Tribune: It’s a Buyer’s Market for Condos Downtown

The Chicago Tribune addresses what we’ve been chattering about for several months: it’s a buyer’s market for condos downtown.

In “Rising Expectations,” buyers and developers discuss the incentives that are being offered to move product as the market has slowed. They interview a 20-something  looking for a “deal.”

With sales down sharply in 2007 but the supply of new units slated to rise dramatically, many developers are encountering house shoppers like Nirali Shah, a 29-year-old pathologist assistant.

While eyeing a Streeterville high-rise with lake views, this first-time buyer says she won’t commit to purchasing a condominium unless the developer gets into a bargaining mood.

“I’m waiting for the seller to bring down the price at least 10 percent, to include a $65,000 parking space or a year of free assessments,” said Shah, who is prepared to spend about $650,000 for a newly built unit.

“It’s a buyer’s market,” she said with assurance.

Here are the stats:

  • 6,274 new units will be completed this year,  a 50 percent increase over 2006 completions and 100 percent more than 2005
  • 1,326 of the 6,274 units are unsold.  According to the Tribune, a unit is considered sold when the buyer puts down a deposit and signs an agreement.
  • Through the third quarter of 2007, new downtown condo sales were down 35% (wonder why we haven’t seen the fourth quarter numbers yet?)

We know that these stats are a little misleading. Flippers have bought at least 20% (maybe as high as 30% or 40% in some buildings) so that will skew these numbers. I would estimate the “true” number of unsold units is more likely 2,800 units as at least 30% will be coming back on the market as flips.

Developers are apparently trying to reassure buyers:

“There remains a reluctance to make a decision primarily because buyers fear the market will crash, harming their number one investment,” said Ron Shipka, Jr., president of The Enterprise Companies, a Chicago-based developer with six downtown projects under way.

He tries to reassure consumers by showing them that since early 2007 re-sold units in Enterprise buildings have appreciated in value. His company also offers $5,000 to $7,000 in upgraded finishes for new projects.

Incentives are the name of the game. There are going to be freebies given out everywhere. At the minimum, buyers should be asking for free parking.

One recent study by Chicago Agent magazine found that 71 percent of developers interviewed said they intend to offer upgrades, 52 percent will offer agent incentives and 48 percent mortgage assistance.

Meanwhile, 65 percent said they would offer a combination of incentives.

What is a good incentive or a reduction? Is it upgrading the kitchen cabinets? Is it installing marble floors in the bathrooms? Is it free parking? Or is simply giving the buyer $5,000 enough?

At the Streeterville high-rise that attracted the interest of Shah, Park View at River East, other buyers are signing contracts with incentives that amount to $5,000 to $15,000 per unit, said a spokesman for the developer the MCL Cos.

For instance Swapan Goddam, a 34-year-old doctor relocating here from Atlanta, has agreed to buy a two-bedroom unit on the 20th floor with a Lake Michigan view.

“They’re offering some incentives like $5,000 off the parking or $10,000 off a $550,000 unit,” he said. “But buildings in Streeterville and Lake Shore East aren’t offering as much as neighborhoods like the West Loop that aren’t selling as well.”

Goddam is willing to pay a premium to be near the hospital where he works, restaurants and entertainment. Furthermore, “with new construction, assessments are lower and resale values higher,” he said.

But Shah’s concerns about the housing market are holding her back.

“What if something happens and I’m not able to re-sell?” she asked. “I’m hoping in the next few months, something will change.”

Will condos sell with these types of incentives? Stay tuned.

Foreclosure Strikes in West Town: 1850 W Division

Despite much chatter regarding foreclosures here, the number of foreclosures is still much larger on the South Side than on the North Side.

But as I’ve been pointing out lately, the North Side isn’t immune.

Thanks to the Tipster who sent me information on 1850 W. Division in Ukranian Village/Wicker Park, a mid-rise building with around 14 units that was built in 2003.

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Until this week, there were two units for sale in the building, both with the same listing contact.  Both are owned by the same corporation.

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Unit #4B: 3 bedrooms,  2 baths, 1 car parking, duplex

  • Sold in November 2003 for $529,297
  • Was originally listed for sale in November 2007 for $849,000
  • Last week was listed for $789,900
  • Went to foreclosure auction for $544,777
  • Assessments of $510 a month
  • Robert Adolfson has the listing

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Unit #4A: 3 bedrooms, 2 baths, 1 car parking, duplex

  • Sold in December 2003 for $640,000 (most expensive in the building)
  • Originally listed in October 2007 for $949,900
  • Currently listed for $899,900
  • Assessments of $565 a month
  • Robert Adolfson has the listing

The last sale in the building was in 2006 when Unit #3D, a two bedroom/two bath, sold for $440,000.

McMansion Foreclosure in Bucktown: 2230 W Medill

The media has been saying lately that foreclosures are “bad for the neighborhood”.

This McMansion house at 2230 W. Medill is the perfect example of that. 

