Sold! The 3-Bedroom Duplex at 419 W. Grant Listed Under $360K in East Lincoln Park
There has been a lot of chatter about this 3-bedroom duplex up at 419 W. Grant in East Lincoln Park because it was listed just under $360,000.
See our February 2011 chatter here.
Many of you believed it was a good deal for the location and square footage even if it was in a 1970s-era complex.
The unit had two balconies and a wood burning fireplace.
All 3 bedrooms were on the second floor along with 2 full baths. There was even a half bath on the main floor.
The kitchen had white cabinets and appliances and there was separate dining room.
The unit ended up closing for $355,000, or $30,000 under the 2003 purchase price.
Anne Victoria at @Properties had the listing.
Unit #C: 3 bedrooms, 2.5 baths, 1620 square feet
- Sold in September 1997 for $225,000
- Sold in August 1998 for $283,000
- Sold in May 2000 for $338,000
- Sold in May 2003 for $385,000
- Originally listed in January 2011 for $359,900
- Was listed in February 2011 for $359,900
- Sold on March 30, 2011 for $355,000
- Assessments of $343 a month (includes cable)
- Taxes of $5031
- Central Air
- Washer/Dryer in the unit
- Parking included
- Bedroom #1: 13×12 (second floor)
- Bedroom #2: 14×8 (second floor)
- Bedroom #3: 12×8
still seems like a good deal to me.
Just compare this to Howe (how much of the extra sf is basement?)…
Another one at 439 just closed at $388,000. Bet they’re not too happy!
had newer kitchen and bath, though.
Some buyer got totally ripped off; or in the alternative, some seller transferred ownership of a falling knife. Patience is a virtue for buyers.
Below the 2000 selling price. It’s truly been a lost decade.
new math?
Looks like I hit this one right on the nose, both on timing and price.
Danny, it was above the 2000 price…
This isn’t the only cc’ed place that day to sell recently. The 3 bedroom on Lincoln also sold lately. Maybe spring has sprung!
Short sale 3/2 in ELP listed 50k below ’03 price (per redfin):
http://www.redfin.com/IL/Chicago/2341-N-Commonwealth-Ave-60614/unit-2B/home/12557163
Looks like a nice place at a good price Roma. Only question is if someone put in an offer how many months will they wait for a response from the bank? Short sales suck!
This seller sold for $30k under the (near) peak price they paid. They can’t be thrilled, but at least it wasn’t ruinous for them (unless they treated the place as an ATM).
As for this buyer, they just got a 3 bed/2.5 bath place with a/c and w/d, a parking spot and some outdoor space, barely two blocks from the park, in the Lincoln attendance area, for $355k. Sure, these are modest units in a modest development, but whether a buyer pays $325k or $400k for a place in these Grant units, they are getting a fair deal. The buyer who pays $325k (i.e., a patient, if not lucky, buyer, in HD’s view) will obviously make out better on resale than one who pays $400k, but even the latter is getting a place at less than it would cost to rent.
Congrats to this buyer (and the buyer of 439), and welcome to the neighborhood.
“This isn’t the only cc’ed place that day to sell recently. The 3 bedroom on Lincoln also sold lately. Maybe spring has sprung!”
Looks like I got that one just about exactly right as well.
Here’s the link:
http://cribchatter.com/?p=9985
That’s a shame for the sellers of the Commonwealth unit. We considered it last year (when it was in the low $400’s?). A little dark, but it’s a fairly large, charming place. But not only is it “nearby” rental parking, the potential w/d would be in the kitchen (and not in a kitchen closet, but in the kitchen, if memory serves).
Great location and great deal.
aww, homedelete is mad because the real market doesn’t match his ludicrous pessimism. isn’t that cute!
“aww, homedelete is mad because the real market doesn’t match his ludicrous pessimism. isn’t that cute!”
In real dollars, it’s *below* the ’98 price ($384k, deflated). So it’s already beat his long-established level of pessimism, which has taken another leg down.
Liked it then. Like it now. Congrats to the new owners.
