$150k Reduction in East Lakeview: 652 W. Sheridan
This single family home at 652 W. Sheridan in East Lakeview sold only three years ago.
It’s been on the market since April 2008 and has had a $150k price reduction. It’s also available to rent.
The vintage home was built in 1903 and has original wainscoting, crown molding, chair rails and coffered ceilings.
It’s also on a larger yard with a two car garage.
@Properties has the listing. See more pictures here.
652 W. Sheridan: 5 bedrooms, 5 baths, 6000 square feet, 2 car garage
- Sold in June 2005 for $1.3 million
- Originally listed in April 2008 for $1.65 million
- Reduced
- Currently listed for $1.5 million
- Taxes of $16,555
- OR– you can rent it for $5,000 a month
- Central air
Interesting, I see the listing says central air, but I don’t see ANY vents and I see lots of radiators…
Why would you buy this place in this current housing climate when you can rent it for 5K? This needs to drop to around 1.1M just to get in the ballpark of its rental price.
“This needs to drop to around 1.1M just to get in the ballpark of its rental price.”
The ~$3700/month available after taxes would service a ~$650k mortgage at 5.75% interest. With currently available jumbo rates, I think “the ballpark” of rental price is a purchase price under $1mm, unless you’re playing in a **really** big ballpark.
I can’t think of one place I’ve ever seen on this site where it really was a no brainer to buy instead of rent. Rent rates vs. purchase prices in Chicago seem very out of whack to me. I see huge 3 bedroom, 1 bath places renting in Edgewater for under $1500/month (heat included) all the time. Can anyone beat that with a 3-bedroom condo for sale for 200K or less? Rent seems dirt cheap whenever I look at rates for places in Oak Park on craigslist. The rent vs. buy always favors renting in the South Loop, River North and the list goes on. I have a friend who rents a 2 bed, 2 bath place in a fairly nice vintage building near Roscoe and Halsted for 1200 per month.
I think in this town it’s almost always a better deal to rent. The problem is I don’t want to live in a house with an ugly, outdated kitchen. (And I certainly wouldn’t spend 5K a month for the privilege!) This is the problem I have with all the rentals in Chicago. They’re either really outdated dumps or they’re new construction or rehabs with completely generic finishes (maple or cherry cabinets, granite countertops, travertine baths, etc.). So, it seems like renting is always the better deal as long as you don’t care about really customizing your space to reflect your personal style.
Sad but true. In general renting in this city is 60% of the cost of owning. And you don’t have to settle for outdated kitchens. There are very nice rentals available – flippers turned landlords.
Looking at this another way…take your $1.5MM (to make it easy I’m assuming cash purchase) and invest in a tax free money market. That yields 78,000/year tax free, which more than covers the 60K rental price and you save almost $17K in property taxes and you can also assume 3%/year on maintenance in the long run.
I lived in a townhouse like this in Boston awhile back. It was nice having the space and the working fireplaces, and living in a SFH in the center of the city is addictive to say the least.
Probably the largest drawback to living in a SFH in a city neighborhood is the issue of trash. You set your trash out, and within hours people have picked through it, many times strewing it along the sidewalk in their quest for that one aluminum can that doesn’t even exist because you separated your recyclables. I think there’s this myth that people with the townhouses are hiding valuables in their trash. I would literally make my trash as disgusting as possible to pick through to keep people out of the trash. Pouring old coffee over the trash was my M.O.
And then people in neighboring apartment buildings set things out with YOUR trash like computers, televisions, car batteries, old appliances…. ….and If I didn’t catch the items by 9AM I’d have a $125 fine taped to my door for trash strewn on the sidewalk or items that didn’t belong in the trash to begin with. I swear I’d have to fight no less than $750/yr in fines and if I didn’t have the time to deal with the city I’d just pay the fines.
One advantage on the trash issue: You can set out decent furniture and stuff you no longer want, and it’ll disappear within hours to being a new life in someone else’s space. I placed a whole bedroom suite out once, and within minutes I literally had a group of immigrant guys waiting at my door for the next items to arrive (which was ideal b/c I didn’t have to carry the furniture an additional 5,000 ft.
Anon: I was giving a *very* generous ballpark.
Regardless, this is an obvious point but without the funny money I think we should see the huge distortion of the cost of owning vs. renting significantly reduced. This will be a very healthy correction needed to restore sanity in the economy (for all the obvious reasons stated again and again on this site).
I’m curious to know how much people think this gap will narrow. I have my suspicions that because of expectations of essentially negative to flat housing prices, we could have a very interesting situation come spring time (as sellers run out of hope).
The direction of 1) market rent and 2) interest rates will largely inform the selling price.
Depending on changes in the above, at some point it will become very lucrative for entities with a lot of available to equity to start acquiring properties as rentals, with 50% or higher equity targeting 5-10% annual ROI – if rents stay steady as they have been, we may hit this point pretty soon. Eventually, the price declines will stop, and they’ll stop well before the PITI falls to equal rent parity in Year 1 which is what seem people seem to expect. In that case, particularly as financing tightens up for all but those buyers with high equity, property will be held by fewer and fewer players in the market. The new twist we’ve yet to witness is that, rather that owning an entire building of rental properties, these owners will own many, many condos in a wide variety of buildings. In some cases, this would lead to consolidation of condo buildings de-converting into rentals, but this seems less plausible for those condo associations with many units.
Of course, if the economy goes in the tank and rents start falling hard and fast and interest rates are hiked to combat inflation caused by the printing of money to pay down debt, who knows what happens.