The house is near the Kennedy Expressway and Western Avenue in North Bucktown/West Bucktown/Logan Square (???).  In the picture below, you can see that there are two McMansions built next to each other that look pretty identical.

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In fact, they both were built and sold within a month of each other in 2006.

  • 2230 W. Medill: sold in July 2006 for $1.475 million
  • 2226 W. Medill: sold in August 2006 for $1.475 million

Now,  2230 W. Medill is owned by the bank and the bank is simply trying to dump it.

It stinks to be 2226 W. Medill right about now, doesn’t it?

There aren’t many pictures of 2230 W. Medill- sorry. But this gives you an idea.

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2230 W. Medill: 5 bedrooms, 4.5 baths, 2792 square feet, 2 car garage

  • Sold in July 2006 for $1.475 million
  • Currently listed for $949,500
  • REO Properties has the listing

That’s about a 35% price reduction from the 2006 price.

The listing says the property needs some work: 

ARCHITECTURAL GEM IN BUCKTOWN! THIS NEW HOME OFFERS ALL OF THE FEATURES YOU ARE LOOKING FOR- HDWD FLRS, MARBLE BATHS, GRANITE CNTPS. 4 FLOORS OF LIVING AREA WITH FINISHED BASEMENT. HIGH SPEED WIRING INCLUDING SURROUND SOUND / INTERNET / INTERCOM/MORE! CENTRAL VACUUM. BEAUTIFUL ARBOR ON ROOFDECK BANK TAKING A $500000 LOSS NEEDS MINOR WORK APPLIANCES INSTANT EQUITY MUST SEE

Is this “instant equity” or is this the new market price?

Steals and Deals: 2 bedrooms for under $300k in the South Loop

How badly do you want space?

There are a couple of short sale condos on the market in Dearborn Park in the South Loop that are far cheaper than any of the new developments going up to the east.

Of course, you’ll have to live in a building constructed in 1979.

I’m talking about 1143 S. Plymouth. It’s one of those non-descript red brick buildings just south of Printers Row.

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There is no laundry in the unit.  And there is a wait list for parking.  But there’s apparently an outdoor pool.

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Unit #302: 2 bedrooms, 2 baths, 1250 square feet

  • Sold in March 1999 for $145,000
  • Currently listed for $279,900
  • Assessments of $332 a month
  • Baird and Warner has the listing

Unit #604: 2 bedrooms,  2 baths, 1250 square feet

  • I couldn’t find the previous sale price
  • Currently listed for $249,900
  • Assessments of $354 a month
  • Listing says it’s the lowest priced unit at Dearborn Park
  • It has a month to month tenant
  • Baird and Warner has the listing

There are no interior pictures of Unit #604.

At least one unit did sell for over $300,000 in the building in the last year.

Own Your Own Coach House in the Gold Coast: 20 E Goethe

The Gold Coast isn’t just about the lovely vintage rowhouses and mansions on Astor Street.  There are some unusual properties if do some investigation.

This coach house at 20 E. Goethe is one of them. If the address sounds familiar to you- it should. This is the building you’re thinking of:

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But behind the building lurks this 4 story coach house, complete with 1.5 car garage:

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I don’t have the exact age of the building, but the listing says “turn of the century.”

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20 E. Goethe Coach House: 4 bedrooms, 3 baths

  • Sold in December 2004 for $773,000
  • Currently listed at $1.069 million
  • No assessments

I don’t have the total square footage. 

Several of the bedrooms are on the small size.  One is 11 x 10 and another is 13 x 11. 

It also appears to have outdoor space on the roof.  But this doesn’t really look like a deck to me.

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The listing says:

Possibilities To Expand And Create More Spaces And Rooms. This Is Truly A Unique Opportunity.

Dana DiPasquale at Baird and Warner has the listing.

Chicago Housing Market: More Luxury Condos in the Gold Coast

I don’t know how many of you saw this blurb in David Roeder’s column in the Sun-Times yesterday:

For months, people living near the southwest corner of Clark and Chestnut wondered about the hole in the ground. The owner, Lubavitch Chabad, planned a Center for Jewish Life on the site, but couldn’t raise the money.

Apparently deferring its dream of a new building, the organization has a tentative agreement to sell the property to Chicago-based LG Development Group. Ariel Weissberg, attorney for Lubavitch Chabad, said LG wants to build a 15- to 20-story condo building with just two high-end units per floor. The Chabad, he said, may look at other sites to build a spiritual sanctuary.

The property is part of a planned development that requires any developer to obtain the consent of neighbors before building. Talks are under way, Weissberg said, noting that downtown Ald. Brendan Reilly (42nd) was impressed with LG’s proposal, made with the Hartshorne & Plunkard architectural firm.

Good timing for that developer or not?

There were apparently other developers who also bid on the property.

Flipper Alert: 30 W Oak is a flippers dream

30 W. Oak on the edge of River North/Gold Coast near the Rush Street restaurant scene was a successful building since inception.