Thank you anon(tfo). I couldn’t have said it better myself.
hd, was your way-off prediction of $299k based on 2011 dollars or 1998 dollars?
nonya:
People told me the same thing 3 years ago in April 2008, my pessimism is ludicrous, ridiculous and absurd. I was correct then just as I am correct today.
I will remember this comment and bring it to your attention 12 months from now.
JJJ:
nominally $299,999.
I am right on the price but wrong on the timing.
I’m sure we’ll revisit this complex in a year or two.
“I will remember this comment and bring it to your attention 12 months from now.”
Maybe so, maybe not. Either way, the buyers of this place will have lived in the unit for an entire year: enjoying a decent home in an outstanding location, taking a tax deduction (assuming their incomes justify itemizing) and, while minimally at first, making payments toward the principal. Show me a rental that is a comp for this place that would cost less per month.
It’s hilarious, all over the news are stories about the declining real estate market, and housing prices falling again, and volume is still dismal; and yet, some buyers are still foolish enough to overpay.
“some buyers are still foolish enough to overpay”
I repeat: Show me a rental that is a comp for this place that would cost less per month.
Rentals are irrelevant in this situation. I’m sure you’re aware that principal payments don’t necessarily build equity, all principal payments do is reduce the outstanding balance on the loan…
which will become all the more poignant and biting when 12 to 18 months from the next comp is lower.
“#anonny on April 1st, 2011 at 12:00 pm
“I will remember this comment and bring it to your attention 12 months from now.”
Maybe so, maybe not. Either way, the buyers of this place will have lived in the unit for an entire year: enjoying a decent home in an outstanding location, taking a tax deduction (assuming their incomes justify itemizing) and, while minimally at first, making payments toward the principal. Show me a rental that is a comp for this place that would cost less per month.”
It’s irrelevant that I could rent something similar for more per month when the principal payments fail on this property fail to build any equity.
At least with a rental you can leave when the lease is up and not be stuck with a depreciating asset.
“nominally $299,999.
I am right on the price but wrong on the timing.
I’m sure we’ll revisit this complex in a year or two.”
That is pretty funny – I will start to use that. “I might have been wrong now, but sometime will come when the thing I said would happen will happen, and you can’t prove me wrong because you won’t live forever, but the future will vindicate me.” Keep on telling yourself that.
How are rentals irrelevant in this situation? Do you think these buyers were living in the park before the closing?
You have to live somewhere. With rare exceptions, that means either you rent or you buy. These people (a small or expectant family, I would guess) obviously value living in this particular neighborhood, be it for elementary school or outdoor lifestyle reasons (or both). That means they could either rent a place or buy a place. In light of the fact that they likely could NOT rent a comparable place for the same cost as buying this place…I’d say that rentals are entirely relevant.
JJJ:
You could have made your comment in 2008 and a short time later you would have been proven wrong.
I said within a year or two, not “you can’t prove me wrong because you won’t live forever.”
Aren’t rentals completely relevant? So if you buy a place and the monthly cost is materially less than the monthly cost to rent a comparable place, that’s irrelevant? I’m not arguing about the direction of prices, but how is that irrelevant? Rents are among the most relevant variables when it comes to housing prices. If someone buys a house at a lower price and far higher interest rate, it is also possible that the monthly cost would be higher than a comparable rental.
“It’s hilarious, all over the news are stories about the declining real estate market, and housing prices falling again, and volume is still dismal; and yet, some buyers are still foolish enough to overpay.”
im as bearish on RE as anyone, but ive noticed this too and it is making me question my opinions. when there is blood in the streets, you should be a buyer. when everyone is bearish, you should be bullish.
“At least with a rental you can leave when the lease is up and not be stuck with a depreciating asset.”
and at least with buying a place, your payment is relatively fixed over a long period of time…
I doubt they were living in a park, but I do know that if they were lowly renters, they probably felt like paying rent was “like throwing your money away.”
They will soon discover that purchasing on the cusp of a precipitous decline of prices (as show by the CS attached housing index from a few days ago) is analogous to ‘throwing your money away.’
I hope they love love love this place because they’re going to be here a long time.
“anonny on April 1st, 2011 at 12:11 pm
How are rentals irrelevant in this situation? Do you think these buyers were living in the park before the closing?”
