Sales Slump in Chicago in the 4th Quarter; Inventory to Rise

Crain’s is reporting the fourth quarter Chicago sales statistics:

Builders sold 2,196 units in the quarter, a 51% decline from the year-earlier period and the biggest quarterly drop since the residential slump began more than two years ago, according to Tracy Cross & Associates, a Schaumburg-based real estate consulting firm. Homes sold in the quarter at the slowest pace in 15 years, the firm says.

Still, the experts aren’t grim about all of 2008:

As they head into the spring selling season, typically the market’s strongest period, builders “will be lucky to repeat last spring,” says Tracy Cross, president of the eponymous consulting firm. Still, he expects a recovery in the second half of the year, with annual sales rising 12% for all of 2008.

Yet, the slowdown in sales is clearly troubling. Inventory is rising. And we all know that dozens of new high rises are being built downtown.

Builders last year suffered most in the suburbs, where sales fell 39% to 11,565 units. City developers sold 4,121 units, a 32% decline, and could be in for more tough times as a slew of new downtown condominium towers opens up. About 3,500 unsold downtown condos are under construction and will be completed between now and 2010.

“Some of those buildings are going to have some trouble,” Mr. Cross says.

The spring selling season is about to begin. It should get interesting.

Flipper Alert: Avenue East now at 40% flips

The number of flippers keeps growing larger at Avenue East at 160 E. Illinois in Streeterville.

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The building has not completed closings yet.

There are only 133 units.  So far:

  • 43 units are for sale
  • At least 18 units are for rent
  • 53 units are either for sale or for rent

That means 40% of the building is owned by investors or the developer (so far.)  And the number is actually higher, because a half a dozen units have actually already rented.

The rent versus owning ratios are pretty striking in the building already.

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Unit #1302: 2 bedrooms, 2 baths,  1508 square feet

  • Currently listed for $850,000 (with parking available for at least $50k)
  • Assessments of $604 a month
  • Koenig & Strey has the listing

Or you can rent it for: $4200 a month

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Unit #24A: 2 bedroom, 2.5 bath, 1482 square feet penthouse unit

  •  Currently listed for $798,000 (parking is available for $50k)
  • Assessment of $685 a month
  • Baird and Warner has the listing

Or you can rent it for $3950 a month.

The most radical rental is Unit #23C.  I wish I had some pictures of it.

Unit #23C: 1 bedroom, 1 bath, 907 square feet

  • Currently listed for $590,000 (parking is available for $50k)
  • Assessment of $399 a month
  • Baird and Warner has the listing

Or you can rent it for $2100 a month.

From what I can tell, nothing has flipped yet in the building even though closings began over 6 months ago.  Several have rented.

I guess this means no Europeans are strolling into the building off the Mag Mile, shopping bags in hand, to buy condos.

Charlie Chaplin’s Penthouse in Lakeview is on the Market

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The Brewster, at 2800 N. Pine Grove in Lakeview, is famous for several reasons.  Not only did Charlie Chaplin live in the penthouse in 1915 and 1916 but several movies have also been filmed in the building,  including Childs Play and The Untouchables.  The interior of the building is amazing, with intricate ironwork and skylights.

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Built in 1893, it was originally known as the Lincoln Park Palace.  It was designated a Chicago Landmark in 1982.

Chaplin’s penthouse is again on the market.  But it looks like it hasn’t held up so well (if you can even tell anything from these pictures).

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The listing says the unit has 18 foot ceilings, but there aren’t any pictures of them in the listing.  Nor are there pictures of the “FAB kitchen” nor the baths.

The biggest selling point of the unit, though, is the wonderful wrap-around terrace.

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Unit #PHA: 3 bedrooms, 2 baths, 2200 square feet

  • Sold in June 1997 for $163,500
  • Sold in September 2000 for $320,000
  • Sold in June 2005 for $545,000
  • Currently listed for $597,000
  • Assessments of $998 a month

The Brewster has no parking available.

Castle Keepers Realty has the listing.

Flipper Alert: 550 N. St. Clair Flips Coming on the Market

Let the flipping begin in 550 N. St. Clair in Streeterville.

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I don’t believe any units have officially closed yet but already there are 15 units on the market out of 112 units.  It appears that nearly all of floor 13 is back up for sale,  with several units available from the developer’s agent- which is Weichart Realtors.

