Market Conditions: Plans For New Apartments Heat Up But Is It Too Much?

At the height of the condo boom in Chicago, there were developers building buildings of all shapes and sizes who only several years before were in a completely different profession and who has little experience in the real estate industry.

Is speculation ramping up again?

Crain’s reports on the surge of plans for new apartment buildings in the GreenZone:

Two more developers are joining in the fun, one who wants to build a 15-story, 198-unit apartment building in the West Loop and another who plans a 16-story, 240-unit project in River West and a 51-unit building in River North. They are getting in on a development boom that’s expected to add about 4,700 apartments to the downtown market by the end of 2014, and possibly many more after that.

The question is whether construction lenders will let the party get out of control — like they did during the condominium boom — or whether they’ll take away the taps at the right time. Many apartment developers and investors continue to express faith in the ability of lenders to stay disciplined, financing only the most worthy projects and preventing a potential glut.

“Even if we’re not concerned, the lenders are concerned,” said Jay Javors, president of Midwest Property Group Ltd., a Chicago developer.

But there are some new players on the scene who have little to no history of building apartment or condo buildings in the city.

Dan Moceri, co-founder and CEO of Convergint Technologies LLC, a Schaumburg-based firm that specializes in security and fire systems integration and was ranked 37th on the Crain’s 2012 list of the 50 fastest-growing Chicago-area companies.

Last fall, KRG Capital Partners, a Denver-based private-equity firm, invested an undisclosed sum in Convergint, presumably freeing up money for Mr. Moceri to plow into other investments.

A venture led by Mr. Moceri agreed to buy a property at 601 W. Jackson Blvd. in the West Loop, with plans to build a 198-unit apartment building there, according to a source familiar with his plans. Mr. Moceri was traveling Tuesday and not available for comment.

Developers of some apartment buildings also seem willing to convert them into condos if the condo market were to heat up more than it has.

Developers have flocked to apartments as rising rents, occupancies and property values offer the potential for tantalizing investment returns relative to other assets. But the condo market is coming back, too, and Mr. Breheny has designed his projects with the option of converting them to condos if that makes sense, either before or after they are finished.

“Everything we’re building, we’re building with that in mind,” he said. “It could go either way.”

Is the apartment building frenzy sending up red flags?

Building bash: More developers plan downtown apartments [Crain’s Chicago Business, Alby Gallun, February 6, 2013]

Are Lofts Still Popular? A 2-Bedroom Penthouse At 1801 S. Michigan In The South Loop

This 2-bedroom loft in the 18th Street Lofts at 1801 S. Michigan in the South Loop just came on the market.

The corner unit has features loft lovers look for including a ton of exposed brick walls (including in one of the bathrooms which also has a huge window) and a 15 foot high timber ceiling.

But never fear about hearing noise above you (with the timber) as it’s a top floor penthouse unit with roof rights.

The loft also has industrial size 9 foot windows.

The kitchen has cherry cabinets, granite counter tops and stainless steel appliances.

The loft has a garage parking space, central air and washer/dryer in the unit.

It is listed just $20,000 above the 2004 price.

Are lofts as popular as they were a decade ago when every industrial building in the GreenZone was being converted?

Anne Victorin at @Properties has the listing. See the pictures here.

Unit #701: 2 bedrooms, 1.5 baths, 1150 square feet

  • Sold in August 1998 for $175,000
  • Sold in October 2000 for $255,000
  • Sold in June 2004 for $280,000
  • Currently listed for $300,000 (includes parking)
  • Assessment of $403 a month (includes cable)
  • Taxes of $4549
  • Central Air
  • Washer/Dryer in the unit
  • Roof rights
  • Bedroom #1: 14×12
  • Bedroom #2: 11×10

 

Market Conditions: Just 586 New Construction Homes Sold In Chicago In 2012

We’ve been chattering about quite a few new construction 3 and 6 flat projects around the north and west sides of the city in the last six months.

But those projects appear to be an anomaly in the new home market as new home sales in Chicago rose just 4.6% in 2012 to 586 properties.