Sonies: Ever heard of a little thing called ‘real estate taxes’?
“I am right on the price but wrong on the timing.”
a lot of guys who were short the Nasdaq in the 90s said the same thing….
That’s just a stupid little adage with little relevance to an individual’s situation. It’s about as useful as “bears eat, bulls eat, but pigs get slaughtered,” and “bottom feeders get sticky fingers” and “you make money on the buy, not on the sell.”
Rentals are irrelevant. This is about a buyer overpaying for a property that will most assuredly decline in value. SO what if he could rent the same unit for $200 more a month. It’s relevant to the fact that the buyer will suffer a significant paper loss on the value of his home in the upcoming months.
“im as bearish on RE as anyone, but ive noticed this too and it is making me question my opinions. when there is blood in the streets, you should be a buyer. when everyone is bearish, you should be bullish.”
“im as bearish on RE as anyone, but ive noticed this too and it is making me question my opinions. when there is blood in the streets, you should be a buyer. when everyone is bearish, you should be bullish.”
Totally agree – my approach on most valuation is to to the opposite of everyone else if it’s well-supported by the numbers, unless you can be reasonably certain you’re on the climb up in a big bubble or the fall down in an illogical panic.
That’s why I am relatively long (about 5-10x annual income) real estate with minimal hedging and medium leverage in my home and personal holdings these days.
I’m not coming from outerspace on this one. THe CS index shows a precipitous decline in the value of attached housing in Chicago last month. Not even a stable market, but clearly a declining market.
Oh that’s right, the CS index doesn’t apply to LP. LP is different.
“SO what if he could rent the same unit for $200 more a month.”
O.K., good grief, one more time: (In Cuba Gooding Jr. voice) Show Me the Comp!
It’s a two-step inquiry. First, what do we assume this buyer’s monthly cost will be (mortgage, assessment, tax)? Second, find a comp for no more than that amount.
“THe CS index shows a precipitous decline in the value of attached housing in Chicago last month.”
Maybe you understand this, but it doesn’t seem like it: the numbers from a few days ago were for January.
Last month meaning the data was released just a few days ago; not last month meaning prices fell last month (although they most assuredly did).
HD – are you calling for prices down 40% or 50% from peak? So far they’ve fallen about 30% or so.
“most assuredly”
This is your tell when you’re not really that sure, right?
The question you should be asking is not what a similar unit will rent for, but instead:
How much will the buyer save if they timed their purchase better by waiting just a little while longer until the stabilization of our precipitous decline in prices.
When you look at it that way, well…you understand why renting, regardless if it is more expensive, is irrelevant.
I know someone who bought a million dollar home in early 2008….they thought they were getting a deal because their offer of 10% was accepted…
Today their 10% down payment is nothing but a figment of their imagination.
“It’s a two-step inquiry. First, what do we assume this buyer’s monthly cost will be (mortgage, assessment, tax)? Second, find a comp for no more than that amount.”
Are you calling a bottom?
“#Chris M on April 1st, 2011 at 12:37 pm
HD – are you calling for prices down 40% or 50% from peak? So far they’ve fallen about 30% or so.
I’m not calling anything. Was just wondering what you think…
Alright, let me put it this way:
I want to live in a 2 or 3 bed/2.5 bath place, with a/c and w/d, a parking space, some type of outdoor space, in Lincoln attendance area and within a couple blocks of the park. Can you please show me the cheapest rental listing that meets those criteria.
Thank you.
Aren’t rents to real estate as earnings are to equities?
“Aren’t rents to real estate as earnings are to equities?”
Don’t let facts get in the way; it’s Friday afternoon, day after quarter end and opening day. No one cares about facts today.
You would be hard pressed to find a better looking top floor 3br/2ba unit in this area and school district anywhere near this price. If anyone can, please tell me so I can buy it. Whether or not now is the time to buy it or not is largely irrelevant. These people, for whatever reason, wanted and needed to buy, and if they were looking to maximize space and location for the least amount of money possible, they got a good deal.
What I think is public record on this forum.
You’ll know you’re getting a deal when the price you pay today is roughly the same price the a previous owner paid in 1999 (absent any major renovations, upgrades, etc).
