which is why I think a Congressional fix for any bad documents is far more likely.
In any case, the only certain result will be greater uncertainty and a large increase in the shadow inventory. This will cause buyers to be more hesistant to buy because of the likelihood that home prices will continue to drop in the future. Thus, the banks’ problems will be more likely to cause housing prices to drop even further until they are resolved.
HA! Only saps are paying their mortgage today. Repercussions? A FICO score of 500 will be considered excellent by the end of 2011. Next step-Obama granting “mortgage amnesty” to those in default. Redistribution of income/assets, communism rules!
The BoA foreclosure thing is based on blind packaging and selling of bundled mortgages. The blind part it because there were so many transactions occuring, the bank couldn’t keep up with the paper work. This led to BoA foreclosing on certain mortgages without proper documentation of who actually is responsible. A few court cases later…a few more…infinite amount scheduled…and boom! BoA realizes that though they have the property, they also have a lawsuit for every foreclosure on their hands.
Bigger problem will occur when title companies refuse to insure titles for homes purchased through foreclosure proceedings. This week, NYTimes reported that Old Republic Title Company announced that it will no longer issue title insurance for homes purchased from JP Morgan/Chase’s foreclosure proceedings. Additional title companies are likely to follow their precedent. Restricted ability to obtain title insurance means no sale for that foreclosed property, due to clouded title issues.
“In any case, the only certain result will be greater uncertainty and a large increase in the shadow inventory. This will cause buyers to be more hesistant to buy because of the likelihood that home prices will continue to drop in the future.”
Excellent description and analysis of the situation, Calderon!! While I agree with you 100% that there is uncertainty with all of the foreclosures, I don’t see how this will ADVERSELY affect the sale of non-distressed properties. In my opinion, people will shy away from short sales/ foreclosures because of these uncertainties and will start buying the higher priced non-distressed properties. That is why I think this whole shortsale/foreclosure debacle is actually GREAT news for those non-distressed sellers. You would be correct if people could wait to buy/rent – but housing is a necessity (not a luxury) so people will continue to buy/rent – just not the distressed properties!!
Clio: what I mean is that if you were hanging on and might get foreclosed on why not stop paying now? If that’s where you’re headed and it is your sad reality stop now. Then it will take forever to begin the process to start foreclosing again, there will be (already is) a backlog and you will sit in your free shelter for a long time before you have to pay anything for housing. Sure there are ramifications, I was being dramatic as we are wont to do (seriously, you of all people calling me out for gross generalizations and misstatements?) on this site.
I sgree with Clio, these developments should add an incremental premium to non-foreclosure/short-sale properties for sale.
“Clio: what I mean is that if you were hanging on and might get foreclosed on why not stop paying now?”
Roscoevillager, I agree with you – IF you are in preforclosure and foreclosure is inevitable, (and you are morally ok with not paying mortgage) then the smart financial decision may be to stop payment of mortgage. However, there are going to be REALLY BAD consequences for you once this gets resolved (sure, no worse than they are now, but still bad). You won’t be able to buy another house for awhile, your credit score (and thus insurance rates, credit card rates and other things will go up) and your ability to rent a place will be hurt (b/c of the credit score and previous foreclosure). May landlords will NOT rent to someone who has undergone foreclosure as they have told me that they feel that this is an indication of finacnial irresponsibility and an inability of the person to understand his financial status and live within his means.
So what happens to Fannie and Freddie, and all the MBS paper the Fed owns if paying mortgages becomes discretionary? Will there be more losses and or liquidation of Fannie Freddie? EUR/USD to 1.75? Gold to 2,000? I have zero faith in this system, the market is broken.
I find it completely disturbing that Fannie (ie The Government) is dictating foreclosure policy to BofA (see the wsj article). The real estate market is a farce, the game is rigged, and it is collapsing under its own weight. And I’m not even a tea partier. Anyone who would consider buying a leveraged asset in such a disjointed market is begging for trouble. No thanks, I’ll keep renting.
“No thanks, I’ll keep renting”
uhhh Joe – I hate to break it to you, but this affects EVERYONE (including renters). There are going to be a HUGE number of people that feel the same way you do – flooding the rental market. This could result in significant increases in rent (as well as lack of availability of good rentals). Now, add the fact that the foreclosed houses/condos are off the market, and you have an automatic decrease in housing supply. This will further increase rent prices.
When my house in Atherton burned down and I needed to find a rental, it was AWFUL because the rental market was so good in that area at that time that I couldn’t find anything suitable for rent (even though I was willing to pay up to 5000/month). I ended up renting a furnished 1 bedroom 900 sq foot apt in Redwood City for 3500/month!!!
“EUR/USD to 1.75? Gold to 2,000?”
Sounds like an environment where the dollar is plummeting in value and inflation is on the rise. Real estate has been in a deflationary spiral for the past several years, but what happens if inflation takes off? Real estate, like commodities, is a hard asset that has an intrinsic value and it historically keeps up with the rate of inflation. Fixed rate mortgages aren’t affected by inflation but rents certainly will be. I’m not saying the real estate market is poised for a dramatic rebound anytime soon, but I don’t think you’ll be better off renting in that scenario.
Continuing defaults on mortgage debts is not the recipe for inflation. Wrong ingredients and and wrong amounts.
“In my opinion, people will shy away from short sales/ foreclosures because of these uncertainties and will start buying the higher priced non-distressed properties. That is why I think this whole shortsale/foreclosure debacle is actually GREAT news for those non-distressed sellers.”
Unless you MUST buy a property in the next 90 days (for whatever reason)- most buyers will wait until the foreclosure moratorium is lifted and they have more choices on which to buy.
I just talked to someone yesterday who lived for years in Wicker Park, had a baby and her and her husband just bought in Naperville because they were priced out of the city neighborhoods with semi-decent schools. What did they buy? A foreclosure. And even then, they were patient and waited 6 months to close on it! 6 months!
Anyway- with the foreclosure moratorium, a buyer like this is unlikely to have bought a full-priced home from a non-distressed buyer. They didn’t HAVE to move immediately.
All this moratorium is going to do is delay the pain. Prices have to come down further to get to a stabilization point that is in line with incomes in the Chicago area. It is NOT yet in line.
I don’t see forgiveness on the loans occuring but cram downs are fast approaching which basically does the same thing. Not sure how the government will get the banks to take those kind of losses though. Right now, remember, there is no mark to market for the “losses” the banks will see from the underwater mortgages. But if there is a cram down scenario- suddenly the banks that were not declaring that $100k loss on a $400k property- will now have to put it on their books.
Not to mention the moral hazard dilemma involved if one neighbor on a block get a cram down on the $400k house to $300k and continues to live there with the lower payment while everyone else on the block is paying their $400k mortgages. What is the incentive for them to keep paying? There is none. So I don’t see how cram downs are the answer.
“Unless you MUST buy a property in the next 90 days (for whatever reason)- most buyers will wait until the foreclosure moratorium is lifted and they have more choices on which to buy”
I don’t know – I have to disagree. I think people are going to shy away from foreclosures/short sales because they are not sure about what the government/banks are going to do next. Can u imagine buying a forclosures and days away from closing and all of a sudden it is yanked away from you?!!! People arent’ going to be that understanding or patient. Also, with the moratorium, the conditions of these foreclosures going to rapidly deteriorate. Most will need a LOT of work – something the average buyer is not able or willing to do. Again, the winners are going to be the investors who can afford to wait, don’t get affected if the sale doesn’t go through, and who have the money to fix up these places.
This foreclosure documentation issue is portrayed in the news as “bank officers signing documents they haven’t really read.”
But the real story is the use of “document mills” to FABRICATE necessary paper work that was never previously there. There is evidence of widespread FRAUD by many of these large banks. This is not an issue of mere “technicalities” but out and out criminality.
I agree with Sabrina that this is a black swan type of situation, which could effectively seize up the economy.
And sadly, I think the outcome will be the same regardless of the results of the November elections. With unlimited corporate contributions (thanks Supreme Court), both parties are 100% owned by the banks. That unanimous Senate vote on the interstate notary-public deal should show us everything we need to know.
“Unless you MUST buy a property in the next 90 days (for whatever reason)- most buyers will wait until the foreclosure moratorium is lifted and they have more choices on which to buy.”
Sabrina, I would respectfully disagree with that statement, for at least two reasons.
First, do you really think that “most buyers” are prospective foreclosure purchasers?
Second, if one is looking to buy in certain cities (e.g., Vegas) or certain marginal areas in and around Chicago (i.e., on the fringes of the GZ and the non-elite suburbs)), then sure, I can see how waiting for the full avalanche of foreclosure inventory to hit the market would make sense. But I’ve been following the market in ELP (for two and three beds in the $425-$550k range) for about two years, and I’ve certainly not gotten the sense that foreclosures, or even short sales for that matter, have or will have any material impact on my target market segment.
listen to the Chris Whalen interview on kingworldnews.com/broadcast. The nation’s top non-BS-artist bank analyst says that all the banks’ capital is phantom and will be wiped out under the scenario Sabrina outlines below. The question is when is this day of reckoning? will FASB sell-out again, will there be another Federal bailout of the TBTF banks? etc.? Nobody knows when this will occur, so even buying one of those short-financials ETFs could be a long wait.
“I don’t see forgiveness on the loans occuring but cram downs are fast approaching which basically does the same thing. Not sure how the government will get the banks to take those kind of losses though. Right now, remember, there is no mark to market for the “losses” the banks will see from the underwater mortgages. But if there is a cram down scenario- suddenly the banks that were not declaring that $100k loss on a $400k property- will now have to put it on their books.”
Anonny is dead on about the better locations…in general, they just haven’t been hit by this real estate crisis as severely as the lower income neighborhoods that were preyed upon by unscrupulous lenders and bid up to truly ridiculous levels by speculators. Waiting for foreclosures isn’t going to affect all neighborhoods and towns in the same manner. For example, the northeast corner of the town aside, foreclosures have been a very small percentage of properties for sale in Oak Park. Time probably won’t have a significant impact on the prices of properties in this area and, in turn, its affordability, whereas rising interest rates will definitely have an impact. So, in my opinion, it’s really important to consider your target neighborhood/town before deciding if waiting and watching is really the most prudent approach.
“So, in my opinion, it’s really important to consider your target neighborhood/town before deciding if waiting and watching is really the most prudent approach.”
Chris, it’s not just your opinion, it is fact. Waiting for foreclosures is NOT a great option and you are taking a HUGE risk of being priced out forever (especially if you are looking at good/popular areas/buildings). NOW is absolutely the time to buy (b/c of the off season as well as interest rates). If you wait until spring, you really risk price and rate increases. Even in unpopular/not-so-nice areas, home prices will likely not come down as sellers in these areas no longer have to compete with foreclosures.
“First, do you really think that “most buyers” are prospective foreclosure purchasers?”
Currently- in Chicago- 30% to 40% of ALL sales are distress properties. So, yes, there are a ton of buyers purchasing or looking to purchase in this category. (they’re not all foreclosures- as I’ve said before- it’s really the year of the short sale.) I see data for the near north side pretty regularly- and in any given week, nearly half the sales are short sales or foreclosures.
In LP- there are several short sales and/or properties selling significantly under the 2003/2004 price point now (in the $400k to $550k price point.) Don’t know about “east” Lincoln Park exactly (as it isn’t really clear what the definition of that is anyway.)
I’ve been seeing some nice townhomes priced at 2004 prices lately in LP (and no, not in the Clybourn corridor.)
Not everyone is going to get a “deal” in the most prime neighborhoods. But prices have dropped at least 10% or 20% in even the prime areas from the peak.
I could do an entire week on Crib Chatter just showcasing the short sales in LP, Lakeview and the Gold Coast (including million dollar properties) and that would only scratch the surface of what is going on out there.
“I think people are going to shy away from foreclosures/short sales because they are not sure about what the government/banks are going to do next. Can u imagine buying a forclosures and days away from closing and all of a sudden it is yanked away from you?!!! People arent’ going to be that understanding or patient.”
Clio- I agree with this. But to get sales to increase it will mean prices will have to come down to the foreclosure/short sale prices on the other properties. That is what is selling now. That is the market. Everyone wants a “deal” or they’re not going to buy it.