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The building has become a favorite of those who like the modern style.  The 24 story, 46 unit building has only top of the line finishes including Poggenpohl kitchens.  Ceiling heights are 10 feet and there is south facing floor to ceiling glass.

Units sell pretty quickly in the building.  For the last several months, there hasn’t been anything on the market in the building. 

But after they’ve been flipped a few times, you have to wonder, how much longer does the party last?

We’re about to find out.

A large 2 bedroom unit just came on the market.  It’s empty now and the sales information makes you wonder if anyone has ever lived in it.

 Unit #4C: 2 bedrooms, 2 baths, study, 2057 square feet

  • Sold in November 2006 for $1,009,900
  • Sold in May 2007 for $1.115 million
  • Currently listed for $1.325 million plus $65k for parking
  • Assessments of $1,063 a month
  • Listing says it has a 24 x 12 terrace
  • Fee Simple Realty, Inc. has the listing

The first flipper didn’t make much.  The second flipper is trying to top that and actually make some money.

Will this flipper be left without a chair when the music stops?  Stay tuned.

Sellers Hang on to Prices: Lofts at 333 W Hubbard

Why haven’t prices come down much in Chicago?

Sellers are holding onto the old mania prices and hoping someone will bite.

And holding.  And holding.  And holding.

Thanks to the tipster who sent me the information about the group of one bedroom units at the Union Square Lofts at 333 W. Hubbard in River North.

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The building was converted in 1998.  There are actually two buildings.  A newer shorter section in the front and a taller older concrete loft conversion on the Kedzie street side  (overlooking the Merchandise Mart.)  The taller building has the more authentic loft features, with exposed brick.  The shorter building is more the “soft loft” type of loft.

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Three of the four one bedrooms on the market have been on the market a LONG time.

Unit #612 doesn’t have pictures on-line.

Unit #612: 1 bedroom, 1 bath, 790 square feet

  • Sold in June 1998 for $165,494
  • Sold in April 2000 for $240,000
  • Sold in September 2003 for $250,000
  • Sold in February 2005 for $265,000
  • Currently listed for $289,000 plus $35,000 for parking
  • Assessments of $389 a month
  • Prudential Preferred has the listing
  • Market time: 240 days

OR:

You can rent it for $1250 a month plus extra for the parking.

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Unit #512: 1 bedroom, 1 bath, 790 square feet

  • Sold in October 1998 for $180,000
  • Sold in May 2002 for $247,000
  • Sold in February 2005 for $260,000
  • First listed for $349,000 plus $39,000 for parking- recently reduced $50,000
  • Currently listed for $299,900 plus $39,000 for parking
  • Listing states it had a complete renovation- including a stainless wolf range and subzero refrigerator
  • Assessments of $375 a month
  • Koenig & Strey has the listing
  • Market time: 279 days

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Unit #204: 1 bedroom, 1 bath, 1010 square feet

  • Sold in June 1998 for $145,224
  • Sold in September 2003 for $242,500
  • Currently asking $279,000
  • No parking with the unit- but rental is available for $250 a month
  • Assessments of $376 a month
  • Koenig & Strey has the listing
  • Market Time: 333 days

Nearly a  year on the market and still not sold.

Stay tuned.

Some Chicago Area Housing Stats for November 2007

November seems like ages ago.  We all want to know what is happening now.

But this is the most recent data I’ve seen reported on the Chicago housing market.  It’s better than no data at all.

From the Chicago Tribune:

Times have changed. The inventory of homes on the market in the Chicago area swelled in November to about 111,000, according to data from the Multiple Listing Service of Northern Illinois. In November 2005, when the market was beginning to cool, there were 73,000.

An average single-family home here is spending about 200 days on the market these days, according to MLSNI. That’s despite the recent slide in 30-year mortgage rates, which averaged 5.48 percent Friday, the lowest since March 2004, according to Freddie Mac.

If inventory was that high in November, any guesses on what it will be, say, in May?

‘For Sale’ signs a barrier to re-financing home [Chicago Tribune]

The State of Chicago’s Condo Market

The Chicago Tribune reported on the Chicago housing market today.  The news regarding the downtown condo market isn’t all that positive.

The Chicago metropolitan region “isn’t as bad as Florida and California, ground zero in the housing recession, but we have the same problems,” said economist Diane Swonk of Mesirow Financial.

The ills ailing the new-home market here include too much speculative building and soaring mortgage default and foreclosure rates, she said.

Especially hard-hit are Chicago’s inner-city neighborhoods and growing communities like Joliet, Swonk said.

“Unfortunately, about half of the people having problems with subprime mortgage loans could have qualified for prime loans,” she said. “This reflects greed all around.”

“I worry about the second shoe falling on the downtown condo market,” Swonk added. “Chicago came late to this housing boom so there still are a lot of units in the pipeline due for delivery in the next 18 months.”

“This year will be a big test,” she said.

Housing market’s freeze deepens [Chicago Tribune]