“Motivated Sellers” Are Everywhere

Lots of listings right now have the proverbial: “Motivated Sellers”

But recently I’ve been seeing more of: “Willing to Negotiate”

Such is the case with this 2004 townhouse in Old Town.  This townouse is in the not-so-great part of Old Town (in the re-developed area near Division.) 

Old Town has several personalities.  There is “real” Old Town (in the historic triangle area north of North Avenue).  There is Wells Street and then the “new” Old Town which is the newer development closer to Division.  Is the newer development still able to command the premium prices?

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1233 N Sedgwick: 3 bedroom, 2.5 baths, 2600 square feet, 2 car garage

  • Sold in November 2005 for $661,000
  • Currently listed at $779,000
  • Assessment of $93 a month
  • Vicki Harrison at Koenig & Strey has the listing

The listing states: “Motivated Sellers Willing to Negotiate!” 

The Craigslist ad says: “MUST SELL!! Blow Out Deal!! Model UNIT!! Bring your Best Offer!!”

Or, surprise, surprise, you can rent it.  Going rental rate is $3600 a month.

Update on eBay Condo Sale at The Sterling

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If you remember, there was a 1 bedroom unit at The Sterling at 345 N. LaSalle for sale on eBay.  The auction was expected to end on January 6, 2008 but I found when I went to the page that it had ended early (on January 4.)

Maybe the bids weren’t going high enough?

Same with the auction on the loft unit at 17 N. Loomis.  It also ended early.

More eBay Sales at The Sterling and 17 N. Loomis [link]

Prices Dropping at Park Place in River North

Sometimes you can see the reality of the current Chicago housing market just by pulling the listings of one building.

Park Place at 600 N. Kingsbury was completed in 2002.  It wasn’t a “luxury” building but was your standard River North high rise with 42 inch kitchen cabinets and granite.

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Some of the sellers are struggling to sell and some are selling for less than their purchase price.

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Unit #1410: 2 bedroom,  2 bath, 1200 square feet

  • Sold in September 2006 for $415,000
  • Currently listed for $380,000 plus $30,000 for parking
  • Assessment of $552 a month
  • Chris Sears at Coldwell Banker has the listing

A listing for one of the smaller two bedrooms says to “Bring All Offers!”

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Unit #1712: 2 bedroom,  2 bath, 1025 square feet

  • Sold in May 2004 for $354,500
  • Currently listed for $379,000 including the parking
  • Assessment of $486 a month
  • Prudential Preferred has the listing

Ritz-Carlton Residences Still Not Under Construction

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Every day I walk north down Michigan Avenue,  I am reminded that the Ritz-Carlton project at 664 N. Michigan is struggling.

Over a year ago, they put a big sign up on the sign of the old Farwell Building that said 30% sold.  Then, they replaced that last summer with 40% sold.

It’s been at 40% sold ever since.

More telling about the state of this project is that the Hanig’s Footwear store is still in the building.  If you recall, Hanig’s was to lose their lease and was looking for alternative space.

This was LAST summer.  From the Tribune:

SHOE STORE GETS BOOT: Hanig’s Footwear, one of the last local merchants on the Mag Mile, plans to close its store at 660 N. Michigan Ave. on Aug. 31. The upscale shoe store has been operating on the boulevard since 1978.

The store lost its lease in the landmark Farwell Building, where construction of Ritz-Carlton luxury condos is scheduled to begin in September. Owner Peter Hanig said he is looking to open a temporary location nearby before the holidays.

They had a “moving sale” last summer where they sold off their inventory. And then, surprise, surprise, they never moved.

Hanig’s was operating normally this entire holiday season. And even today they still don’t look like they’re going anywhere.

Yet, the website says “Construction to Begin in February 2008″.

Stay tuned.

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The Ritz Carlton Residences [website]

Do You Have Vision? Fulton House is for You

Fulton House at 345 N. Canal is one of those rare buildings that no one seems to know much about yet it has a prominent location right on the river next to River Bend.