Look at the comments here on Crib Chatter. If a seller even tries to list over 2005/2006 purchase price, they are ripped to shreds for not “understanding” the “market.” The market is being set by the distressed properties- many of which sell quickly.
Like I said earlier- I see nothing good coming out of this moratorium on the foreclosures. It’s subprime Part II. Yes, it could mean that the banks may be willing to do more short sales. I’m already seeing short sales all over the place (and those have their own problems.)
But either way- distressed properties mean prices are going to go lower in those neighborhoods.
Love this building and apartment but this building has ALWAYS had excessively high assessments, which kill the prices. I’m eyeballing a 2 bed 1 bath for $159k there, and that is NOT a typo, but the assessments and taxes together make it rather scary.
About the foreclosure halt driving up values- I don’t think so. The foreclosures are only delayed. The banks will start the process allover again.
Worse, as others have pointed out, the document mess creates uncertainty. Old Republic Title co, to name one, has said it will not insure titles on properties foreclosed by certain lenders. If you can’t get title insurance, the deal is off. Many deals are being killed right now because of problems with the foreclosure. This is NOT good for sales, everyone.
In any case, all the doc debacle does is kick the can a little further. There is still no getting around the massive number of foreclosures lurking in the the “shadow” inventory over and above those listed on the market, for there is an overhang of about 20 foreclosures in the “shadow” inv. in Cook County for every foreclosed home listed on the market.
Michael David White of HousingStory.Net published a chart that showed over 28,000 foreclosed homes in Cook County IL , with only slightly over 1,200 of them listed on the market. That is only 5% of the foreclosed homes visible on the market Will the remaining 26,800 remain “hidden” forever.
Additionally, high-end (over $750K) houses are a third of the foreclosures now.
Looks like the problems have merely begin.
OK then, what is the solution? Obviously people need a place to live so they are either going to rent or buy. If all of them decide to rent (and a SIGNIFICANT number will), rents will start to skyrocket. If they decide to buy, they will have to choose from what is out there. Furthermore, because the supply is going to be significantly lowered (taking short sales/foreclosures off the market), sellers should be able to stand by their asking prices. It is as simple as that – I see it everyday – clients do NOT want to deal w/ short sales (and now foreclosures) so if they want to buy, they have to pay a premium for an ‘above-water’ place – and, believe it or not, many buyers ARE willing to do this to avoid the hassles of the short sale/foreclosure.
If this is what you truly believe then what it means is that we will forever have a bi-furcated market: a market with prices affected by foreclosure sales and a market not affected. The difference in price between the two areas will be substantial.
This however, doesn’t seem logical to me, because eventually some people will decide that it’s cheaper to live elsewhere and the premium isn’t worth difference – and if demand goes down then prices will follow.
But that’s not what’s happened. As we showed the story of the U of C professor, he’s the real life Stanley Johnson (“I’m up to my eyeballs in debt!”) and many of them live in these expensive homes in the GZ. Stanley Johnson make the minimum payment because he has a good job but he has no plan to actually repay the debt – only a plan to make the minimum monthly payment for as long as he possibly can, which in most cases, might be the next 30 years.
That’s why the GZ has held it’s value.
“Time probably won’t have a significant impact on the prices of properties in this area and, in turn, its affordability, whereas rising interest rates will definitely have an impact.”
clio – you conveniently forget that during this boom the developers built more homes than there were households to fill them.
No matter how you fill the housing stock – be it renter or owners or rent-to-owners; there will always be more homes that households for quite some times – that this will be a drag on both rents and selling prices.
“there will always be more homes that households for quite some times – that this will be a drag on both rents and selling prices.”
Not quite sure this is true – and it is DEFINITELY not true in the nicer areas. Think about it – new construction has pretty much halted, the population keeps groweing (albeit slowly) and there is a possibility that the HUGE number of foreclosed houses/condos may be inhabitable by the time they come back on the market. All of these factors is going to lead to a shift in the supply/demand ratio which, in turn will lead to higher rents and home prices. Of course, this won’t be realized for a couple of years…
“and it is DEFINITELY not true in the nicer areas.”
How many empty $1 million homes do you want me to show you? How many condos that have been on the market a year or two or three- also empty?
In the south loop- it was overbuilt by several thousand units. It will take years to absorb all that inventory.
Okay- if you are saying the south loop isn’t a “good” area- there has still been plenty of new construction in LP and especially Lakeview. Drive up and down Diversey, Belmont, Lincoln and Ashland sometimes. It’s a picture of what was happening during the housing boom. There are new condos on every single block- many of them STILL empty.
The problem will be finding buyers going forward. Not many 20-somethings affording the $500,000 condo anymore. These will move lower in price to the $300k to $350k range- more affordable for the 20-something set to purchase. Eventually they will be absorbed.
After the condo boom of the late 1970s- it was literally 20 years before major new construction occurred in Chicago. It goes in cycles.
Right now, they ARE building new apartment buildings. Apparently able to rent new apartments at nearly $2000 a month very easily. All the newbies and transferees moving to Chicago are renting- not buying.
I also agree with what Homedelete said about those in the GZ able to afford their payments so they keep paying on their properties even though they’re underwater etc. So there are fewer foreclosures and short sales as a result.
That is until something results which forces them to want to move- kids, job transfer etc.
One of the best buildings with classic floor plans and fantistic staff and services. If you can’t cut the assessments you really should not be looking at an 80 year old jewel. I am sorry to see the bathrooms have been “improved” from the elegant 1929 multi head body spray showers that this property usually has.
Looking for a SF deal with parking, low assessments, crappy maintenance and a TON of foreclosures? Look out the back door of the Eddystone. Then buy a studio at 420 Belmont rent the apartment and use the parking. This building is great. Lake shore access without the address. Much more taseteful. Nick, Nora and Asta would be right at home here. And if you don’t know who they are you belong at 420 Belmont.
No, I do not live in or own a unit at this address.
QUESTION – we are a young couple looking to buy soon. We started looking in the city with the idea that even if we do move in five years, we will keep our place and rent it for the long term. We began looking at condos and townhomes in lincoln park but I am not convinced this is the best idea. If we know we will be in the burbs in five to six years, would it be smarter to buy a place in the near western burbs, rent it out for a few years, and continue to rent in the city until we are ready to move out? Love to hear thoughts.
“If we know we will be in the burbs in five to six years, would it be smarter to buy a place in the near western burbs, rent it out for a few years, and continue to rent in the city until we are ready to move out? Love to hear thoughts.”
Why buy anything at all? Just continue to live in the city until you are ready to move in 5 or 6 years. Save money for a downpayment. Hopefully you will be earning more by then and can afford a nicer property (and will have the downpayment to do so.)
Looking,
I think that in your particular situation, you should rent until you are ready to buy in the suburbs. Your 2 alternative solutions will bring you tremendous headaches.
“We began looking at condos and townhomes in lincoln park but I am not convinced this is the best idea. If we know we will be in the burbs in five to six years, would it be smarter to buy a place in the near western burbs, rent it out for a few years, and continue to rent in the city until we are ready to move out? Love to hear thoughts.”
What’s wrong with this picture: Lincoln Park to…the near western burbs…
Question, if you’re considering living in LP for the next 5 or 6 years, it simply does not follow that you’re planning to “settle down” in the western burbs. I presume that, if you’re willing to pay a premium to live in LP, it’s because you place a high value on the park and lakefront. Why don’t you look for a deal on the north shore now?
Looking–do you have kids already? I’m assuming that the prospect of kids is prompting the move. So unless kid #1 is right around the corner, I would stay in the city and enjoy it because life is very different once you become parents (just had my first child 7 weeks ago).
Anonny make a good point, though. Is there a reason why you are targeting the western suburbs? Do you have certain suburbs already in mind?
“That is until something results which forces them to want to move- kids, job transfer etc.”
You can’t do a short sale just because you had kids and want to move to the suburbs or are moving for a new job. You have to document financial difficulty. And I doubt sellers in these areas are just going to walk away from their property under these circumstances. Chances are they will bring money to the closing table to cover the loss…I’ve witnessed this more recently at closings on “GZ” properties.
“You can’t do a short sale just because you had kids and want to move to the suburbs or are moving for a new job.”
If you are moving to a new city for a job- of course the bank will let you short sale. I personally know of 3 instances where this has happened in the last 6 months. In one of them, however, the bank is making them bring $30k to get out of the house (when they are about $150k underwater.) It’s better for both parties than going into foreclosure.
Interesting. What if you called the bank and told them you want to do a short sale because you had a kid(s) and now want to move to the suburbs?
Even when financial difficulty is present, the short sale process is taking about 6 months or more. I can’t imagine it would be any faster or more desirable to do a short sale if you’re not able to demonstrate an inability to make the payments.
“Interesting. What if you called the bank and told them you want to do a short sale because you had a kid(s) and now want to move to the suburbs? ”
The short sale process is about the bank limiting its losses, not about helping out borrowers. If the banks thought they would come out ahead by forcing borrowers thru foreclosure, or bankruptcy, or conscripted service in the symbionese liberation army, they do it. In there current situation, in most cases, they determine that a short sale will best protect the banks interests–remember, they are amoral profit maximizers, unconcerned about “letting” any individual “get away with something”.
I complete understand what you’re saying, but given this fact why don’t banks respond more timely to short sale offers? These deals fall apart so often due to the long processing time that a lot of these properties end up in foreclosure and ultimately sell for less. It just doesn’t seem like the banks are always acting in their best interest.
“but given this fact why don’t banks respond more timely to short sale offers? … It just doesn’t seem like the banks are always acting in their best interest.”
Ever work for a large corporation? Does anyone near the front lines get rewarded for “I only lost the company $100k, instead of $150k” on a transaction that they have complete control over?
The incentives for the employees are FUBAR and the opportunities for second guessing if the RE market turns even a little positive are massive. Almost everyone is in CYA mode and the banks’ leadership need to set up a proper incentive structure (or, at least, define benchmarks for pricing) to clear the shortsale logjam. If everyone is worried about making the mistake that costs their job, then decisions don’t get made.
ps:
As bob repeatedly points out, the banks themselves aren’t particularly motivated to clear the books, either, as (almost) every shortsale leads to recognition of a loss and a decrease in the banks assets.
Anon(tfo), you nailed it on the head. Short sales are not about helping out the borrower but instead helping out the bank. Same with HAMP loan modifications.
Here’s a few sentences from a letter I received from a client on why his loan mod was denied. (I occasionally dabble into loan mods but not by choice – it’s a long story):
“The [HAMP] program requires a calculation of the Net Present Value (NPV) of a modification using a formula developed by the Department of the Treasury. The NPV calculation requires us to input certain financial information about your income and you Loan including the factor below (i.e. balance, ARM reset, taxes, assessments, months DQ, interest rate, zip code, etc). When combined with other data in the treasury model, these inputs estimate the cash flow the investor (owner) of your loan is likely to receive if the loan is modified and the investor’s cash flow if the loan is not modified. Based on the NPV results, the owner of your loan has not been approved for a modification.”
SO it’s all a facade, it’s all a ruse, a joke. HAMP is not about keeping homeowners in their homes – it’s about maximizing cash flow for the bank. That’s it. If the bank thinks it get can more money in a foreclosure then it sells the house.
Point well taken…which is why I am skeptical that short sales are a viable option for people moving for reasons such as kid(s) or new job UNLESS they are so underwater it’s the only option.
I probably wasn’t specific enough, I wasn’t saying specifically Lincoln Park, by the lake, maybe west lincoln park, lakeview. We have dual income, near $200,000 a year in our mid 20’s and i guess i am not convinced that renting and putting money in savings is our best option.
Everyone on here seems to talk in absolutes, especially about the future of the market. I do agree that buying something and having to sell in the next five years is a bad idea. However, that’s not exactly what I am saying. No matter what option we choose, the plan is to hold on to the property.
If we bought in the city, we would hold onto that property long term, 15 to 30 years ideally. We would live in the city until our kids are getting to school age and then move. We love a bunch of western burbs, riverside, elmhurst, western springs.
I guess what I am weighing in my head is knowing that we want to be in the burbs eventually and that values are fairly low (dont know if they are rock bottom) and the cost to borrow is the lowest it’s ever been, is it a better idea to get more for our money in the burbs now, even if we don’t want to move there?