We’ll overshoot the bottom by a little, and probably shoot back up a little after that, with a stabilization around 1999 prices.
“Chris M on April 1st, 2011 at 12:44 pm
I’m not calling anything. Was just wondering what you think…”
“You would be hard pressed to find a better looking top floor 3br/2ba unit in this area and school district anywhere near this price.”
Hard pressed to find *anything* with 3 BRs and parking at or below the price in Lincoln. Here’s something that’s not really comparable, but has 3 BRs and is cheaper, while still being the same school.
http://www.redfin.com/IL/Chicago/444-W-Fullerton-Pkwy-60614/unit-909/home/12772329
The asking rent–if realistic (doubt it)–makes it a cheaper buy.
Lincoln Park and Lake View condos will need to go lower in price to get the market moving again. Here are the historical March sales numbers for condos/TH (year/Lincoln Park/Lake View):
1988 58 45
1989 71 67
1990 76 78
1991 76 76
1992 102 103
1993 76 93
1994 113 110
1995 84 95
1996 88 123
1997 89 135
1998 104 166
1999 110 138
2000 98 138
2001 96 151
2002 101 150
2003 120 173
2004 132 170
2005 124 209
2006 103 232
2007 128 180
2008 97 190
2009 25 72
2010 74 102
2011 58 62
(Note that 2011 numbers will likely increase by a couple of units as tardy agents get around to entering late-month closings.)
“Aren’t rents to real estate as earnings are to equities?”
I think it’s important to distinguish them (real estate v. equities) – hd most assuredly thinks that real estate and equities are the same in that there is no benefit to owning them other than the appreciation and income associated with them during the ownership period, and they’re similarly liquid. Clearly, most people disagree – unlike equities, owning real estate eliminates a need for a substitute product – rental housing, which can be an expensive and important proposition for people with lives and families. Most people with sufficient means to purchase real estate show that rental real estate is a poor substitute for owned real estate.
In other words, if you told me that I could buy a great property today and it would not appreciate or depreciate for 10 years, I would still consider whether the property meets my needs, is attractively-priced compared to alternative purchases or rentals and whether I would want to live there. hd would reject it immediately because in ten years his down payment on that property would be worth more in a riskless investment. Different strokes for different folks.
Note from realtor I know:
38 condos, townhouses & co-ops for sale in Chicago’s Gold Coast, Old Town, River North & Streeterville got contracts this past week.
oh for f’s sake. I’m not saying pessimism isn’t the way to go. I’m saying that homedelete’s level of pessimism is ludicrous and that’s shown every time one of these sold posts come up. homedelete predicted a ludicrously low $299 for this and shocker, he was wrong, it sold for very close to ask because the ask on this one was reasonable. So, since he’s wrong, he’s gotta whine about how the sellers are knife catchers.
these are closings, not contracts, right G?
Wouldn’t hd reject it because he knows he’ll be able to buy it for cheaper in the near future?
OK, so the prediction is percentage terms is roughly 45% off from peak and up to 20% off current prices.
Yes, roma, they are closings.
This was a deal.
“38 condos, townhouses & co-ops for sale in Chicago’s Gold Coast, Old Town, River North & Streeterville got contracts this past week.”
Absent any context, that means what?
Near North condo/TH contracts for 3/24 – 3/31 of each year:
2011 49
2010 57
2009 47
2008 52
2007 90
Keep in mind that current contracts include more that will fall out than historical numbers.
If you continued the fairly stable trendline for Chicago during the 1990s to today, we’ve already dipped below the trend. Again, not saying prices can’t/won’t go down further, but it’s pretty clear from graphing the seasonally adjusted CS numbers.
Some more condo/TH contract numbers by zip for 3/24-3/31 of each year:
60611
2011 22
2010 27
2009 26
2008 29
2007 29
60610
2011 17
2010 27
2009 20
2008 25
2007 65
JJJ:
Your ability to set up a straw man argument, attribute arguments to me, and then knock them down, are without parallel to anyone else who has ever posted on this board.
Congrats!