Unit #1303: studio, 600 square feet

  • Currently listed for $288,500 (parking is $45,000 extra)
  • Emarket Realty has the listing

Unit #1304: 2 bedrooms, 2 baths

  • Currently listed for $598,500 (plus $45,000 for parking)
  • Weichart Realtors, First Chicago has the listing

Unit #1305: 2 bedrooms, 1.5 baths

  • Currently listed for $498,500 (parking is $45,000 extra)
  • Weichart Reatlers, First Chicago has the listing

Unit #1306: 1 bedroom, 1 bath, 800 square feet

  • Currently listed for $399,000 (parking is extra)
  • Emarket Realty has the listing

Unit #1307: studio, 600 square feet

  • Currently listed for $319,500 (parking is extra)
  • Emarket Realty has the listing

A larger flip has also come on the market.

Unit #1508: 3 bedrooms, 2 baths, 1625 square feet

  • Currently listed for $749,900 (plus $50,000 for parking)
  • Caren Real Estate has the listing

Unit #1708 is going to have to compete against the developer.  Weichart is trying to sell Unit #908, same size unit, for nearly the same price: $748,500.

The investor on Craigslist a few weeks back is still out there looking for help:

I am an investor and I need to sell a few units I bought at 550 n. st clair. This is a beautiful building in Streeterville, close to Michigan Ave where there is an array of shopping and wonderful restaurants. My intention was to live in one and manage the others as high end rentals; however, I have decided not to move forward. I can either lose my earnest money, or sell my units at the price I contracted them at 3 years ago, which in some cases are up to 10% less than what the Developer is asking for now.

There are also a few rentals available already on Craigslist.

Stay tuned. There will certainly be more action in this building in the next few weeks.

550 St. Clair [website]

Developers Offering “Deals” to Move Product

Did you see all the incentives developers were throwing around in this weekend’s real estate ads?

The ad for The Emerald, which is being built in the West Loop near Greektown, said:  “Limited Time- Leap Year Promo”

Now thru March 2, leap into Emerald for special offers! Plus get $1000 off closing costs and put only 5% down. See sales rep for details.

They don’t say what the “special offers” are but if you go to their website it says they are offering free parking through March 2.

At the Terrazio at 1935 S. Wabash in the South Loop, you can get a “New Year’s Special” of $25,000 off purchase. It is limited to the first 15 contracts only. The ad says to “hurry”.

The Marquee at 1454 S. Michigan is also offering a “New Year’s Special” of a $25,000 furniture credit. Now that’s unique. Imagine how much furniture that could buy you in a one bedroom condo? That is only available for the next nine contracts. The ad says to “hurry” too.

At the Residences at the Grand Plaza at 545 N. Dearborn in River North, you can get up to $100,000 in personal upgrades for your penthouse. Those start over $1 million. The ad says the “allowance” differs by unit and purchase price.

2930 Sheridan Tower at 2930 North Sheridan in Lakeview, an apartment to condo conversion, is offering $5,000 cash at closing. A few months ago when I visited the sales center, they were also offering a $5,000 “credit” towards upgrades like getting rid of the popcorn ceilings.

Eco 18, the “green” building at 1830 S. Wabash in the South Loop, is offering free parking “for a limited time.”

The Emerald [website]
Terrazio [website]
The Marquee [website]
The Residences at Grand Plaza [website]
2930 Sheridan Tower [website]
Eco 18 [website]

When Old Man Winter Strikes, Light Up That Fireplace

This is the time of the year in Chicago when you think, “darn, I should have bought that house with the fireplace.”

Or, in this case, you can buy one with two.

7406 N. Claremont is a vintage building  in the West Ridge neighborhood (aka West Rogers Park) originally built in 1928 and renovated and converted in 2000.

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7406 N. Claremont #1S:  3 bedrooms, 3 baths, duplex, 3100 square feet

  • Sold in March 2002 for $302,000 
  • Currently listed for $434,900 (includes the parking)
  • Assessments of $232 a month

Look at these cozy fireplaces.  There’s even one in your bedroom!

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James Snelson and Sam Powell at Keller Williams Lincoln Park have the listing.

Wolfram Street in Lakeview: Snapshot of the Mansion Market

It’s not just condo flippers who are having a hard time selling in this market.  Owners of million dollar homes in Chicago seem to be under some stress as well.

Just take a walk down West Wolfram Street in West Lakeview.

I’ve already posted about 1445 W. Wolfram.  Remember that house?  It was the “Once in a Lifetime Opportunity” on a new construction McMansion listing.  The listing said:

“Developer must get out now! Make an offer!! Being sold “as is” – way under market value 95% complete – you put in last 100k of work (apps, elevator, etc.)! Home boasts tremendous light, hwdflrs, custom cabinets, eat-in chef’s kitchen, walk-in pantry, elevator, radiant heat, 5 decks & 2 laundry centers, exquisite finishes, master craftsmanship & great floorplan.”