I dont think anyone knows exactly what is going to happen thats why I am interested in hearing different opinions…
Looking,
I really think that you should hold off on buying anything until you are ready. You are very young and although you may think you know what your life is going to be in 5 years, you don’t. When I was 25, I was married had 2 kids and living in Boston. My wife an I were both in high income jobs and I thought that I would stay in boston (brookline) for the rest of my life. By 28, I was single, paying child support and living in California. Although I hope what happened to me doesn’t happen to you, I DO think that you shouldn’t make any plans until you are ready to actually make the move – keep your flexibility – you never know when you will need it.
“We have dual income, near $200,000 a year in our mid 20’s and i guess i am not convinced that renting and putting money in savings is our best option.”
And buying a depreciating asset that is hard to sell IS the best option? Who is telling you this? Your parents? Because a lot of older people are living in the old times when real estate only went up. They don’t know what it’s like when real estate declines (or goes flat.)
Does your thinking change if you were to be told that that condo or house that you’re buying (and not even going to live in) won’t go up in value for 10 years or more?
You don’t say if you have any debts. If you don’t- and you have $200k a year without any responsibility- why not just enjoy life? Max out your 401ks while you can (and you’ll be rich later.) That is $32k right there. Put some in an IRA – and that’s another $8k. Live in a nice rental condo and/or townhouse. The city is your oyster.
Why would you want to buy something- knowing you are going to move in a few years time- when there are so many other attractive investments out there? I guess- my question to you is- why are you “investing” in a house in your mid-20s that you will hold for 20 or 30 years (some of which you won’t be living in it) when housing is a lousy investment?
Buy stocks instead. Travel. Save a lovely downpayment that in 5 years times will give you a complete advantage over everyone else in the housing market.
you guys have good/valid points but my question to you becomes are you sure that your negative feelings about the current market aren’t carrying over to your projections of the future?
Any market, in the end, revolves around supply and demand. There are plenty of young people out there who want to buy. As the economy recovers, you dont believe that supply will start to decrease? As it does, will value not increase?
If you read what many of the credit analysts involved in mortgage bonds, that called for the housing down turn and the implosion of the “CDO” market, aren’t many of them saying preaching to investors that now is the time to buy?
I am simply playing devil’s advocate. To say that your thoughts aren’t leading me to question things definitely is not true. I am simply just not sure it’s as cut and dry, housing won’t appreciate for 10 years, as you guys say it is.
If you are making $200,000 a year between you and your partner, buying multiple pieces of residential real estate and holding on to it for many years is one of the best ways to slowly flush your money down the toilet.
I’ll tell you this much: 1) your high income earning days may not last forever, and they might be shorter than you think and 2) there’s no rush to buy, there are a handful of reasons to buy, and two dozen more not to. Without any real clear investment strategy than “If we bought in the city, we would hold onto that property long term, 15 to 30 years ideally. We would live in the city until our kids are getting to school age and then move” I suggest you give your money to me and I’ll return it back to you.
Save your money, you’ll need it more in the future than you need it today. Don’t blow it on real estate for goodness sakes.
“There are plenty of young people out there who want to buy. As the economy recovers, you dont believe that supply will start to decrease? As it does, will value not increase?”
Sure- supply will start to decrease but not before we get through all the foreclosures and short sales first. And THEN we will hit the bottom on price and probably limp along. This will take years. Many people will figure out that life goes on if you don’t buy real estate. Believe it or not- “young people” used to rent for 10 years (gasp) before buying their first homes (usually single family homes- not condos.) We’ll likely return to that. So there won’t be demand for a long, long time.
None of us knows where the housing market is going to go. But history tells you that when a bubble bursts, that asset class doesn’t go anywhere for years and years. If you need somewhere to live, you can easily afford the payment and you know you’re going to be there 10 years or more- then go for it. But otherwise- it’s probably not a smart move.
As Clio pointed out- many people in their 20s change jobs frequently (with many changing states.) Why tie yourself down? The greatest gift you have in this job market is mobility.
“Any market, in the end, revolves around supply and demand. There are plenty of young people out there who want to buy.”
I am one of the biggest proponents/cheerleaders of real estate on this site and often use the supply/demand argument and low interest rates to urge/encourage people to “buy now”. However, it ONLY makes sense if you are going to either:
1. live in the property yourself for a long time
2. have experience with being a landlord AND have disposable income for investment purposes
However, if you are hell-bent on buying, why not check out properties that offer lease/option or contract sale opportunities? It might be a way to have your cake and eat it too. I offer this option on all of my properties (not that this is a solicitation). Many other owners (especially in nicer buildings) will do the same.
“Looking” is just one example of many that underscores the importance psychology has on the market. Here is a young guy who makes a lot of money and has all of the freedom in the world. Given his young age, lack of disposable income/savings/job security, all of the signs are warning him to stay out of the market yet he really wants to buy something now. This is exactly what I am talking about when I say, “don’t underestimate the power of psychology on real estate”. It shapes the market MUCH MUCH more than you would like to think
PS Looking – sorry to use you as an example, but it fit too perfectly.
Looking–you got a lot of discouraging responses to your question. As you know, it doesn’t make sense to buy if you’re not going to be in the property for a long time. And as Clio pointed out, it’s no fun being a landlord.
However, if you’re married, have at least 20% down and extra cash in reserves, are comfortable with the move to the suburbs in your mid-20s, can find a place that you could afford on just one of your incomes (if necessary), and are in it for the long-term (at least 10 years), then it’s not unreasonable to consider a purchase. These are a lot of conditions, but if they match you then see what’s out there. The key in this market is to tread carefully…as I’m sure you know, there are A LOT of overpriced properties in this market. You need to be patient and do your due diligence on any property under consideration and, if you bid, BID AGGRESSIVELY, factoring in not just recent comps but also possible future declines in prices.
In the end, housing will start to appreciate again. Just as you were directed to stocks, which have performed horribly this decade, equities and real estate both historically are appreciating assets and it is now confirmed that NO asset is immune from price declines. Who knows when we will hit rock bottom on pricing…what you need to consider is total affordability over your intended time frame. If you are looking very long term, then interest rates and prices should have a strong bearing on your decision…however, a short term time frame is all about price.
Virtually everyone is bearish on real estate right now, similarly to how virtually everyone was bullish on real estate from 2000-2007. Consider the conditions above and shop prudently.
Also, keep in mind that if you were looking for positive encouragement on buying you probably came to the wrong website…
Hey, how did pets.com do long term?
How do you think homes in the exurbs will do long term? How will mcmansions do long term? Heck how well do you think schaumburg will do long term? How are you supposed to know what real estate investment is good long term?
I frequent this website often and knew what to expect. They are things I wanted to hear because many people, regardless of what is thought on here, believe its a good time to buy (whether right or wrong). I didnt float this question on here because I had my mind set about something. I appreciate the responses. We have been back and forth on looking for the last year and a half and I keep saying we need to wait. I am definitely still unsure of the right thing to do but I feel no rush to form a concrete opinion. Therefore I can’t see us buying anything anytime soon.
“Virtually everyone is bearish on real estate right now, similarly to how virtually everyone was bullish on real estate from 2000-2007.”
I disagree with this. If this were true- Looking wouldn’t even consider buying right now (and no one he knows would be telling him to buy.) But he is (and they are.) That is not “bearish.”
In my opinion, psychology about housing has changed very little. Even for those who are underwater and have to rent out their condos in order to buy the next property. What are they doing? They’re buying the next property without ANY hesitation. There is little fear that things could get worse or that they could be underwater in a few years on the second property. Or that when they go to sell in 10 years they will make no money.
At the bottom of markets- NO ONE wants to buy that asset class. While it’s not “go-go” like 5 years ago- that’s only because people have to actually come up with the money to put down now (for the most part) and credit is harder to get. If it were still easy to get the credit- we’d still have everyone buying. Like I said- there is no fear.
“Hey, how did pets.com do long term?”
-Who cares? At the end of the day the stock was worthless, whereas a well thought-out decision about purchasing a home with a long time horizon cannot. I did qualify that with assuming you make an informed decision from the beginning. If you’re entering the market, there’s no reason to believe it will have significant downside vs other investment decisions long-term. If you believe over the course of 25 years it will be, then what investment could withstand the ultimate destruction of wealth of our whole over-leveraged country? At the end of the day, your dollars in bond funds, the stock market, or anything else would be worthless anyways.
Buy a place to live in the burbs, or buy a place to live in the city. With a long-term purchase in the city, however, I’d understand the risks of dramatic shifts in the tastes of the public over a long time period and remain focused on areas with enough positives to withstand any such switch, ie close to the loop or significant amenities.
Sabrina–you’re right on that quote…it was incorrect and an exaggeration. What I meant to say–and I believe this to be true–is that bullish views were dominant and promoted by the media during the boom years (I think everyone can agree with this), whereas bearish views have become much more popular and promoted by the media over the past few years. That’s not to say they are accepted by everyone, but the negative outlooks on real estate seem to be more widespread on the Internet and other medium than bullish views.
HD–I miss your glass half full Old Irving Park personality from a few days ago. Unless you were joking, you indicated that you would join the ranks of homeownership if a certain property in OIP was at a particular price point. I’m just curious why you’re seemingly optimistic about real estate only when we talk about properties in Old Irving Park.
@looking,
#1 you dont know how much your mind-set changes once the first kiddo squirts out. your beliefs/ideal/morals will even if you fight it will get a complete overhaul.
so why make a present you decision for future you that you know nothing about yet?
#2 you cant count on a burb to be the same in 10 years, just look now how many of them slipped just in 3 years, and with more and more mexican families taking over some burbs just look at the stats of what going on in Aurora.
So why by something now for the future the maybe in the future will not be suitable or safe for your future family?
Riverside, Elmhurst, and Western Springs are a far cry from Aurora and its drawbacks. Anyone buying bubble properties 1+ hour away from the loop by public transit stand to lose a lot of money, money that most likely isn’t there.
“you cant count on a burb to be the same in 10 years, just look now how many of them slipped just in 3 years, and with more and more mexican families taking over some burbs just look at the stats of what going on in Aurora.”
Groove, I have to respectfully disagree – there are a number of suburbs (as you should know) that have ALWAYS been extremely desireable and high-priced (Oak Brook, Hinsdale, Winnetka, Kenilworth, Wilmette, and certain sections of Western Springs, La Grange, Highland Park, Glencoe, Glenview, Northbrook, etc.). Pick well, and he should do fine. However, I totally agree with you that his life is likely not going to be like anything he imagined in 5 years (especially after having kids)!!
“HD–I miss your glass half full Old Irving Park personality from a few days ago. Unless you were joking, you indicated that you would join the ranks of homeownership if a certain property in OIP was at a particular price point. I’m just curious why you’re seemingly optimistic about real estate only when we talk about properties in Old Irving Park.”
HD is knowledgeable enough to understand that income and housing prices are intrinsically related but either blind to the realization that this calculation occurs in other neighborhoods as well, or most likely just doesn’t care. He knows what that price is in OIP given the demographics of the neighborhood and is comfortable in making that decision when the price is there. It’s impossible to understand the demographics of all areas, and HD just chooses to use the rest of his time fear-mongering, it’s tiresome.
clio,
true the burbs you have mentioned have held well (time will tell for Highland park its dirt cheap there now).
but i am under the assumption that
1. looking wouldnt want to drop that amount of cash on a home in those burbs
2. wouldnt want the carrying cost of its insane high taxes when not even living there
3. IDK but in the burbs you listed would looking be able to get rent to even cover the mortgage and taxes there?
“There is little fear that things could get worse or that they could be underwater in a few years on the second property. Or that when they go to sell in 10 years they will make no money.”
I couldn’t agree more, Sabrina – which is why real estate is so interesting and confusing: the psychological factor is one of the biggest driving forces in real estate prices. The people who are buying my “farm” in St. Charles are a couple in their 40s w/ 2 kids, an income of near 175k. They are paying 50k over asking (b/c of the owner financing I am providing). I have warned them repeatedlly that the place needs 100k in work to make it liveable and then, there is a HUGE mainenance cost. Despite all of these warnings, they want to proceed – they imagine such a better life there, riding horses, planting vegetables and enjoying the rural life. Maybe it will happen, but I doubt it. You would think that if an owner of a property is warning you, you should think twice and walk, but they are not. We are signing the contracts this week!