#JJJ on April 1st, 2011 at 1:09 pm
“Aren’t rents to real estate as earnings are to equities?”
I think it’s important to distinguish them (real estate v. equities) – hd most assuredly thinks that real estate and equities are the same in that there is no benefit to owning them other than the appreciation and income associated with them during the ownership period, and they’re similarly liquid. Clearly, most people disagree – unlike equities, owning real estate eliminates a need for a substitute product – rental housing, which can be an expensive and important proposition for people with lives and families. Most people with sufficient means to purchase real estate show that rental real estate is a poor substitute for owned real estate.
In other words, if you told me that I could buy a great property today and it would not appreciate or depreciate for 10 years, I would still consider whether the property meets my needs, is attractively-priced compared to alternative purchases or rentals and whether I would want to live there. hd would reject it immediately because in ten years his down payment on that property would be worth more in a riskless investment. Different strokes for different folks.”
You’re looking at the chart all wrong
The trend line doesn’t start in the 1990’s and go up
the trend line starts in 2007 and goes down…..
“#Chris M on April 1st, 2011 at 1:26 pm
If you continued the fairly stable trendline for Chicago during the 1990s to today, we’ve already dipped below the trend. Again, not saying prices can’t/won’t go down further, but it’s pretty clear from graphing the seasonally adjusted CS numbers.”
anon (tfo) “it’s Friday afternoon, day after quarter end and opening day. No one cares about facts today.”
Hmmm… defining yourself a bit here today, someone guessed Sidley, I’ll guess backoffice..
“Your ability to set up a straw man argument…”
Well, since you never say anything concrete, other than lowballing values for everything and ridiculing everyone who owns real estate, buys real estate or would like to own real estate for more than half of its current value, we have to use hypotheticals like these describe arguments consistent with your outlandish worldview.
Again, in 2007/2008 my posts were considered ludicrous…”we will never see 1999 prices: YOU SIR, ARE AN IDIOT!” I heard that one quite often too.
Yet everyday prices get closer to 1999 nominal prices.
history will show whose posts are absurd.
“#nonya on April 1st, 2011 at 1:10 pm
oh for f’s sake. I’m not saying pessimism isn’t the way to go. I’m saying that homedelete’s level of pessimism is ludicrous and that’s shown every time one of these sold posts come up. homedelete predicted a ludicrously low $299 for this and shocker, he was wrong, it sold for very close to ask because the ask on this one was reasonable. So, since he’s wrong, he’s gotta whine about how the sellers are knife catchers.”
OK, I took the trendline since 2007 and it looks like we should be below 0 on the CS index by the end of the decade.
So it’s my fault that you have to make stuff up? that’s a novel argument, i’ll give you some credit for that.
I don’t know how much concrete i can get than “IN A FEW SHORT YEARS THESE UNITS WILL SELL FOR 1999 NOMINAL PRICES”.
Is that concrete enough for you?
And guess what, similar units to this, crapshacks in middle class suburban areas, are selling for far less than this right now. So location, amenities, city urban living does matter. They will always sell for a higher price than the tract townhomes in the suburbs but in my opinion the spread is still too wide.
“#JJJ on April 1st, 2011 at 1:51 pm
“Your ability to set up a straw man argument…”
Well, since you never say anything concrete, other than lowballing values for everything and ridiculing everyone who owns real estate, buys real estate or would like to own real estate for more than half of its current value, we have to use hypotheticals like these describe arguments consistent with your outlandish worldview.”
Chris M:
Obviously we won’t hit zero, and trend lines adjust accordingly.
But you get the idea of where prices are heading.
Down.
“OK, I took the trendline since 2007 and it looks like we should be below 0 on the CS index by the end of the decade.”
Hahaha you’re screwed Chris M because you own property and are lashing out. I don’t own property and I’m eating popcorn right now. I am eating popcorn with amusement at your misfortune.
I’m lashing out? Popcorn?
“Yet everyday prices get closer to 1999 nominal prices.”
Case Shiller will bottom out in March (two months from now) then start to rise again due to the seasonal summer bounce. At which point the RE bulls will interpret it as a market bottom. Until next January when the November data comes out when the decline resumes.
