Market Conditions: “The Carrying Costs Will Eat You Alive”

Crain’s reported that 2 developers, Habitat Co. and Thrush Co., successfully auctioned off unsold condo and townhouse units at two South Side developments in December 2008:

  1. McKinley Park Lofts at 2323 W. Pershing Road, a 163 unit loft conversion in McKinley Park
  2. Jazz on the Boulevard, a 137-unit complex at 41st Street and Drexel Boulevard in North Kenwood

Habitat, which developed the McKinley Park Lofts, sold all 34 units up for auction at the auction.  Condos sold for $150,000 to $250,000, down significantly from the original prices which were as high as $374,000.

The discounts were even more deep at Thrush’s Jazz on the Boulevard. 10 townhouses originally priced up to $625,000 sold between $250,000 and $300,000.

10 out of 12 condos also sold for between $150,000 and $200,000 which had been originally priced up to $363,000.

“The condo market in Chicago is very soft,” says Rick Levin, president of the Chicago firm that led the auctions. “There’s an oversupply and financing is difficult. . . .I think you’ll see that continue through 2009.”

“It’s better to close out and move on,” says Thrush President William Wolk, adding that the project has completely sold out since the auction. “The carrying costs will eat you alive.”

Currently, there are 7 re-sale units on the market at McKinley Park Lofts ranging in price from $174,900 to $234,900.

Condos sell for big discounts at 2 auctions [Crain’s Chicago Business, Jan 6, 2009]

Does Parking Matter? 2123 N. Kenmore Still On the Market

In May 2008, we chattered about whether or not having parking with a condo unit mattered.

Read our chatter here.

2123 N. Kenmore, a 3-bedroom, 2 bath unit, in Lincoln Park seemed to have “everything” except a parking spot.

It is still on the market 8 months later and has been reduced by $30,000.

Suzanne Gignilliat at Koenig & Strey has the listing. See more pictures here.

Unit #2: 3 bedrooms, 2 baths, wood burning fireplace

  • Sold in June 2006 for $462,500
  • Was listed in May 2008 for $544,000
  • Reduced
  • Currently listed for $514,000
  • Assessments of $300 a month
  • Taxes of $7,181
  • Central Air
  • Washer/dryer in the unit

Catching a Falling Knife: 4350 N. Broadway in Buena Park

We last chattered about 4350 N. Broadway in Buena Park in January 2008.

At the time, Unit #1010 was going to foreclosure auction and Unit #1012 was already bank owned.

See the pictures here.

Unit #1012 sold in February 2008 for $405,000 (including 2 parking spaces.)

Here’s its history:

Unit #1012: 3 bedrooms, 2.5 baths, 1950 square feet

  • Sold in December 2005 for $711,000
  • Was listed in January 2008 as a bank owned property for $399,000
  • Sold in February 2008 for $405,000
  • Listing stated it is “sold in as-is condition. Great opportunity!”
  • Assessments of $675 a month

Did that buyer catch a falling knife?

Because Unit #1010 has finally come back on the market as a bank owned property a year later (as no one bought it at the foreclosure auction.)

It’s listed a full $150,000 under what #1012 sold for a year ago.

Here’s its history:

Unit #1010: 2 bedroom, 2 bath, duplex, 1700 square feet

  • Sold in January 2006 for $557,500
  • Sold in August 2006 for $650,000
  • Foreclosure auction price in January 2008 of $482,081
  • Now bank owned
  • Currently listed for $256,450
  • Listing doesn’t say anything about parking
  • Assessments of $554 a month
  • Area Wide Realty has the listing. See the listing here.

There are no interior pictures available so it’s unclear what the condition of the unit is.

Here are comments on the building in April 2008 from Mark, who said he was an agent in the building:

“Many of us active in the area were shocked by these sales as we just weren’t selling condo’s for any amount near these sales back in ‘05.