Thats a major concern, definitely don’t know much if anything about rental market in those western burbs. Also, the real estate taxes are a real draw back considering I wouldn’t even be able to use the better schools, etc.
Looking–based on what you’ve told us, you really should just continue renting right now. If you don’t have kids or plans in the immediate future for kids, just save your cash and enjoy life in the city right now, as Sabrina suggested.
Looking do you really want to be a landlord in the short or long term? Are you willing to deal with random issues that may arise at the most inconvenient times? Are you handy and willing to spend your spare time fixing stuff, or do you believe the numbers will allow you to hire people? Are you good at screening tenants? I believe the pretty consistent advice on here from a number of sources is that being a landlord is tougher than you think. I think you can make a decent return under the right circumstances but personally, I’d rather put my money and time elsewhere.
What’s your view of housing prices? I think real prices will likely decrease and the chance of a significant increase is negligible over 5 years. I take the point about low interest rates, but their benefit depends on your continuing to own the home, is mitigated by future declines in rates (which would allow you to refinance even if rates were high when you bought), and (at least arguably) may be partly reflected in price levels. I’m not so bearish I wouldn’t buy, but buying a house I think I would want to live in in 5 years, and dealing with the hassles of being a landlord for that time, seems like a pain in the ass, even if the numbers worked out. But I’m probably lazy, and wary of encumbrances.
And how sure are you about plans in 5 years?
How are the Englewood properties doing? Many bought long term…and now their blocks are full of foreclosures they cannot give away.
How about Cal City? Or the exurbs? or Plainfield?
They all bought long term and look where they are now.
All you can do is buy today when the number make sense; and if you hold out for the long term – great – hopefully you get lucky in the RE lottery. However, to blindly give advice like “if you buy for the long term, even if you overpay today ” is ridiculous.
Of course, people here tend to think that the only real estate that will ever hold its value is the Green Zone; and they conveniently forget 20 years ago when Bucktown and Wicker park were basically an extension of Humboldt.
You buy today because the monthly payment is cheap, the neighborhood is good and the house is stable. If you buy your resident to hold for 20 years thinking you’ll make money down the road…well, that may have worked in the past but there’s no guarantee that will work in the future. Good luck folks.
“At the end of the day the stock was worthless, whereas a well thought-out decision about purchasing a home with a long time horizon cannot.”
If I had the time (Which I dont) I could show thousands of city properties selling for less today than they were 10 years ago. Hell people in my area bought in 2002 and can’t sell their home for the price they paid 8 years ago and I live in a good neighborhood. You buy because the payment makes sense in your budget today and hopefully in the future. The buy and hold strategy is garbage. You buy and hold only so that you don’t have to pay transaction costs .
I’m not just fear mongering, this is reality. The real estate sector is in a depression. A DEPRESSION. It’s practically decimated. People on this board whistle past the graveyard full of bankrupted builders, designers, architects, carpenters, lenders, mortgage companies, realtors, home sale retailers….
Yeah, that’s right, buy and hold, that’s how to make money in today’s real estate market…..see above.
HD- I don’t think anyone is advocating buying in Englewood, Cal City, or even Wicker park/Bucktown – however, if you find a deal in Hinsdale/oakbrook/kenilworth/winnetka or in great areas of the city (the good buildings in the G.C./L.P) now IS ABSOLUTELY POSITIVELY the time to buy or you seriously might be priced out forever. These areas have virtually NOT been hit (in terms of prices) in this real estate recession/depression. While prices were 10% lower in O.B. in 2008-2009, they have rebounded to previous levels and are predicted to slowly climb. The same could be said for the other areas.
“now IS ABSOLUTELY POSITIVELY the time to buy or you seriously might be priced out forever”
Doesn’t this view mean Looking should buy the house in burbs (don’t know where you think western springs fits in the scheme of things) if they are sure they want to be there in 5 years?
HD–So were you just being facetious the other day when you suggested you would join the ranks of homeownership if certain properties in Old Irivng Park were available at a certain price point?
“Doesn’t this view mean Looking should buy the house in burbs (don’t know where you think western springs fits in the scheme of things) if they are sure they want to be there in 5 years?”
Yes – for someone who KNOWS they want to live in these areas, now IS the time. The problem with “looking” is that he is really young, not yet settled (professionally, socially, family-wise) and doesn’t know where he is going to be in 5 years. However, someone who already lives in the area and is looking for a bigger house, who is established and settled in their professional/social/and family lives definitely should be looking and buying right now.
no I would be willing to join at a certain price point. Unfortunely there are too few homes in the condition I want at the price point in which I am interested. Apparently others agree with me because so few homes are selling. Sure a handful wenbt under k but its few compared to the number for sale.
Looking wants to buy two houses in nice neighborhoods because he wants to employ the buy and hold strategy. That’s absurdity. He should save his income or buy one home to live in.
But do not delude yourself into believing this is a great time to buy. Its really only slightly better than a few years ago.
HD–I agree with you. And, honestly, I think the house you pointed out in OIP might still be overpriced in the mid-300s, the price point at which you said you would buy it. I’m not suggesting that people overpay for real estate…I am suggesting being aggressive if you are in a position to buy right now. I’m talking an opening bid of 20-30% or more off list price. And I advocate targeting properties where the seller is in a position to entertain these aggressive offers, particularly long-term owners and estate sales. In my experience, foreclosures and short sales aren’t good deals…they need a ton of work and they aren’t that negotiable on price. And I absolutely advise against buying a city property just to rent it out later.
HD, if your convictions are as strong as your diatribe atop the soapbox you suggest everyone to on a daily basis, you’d wouldn’t have a thought in your mind of purchasing, at any price, in any location. Are you hard-headed enough to believe that the truth is a combination of HD/Clio and your knowledge doesn’t encompass all that is known about the present state of the real estate market?
“But do not delude yourself into believing this is a great time to buy. Its really only slightly better than a few years ago.”
HD – what are you talking about?!!! People realize that the great areas/buildings will ALWAYS be great – that is the reason to buy in these areas. Interest rates have never been (and will never be) lower and prices are at their lowest in a long time (and will surely rise in the next several years). Furthermore, why postpone your life – and I know that Sabrina always says that just because you rent and don’t buy doesn’t mean you are postponing life – but we all know that if you are thinking of buying a house/condo and don’t – it DOES consume a lot of your time and energy (constantly looking at houses/prices and avoiding renovations on your current residence because you know you will move). There is a sense of instability when you know you need/want to move – all of these are reasons to buy now. Again, don’t underestimate the power of psychology on the real estate market and your life!!
“But do not delude yourself into believing this is a great time to buy. Its really only slightly better than a few years ago.”
I don’t know if that applies across the board, HD. For instance, I know some folks who sold their house on the north shore for $1 million about 4 years ago – it was an immediate tear-down (they clearly sold at just the right time). Today, one could buy a pretty nice home in roughly that same neighborhood for well under $1 million – not a tear down, but a home into which a family could move right away. The barrier to entry into the north shore has never been lower.
“The barrier to entry into the north shore has never been lower.”
Extraordinarily untrue. Not in our adult lives, probably, but the barrier to entry was much lower in the 70s, even considering inflation, salaries and interest rates. People who bought in NT T’ship in the 70s have done quite well, in real dollar terms, if they’ve held for 35 years. Obviously even better if they sold 4/5 years ago.
My diatruibes are no different than anyone else. Skip my posts when you see my name. I skip nearly all of clio’s unless I want a good laugh.
Yes, anon, by “never been lower,” I’m talking about the relatively recent market. It was also cheaper to buy there in the 1800’s, far cheaper than the 1970’s.
The folks I know (who sold a tear down for $1 million) bought in the 70’s for the low $100’s, lived there a few decades (doing very little to the place), then sold to a developer in a matter of days.
If I were inclined to live in the burbs (and I’m not), I would be looking to buy a place in one of the north shore burbs, as far east and south as possible.
“I skip nearly all of clio’s unless I want a good laugh”
Happy that I can bring some joy into your obviously cynical/depressing life!!!
Looking – try to remember that the calculation of one’s net worth only recently included their primary residence. I am trying to underscore that the value of your HOME should not be looked at as a path to wealth. While you are just trying to determine if “now is a good time to buy” keep in mind that it is only a good time to buy if you are ready to commit to something you could see for the foreseeable future. Your home is not an investment, over the years you will spend more on maintenance, taxes, decorating, re-decorating, remodeling, new appliances etc. that you are likely to make on appreciation.
I am not advocating a bearish position, that would be a road to poverty. My comfort level is something I can comfortably afford with a good cushion and a place I can see raising kids because that is a very loose description of where my life is going. If you are thinking you would rent a place out you take on some risks and if you are comfortable with that, great, but there are risks. I waited and it looks like my timing was fortuitious but recognize it’s not for everyone.
“Not in our adult lives, probably,”
Was the cost higher in say the 1980s? Or was it similar to what it is now?
Just curious. Not really looking up there, although we did have an awfully nice morning at the beach up there on Sun. North shore is really beautiful in the fall.
“Yes, anon, by “never been lower,” I’m talking about the relatively recent market. It was also cheaper to buy there in the 1800’s, far cheaper than the 1970’s. ”
Not trying to be a pain, but “never” to me means more at least more than my lifetime. I wouldn’t (as some here might) point to buying the from the Chippewa as a reasonable comparison, but if one’s parents might of bought it for less, then “never” isn’t a correct description.
LOL..you mean the Potawatomi?
Haha…Chippewa? Totally off subject but I think Potawatomi is more accurate.
“The folks I know (who sold a tear down for $1 million) bought in the 70’s for the low $100’s, lived there a few decades (doing very little to the place), then sold to a developer in a matter of days”
What many people fail to realize is that there are a LOT of maintenance costs that don’t get figured in when imagining a profit. In the example above, how much did the people pay in taxes and general repairs (not necessarily a remodel). Once you add in those costs, you will realize that they may not have made much of a profit at all. Monthly maintenence costs on my house in OB are close to 4k/month – those are unrealized losses and should (but are rarely ever) be calculated when looking at a home as an investment.
“The folks I know (who sold a tear down for $1 million) bought in the 70’s for the low $100’s, lived there a few decades (doing very little to the place), then sold to a developer in a matter of days”
What many people fail to realize is that there are a LOT of maintenance costs that don’t get figured in when imagining a profit. In the example above, how much did the people pay in taxes and general repairs (not necessarily a remodel). Once you add in those costs, you will realize that they may not have made much of a profit at all. Monthly maintenence costs on my house in OB are close to 4k/month – those are unrealized losses and should (but are rarely ever) be calculated when looking at a home as an investment.
Clio-
The people buying your farm are most likely idealists who are looking to live a “back to the earth” lifestyle will working at their jobs. It’s very trendy these days. That’s probably why they’re willing to pay the extra dosh.
Boy, are they going to find out quick that it doesn’t work like that.
“Monthly maintenence costs on my house in OB are close to 4k/month”
WTF? Clio do you have time to provide a list of what you consider “maintenance”. do you have a gardener that is exclusive to just your OB home? and a maid/cleaning lady should be in the calc for investment purp.
“Boy, are they going to find out quick that it doesn’t work like that”
I know – I feel bad for them and have warned them repeatedly – but they are hell bent on buying. so i am wiping my hands of it and signing the contract.
“WTF? Clio do you have time to provide a list of what you consider “maintenance”. do you have a gardener that is exclusive to just your OB home? and a maid/cleaning lady should be in the calc for investment purp.”
Electricity: 600-1200/month
Gas: 300-500/month
Pool care: 7500/year
putting green maint: 1500/year
lawn care (2 acre manicured grounds): 4000/year
driveway (15000 sq foot)plowing: 3000/season
flowers (annuals and around the pool): 2000/year
“Haha…Chippewa? Totally off subject but I think Potawatomi is more accurate.”