“I’m lashing out? Popcorn?”
If you want to see something scary look at the year/year price changes by month (it helps to remove seasonality). It bottomed out at -23% in March 2009 to spike up to 11.7% in May 2010. But this was all government money causing these wild gyrations.
Currently the trend is sharply back down. At -7.6% in January 2011.
Will it go back to -23% year over year depreciation now that knife catchers lost enough fingers? It is sharply lower.
Bob, I don’t even know if we’ll get a summer bounce. If volume is picking up like everyone believes (that isn’t actually playing out in the stats G posts), then prices will most assured be lower. Lower prices leads to higher volume, sometimes it’s just the perception of the same that gets greases the wheels of the supply/demand curve.
“Case Shiller will bottom out in March (two months from now) then start to rise again due to the seasonal summer bounce.”
I tried to get people to offer predictions, which I think you but few others did. Then again, I wasn’t offering the big bucks like Gary. I think I won the first round.
“that isn’t actually playing out in the stats G posts”
Is that right? I haven’t been following that closely but what I’ve seen of G’s numbers were comparing to same period in prior year(s). Bob’s just saying June of this year will be higher than Jan of this year (I think).
“Hahaha you’re screwed Chris M because you own property and are lashing out. I don’t own property and I’m eating popcorn right now. I am eating popcorn with amusement at your misfortune.”
Dude…relax. I’m not making predictions, I’m just having fun with the chart. And the seasonally adjusted and non-seasonally adjusted charts don’t look that different.
keep frothing, HD, keep frothing. you crack me up
“You would be hard pressed to find a better looking top floor 3br/2ba unit in this area and school district anywhere near this price. If anyone can, please tell me so I can buy it. Whether or not now is the time to buy it or not is largely irrelevant. These people, for whatever reason, wanted and needed to buy, and if they were looking to maximize space and location for the least amount of money possible, they got a good deal.”
Well put, Mariposa.
HD.. I think I like every asset class with the exception of US real estate right now. Going to suck the next 2 years to see prices rising on everything but homes. A-fed didnt get my comment on that $30 lunch, today I looked at simple Big Mac meal price here.. US$12 (regular size). Price pressure coming to a theater near you soon enough…
nonya: An hour ago I was whining. Now I crack you up. Which is it? Does whining crack you up?
annony: spoken like a realtor. you should consider getting your license.
FYI, there are knifecatchers and idiot buyers in every market – however, it seems that between investors and idiots, that’s the entire market.
I see tons of contracts pass across my desk, some of whom are signed by known fools. You don’t see what I see come across my desk. I see deals that get canceled over a few hundred dollars in taxes that mess up the DTI ratios. a few hundred dollars! I see plenty of investor buyers in all cash, I also see plenty of 3.5% down buyers willing to sign away their financial lives buy simply because they think they’re getting a deal. The market still has a long long way to go down.
“#nonya on April 1st, 2011 at 2:18 pm
keep frothing, HD, keep frothing. you crack me up”
It’s inevitable that there is another round of deflationary debt defaults coming. This will lead to lower prices here at least, maybe not in Brazil.
My office is still very busy. In fact before I leave today I’m going to start the process of discharging another $100,000 in debt. I feel honored to be able to do my part in dampening the credit bubble.
“#gringozecarioca on April 1st, 2011 at 2:27 pm
HD.. I think I like every asset class with the exception of US real estate right now. Going to suck the next 2 years to see prices rising on everything but homes. A-fed didnt get my comment on that $30 lunch, today I looked at simple Big Mac meal price here.. US$12 (regular size). Price pressure coming to a theater near you soon enough…’
“today I looked at simple Big Mac meal price here.. US$12 (regular size). Price pressure coming to a theater near you soon enough…”
Bwhahaha sucks to be you! Here in the good ol USofA porterhouse steak is on sale at $5/lb. Plus I thought steak was big in Sudamerica? Who the hell is buying Big Macs for $12/meal?
HD – Honestly, if I was in your line of work I would probably be far more pessimistic than you. I’d probably never buy a house or take on any debt whatsoever if I had to deal with that stuff on a daily basis. And I’m being completely sincere.