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Built in 1903 as a cold storage warehouse,  it was converted into apartments in 1979-81.  It was converted into condominiums in the 1990s.  It is a “live-work” building and there are actually businesses who use the space as their offices.  That can make for a strange set-up for people who simply want to live there.

But there are some enormous units with interesing layouts in the building.  Do you have the vision to convert one of them into your loft masterpiece?

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Unit #1403:  2 bedrooms, 2 baths, duplex, 2030 square feet

  • Sold in January 1995 for $215,000
  • Currently listed for $393,000
  • Assessment of $870 a month
  • Listing says there is parking
  • Chicago Realty Partners, LTD has the listing

From the listing:

WOW! WONDERFUL DUPLEX LOFT LIVING IN HISTORIC FULTON HOUSE. HARDWOOD FLOORS, SPIRAL STAIR CASE, BRICK WALLS, AND OPEN ATRIUM BETWEEN 1ST AND 2ND FLOOR MAKE THIS UNIT ONE OF A KIND. UNIT NEEDS SLIGHT TLC TO MAKE INTO SHOWCASE. THE UNIT HAS TREMENDOUS LIGHT AND INDESCRIBABLE SUNSETS. BUILDING ACROSS FROM EBC, STEPS FROM RIVER, TRAINS AND LOOP.

As you can see, it’s being used as offices.  It could be cool space.  Here is a smaller 1 bedroom that has been renovated.  

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Unit #603: 1 bedroom, 1 bath, 1275 square feet

  • Sold in March 2002 for $187,000
  • Currently listed at $329,900
  • Assessment of $384
  • Washer/Dryer in the unit
  • No parking

Major Enterprises, Inc. has the listing.

Steals and Deals: A two bedroom in River North under $375k

Why buy a one bedroom in River North or Streeterville when you can buy a two bedroom for much less?

For those looking to buy, it pays to look at the high rises that are slightly older.  Such is the case with Park Place at 600 N. Kingsbury on the edge of River North near the Chicago River.  When the building was built in 2002, it was the far edge of River North and there was a “proposed” park to be built in front of the building.

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Flash forward 6 years and  the park is complete and there are several new high rises nearby.  Suddenly, the far west edge of River North doesn’t seem so “far.”

One listing for one of the smaller two bedroom, two bath floorplans says that the “seller is relocating, very motivated!”

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Unit #1512: 2 bedroom, 2 bath, 1052 square feet

  • Sold in September 2003 for $329,000
  • Currently listed for $344,000 plus $30,000 for parking
  • Assessment of $507 a month
  • Re/Max Signature has the listing

Is this a “deal” at this price point?  That is $335 a square foot (excluding the parking).

Flipper Alert: Flippers Appear in the Elysian (???)

The Elysian is a 60 story hotel/condo building being built in the Rush Street Corridor at 11 E. Walton.  It will have 188 guest suites (i.e. hotel rooms) and 51 private residences.

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Interestingly, there are 7 listings on the MLS for units in the building even though the building is far from complete.  Two listings are through Baird and Warner and five are through The Luxury Sales Group LLC.  Investors getting cold feet?

I cannot tell who is actually handling sales at the project (which realtor) but it appears that neither Baird and Warner nor The Luxury Sales Group are involved.  That leads me to conclude that all seven of these units are flips.

They range in price from $800,000 for a 1 bedroom, 772 square foot condo/hotel room to a 4 bedroom, 4.5 baths, 4 car garage, 3,972 square feet condo unit for $4,170,600.  These are the developers’ pictures of what the condo units will look like:

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The building was originally scheduled to be completed in 2008 but if you walk past the construstion site it is only about 15 stories up.  I don’t see how it will be completed in 2008.  2009 is more likely.

Flippers trying to flip over a year in advance?

The Elysian [website]

1 Bedroom Selling Below Purchase Price in The Palmolive

When you think of The Palmolive at 159 E. Walton in the Gold Coast, you think of exclusivity.  There is something neat about that building.  It is not flashy or “new” but has an understated elegance.