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It was originally listed for $1,999,999 and had been reduced to $1,650,000. It has since been reduced again to $1,600,000.

It’s got some steep competition nearby however. It seems Wolfram is full of million dollar homes that aren’t selling.

Only a few doors down is 1417 W. Wolfram. I don’t have pictures of this house, but it just went into foreclosure.

  • Last sold in January 2004 for $1.295 million
  • Foreclosure auction price of $1,383,203

Not too far away is 1351 W. Wolfram.  From the listing, it looks like it was newly built in 2005. The listing says it has Viking, Sub-zero and Bosch appliances.

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1351 W. Wolfram: 4 bedrooms, 3 baths, 2 half baths,  2 car garage

  • Currently on the market for $1.725 million
  • First came on the market in March 2005
  • Total market time of 441 days (but has been on and off the market for nearly 3 years)
  • Amanda Samuels at Coldwell Banker has the listing

A little further west there are two new McMansions that are nearly identical right next door to each other. (The interior pictures on the listings are the same for both.)

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1726 W. Wolfram: 5 bedrooms, 4.5 baths, 2 car garage

  • Currently listed for 1.545 million
  • First came on the market in February 2006
  • Market time of 219 days (but has been on and off for about 2 years)
  • @Properties has the listing

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1724 W. Wolfram: 5 bedrooms, 4.5 baths, 2 car garage

  • Currently listed for $1.475 million
  • First listed in March 2005
  • Market time of 292 days (has been on and off the market for nearly 3 years)
  • @Properties has the listing

What do these properties say about the state of the upper bracket market in Chicago?

You be the judge.

Chicago Market: Housing Bust Affects the Wealthy Too

Reuters wrote an article this week entitled, “Wealthy May Be Next in Line in U.S. Home Crisis.”

And wouldn’t you know it- the writer chose Hinsdale, Illinois as an example of how the bust was affecting the wealthy.  The article had some good quotes about the Chicago housing market. 

About Hinsdale:

“There is a section of the population here that over-extended themselves to buy here and then keep up the facade of wealth,” said Sharon Sodikoff, a broker associate at local real estate agency Prudential Homelife Realty. “In the next year or so they’ll be forced out in dribs and drabs.”

The average sale price in Hinsdale for the 12 months through September 30, 2007 was $1.15 million.

“The next wave of problems will come from prime borrowers who bought too much house or borrowed too much against it,” said Michael van Zalingen, director of home ownership services at Neighbourhood Housing Services of Chicago.

Inventory is rising in Hinsdale. It had risen to 17 months by the end of October 2007 versus only 6 months in January 2006.

What about Chicago, you ask?

“I’ve seen people who bought less than a year ago and have no equity in their homes simply walking away with no regard for the consequences,” said Genie Birch, a real estate agent at Chicago-based Koenig & Strey GMAC who covers the city’s wealthier districts.

Real estate agents say speculative investors who bought to make a profit are also walking away as the rents they charge fall behind the mortgage payments as their adjustable-rate mortgages readjust.

The article states that you won’t see as many foreclosures among the wealthier because they have the ability to call up the lender and make some kind of deal- presumably for a short sale.

“You won’t see many foreclosed homes here because that would involve public embarrassment,” Prudential Homelife Realty’s Sodikoff said. “But they will call their realtor and get them to quietly broker a deal to get out of their homes.”

Oh really? Remember this million dollar Hinsdale foreclosure at 805 W Hickory? I chattered about it in September 2007.

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It was originally listed for sale in 2004 for $3.198 million. It went to foreclosure auction with a price of $1.301 million after spending three years on the market. It was sold in foreclosure auction.

Granted, there isn’t a tidal wave of similar foreclosures in Hinsdale or other wealthy communities.  But I’ve seen million dollar foreclosures in Wheaton, Burr Ridge and Highland Park in recent weeks (to name a few.)

Flipper Alert: MoMo Starts Closings; Rentals Appear

Momo, the Smithfield development on the corner of State and Randolph in the Loop across from the old flagship Marshall Fields, is set to begin closings any day now.  The first flips and rentals are starting to appear.

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My question on the rentals is: will investors be able to get higher rents in that location?  None of the one bedroom units had parking available for purchase so every renter will have to pay to rent nearby. 

There is one listing for a rental on Craigslist that says move-in is available on February 1st. (The pictures below are of the model unit, I believe.)

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It doesn’t list the square footage, but they are asking $1795.