“HD.. I think I like every asset class with the exception of US real estate right now. ”
Go buy some chinese real estate right now then. When that bubble pops it’s gonna be scary.
Bob, I didn’t say today… just sayin it’s comin…
“Go buy some chinese real estate right now then. When that bubble pops it’s gonna be scary.”
Asia doesn’t interest me.
“Bob, I didn’t say today… just sayin it’s comin…”
Thing is we got a good resource here: arable land. Alternatives for oil can and will come online–so what if we have to burn more coal (nuclear would’ve been preferable but that’s a no-go for the next few decades now).
High oil prices will lead to increased investment in alternatives–there really isn’t an alternative to arable land.
Heck already people in Utah are using natural gas and the Honda Civic GX to fill up their tank for $12 (one tank gets 220mi). Why the mormons have that option and not us is beyond me.
“Bwhahaha sucks to be you!”
I don’t understand. I posted here a year and half ago, just before I disappeared, I was going long ags. Explain to me how this sucks?
My suggestion, cook the porterhouse in lots of butter and keep marinating it with butter… 2 minutes each side on a cooktop super high and then into the oven.. keep basting even in the oven!
It’s doesn’t necessary jade my view but it gives me a different perspective than most. I see things that others don’t. Some might think that it makes me biased, but i think that it gives me a informed and holistic view. There’s nothing wrong with taking on debt to buy a house. There’s nothing wrong with buying real estate. It’s the attitudes and reasons that some buyers use to buy and take on debt which becomes the source of their problems. The scary thing is that they don’t even see it.
15, 20, hell, even 50 years ago, buyers bought with a much different mind set. 1/2 of all properties (supposedly) are owned out right. they used to have these things called “mortgage burning parties”. they dont have them anymore. attitudes have changed, and hence, people get in way more trouble, which keeps me very busy.
“Chris M on April 1st, 2011 at 2:37 pm
HD – Honestly, if I was in your line of work I would probably be far more pessimistic than you. I’d probably never buy a house or take on any debt whatsoever if I had to deal with that stuff on a daily basis. And I’m being completely sincere.
“#Chris M on April 1st, 2011 at 2:37 pm
HD – Honestly, if I was in your line of work I would probably be far more pessimistic than you. I’d probably never buy a house or take on any debt whatsoever if I had to deal with that stuff on a daily basis. And I’m being completely sincere.”
“annony: spoken like a realtor. you should consider getting your license.”
Thanks HD, but those were Mariposa’s wise words, not mine. But I did have a real estate license (expired).
I’ve been, and continue to be, bearish for the most part about real estate, even in the nicest of areas. That said, for the 1,000th time, you have to live somewhere. There is a difference between recognizing that the market may stay flat or go even lower and holding fast to the view that the market will go lower, so, while waiting for it to continue downward, you rent in a location that counts among its ammenities a lack of tourists and affluent residents.
There are only a few areas in this entire region of the country that I would like to live for any extended period of time: ELP, NEGC (Division to North, LSD to Dearborn), ELV (east of Broadway, south of Belmont), or, if not in the city, east Evanston or east Wilmette (maybe Winnetka). That’s it. I’d rather live in a smaller and less updated place in one of the foregoing areas than a larger, newly updated place any where else in the midwest. If I can’t live in one of those areas (even if in a smaller, less updated place), then I’m out (to NYC, Atlanta, a few places in Colorado, or someplace on the west coast). It’s a short life…much, much too short to spend one’s all-too-few non-working, waking hours living anywhere but the very best locations of a particular area.
“Heck already people in Utah are using natural gas and the Honda Civic GX to fill up their tank for $12 (one tank gets 220mi). Why the mormons have that option and not us is beyond me.”
Yeah all the gas stations here have nat gas and it amazes me how little the guys filling up on it pay. A few dollars while gas here is almost $8 a gallon.
I agree with you completely that some day the energy problem is resolved and the memory is a joke. I trust someone will figure it out. As for Nat gas in the US it can not work. Way to needed as a heating fuel and if you don’t store at least 3t’s by November and have a cold winter.. oh boy!!