See:
http://books.google.com/books?id=kgsuAAAAIAAJ&pg=PA402&lpg=PA402&dq=chippewa+treaties+ceding+illinois&source=bl&ots=qSw1lIIy-E&sig=5u4D8R2Ncjv2S3R4TpzeJbFQu1k&hl=en&ei=v5K0TIyaM4TAnAfpxpz_BA&sa=X&oi=book_result&ct=result&resnum=4&ved=0CCAQ6AEwAw#v=onepage&q&f=false
wait, I wasn’t done…
tennis court maint: 2500/year
gutter cleaning/spring fall cleanup: 3000/year
tree trimming: 4000/year
bulb replacement (197 outdoor lights): 2000/year
scott’s lawn service: 1800/year
and this isn’t including bush/tree replacement, driveway resurfacing, outdoor painting, etc.
“bulb replacement (197 outdoor lights): 2000/year”
“Electricity: 600-1200/month”
You, my friend, need to get a bulk order of LED lights together.
LED lights suck, they need a few more years of development for them to start making sense financially and they need to be brighter
Dammn, anon…you did your homework! I stand corrected. I always thought it was the Potwatomi…maybe that was specifically Chicago.
“LED lights suck, they need a few more years of development for them to start making sense financially and they need to be brighter”
He’s got 197 *outdoor* lights that he pays someone to replace (basically) every year. And a crazy electric bill. He’d do his neighbors a favor by not having the ranch lit up quite as brightly.
“Dammn, anon…you did your homework! I stand corrected. I always thought it was the Potwatomi…maybe that was specifically Chicago.”
Actually, it was an off-the-cuff first real area tribe I could think of post, with the follow-up out of curiosity. Also learned that Potowatomi, Ottawa and Chippewa/Ojibwe were related tribes, hence all of them in that 1833 treaty.
Clio:
I think your maintenance expenses are somewhat unique, not just for this website. I live in a relatively nice north shore house, 4000 sq. ft., newer construction, and my maintenance (mostly lawn, snowplow & utilities) is probably about $8 K per year.
Then again, I lack the pool, tennis courts, putting green, 1/4 mile long driveway, etc.
“my maintenance (mostly lawn, snowplow & utilities) is probably about $8 K per year.”
Really – I have a hard time believing that your electic/gas bills themselves are anything less than 650/month – no way that those bills plus lawn care/snow removal/flowers/mulch/spring-fall cleanup is less than 8k for you.
“Really – I have a hard time believing that your electic/gas bills themselves are anything less than 650/month”
House is somewhat smaller than 4000 sf, but well over 2000 and old and poorly insulated, and our electric+gas averages well under $350/month, probably under $300.
You sure you don’t have a Tesla hiding in the garage?
That’s it – party at Clio’s
“House is somewhat smaller than 4000 sf, but well over 2000 and old and poorly insulated, and our electric+gas averages well under $350/month, probably under $300”
I just don’t believe this!! My electric bill on my 1800sq foot condo is 150/month and I only stay there 5 nights/month!!! What are you keeping your thermostat at? – 40degrees in the winter and 90 degrees in the summer?
Clio,
thank you for the break down, and the economy thanks you for keeping people employed.
1. i dont think Looking will be buying such a large complex as you have
2. Looking and most people you are correct they underestimate maintenance cost. your list should scare anyone 🙂
Groove – you are wise beyond your years!! I was an idiot when I bought this place 6 years ago. I imagined lavish parties, family/friends playing in the pool/tennis court/putting green, and fun times… unfortunately not only did I neglect to factor in maint. costs, but also failed to realize that all of my friends are in the city and don’t want to come to the suburbs to play!!! Taking account of your lifestyle/life is of paramount importance when deciding where to live!!
“I just don’t believe this!! My electric bill on my 1800sq foot condo is 150/month and I only stay there 5 nights/month!!! What are you keeping your thermostat at? – 40degrees in the winter and 90 degrees in the summer?”
69-72 year round, depending on how everyone feels. Two refrigerators, separate freezer, people in the house all day. 3 dvrs sucking power 24/7, a desktop computer that never gets turned off, and lots of other “vampire” electric draw. Electric bill topped out at ~$275 this summer, gas “budget” amount for this year is $125, tho I expect that will go up to ~$175 mid-winter. Mid-winter electric bill is ~$100 to $125.
i with a poorly insulated wood frame old ass house (~1000sf)
Electricity: 125/month average
Gas: 200/month average (lots of cooking and winter at 74 degrees because little groove can be cold)
Pool care: 70/year admission to northshore beaches
putting green maint: 5/year a cup, carpet, ball and putter
lawn care (50×125 lot): 30/year gas for lawn mower
driveway plowing: 150/season a shovel, aleve for back pain, and salt for melting
flowers (annuals): 200/year when i had more time i would spend up to 400
tennis court maint: 0/year taxes cover the parks court
gutter cleaning/spring fall cleanup: 15/year a ladder and some gloves and a six pack
tree trimming: 500/year this is one i dont do myself
bulb replacement (197 outdoor lights): 0/year
scott’s lawn service: 75/year lowe’s on sale on off seasons
groove – the funny thing is that you probably get more use out of your yard, public pools/tennis court than I do!!!
anon- can I buy your house? don’t ever move – those bills are ridiculously low!!
my electric bill topped out at $100 this summer and I own a ton of electric appliances
I rule, and so do ‘smart meters’
I’m guesstimating, $125/month average each for electric and for gas. House is almost always occupied. In summer, keep house at 72 during day, 69-70 at night. In winter, 70-72 during day, low 60s at night (little DZ has really expensive scandinavian wool undergarments that are apparently cost-justified by ability to keep him warm). Landlord takes care of most everything else.
“groove – the funny thing is that you probably get more use out of your yard, public pools/tennis court than I do!!!”
we would probably get more use out of your yard than our own, the pool would draw more bbq’s and more people per bbq, the tennis court might have us loose friends (wife’s eastern euro tennis skills spank me every time) the putting range wont be put to use as my short game is on point, teach me to hit a 3 iron accurately i will give you my kingdom 🙂
I do wish i had a underground pool, the above ground city thing really isnt the same. plus the deck built to accommodate just takes up all the yard.
“little DZ has really expensive scandinavian wool undergarments that are apparently cost-justified by ability to keep him warm”
link plz!!!!!!!!
“link plz!!!!!!!!”
http://www.novanatural.com/s.nl/sc.18/category.20902/.f
DZ,
before i forward this on and she goes and buys one of each color bodysuit.
is it really worth it? and what are the laundering requirements?
“before i forward this on and she goes and buys one of each color bodysuit.
is it really worth it? and what are the laundering requirements?”
Well, what I can say is that my wife loves them. Cannot machine dry. I think advice is hand wash but sometimes we do gentle cycle.
“we would probably get more use out of your yard than our own”
groove – forget about kenilworth – buy my house!! OB and Hinsdale schools are AWESOME and the people are a lot friendlier. More importantly, I can offer owner financing!!!
“the people are a lot friendlier”
I’m not really in a position to make the relative comparison, but I have heard a number of independent complaints of snootiness about Hinsdale.
“I’m not really in a position to make the relative comparison, but I have heard a number of independent complaints of snootiness about Hinsdale.”
My negative experiences with snootiness around Chicago have all been in the OB area.
Groove probably couldn’t afford the taxes + maintenance on your house clio if you gave it to him for free… ( i know I couldn’t!!!)
“Well, what I can say is that my wife loves them. Cannot machine dry. I think advice is hand wash but sometimes we do gentle cycle.”
we are buying two onzies buy the end of work day, and she said she is fine with hand washing.
so if they work out maybe she will let me lower the thermostat to 71 at his bed time. i need a place with zoned heating. the worst is its at 74 24/7 when wither comes!!!!!!
“we are buying two onzies buy the end of work day, and she said she is fine with hand washing.
so if they work out maybe she will let me lower the thermostat to 71 at his bed time.”
I was being a little facetious about them being cost-justified. But we really do keep the thermostat in the low 60s. His room is small enough and easier to keep warm so it is prob closer to 68 at night. My wife does really love the wool though. For going outside as well. Just try to stay away from the $150 wooden fire trucks.
“probably couldn’t afford the taxes + maintenance on your house clio if you gave it to him for free”
I think clio would prob offer owner financing on that too.
“groove – forget about kenilworth – buy my house!! OB and Hinsdale schools are AWESOME and the people are a lot friendlier. More importantly, I can offer owner financing!!!”
Sonies hit it on the head, besides the oddly low tax percentage in OB, even with me doing most of the maintenance myself the rest would put me in a hole.
i really only need a 3 bedroom place 🙂
do thank you for the offer clio
I like this stuff for me and it is machine washable
This link apparently is for the little ones
https://www.smartwool.com/default.cfm#/Kids/Babies/
I only buy it when its on sale
“I like this stuff for me and it is machine washable
This link apparently is for the little ones”
I don’t think they have underwear for little kids (toddlers). My wife does love their socks.
“But we really do keep the thermostat in the low 60s. His room is small enough and easier to keep warm so it is prob closer to 68 at night”
DZ, well you cant tell i only handle the finances in the house all other orders, oops i mean decisions, are made by my wife. but i am happy even when peoples gas is in my mail box 🙂
“i only handle the finances in the house all other orders, oops i mean decisions, are made by my wife”
Can’t you close some of the other vents, keep little groove’s room door closed, and get his room temp maybe +3 degrees over rest of house? Keep the house at 68 at night, his room will be 71, which is really as warm as anyone needs to sleep at. Get something like this (maybe with humidity readings as well) to monitor temps:
http://www.amazon.com/Oregon-Scientific-RMR382-B-Wireless-Thermometer/dp/B000I2RNEQ/ref=sr_1_1?ie=UTF8&qid=1286914361&sr=8-1
Radiant heat, plus wifey plugs in an electric heater 1 hour before bed time closes the door to make the room “toasty” then unplugs it before bed time.
she does the same for bath time, electric heater in the bathroom 30 min before.
i lost the thermostat battle our first winter before we married and got our own apt. since then after the first bill i whine for like a month but she still gets her way and i wasted a month crying about it.
but i will take you advise if the new place is forced air.
General real estate question for any attorney or real estate person: My contract sale is falling apart ONLY because the fricking real estate agents want their commission up front (even though I won’t be paid until the end of year 5 – and risk the buyers walking away). Are there any set rules/guidelines for payment of the real estate agents? I don’t think it is fair for them to take the full commission up front on a contract sale (as the buyers could walk anytime). I am willing to give them a percent every year (commiserate with the amount I am getting from the buyers). My other contract sales were done without agents and went extremely well – but get these damn real estate agents involved and the deal falls apart. I don’t even know what legal recourse I have if the deal doesn’t go through because of the commission issue. Can I sue them?
Pay the agents from the down payment.
“My contract sale is falling apart ONLY because the fricking real estate agents want their commission up front”
You aren’t giving the buyer a deed, right? Tell the realtors to F.O. and go ahead and file their damn lien on the property, if they know how. Then, if/when there is a deed, they can get paid.
Thanks a lot hd and anon- good information and VERY helpful. I couldn’t think straight because I was so angry!!!
DZ –
I am fairly handy and I have a lot of family members that are/were in the developing business in some aspect (home builder, carpenter, electrician) who would help.
My view of housing prices? I have no doubt there is a strong possibility that we are not at the bottom. With many banks halting foreclosures and knowing there are plenty that are currently stuck in the process, I get that there is still a large amount of supply yet to hit the market (very cheap supply). I wouldn’t buy a place unless I knew I would hold it for a long time. I think the best point made here thus far is that I am young and obviously life could change.
However, I feel pretty certain about where my future is headed. I work for a family member in a very strong company. The office is in Oak Brook, my future wife and I know we both want to end up near my office/love the western burbs. I know enough and read enough to feel that opinions on this site aren’t necessarily 100% right. There are certainly plenty of unanswered questions that I need to face before I am ready.
Lastly, why are many of the folks on here better analysts and better at projecting than the likes of Warren Buffett or John Paulson? Both preach to buy in this market and (this may be ignorant) but are seemingly more successful than all of us collectively. So why is one man, who made his money betting against the housing bubble, calling everyone to buy property?
Looking:
If you work in Oak Brook- why not just move out there right now? Buy something and live in it for 20 years. That seems like the best solution. Otherwise, just keep renting and then buy in 5 years when you want to move. Nothing will have changed (except interest rates) in 5 years and your financial situation will be much, much stronger.
“The office is in Oak Brook, my future wife and I know we both want to end up near my office/love the western burbs.”
I’ve got a great house in Oak Brook for you – I’m sure your wife and you would absolutely LOVE it.