From Crain’s:

A lack of supply in the city may tell part of the story. Though the city condo market has come back — Chicago condo sales jumped nearly 18 percent in December over the year-earlier period — developers have yet to start building high-rises again. Because condo prices have dropped so much the past several years and construction costs have not, it’s still hard to justify a new tower, Mr. Cross said. As a result, buyers have fewer new projects from which to choose.

In the entire metropolitan Chicago area, 3445 new construction properties sold in 2012. That was up 18% from 2011 and was the first year over year increase since 2005.

But sales are also coming off of record lows. At the peak, in 2005, 33,000 homes, condos and townhouses were sold in the Chicago metropolitan area.

The good news is that the pick-up in building is creating jobs.

The recovery is good news for the carpenters, electricians and plumbers who logged overtime during the boom but have struggled to find work since the bust.

“I did more houses last year than I did in the past four years combined,” said Jim Venhuizen, owner and president of Cimarron Construction Inc., a New Lenox-based carpentry contractor that employs about 10 carpenters now, down from as many as 80 before the crash.

Cimarron worked on about 25 homes in 2012, several for the Neighborhood Stabilization Program, a federally funded program to rehabilitate homes in struggling neighborhoods, he said. But the firm, which used to rely on residential construction for 99 percent of its business, has survived by diversifying into commercial construction. Mr. Venhuizen will take more residential work if he can get it, but he’s wary of getting too exposed to the market.

“Even if residential were to come back, we’re going to stay here and not put all our eggs in one basket,” he said.

Will it take the construction of new condo towers to really perk up Chicago’s new construction market?

Local new home sales jump 18 percent [Crain’s Chicago Business, Alby Gallun, February 5, 2013]- be sure to check out the great historic home sales chart in the article.

Want A 4-Bedroom Old Town Duplex Down Without All The Bedrooms In The Basement? 1847 N. Cleveland

We’ve chattered about this vintage greystone building at 1847 N. Cleveland in Old Town several times over the years.

This 4-bedroom duplex down just came on the market.

The listing says it is extra wide and it has a fireplace and moldings.

The kitchen has 42 inch cabinets, granite counter tops and stainless steel appliances.

2 of the bedrooms are on the main floor and 2 are in the lower level along with the family room.

It has all the other features you would expect including washer/dryer in the unit, central air and 1-car secured parking.

The unit has come on the market for just about $10,000 above the 2008 purchase price at $849,000.

Is $850,000 the top of the range for a property like this?

Or could we see $1 million duplex downs?

Rachel Krueger at Coldwell Banker has the listing. See the pictures here.

Unit #1S: 4 bedrooms, 2.5 baths, no square footage listed

  • Sold in August 2000 for $519,000
  • Sold in May 2002 for $652,000
  • Sold in June 2004 for $750,000
  • Sold in August 2008 for $839,500
  • Currently listed at $849,000
  • Assessments of $275 a month
  • Taxes of $7720
  • Central Air
  • Washer/Dryer in the unit
  • 1-car parking included
  • Bedroom #1: 17×12 (main floor)
  • Bedroom #2: 12×11 (main floor)
  • Bedroom #3: 12×12 (lower level)
  • Bedroom #4: 12×11 (lower level)
  • Family room: 25×18 (lower level)

The Cheapest SFH In Lincoln Park Is Back! (And Reduced) A 3-Bedroom At 610 W. Kemper

We last chattered about this 3-bedroom single family home at 610 W. Kemper in Lincoln Park in July 2012.

See our prior chatter here.

At the time, because it was listed at $499,000,  it was a “story” because it was a rare Lincoln Park single family home priced under $500,000.

But it didn’t sell.

The house recently returned to the market reduced $61,100 to $438,800.

If you recall, the house is built on a smaller than average Chicago lot of 50×21. The only outdoor space it has are a large front patio and a rooftop deck.

All three bedrooms are on the second floor.

The master bathroom has a skylight.

The kitchen has maple cabinets, granite counter tops and white appliances.

While the house does have central air it doesn’t have parking. It’s rental only somewhere nearby.

The house is also located directly across from the Lincoln school.

Will this newly reduced price help make the sale or will this house have to go under $400,000 to find a buyer?