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The building sold pretty quickly in original sales but since then it has actually struggled- at least in some categories.

The high end seems to be selling well.  In October, Unit #34A, sold for $5.387 million.  But at least a dozen units have been rented and others are struggling to sell.

At least one unit is listed below its 2006 price.

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Unit #8F: 1 bedroom,  1 bath, 1146 square feet

  • Originally sold in August 2006 for $710,000
  • Currently listed for $675,000 plus $50,000 for parking
  • Was the model
  • Assessment of $855 a month

The listing states:

Former model 1 bedroom unit in Palmolive building with large windows, high ceils, opulent master bath, top appliances, advanced technology. Parking space available for an additional $50,000. Private health club, elegant club room for residents.

But a tipster sent me the listing that agents get where it actually admits they are selling below the former purchase price. It also is tenant rented until April 2008- for $3500 a month including the parking.

My question is- did the former sale price include the parking or not?  If it did, then they are technically not “below” the former sales price.  They simply stripped out the price of the parking so the unit “appears” cheaper than what it sold for before.

But a loss is pretty much a given once you pay the agent fees and closing costs. 

Katherine Chez and Mary O’Connor at Coldwell Banker have the listing.

Unit #13E, also a 1146 square foot 1 bedroom, 1 bath is also on the market.

  • Originally sold in May 2006 for $685,000
  • Currently for sale for $750,000
  • Or for rent for $4,000 a month
  • Baird and Warner has the listing

550 St. Clair Promotes “Special Prices”

With 550 St. Clair in Streeterville nearly completed, the developer is getting more aggressive in trying to sell the remaining units.

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There was a half page ad in the Sunday Chicago Tribune in the Perspectives Section (interesting that it was not in the real estate section) promoting: “Special Prices on Remaining Units.”

The ad didn’t say what was meant by “special prices”.

But if you go to the website it is promoting: “One Bedroom Homes Under $400K- Including Parking.”

That would seem like a “deal” compared to other nearby newly completed buildings  where the one bedrooms are selling for much more than $400,000 as flips by investors. 

The website says 60 Day Delivery.

Stay tuned.

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550 N. St. Clair [website]

2008 Predictions for Chicago Real Estate

The Sunday Real Estate section of the Chicago Tribune had an article titled, “Seers, soothsayers and educated guessers” about what might go on with the Chicago real estate market in 2008 (and beyond).  It had a few interesting tidbits about the Chicago condo market. 

1.  Younger people will be able to buy condos if they have the credit:

Market getting younger: Generation X and Gen Y are taking over the spot of first-time buyers, according to Kay Wirth, president of the Illinois Association of Realtors. (Baby Boomers are in the second-home market now — not to mention move-downs.)

“Younger buyers are seeing amazing opportunities,” Wirth says, adding that fears of being unable to get a mortgage are unfounded. “Money is to be had for those who qualify.”

There’s also hidden inventory in the condo market, Swonk points out. “Cancellations are pretty high in new condo developments,” she says. In addition, “a lot of supply has yet to hit the downtown condo market, which will hold down prices in that market until 2009.”

2. Rents will be picking up at 10% to 12% a year:

“The big story for 2008 is that rents are going up,” says Maurice Ortiz, marketing director for The Apartment People, an apartment-finding service with offices in Chicago and Evanston. “We haven’t seen rates like these since 2000.” Rents are going up as much as 10 to 12 percent in downtown areas, he explains.

“No one’s buying,” Ortiz says. “Everyone’s scared and going to wait a year or two.”

But it also sounds like the excess inventory in new condos will make it easier to get a rental deal on one of those units:

If a prospective tenant is in a position to pick up and leave in 60 days, a typical time for a sale to close, there are rental deals for condos that aren’t selling, adds Swonk.

Is anyone else seeing 10% to 12% rental increases? I know that the new luxury rental buildings in River North and Streeterville are renting very quickly- at high rental rates ($2,000 and up for one bedroom apartments.)