“Lastly, why are many of the folks on here better analysts and better at projecting than the likes of Warren Buffett or John Paulson? Both preach to buy in this market and (this may be ignorant) but are seemingly more successful than all of us collectively. So why is one man, who made his money betting against the housing bubble, calling everyone to buy property?”
Buffett said to buy stocks in December 2008. Did you?
Paulson is buying massive amounts of gold. Are you?
“Nothing will have changed (except interest rates) in 5 years and your financial situation will be much, much stronger.”
Prices in Oak Brook will be much higher in 5 years. 5 years ago it was impossible to break into oak brook (OB/HC school district) for less than 1million. Right now, you can possibly find an ok house in an ok subdivision for 850k – but the nicer houses really haven’t come down in price. In 5 years, prices will be out of reach again. The one thing “looking” COULD do is negotiate with someone who owns a nicer house and see if you could do a contract sale, lease/option – they may just take you up on it.
“office is in Oak Brook”
I think clio is looking to sell.
“Lastly, why are many of the folks on here better analysts and better at projecting than the likes of Warren Buffett or John Paulson? Both preach to buy in this market and (this may be ignorant) but are seemingly more successful than all of us collectively. So why is one man, who made his money betting against the housing bubble, calling everyone to buy property?”
I think Paulson’s point was more on inflation expectations than housing prices. I probably underweight this personally as I’d be happy to be pay off a mortgage as quickly as possible. That said, if double digit inflation does come along, it would be pretty nice to hold a mortgage at current rates.
If you’re very sure about your plans, think you can find the house now that you’ll want for the next 30 years, get it at a reasonable price (by which I mean 2002-2003 nominal price, which is where case shiller is, but list prices are often much much higher), if rents etc work out, then I don’t think it’s a crazy decision to buy in the burbs now. In the event crazy inflation comes along you’ll be doing well. (Of course, if you hadn’t bought and there’s inflation, you’re not in a terrible spot. Rates are higher, but they’re higher b/c inflation is higher, and you can refinance when inflations goes down. And prices might be lower (I said might) if there is a huge increase in interest rates.)
“In 5 years, prices will be out of reach again.”
Why? Because salaries are skyrocketing?
I don’t get your reasoning Clio. You seem to think there are all these incredibly rich people who will suddenly come into hundreds of thousands of dollars for their downpayments and who don’t already own homes who will swoop in and push up prices in areas where there are hundreds of million dollar homes sitting on the market and not selling. The inventory in the suburbs for over $1 million runs in the years right now. So I don’t see how in five years it will suddenly change.
You know how it works right?
Too much supply = lower prices.
If someone wants Hinsdale schools (a nicer town, in my opinion), they can just buy there and not Oak Brook.
I’ve said many times- that if you’re going to live in the house for the minimum of 10 years- then it’s not a bad time to buy in the Chicago area. Go for it. Live your life.
But, as we know, that’s not what Looking is planning on doing.
Noone is buying clio’s overpriced property in Oak Brook for 850k when you can get this 800k house in Wilmette (MLS #: 07530294). 4/3.5 right on the Chicago River AND the Lake AND the Linden stop.
Stop talking up your book clio when your book sucks it comes off as groveling.
“Noone is buying clio’s overpriced property in Oak Brook for 850k when you can get this 800k house in Wilmette (MLS #: 07530294).”
850k? WTF are you talking about? If I offered my place for sale for 850k, I guarantee you I would get 10 cash offers within hours. Remember, vacant land out here costs about 1 million/acre and I live on 2 buildable acres. sorry to disappoint….
“Prices in Oak Brook will be much higher in 5 years. 5 years ago it was impossible to break into oak brook (OB/HC school district) for less than 1million. Right now, you can possibly find an ok house in an ok subdivision for 850k – but the nicer houses really haven’t come down in price. In 5 years, prices will be out of reach again.”
What were prices like 10-15 years ago?
“800k house in Wilmette (MLS #: 07530294). 4/3.5 right on the Chicago River AND the Lake AND the Linden stop.”
We did have a really nice time at Gilson Park this weekend. Is the El a reasonable commute from all the way out there?
“I’ve said many times- that if you’re going to live in the house for the minimum of 10 years- then it’s not a bad time to buy in the Chicago area. Go for it. Live your life.
But, as we know, that’s not what Looking is planning on doing.”
Well, as I understand it, Looking will live there for 30 years, just not the next 5 (under the burbs variant of the plan).
“I don’t get your reasoning Clio. You seem to think there are all these incredibly rich people who will suddenly come into hundreds of thousands of dollars for their downpayments….”
Sabrina, one thing I DO know is Oak Brook real estate. It may be different than other areas, but most people here buy their multimillion dollar properties with cash. I am not sure where they get/got their money but most are business owners. Oak Brook attracts them because they are cheap and don’t want to pay property taxes (there are not city real estate taxes in Oak Brook). Prices in Oak Brook have really not gone down very much at all. If a tear down in one of the cheaper subdivisions in the HC school district comes on the market for under 700k, it is bought within a day for cash by some land banker. But I do understand your point – there are a lot of million dollar houses in surrounding areas (Elmhurst, Western Springs, La Grange, Downers and many areas of chicago ) that are just going to languish. Oak Brook and most of Hinsdale are NOT those areas. This is why they are such great places to live. I suspect that Kenilworth and Winnetka are similar -but again, that is not the norm.
I have tried to be as bearish about real estate as possible these last couple of years. I looked at dozens of places about a year ago, but all were still priced too high. I’ve thus been quite content to be renting a great 2/2 in ELP for between $800-$1,000/mo less than it would cost me to own the place. (But note that while it is a really great place, I rent parking a block away, and it has neither central air nor in unit w/d; it’s also in Alcott attendance area.) Again, I’m getting a great deal on this rental, but I’ve nonetheless been paying $30k/year, for nearly three years.
I’m considering buying a place that would run me a few hundred dollars more a month than my current rental. Here’s one for the especially bearish “rent-unless-you’re-sure-you’ll-live-there-ten-years” segment of the Chatteratti: Try to find me a 2/2 (I’d love a 3/2, but I’m realistic) in move-in condition, with a w/d, central air, garage, with at least a tiny bit of outdoor space, that’s not on the ground floor, where the kitchen is not in the living room, in Lincoln attendance area and, last but certainly not least, in ELP, for no more than $3,000/mo in rent. My recent efforts to find such a rental have been unavailing.
Note: In another thread, Sabrina raised a valid question as to what exactly counts as “ELP.” While I am open to a debate as to whether the period should be placed outside or within those quotation marks, for me personally, I consider ELP to be within roughly two, and sometimes roughly no more than four, blocks, give or take a half block or so (it varies based on the length of block, and where those blocks are in terms of north/south location. Ideally, it would be east of Clark (but obviously that would not be the case from around North to around Dickens). I’d be willing to give up the Lincoln attendance area for the right place between Clark and Lakeview Ave, but none of my other criteria can be waived.
Good luck!
“I consider ELP to be within roughly two, and sometimes roughly no more than four, blocks, give or take a half block or so,” of the park.
I always considered ELP to be anything east of Halsted.
And Lincoln Elem is an outstanding school, as you are undoubtedly aware. The Ecole Franco-Américaine de Chicago housed at Lincoln is exceptional as well, though you must be Francophone to gain admittance.
From the NYT
http://www.nytimes.com/2010/10/13/business/economy/13econ.html?_r=1&hp
¶At the current rate of job creation, the nation would need nine more years to recapture the jobs lost during the recession. And that doesn’t even account for five million or six million jobs needed in that time to keep pace with an expanding population. Even top Obama officials concede the unemployment rate could climb higher still.
¶Median house prices have dropped 20 percent since 2005. Given an inflation rate of about 2 percent — a common forecast — it would take 13 years for housing prices to climb back to their peak, according to Allen L. Sinai, chief global economist at the consulting firm Decision Economics.
“But I do understand your point – there are a lot of million dollar houses in surrounding areas (Elmhurst, Western Springs, La Grange, Downers and many areas of chicago ) that are just going to languish. Oak Brook and most of Hinsdale are NOT those areas. This is why they are such great places to live. I suspect that Kenilworth and Winnetka are similar -but again, that is not the norm.”
Clio- you’re wrong. Inventory in “real” Hinsdale is in the years. There is no demand for million dollar homes.
From Crain’s just yesterday- the top broker in Hinsdale is saying sales will be flat. Sales are also down sharply for the top broker in Chicago.
“Ms. Rosenbloom, who focuses on Chicago’s most expensive neighborhoods, was third locally in transactions last year, with 161 closings, REAL Trends says. She predicts that will drop about 32% this year, to 100 deals. The total dollar volume of her sales will fall 20%, to roughly $60 million, in 2010, compared to 2009, she says.
Last year, Ms. Rosenbloom finished second locally in sales volume to Linda Feinstein, broker/owner of Hinsdale-based ERA Team Feinstein LLC, who closed deals totaling just under $82 million. Ms. Feinstein predicts her sales will be flat this year compared with 2009.
“It’s much harder now,” she says. “We don’t see the slew of buyers we should be seeing.””
http://www.chicagorealestatedaily.com/article/20101012/CRED0701/101019991/top-brokers-find-tougher-sledding
2800 Mayfield, Park Ridge.
64% off the 2004 price. $1,000,000 in 2004; now a foreclosure listed for $439,000.
Seems like a great time to buy – for knifecatchers!
http://www.redfin.com/IL/Park-Ridge/2800-Mayfield-Dr-60068/home/13658545
““It’s much harder now,” she says. “We don’t see the slew of buyers we should be seeing.””
Talk about entitlement.
“64% off the 2004 price. $1,000,000 in 2004; now a foreclosure listed for $439,000. ”
It better be at least 64% off considering what they did to those bathrooms. Those bathrooms are exactly why people with eccentric tastes should not have access to too much credit.
Those bathrooms are weird, too weird. But somebody paid a million dollars for this home in 2004 (not 2007!) and actually made the payments for 4 or 5 years before defaulting. Bathrooms aside, this is a 64% off sale IN PARK RIDGE. Do you want to catch this knife?
“I always considered ELP to be anything east of Halsted.”
Chris: Yes, that’s the definition I’ve often heard as well. But some locations just east of Halsted “feel” more ELP than others.
Other than proximity to the park (and lake), I’d say that another defining element of ELP is that one takes a bus to the Loop, not the el (assuming one utilizes the CTA).
“Clio- you’re wrong. Inventory in “real” Hinsdale is in the years. There is no demand for million dollar homes.
From Crain’s just yesterday- the top broker in Hinsdale is saying sales will be flat”
Ok –
First of all, I was talking about Oak Brook and the nicer areas of Hinsdale – unfortunately there are a lot of areas of Hinsdale that aren’t that nice where builders put million dollar houses on postage stamp sized lots – those houses AREN’T selling – but the nicer areas of Hinsdale and pretty much all of Oak Brook have NOT seen price drops.
Second of all, we are confusing number of sales with price. Sure, the number of sales has dropped – but the prices of the properties have not. Whether this is a function of time or not remains to be seen. Most of the people who own these expensive homes absolutely 100% can afford to keep them (many of them are paid off and these are multimultimillionaires). They will just keep them on the market until the economy recovers.
Third of all – don’t listen to agents or brokers – most are so incredibly stupid and unaware they have no idea WTF they are talking about. They will have 3 sales in one week and declare a turnaround in the market. Then, the next week there will be no sales and they will declare a real estate disaster.