Daniel McEneaney at Jameson Sotheby’s has the listing. See the pictures here.

610 W. Kemper: 3 bedrooms, 2 baths, no square footage listed

  • Sold in 1993? (no price)
  • Originally listed in February 2012 for $499,900
  • Was still listed in July 2012 for $499,900
  • Withdrawn in November 2012
  • Reduced
  • Relisted on February 1, 2013 for $438,800
  • Taxes now $6582 (they were $6477 in July 2012)
  • Central Air
  • No parking- but rental in the neighborhood
  • Bedroom #1: 11×22 (second floor)
  • Bedroom #2: 8×11 (second floor)
  • Bedroom #3: 8×11 (second floor)

 

Is The Short Sale A Problem For This Vintage 3-Bedroom? 2130 N. Lincoln Park West In Lincoln Park

We’ve chattered about this 3-bedroom vintage unit overlooking the park at 2130 N. Lincoln Park West in Lincoln Park several times over the last year.

See our October 2012 chatter here.

Last October, it went to a short sale and reduced to $712,000. The unit directly above it, Unit #3S, with the same layout had sold in July 2012 for $750,000.

It’s still on the market and was recently reduced again to $699,000.

If you recall it has a rare 660 square foot private terrace. Usually vintage units in the large buildings don’t have outdoor space. (Unit #3S did NOT have outdoor space.)

It also has nearly all the features buyers look for, but can not usually find, in a vintage unit.

It has a washer/dryer in the unit and attached heated garage parking. The one amenity it is missing is central air.

The unit even has a private elevator entry.

Built in 1927, it has a 38 foot barrel vaulted gallery and oak floors.

The older listing said the kitchen was 3 years old. It has white cabinets, granite counter tops and stainless steel appliances.

The old listing also said the bathrooms were “new.”

Even though everyone says they want a “deal”- are short sales just too much of a hassle for most buyers to deal with?

Michael Hall at Baird & Warner still has the listing. See the pictures here.

Unit #2S: 3 bedrooms, 3 baths, 2400 square feet

  • Sold in February 2000 for $480,000
  • Originally listed in January 2012 for $895,000
  • Reduced
  • Was listed in March 2012 at $849,500
  • Reduced in April 2012 to $825,000
  • Was listed in September 2012 for $750,000
  • Reduced
  • Was listed in October 2012 as a “short sale” for $719,000
  • Reduced
  • Currently listed as a “short sale” at $699,000
  • Assessments of $1440 a month (includes heat, parking, cable)
  • Taxes are now $9813 (they were $10640 in July 2012)
  • No central air- window units only
  • Washer/Dryer in the unit
  • Garage parking included
  • 600 square foot private terrace
  • Bedroom #1: 16×14
  • Bedroom #2: 16×11
  • Bedroom #3: 10×10

Market Conditions: The Super Bowl Is Over- Will Inventory Finally Pick Up In February?

Are you in a multiple offer situation on a property?

Nearly everyone who writes me tells me that they are (in both the city and the suburbs.) Properties are going under contract within 24 hours.

It also cuts both ways. They are getting multiple offers on their property they are listing to sell but they are up against multiple offers on properties that they are buying.

People are bidding over ask, in some cases, just to win the property. Some are even waiving inspection issues.

The Super Bowl is now over. February has historically been the start of the “spring buying season” in Chicago. But this year we’re starting it with record low inventory in most neighborhoods and record low mortgage rates.

What do you expect to see over the next 1 to 3 months?

Will more inventory come on the market as word gets out about the “hot” market and multiple offers? (I’m waiting for a Tribune article any day. What is wrong with them? Why haven’t they written it yet?)

Or will this low inventory market be the new reality in 2013?

 

How Hot Is the Market? Trying to Sell Just 9 Months Later In Lincoln Park: 1312 W. Webster

We first chattered about this 9 unit new construction building at 1310-1312 W. Webster in Lincoln Park in November 2011 when it was under construction.

See our previous chatter here.

The units sold pretty quickly but you’re in luck if you really wanted to buy there.

A 4-bedroom duplex down just came back on the market only 9 months after its previous sale.