Interesting, of the 7 or so that sold for above $700K—all ended up being rentals. Odd, eh? Why would someone pay $700K for a brand new condo and rent it out is a mystery. Over time it became evident that the renters weren’t taking care of the units and weren’t paying rent. At the same time, the owners of these units stopped paying their mortgages, condo fees and taxes. Surprise–1 foreclosure recently sold (#1012), 2 more are pending (#1001 and #1004, both under contract in less than 20 days).#1002 is on the market (beat inside) and I suspect that #1003, #1005 and #1007 will be on the market soon as all are vacant. That will take care of the foreclosure issue in this building–to the best of my knowledge there aren’t any other foreclosures elsewhere in the building and very few in the area.SO what happen to the PH level at Buena Pointe? GOOD question.

I would give anything to review the original lending files of the units that sold at $700+ in ‘05. I cannot imagine what is in those appraisals as comparable sales—they just didn’t exist. So whatever lenders and owners got nailed on this–they deserved it. Unfortunately the condo assn and other owners in the building have been forced to deal with the PH’s (due to lack of payment of monthly fees), but by the end of this year as all the foreclosed units have been sold and new owners make payments–they’ll be in good shape.

This is a good building with surpising decent lake and some city views. The lobby is very nice, it is well-managed, the board is active, the roof top party room/outside decks is phenominal AND ++ for the garage—you can still get a second spot (for about $20k).”

Competing Against the Developer: 1720 S. Michigan in the South Loop

Sellers continue to struggle to make any profit in 1720 S. Michigan, the 498-unit building in the South Loop that started closings in the summer of 2007.

See pictures of the interior of the units in the building in our old chatter here.

Not only do sellers have to contend with other flippers, but the developer has yet to sell out the building.

Such is the case with Unit #2011, back on the market a little over a year after first closing.   It is listed for only $9,400 more than it sold for in Oct 2007.

The developer is trying to sell a similar unit only 2 floors below for $8,100 cheaper.

Here’s the history of #2011:

Unit #2011: 2 bedrooms, 1 bath

  • Sold in October 2007 for $285,500
  • Currently listed for $259,000 plus $35,000 for parking (=$294,900)
  • Taxes are “new”
  • Assessments are $329 a month
  • Domus Central Real Estate LLC has the listing. See the listing here (no interior pictures available.)

Unit #1811: 2 bedrooms, 1 bath, 829 square feet

  • Currently listed for $249,000 plus $36,900 for parking
  • Taxes are “new”
  • Assessments are $293 a month
  • CMK Realty has the listing. See the listing here (also no pictures of the interior.)

Stats for the building (out of 498 units):

  • 27 for sale
  • 8 for rent

Some units may be both for sale AND for rent.

11 Months Later, Still No Price Reduction: 1401 W. Berteau in Lakeview

We chattered about this 3-bedroom contemporary townhouse at 1401 W. Berteau in Lakeview in September 2008.

See pictures and our chatter here.

Since then, nothing has changed. The townhouse is still for sale, a “paint credit” is still “negotiable” and the price is unchanged at $660,000.

But at least the snowy pictures are now current.

@Properties still has the listing. See more pictures here.

Unit #B: 3 bedrooms, 3 baths, 2 car garage

  • Sold in October 2004 for $599,000
  • Was listed in February 2008 for $660,000
  • Was listed in September 2008 for $660,000
  • Still listed for $660,000
  • Assessments of $331 a month
  • Taxes of $7684

A 2/2 Under $200,000? 4958 N. Troy in Albany Park

Recently, it has come up in discussion that most of the properties highlighted on Crib Chatter are of the more expensive variety.

Someone posted that he was looking for a simple 2/2 in a north side city neighborhood for under $200,000.

4958-n-troy-approved.jpg

You can find that at 4948 N. Troy in Albany Park.

Okay- so when you add in the parking, this 2/2 is slightly over $200,000.  But hey- everything is negotiable.

This unit is just a few blocks from the end of the brown line, has parking, central air and washer/dryer in the unit.

4958-n-troy-_1-livingroom.jpg

4958-n-troy-_1-kitchen.jpg

Kate Mangan-Smith at Prudential OneSource Realty has the listing. See more pictures and the virtual tour here.