The developer is still trying to sell some units in the building.  There appear to be four one bedroom units left which range as follows (from cheapest to the most expensive):

  • 860 square feet for $299,900 on the 14th floor
  • 925 square feet for $359,000 on the 31st floor

Those prices are without parking.

There is a two bedroom, two bath unit with 1348 square feet for $460,900 on the 29th floor.  The listing says “rental parking available.”

[By the way- if anyone knows the “real” address of this building, please let me know.  The developer has it listed as 151 N. State, which is the address of the Loehmann’s.  Won’t the actual address be on Randolph Street?]

Steals and Deals: 3180 N. Lake Shore Drive

Maybe you’ve seen this Craigslist ad too.  It’s been posted for what seems to be months now.

It has a title that reads: $399900 Lake Shore Drive 3 Bed / 2.5 Bath Priced $191K Under Market

Who wouldn’t at least click on the post, right?

Here is more:

Lake Shore Drive 3 Bed / 2.5 Bath Priced $191K Under Market

Unbelievable Price! 3 Bed / 2.5 bath LSD Below Recent 2 Bed Sale Recently Showcased on WGN as Deal of the Week! Lake Shore Drive!

This unit was originally priced at $570,000 has now been reduced to $399,900!

3180 N Lake Shore, Unit 4A was recently showcased by Dennis Rodkin from Chicago Magazine as being one of Chicago’s deal of the week. Dennis spoke about this property this morning at 8:40am on WGN.

Check it out!

http://www.chicagomag.com/Radar/Deal-Estate/November-2007/This-Week-on-SpikeaNovember-14-price-cuts/

THIS IS A NO BRAINER! My client has just authorized another price reduction which prices this unit $191,000 LESS THAN THE LAST COMPARABLE 3 bed / 2.5 unit at 3180 N Lake Shore. Now priced less than a 2 bedroom / 2 bath unit which sold this year for $405,000!

My client’s significant price reduction has created an unprecedented opportunity to purchase this knock out 3 bedroom, 2.5 bath 1,800 square foot Lake Shore Drive condo substantially under market.

The last 3 bedroom, 2.5 bath condo at 3180 N Lake Shore Drive, Unit 13H was listed for $599,000 and sold for $590,000!

Are the claims in the Craigslist ad true?

First of all, 3180 N. Lake Shore Drive was built in 1952 as an apartment building and converted in 1974 into condos. It is 23 stories and has 175 units.

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1. Was it originally listed at $570,000?

False.

The unit was originally listed in January 2005 for $519,900. It was withdrawn after about 6 months and then re-listed in January 2006 for $515,000 (if at first you don’t succeed, try, try again.)

That listing was also withdrawn after several months, and after several price reductions, which took the price down to $459,000.

In April 2007, the listing re-appeared at $570,000.  The price was lowered numerous times throughout 2007 until it was listed at $419,900 in January 2008.

Finally, that listing was withdrawn and it was re-listed for $419,900 and then recently lowered to $399,000

The owner has been trying to sell this condo for three years.

At one point, this unit WAS listed at $570,000- but not “originally.”  (thanks to the tipster who sent me this information.)

2. Is it priced less than a 2/2 that sold for $405,000 in 2007?

True.

Unit 5E sold in February 2007 for $405,000. It was the second most expensive unit to sell in the building out of 9 sales in 2007. However, Unit 5E was also among the most expensive units to sell in 2006.

  • Sold in February 2005 for $570,000
  • Sold in June 2006 for $598,500
  • Sold in February 2007 for $405,000

And no- I don’t understand what was going on with that unit (Foreclosure? Short sale? Or just the market changing?)

3.  The last 3 bedroom, 2.5 bath condo at 3180 N Lake Shore Drive, Unit 13H was listed for $599,000 and sold for $590,000

True.

Unit #13H: 3 bedrooms, 2.5 baths

  • Sold in April 2007 for $590,000
  • Sold in February 2004 for $327,500

The last three bedroom to sell before #13H was in 2006.  Unit #21H sold in November 2006 for $610,000.  Previously, it sold in May 2001 for $340,000.

As for Unit #4A that is in the Craigslist ad: 3 bedrooms,  2.5 baths, 1800 square feet

  • Sold in November 2004 for $283,000
  • Listed in January 2005 for $519,900
  • Listed in January 2006 for $515,000
  • Listed in April 2007 for $570,000
  • Currently listed at $399,900
  • Assessments of $917 a month

Is this a deal?  Is this truly “$191K under market”? 

Even the listing says: “Market Conditions Dictate New Price.”  Thomas Hall at Rubloff has the listing.