At 2600 square feet, it is on an extra wide lot with both front and rear decks as well as a private deck on top of the garage.

The unit has upscale finishes such as crown molding, heated floors and stone baths.

The kitchen has dark wood cabinets, granite counter tops and Viking and Wolf appliances.

It’s a little bit of a different floor plan than we usually see in the duplex downs.

All four bedrooms are in the lower level instead of having one or two on the main level.

The family room is also on the main level next to the kitchen (usually it’s in the lower level) so the living/dining room is actually a separate space in this unit- not open to the kitchen.

It has a 1-car garage.

It came on the market listed $49,900 above the March 2012 purchase price.

Is the market so hot that someone will pay nearly $50,000 more than just 9 months ago?

John Vossoughi at @Properties has the listing. See the pictures here.

Unit #1W: 4 bedrooms, 2.5 baths, 2600 square feet, duplex down, 1 car garage

  • Sold in March 2012 for $830,000
  • Currently listed at $879,900
  • Assessments of $190 a month
  • Taxes are still “new”
  • Central Air
  • Bedroom #1: 17×14 (lower level)
  • Bedroom #2: 12×11 (lower level)
  • Bedroom #3: 13×11 (lower level)
  • Bedroom #4: 13×11 (lower level)
  • Family room: 17×17 (main level)

Looking For 3 Bedrooms In The Gold Coast For Under $425K? 1555 N. Sandburg Terrace

This 3-bedroom in a mid-rise building in Sandburg Village at 1555 N. Sandburg in the Gold Coast (or is this Old Town? The listing calls it Old Town) just came on the market.

This unit has been renovated.

The kitchen now has cherry cabinets, stainless steel appliances and granite counter tops.

The master bathroom is marble and granite.

The east facing unit has a long private balcony.

It also now has a washer/dryer in the unit (which was added since the last sale) and central air. Parking is leased for $150 a month in the building.

Is this a deal for someone who wants 3-bedrooms in this location?

Randee Shapiro Simborg at Baird & Warner has the listing. See the pictures here.

Unit #302: 3 bedrooms, 2 baths, no square footage listed

  • Sold in November 1993 for $135,000
  • Sold in May 2001 for $325,000
  • Sold in June 2008 for $450,000
  • Currently listed for $412,000
  • Assessmenst of $879 a month (includes heat, ac, doorman, cable)
  • Master Association fee: $84 a month
  • Taxes of $5189
  • Central Air
  • Washer/Dryer in the unit
  • Leased parking at $150 a month
  • Bedroom #1: 19×11
  • Bedroom #2: 12×10
  • Bedroom #3: 15×11

“Magazine Caliber Renovation” Of A 3-Bedroom Lakeview Townhouse: 1246 W. Oakdale

This 3-bedroom townhouse at 1246 W. Oakdale in Lakeview recently came on the market.

This is a small townhouse development and units rarely come on the market.

The listing says it’s had a “magazine caliber renovation.”

For a townhouse, this one has a unique layout as it’s a front end unit that is 44 feet wide and has a southern exposure.

It has its own private front yard.

At 3000 square feet, it’s also as large as many single family homes.

The kitchen has custom white cabinets and a 7 foot dark walnut island with granite counter tops and stainless steel appliances.

There is a first floor family room along with a big lower level great room.

The master bedroom is on the top floor along with a roof deck and the other two bedrooms are on the second floor.

The listing says it’s in the Agassiz school district.

It’s come on the market $69,000 above the 2005 purchase price.

Will it get the premium?

Keith Wilkey at Prudential Rubloff has the listing. See the pictures here.

1246 W. Oakdale: 3 bedrooms, 2.5 baths, 3000 square feet, 1 car garage

  • Sold in July 2002 for $565,000
  • Sold in May 2005 for $630,000
  • Currently listed for $699,000
  • Assessments of $298 a month (includes snow removal)
  • Taxes of $9434
  • Central Air
  • Bedroom #1: 16×13 (third floor)
  • Bedroom #2: 15×10 (second floor)
  • Bedroom #3: 15×10 (second floor)
  • Family room: 17×12 (main floor)
  • Great room: 28×16 (lower level)