Unit #1: 2 bedrooms, 2 baths, no square footage listed

  • Sold in January 2002 for $172,500
  • Currently listed for $199,999 (plus $12k for parking)
  • Assessments of $255 a month
  • Taxes of $2096
  • Central Air
  • In-Unit Laundry
  • Deck
  • Bedroom #1: 12×11
  • Bedroom #2: 11×10

Selling in a Luxury Tower 9 Months Later: 50 E. Chestnut

It seems as if the rich like to move on a moments notice along with the rest of us as this 3-bedroom unit at 50 E. Chestnut in the Gold Coast has come on the market only 9 months after it closed in May 2008.

Not only that- but it’s listed for $508,000 more than in May.

50 E. Chestnut, the 34 story high-rise, is so exclusive it only has 1-unit per floor. It also has all the traditional luxury upgrades: Subzero, Wolf, Dornbracht, Toto toilets and Kohler bathtubs.

Is the unit worth the premium only 9 months later? Stay tuned.

Tricia Fox at Keller Williams Gold Coast has the listing. See the pictures and listing here.

Unit #1001: 3 bedrooms, 3.5 baths, 2 car parking, 3904 square feet

  • Sold in May 2008 for $2,692,000
  • Currently listed for $3.2 million
  • Assessments of $2,398 a month
  • Taxes are “new”

Market Conditions: Best Real Estate Quote of 2008

Crain’s reported today that luxury apartment building company AvalonBay Communities Inc. has pushed back its plans to build 1000 units in the South Loop at Clark and Polk due to economic conditions, including a glut of condo units that are being rented.

Construction was set to start in May 2009 on the first of two 500-unit towers. The start date has been pushed back by 12-months.

Is this the best real estate quote of 2008?

“You’re crazy if you’re developing right now,” said Walter Rebenson, vice-president of development in Chicago for the Alexandria, Va.-based company.

“The job losses are massive.”

Another developer,  however, is going forward with construction plans in the South Loop.

As AvalonBay waits out the market, D2 Realty Services Inc. is moving forward with plan D for a site about a block south of AvalonBay’s. The Chicago developer originally had proposed building about 600 condos on the property at 1000 S. Clark St., later switching to apartments when the condo market tanked. Then D2 hired CB Richard Ellis Inc. to sell the 2.5-acre parcel, with an asking price of $20 million.

Unable to find a buyer, D2 has dropped that plan and now wants to develop the site in two phases. The first would include a 60,000-square-foot retail building with frontage on Clark Street. In phase two, D2 would build a condo or apartment tower on the west end of the property when the residential market recovers.

The $35-million retail development would sit just north of the emerging Roosevelt Road retail corridor, around the corner from the 400,000-square-foot Roosevelt Collection shopping mall that will open next year, and next to a Target store.

Economy changes plans for 2 South Loop projects [Crain’s Chicago Business, Dec 31, 2008]

Still Listed for Under Its 2006 Price: 1445 W. Belden in Lincoln Park

We last chattered about this 2-bedroom unit at 1445 W. Belden in Lincoln Park in September 2008.

See the prior post and pictures here. (In the comments thread- someone claiming to the owner admits that they listed too high in the beginning.)

It has been reduced another $50,000 and is now listed $62,000 under its prior 2006 selling price.

The unit is also now empty.

Judy and Steve Lieberman at Prudential Preferred now have the listing. See more pictures and a virtual tour here.

Here’s its history:

Unit #3N: 2 bedrooms, 2 baths, 1500 square feet

  • Sold in June 2006 for $537,500
  • Originally listed in June 2008 for $573,500
  • Reduced several times
  • Was listed in September 2008 for $524,900 (parking included)
  • Reduced
  • Currently listed for $474,900 (parking still included)
  • Assessments of $331 a month
  • Taxes of $4594
  • Central air
  • Washer/dryer in the unit

Third Biggest Story of 2009: Will Buyers Come Out of Hibernation?

I’ve been hearing buzz from various realtors that many sellers intend to list their properties for sale in early January 2009 (going against conventional Chicago real estate wisdom that there are few buyers in the winter and that you should list in the “spring”- which is normally after the Super Bowl.)

Reasons?

  1. Low interest rates are spurning buyers
  2. Market times are running as long as 9 months- so sellers want to list in January in order to get the property sold by next fall

Will we see a massive influx of both inventory and buyers in January?

Will the Fed’s actions to bring down mortgage rates and free up credit move renters from the sidelines in early 2009?

Make your predictions here!