“the nicer areas of Hinsdale and pretty much all of Oak Brook have NOT seen price drops”
Have things actually been selling? I looked for $2MM+ places in Oak Brook sold in the last year on Redfin and the only one didn’t seem to be either new construction or very substantial reno (just inferring from prices) was the one below, which had a price drop. Maybe it’s low end from your perspective, but if that’s so I’m not sure there are any high end sales that tell us anything about prices.
http://www.redfin.com/IL/Oak-Brook/29-Concord-Dr-60523/home/14170889
Maybe I can help? Here are all Oak Brook single family mls sales since 1/1/09 that had prior sales since 1/1/05:
Closed Date Sold Pr SS/Forclsr
66 GREEN LEAF 8/24/2005 $810,000
66 GREENLEAF 4/24/2009 $425,000 -$385,000 F
237 WOOD GLEN 7/17/2006 $645,000
237 WOOD GLEN 6/11/2010 $625,000 -$20,000 N/A
3007 LINCOLN 6/9/2006 $829,000
3007 Lincoln 5/8/2009 $450,000 -$379,000 S
2S651 AVENUE LA TOURS 10/27/2005 $557,200
2S651 AVENUE LA TOURS 1/29/2010 $475,000 -$82,200 N/A
3022 HERITAGE OAKS 8/31/2006 $1,425,000
3022 HERITAGE OAKS 9/30/2010 $969,000 -$456,000 N/A
709 BROUGHAM 9/6/2005 $696,316
709 BROUGHAM 4/22/2010 $665,000 -$31,316 N/A
836 RED STABLE 4/23/2007 $750,000
836 Red Stable 4/21/2010 $635,000 -$115,000 S
204 ST. MICHAEL 11/4/2005 $1,600,000
204 ST. MICHAEL 4/15/2010 $1,538,000 -$62,000 N/A
506 WOOD ROAD 3/16/2006 $615,000
506 WOOD 9/17/2009 $285,000 -$330,000 F
22 GLENOBLE 8/28/2007 $636,500
22 GLENOBLE 12/14/2009 $535,000 -$101,500 N/A
There have been 16 closed $1M+ single family in 2010 to date, 2 of which were over $2M (incl 29 Concord.) There are currently 78 active listings at $1M+, 34 of which are over $2M. I think that puts the $2M+ inventory at over 10 years.
There have been 27 closed sub-$1M single family in 2010 to date. There are currently 63 active listings under $1M. Sub $1M inventory is closing in on 2 years.
G!!!!!!!!!!
“2800 Mayfield, Park Ridge.
64% off the 2004 price. $1,000,000 in 2004; now a foreclosure listed for $439,000.
Seems like a great time to buy – for knifecatchers!”
No chance of fraud there!! Sold for $1mm, with a pending foreclosure on a $297k loan. Even if that were 80% of appraised value (doubt it–prob 100%), the BANK (it’s reo) is asking for 18% more than the ’04 price.
HD–you have an excellent eye for spotting the fraudulent transactions and then citing them for other propositions.
“Maybe I can help?”
Whoa, G!
Good now with G back sounds like Clio will go running to the hills with his tail between his legs because I’ve long suspected clio of seeing his “reality” he bases his claims on through a fun house mirror.
what’s the fraud anon(tfo)?
G, great to see you back.
anon(tfo) I see a pending foreclosure on a $910,000 loan from 2007 which was a refi of the 2004 mortgage for $908,000.
No fraud here; just a guy who made payments on his super jumbo for a number of years until he stopped in 2008 or 2009.
Why you gotta call me out like that?
“No fraud here; just a guy who made payments on his super jumbo for a number of years until he stopped in 2008 or 2009.
Why you gotta call me out like that?”
Um, look at the ’04 purchase–dude paid $1mm for a house that had a pending foreclosure of a $297k mortgage than was about 12 months old. There is *no way* that ’04 sale was a real, arms-length, market-price sale. None. None.
House was worth *maybe* $400k in ’04, the buyer spent some (a lot of?) money expanding it, putting in the pool, etc, and it may be a decent deal now, if the work was done well, which I kinda doubt. Most likely, it’s a money pit of hidden defects.
WTF, i try and take a day off and G comes back!!!!!!!!!!!!!!
it must have been a small bus going 10mph?
“There have been 16 closed $1M+ single family in 2010 to date, 2 of which were over $2M (incl 29 Concord.) There are currently 78 active listings at $1M+, 34 of which are over $2M. I think that puts the $2M+ inventory at over 10 years.
There have been 27 closed sub-$1M single family in 2010 to date. There are currently 63 active listings under $1M. Sub $1M inventory is closing in on 2 years.”
Thank you G!
I knew I wasn’t losing my mind about the massive amounts of inventory in Oak Brook (and those other western suburbs.) 10 years worth of inventory over $2 million! And this is just one town. I bet in some towns like Downers Grove- it is even longer (as the upper end sales are nearly non-existent.)
And I join in the sentiments of others in welcoming you back, G. Your viewpoint has been missed.
$1M+ Single Family
Closed Sales YTD 2010
Currnet Listings as of 10-14-10
Town Closed Listings Inventory
Burr Ridge 16 99 59 months
Clarendon Hills 14 22 15 months
Darien 0 3
Downers Grove 2 26 124 months
Glen Ellyn 7 30 41 months
Hinsdale 74 121 16 months
Lisle 0 12
Naperville 28 112 38 months
Oak Brook 16 80 48 months
Oak Brook Terrace 1 1 10 months
Warrenville 0 6
Westmont 0 4
Wheaton 5 34 65 months
Willowbrook 0 8
Winfield 0 4
Woodridge 0 2
$1M+ Single Family
Closed Sales YTD 2010
Currnet Listings as of 10-14-10
Town Closed Listings Inventory
Burr Ridge 16 99 59 months
Clarendon Hills 14 22 15 months
Darien 0 3
Downers Grove 2 26 124 months
Glen Ellyn 7 30 41 months
Hinsdale 74 121 16 months
Lisle 0 12
Naperville 28 112 38 months
Oak Brook 16 80 48 months
Oak Brook Terrace 1 1 10 months
Warrenville 0 6
Westmont 0 4
Wheaton 5 34 65 months
Willowbrook 0 8
Winfield 0 4
Woodridge 0 2
Sorry, that second post was supposed to be this:
$1M+ Single Family Detached
Closed Sales YTD 2010
Currnet Listings as of 10-14-10
Neighborhood Closed Listings Inventory
Lincoln Park 99 142 14 months
Lake View 43 73 16 months
Near North Side 6 47 74 months
Near West Side 4 5 12 months
North Center 23 44 18 months
Lincoln Square 8 9 11 months
Logan Square 7 27 37 months
West Town 14 35 24 months
“I knew I wasn’t losing my mind about the massive amounts of inventory in Oak Brook”
Uhhh, sorry, Sabrina, but you ARE losing your mind!!
just as everyone on this site calls me out (correctly) about not knowing my neighborhoods in Chicago, I have to do the same with you and this “G” person.
Oak Brook is highly segregated because of school systems. The sales which “G” posted are mostly from the inferior school districts and are thus MUCH lower than houses in the preferred OB/HC school district.
Oak Brook absolutely, positively remains a destination suburb and will always retain a ridiculously high value. There are MANY people dying to get into this suburb – they are just biding their time. Anyone who thinks otherwsie is a complete idiot.
G, I don’t know who you are, but you obviously don’t know anything about the demographics of Oak Brook – you also don’t realize that MANY of the houses you listed above are being knocked down and new houses are being built. If people don’t believe me – please come by and see the new construction goint on. These are all 2-4 million dollar houses being built. You won’t see closings on these houses because they are not spec homes – they are custom homes.
““I knew I wasn’t losing my mind about the massive amounts of inventory in Oak Brook””
60 homes (out of a few thousand homes) is “massive amounts of inventory”? Sabrina, are you trying to bait me?
“60 homes (out of a few thousand homes) is “massive amounts of inventory”? Sabrina, are you trying to bait me?”
1. It’s 80.
2. With current sales, it’s 4 years inventory.
3. 4 years of inventory is pretty massive.
“2. With current sales, it’s 4 years inventory”
Uhhhhh- not really. Because the number of sales/properties iin Oak Brook is so low, you have to look at the individual numbers (and not percentages, etc). For example, if 10 of thoses houses sell (not a hard number to reach), all of a sudden the inventory length decreases dramatically. Basically, all I am saying is that the “N” in Oak Brook is too low to make these calculations have any useful meaning (the “p” value and standard deviation will be enormous and not statistically significant). You need numbers of properties for sale/sold in the 100s or thousands to make any meaningful interpretation. Let’s just leave it at that – and no, I am not admitting defeat.
“You need numbers of properties for sale/sold in the 100s or thousands to make any meaningful interpretation.”
No, you don’t. This is epidemiology. There isn’t a normal curve (or any reasonable presumption/approximation of one) in $1mm+ houses.
Not. Not epidemiology.
I knew you wouldn’t let it go
LOL, clio. Did you read what you posted yesterday at 8:57am?
“pretty much all of Oak Brook have NOT seen price drops”
“Second of all, we are confusing number of sales with price. Sure, the number of sales has dropped – but the prices of the properties have not.”
I showed every resale in the last 5 years. Every one lost money. Whether or not the buyer tore it down is irrelevant. Until they sell for a loss someday, too, that is.
“I knew you wouldn’t let it go”
You just trying to bait me, now?
“You just trying to bait me, now?”
you always have to have the last word, don’t you>!!
G –
please don’t misinterpret the data. I know that there is no way you would know this, but the VAST majority of people who bought houses in Oak Brook since 2005 still are in their homes and bought for the long haul. The people selling in that short period of time since 2005 were almost certainly all speculators/investors who probably just want to cut their losses. My point is that the data doesn’t always give you a clear picture of what is going on. This is a problem with statistics/statiticians – they can’t see the forest through the trees!!
“please don’t misinterpret the data. I know that there is no way you would know this, but the VAST majority of people who bought houses in Oak Brook since 2005 still are in their homes and bought for the long haul. The people selling in that short period of time since 2005 were almost certainly all speculators/investors who probably just want to cut their losses. My point is that the data doesn’t always give you a clear picture of what is going on. This is a problem with statistics/statiticians – they can’t see the forest through the trees!!”
I see, because of a lack of knowledge of oak brook and clio, we failed to understand when you said there were no price drops you actually meant no price drops for the houses that haven’t sold.
“I see, because of a lack of knowledge of oak brook and clio, we failed to understand when you said there were no price drops you actually meant no price drops for the houses that haven’t sold.”
I thought that was 600 NF, not Oak Brook.
“I see, because of a lack of knowledge of oak brook and clio, we failed to understand when you said there were no price drops you actually meant no price drops for the houses that haven’t sold”
No, I am not trying to sell any houses in O.B. – however, I have had 3 unsolicited offers on my house in the past year (for quite a bit of money). When I spoke with my neighbors, they, also have had unsolicited offers (basically rich people wanting to tear down the house and build their own mansions). Yes, there are 3 houses on my street for sale but they are all 3 million+ and are older houses – which is why they are not selling. So yes, real estate, believe it or not, is about location…
“I thought that was 600 NF, not Oak Brook.”
I don’t understand what this means – (yeah, I know – reading comprehension)
“I thought that was 600 NF, not Oak Brook.”
That’s 5 min of my life I’m not getting back.
The only wildcard/”angel” investors I see swooping in to provide some real stability are international.
At some point, a weakened dollar and crowding in other parts of the world may mean our property/land will be a relative deal.
Sounds a bit far-fetched to Americans, but my brother lived in London for a while and he said it was fairly common for mega-pricey properties (he was in Notting Hill) to be managed locally but owned by middle easterners.
“I don’t understand what this means – (yeah, I know – reading comprehension)”
600 North Fairbanks, which had a poster with at least 3 names passionately defending the view that prices in the building were not going down, all evidence to the contrary. So, inside cc joke.
“Yes, there are 3 houses on my street for sale but they are all 3 million+ and are older houses”
Weird concept of “street”, or weird counting to 3 or 3 million plus weird concept of “old”, as there are no more than 2 $3mm+ houses for sale on a single street in OB, and none of those 4 is over 12 years old.
ah, with G’s return is it long before we hear from deaconblue/turdferguson
Why is all the fancy stuff for sale in OB so “new mansionny”? Why isn’t there a sweet mid-century modern or contemporary retreat?
“Weird concept of “street”, or weird counting to 3 or 3 million plus weird concept of “old”, as there are no more than 2 $3mm+ houses for sale on a single street in OB, and none of those 4 is over 12 years old”
Wow – I don’t know what’s going on in my own front yard!!! Just looked it up – there are 3 houses for sale on my street (one of them is listed under “land” for 3.3 million). One of them was on the market for 5 million but now is 2.99illion. The other was on the market for 4.5 million but is not 2.849k!!!! I don’t know when they reduced their prices – but these are GREAT deals!!!
“Why is all the fancy stuff for sale in OB so “new mansionny”? ”
Oak Brook is HUGELY popular with Indian/Middle Eastern and European people (as well as a huge number of uneducated multimultimultimultimutlimillinaire buisness owners). There is a HUGE market for that type of house. The “gaudier” the better (which is why Oak Brook is sometimes referred to as “Joke Brook” by my city friends).
I know this sounds like I am bashing Oak Brook – but the great things about the village is that there will always be this ridiculous desire to live here AND most of the people here (because they are foreign and ridiculously wealthy) are very stable and have paid cash for their homes (unlike Hinsdale which is very white-american and people have mortgages, loans and tend to live beyond their means). Believe it or not, it is very nice to live around people who are not stressed about money.
that is why the howells were so well liked on gilligan’s island
“There is a HUGE market for that type of house. The “gaudier” the better (which is why Oak Brook is sometimes referred to as “Joke Brook” by my city friends). ”
It’s mainly the same crap in Barrington Hills and Lake Forest (to a lesser extent). It’s the thing the high end builders build. Feaux-Arts fetishism.
And, yes, that was intentional.
clio postulated: “I know that there is no way you would know this, but the VAST majority of people who bought houses in Oak Brook since 2005 still are in their homes and bought for the long haul.”
You must have insider knowledge to make that “VAST majority” claim. But, did you know the sun WILL come up tomorrow? IN the east. It WILL be Friday when it happens. How about, real estate prices ARE set at the margin?
I thought it might be interesting to see how $1M+ single family resale activity in Oak Brook compares to others. I requested the 3 with the closest calculated inventories, here’s what I got:
$1M+ Single Family Detached
All Sold since 1/1/05 and those with resale after 1//1/09
Inventory closed resold %
Oak Brook 48 months 150 10 6.7%
Burr Ridge 59 months 160 4 2.5%
Glen Ellyn 41 months 88 1 1.1%
Naperville 38 months 303 8 2.6%
Every single resale on the list sold for less than the prior sale price.
“Every single resale on the list sold for less than the prior sale price.”
Any easy way to find what percent of those currently listed are listed for 5% or less over purchase price? Because those are all *very* likely to sell for less, too.
Again, G – percentages don’t mean much when you are dealing with small numbers. You add one more sale to the list and it changes the percentages completely. To dumb it down to understand better:
If you are dealing with 100 houses and one more sells – that would be an increase of 1%
If you are dealing with 1 house and one more sells – that would be an increase of 100%
See how it works?
Percentages don’t mean much – furthermore, I can’t even understand what your posts mean (cue anon re: reading comprehension). Are you stating that people who bought after 05 and sold after 09 lost money – well duhhhh: I told you that theses were mostly investors and land bankers (or stupid people who were over their heads) who bought in the cheaper areas of oak brook as investments and then simply cut their losses. It would be more interesting to see how many people who bought 2million+ homes after 2005 (those are the non-investors who bought for themselves) actually sold for less. I bet the number is close to 0.
clio on October 14th, 2010 at 10:46 am
“Uhhh, sorry, Sabrina, but you ARE losing your mind!!
just as everyone on this site calls me out (correctly) about not knowing my neighborhoods in Chicago, I have to do the same with you and this “G” person.”
“Oak Brook absolutely, positively remains a destination suburb and will always retain a ridiculously high value. There are MANY people dying to get into this suburb – they are just biding their time. Anyone who thinks otherwsie is a complete idiot.”
“G, I don’t know who you are, but you obviously don’t know anything about the demographics of Oak Brook”
clio on October 14th, 2010 at 11:25 am
“please don’t misinterpret the data.” “My point is that the data doesn’t always give you a clear picture of what is going on.”
clio on October 14th, 2010 at 1:14 pm
“Wow – I don’t know what’s going on in my own front yard!!!”
“however, I have had 3 unsolicited offers on my house in the past year”
URB rehab is back in business?
G- I put that last part in for your benefit – I knew you(or someone else) would use it!!!
thank you clio for bringing G back. i mean it
Never argue with a fool, onlookers may not be able to tell the difference.
~Author unknown, attributed to Mark Twain
“URB rehab is back in business?”
What’s URB rehab? Two of the offers WERE from builders who were willing to pay land value for the house (1 million/acre). Probably some rich folk are looking to spend 4-5 million on a house and want a nice piece of land to put it on. The third offer was from a person who works in Oak Brook and just loves the traditional understated style of my house!!!
“Never argue with a fool, onlookers may not be able to tell the difference”
Thanks Chichow – I totally agree!!
“What’s URB rehab?”
its a joke i have that nobody really gets. it maybe because i might be sing the wrong company name.
think “Ug buys ugly houses” billboard
“its a joke i have that nobody really gets.”
No, it’s just not that funny, groove.
Anon, this thread is dead – and you keep trying to get the last word in!!! Is this a psychological need?
anon, running through it quickly I only located two actives in OB that previously sold after 1/1/05.
404 Bridgeway closed 2/1/05 $2,100,000 has been on market 650 days OL $2.99M Red $2.89M Now $2.815M
707 Deer Trail closed 7/8/05 $4,500,000 has been on market 813 days OL $7.5M Red $6.45M Now $5.9M
“No, it’s just not that funny, groove”
where is my ball i am taking it and going home
There are clear style differences between the posters on this web-site.
I am more of a U of C guy and hence like G’s posts. I like the quantitative data.
Nice to see you back, G. Please stay for a while.
—
Then there are other posters that make broad sweeping generalizations; request data to back up their assertions; complain when that data doesn’t support their conclusions; and finally go silent when faced with the preponderance of evidence.
That being said I respect everyone’s right to post; I just might not lend as much weight to certain posts.
Where’s MY ball? I’m going to Seward.
“G- I put that last part in for your benefit – I knew you(or someone else) would use it!!!”
Thanks. As you can see, I like to deal with facts.
“No, it’s just not that funny, groove.”
I think its one of those “you have to be an accountant to find that funny” jokes
“I am more of a U of C guy”
Chichow – I actually went to U. of C. for college – (maybe you didn’t) that’s where I learned my non-scientific approach to things….
Seriously, though – numbers are great and interesting, but as I keep stating: psychology and psychological factors play perhaps the BIGGEST role in people’s decision to buy. When money/credit was easier, these psychological factors trumped everything else. For this reason, the numbers/analysis are not that pertinent to any individual home buyer/seller.
“707 Deer Trail closed 7/8/05 $4,500,000 has been on market 813 days OL $7.5M Red $6.45M Now $5.9M”
Fun fact – This was Chris Chelios’ house.
“Thanks. As you can see, I like to deal with facts”
yeah, and I’m sure you’re a blast at parties!!
chichow – i hope you realize that you cannot take the numbers/data spewed by some of the people on this post too seriously. For example, if you live in a 1-3 million dollar highly desireable house/condo in a highly desireable area/building, why would the data on recent sales in surrounding areas or foreclosures/shortsales or lesser buildings/houses matter to you? It is all propaganda used to scare people into not buying and lowering their prices. Be strong and stand up to the fear mongerers!!! You will be much happier!!
I wasn’t referring to the University of Chicago undergrad nor the LAB school program (of oh my parent works in the library) or we’re closer to Hyde Park vs. going to IMSA weirdness.
I was referring to Chicago B-School or Booth I guess now which is more known for its strength in quantitative analysis than other MBA programs.
http://www.chicagobooth.edu/fulltime/academics/curriculum/concentrations/analytic-management.aspx
—
Clio:
“For example, if you live in a 1-3 million dollar highly desireable house/condo in a highly desireable area/building, why would the data on recent sales in surrounding areas or foreclosures/shortsales or lesser buildings/houses matter to you? ”
I do not worry about data when it is an apples to oranges comparison.
It is a concern to me when the comparisons are just…which is why I hesitate to purchase again in the near-term.
chichow:
sam clemens or no, I believe you’re slipping into parody here.
anon- there you go again, always having to get the last word in
Groove… I got your URB joke… For those that didn’t…
http://chicagogangs.org/index.php?pr=NEWS15
thanks russ 🙂
i am glad you posed a link, for a second i thought i was quoting the wrong company name.
Back to the original topic: I am thinking about putting an offer on this apt (#8C 421 W Melrose). I am also thinking about the unit 16C in the same building (currently de-listed) – it was on for $429k (kitchen/bathrooms gutted, few radiators missing) and is currently under renovation by the owners – the price will apparently go up when it is done. I think 8C is a good deal as the building is beautiful, great location and apt layout is perfect. Yes, assessments are high, but it is a full service building with gorgeous roof deck and BBQs, full time doorman etc.
Now, 16C. Me and my wife are in love with this unit, but assessments and taxes come to about $2100. With the price tag and 10% down it comes to about $4k/month. I don’t think they will sell it easily, although a simlar unit (with different layout on a lower floor, 11C) went under contract recently – was listed for $500k. What do you think this one is worth, if baths and kitchen are done nicely? It has only two baths, and one bedroom is smaller but the living room is really nice.
I am not sure about the 4k/month at this point so that is why I am thinking about the 8C. The 2/2 would be ok for few years, but i would be looking to get a 3 bed apt within 3-4 years. I have seen quite a few apts in other buildings in Lakeview and Eddystone has by far the best layouts, it’s right next to the lake (without the noise). I know it makes sense to go for the larger apt now and have a tighter budget for a year or two, but if 8C is done nicely do you think it would sell easier for a higher price? I am worried that if I go for the 2/2 now I will not be able to sell it in few years time and move on.
Any advice is appreciated.
Thanks
Traveler,
you must be kidding, right? Unless you are a multimillionaire with money to burn, why the hell would you buy a place in a building where your expenses are 4k/month WITH THE EXPECTATIONS OF MOVING IN 3-4 YEARS?!!! It just doesn’t make any sense at all. Why wouldn’t you rent for the next 3-4 years and then buy what you want? Or better yet, look for a 3br deal right now?
To the others: this is yet another example of psychology trumping common sense in real estate (not that it is bad or good – it just “is” fact). this is why all of your analyses of the situation (depreciation, inflation, foreclosure moratorium, etc.etc.etc.) don’t factor as much as you may think.
“#DZ on October 14th, 2010 at 1:05 pm
Why is all the fancy stuff for sale in OB so “new mansionny”? Why isn’t there a sweet mid-century modern or contemporary retreat?”
I’ve been watching this place in Oak Brook:
http://www.redfin.com/IL/Oak-Brook/38-Cambridge-Dr-60523/home/18086749
It’s been on the market for longer than since 2009, but they pulled and relisted. The list price has been higher and lower and higher again. It’s also had a second listing running that offers the land and blueprints for $2.9 million. And it sits. And sits. And sits.
I think it was originally purchased in the $300k range, in the 90’s, and now they ask almost triple?? PUHLEEZE. Clio, please explain what the problem with this property is.
logansquarean,
I think the house sits and sits because it IS somewaht midcentury modern which is no longer popular in these parts. It is absolutely a tear down and, for a tear down, the price should be in the mid to upper 600s. I bet if they list at 699k it will be sold within days, rented out and then torn down when the economy improves with a 2-3 million dollar house built on the lot. Seriously, things are weird here in oak brook, houses continue to get larger and larger – remember, nobody NEEDS more than 2000square feet, so these larger houses are built/bought for bragging rights and entertainment. The 2000 square foot modest houses are over in Oak Brook – it is all about flash and glamour. If you want practicality, the thinking is that you should move to Downers, Elmhurst, Lombard, etc.
Clio,
Maybe i wasn’t clear: 4k/month would be for the 3bed which I would be in for a looong time. The dilema is if i should buy the 3bed now or go for the 2/2 for 256k, renovate it and move to a 3bed in 3-4 years.
sorry traveler, I have poor reading comprehension. I definitely would rent until you are ready to buy the 3 bedroom. I have renovated in older buildings and you never know what expensive problems arise (even with minor renovations). Also, the cost of renovations in these vintage buildings is pretty high and there are many rules which make it more expensive)- I had a friend who lived in this building and there were ridiculous restrictions on construction and delivery (because of elevator issues). In addition, even if you renovate, it is unlikely that you will recoup your money in 3-4 years. The building is nice, but is really not a destination building or location and is not that popular in the area in which it is (if it were on East LSD, that is a different story). So, basically, I think that EVERY single person on this site would tell you to wait.