“Explain to me how this sucks? ”
If I ever paid $12 for a Big Mac meal I would know my life sucks, regardless of net worth.
“then I’m out (to NYC, Atlanta, a few places in Colorado, or someplace on the west coast)”
I don’t think someone who prefers the urbanism and is picky about ELP could hack it in Atlanta. I have family down there–it’s endless suburban sprawl and some of the worst traffic in the country. Also winter is not non-existent there as they had a white Christmas this year. In short, Atlanta sucks.
I hear ya…I work in the derivatives industry and routinely see people wipe out their life savings because they don’t understand the risk they are taking on.
I’m not a Keynesian but I think his quote “markets can remain irrational longer than you can remain solvent” is applicable to many.
“they used to have these things called “mortgage burning parties”. they dont have them anymore.”
No I’m pretty sure they still have them. It’s just the event they are celebrating has changed a bit.
“Hmmm… defining yourself a bit here today, someone guessed Sidley, I’ll guess backoffice..”
Defining myself thru sarcasm? Yeah, maybe.
If you really want to know ze, hit the email–anon_tfo on the quente correio and let me know it’s you.
“I don’t think someone who prefers the urbanism and is picky about ELP could hack it in Atlanta. I have family down there–it’s endless suburban sprawl and some of the worst traffic in the country. Also winter is not non-existent there as they had a white Christmas this year. In short, Atlanta sucks.”
I prefer “urbanism” when living in a major city (i.e., NYC or Chicago). For instance, if living in Colorado or California, I may well be in a house, and largely reliant on a car.
Now, on to Atlanta. I lived in Atlanta. While the traffic is no doubt a problem (everywhere in the greater Atlanta area), the infamous Atlanta suburban sprawl is just that: suburban. In the years I lived in Atlanta, I found myself out in that sprawl about as often as I find myself out in Chicago’s suburban sprawl (which is to say two or three times). Not only is the Atlanta area a bubble within the south, but there is a bubble within that bubble, consisting of mid-town Atlanta, the Virginia Highlands, Little Five Points, Decatur, and the general vicinity of Emory (note that I exclude from my list of desirable areas Buckhead, an affluent area known for its malls and hip hop stars). The areas within that “bubble within a bubble” are quite walkable and highly livable.
anon.. c’mon… “back office”, “no one cares” I was just lobbing one out there for Dan…
btw.. don’t most emails come with a dot com 🙂
and i got the quente correio thing.. send u something tomorrow
“anon.. c’mon… “back office”, “no one cares” I was just lobbing one out there for Dan… ”
Playing along, in my typical manner.
“and i got the quente correio thing.. send u something tomorrow”
It was a carioca special for a rainy friday.
HD–still enjoy reading your comments, despite disagreeing with most of them. but, at the core, all your opinions are based on the concept of ‘time’ which as a variable is not limitless. your basic premise assumes that jumping into the stream at any given time is unwise…that is until the stream becomes a trickle or there’s a dam ahead so that you can see where it goes. delaying buying a home is your choice, but to rationalize it as you do makes me think you really are just scared shitless. just keep renting and for god sakes move (rent a place) in your precious suburbs with their great schools, big sf, and blah, blah, blah.
x-educator:
http://1.bp.blogspot.com/_JtcAf5d8LPc/TVH1p-NOWYI/AAAAAAAAAMI/lhg-BtT2lKU/s1600/us+shiller+home+prices.jpg
You look at this chart and tell me if i’m ‘scared $hitless’ or if I’m just waiting out the biggest real estate bubble this country has ever seen, bigger than the florida 1980’s bubble, biggest than the S&L bust, far bigger than them all.
Poor timing can be dangerous to my financial health.
I didn’t make this bubble or the bust. The bubble is what it is. I cannot change or undo what happened. All I can do it wait it out until things start to somewhat resemble normality and stabilization at a pre-bubble level. Yeah it sucks for a lot of people but it would have sucked a lot more if I bought during any of this time.
I don’t find the suburbs ‘precious’ I find them bland and soulless. However, along with the lack of a soul comes better schools, similar property taxes and bigger homes/yards. Its not like I’m the only one who has come to this logical conclusion since the 1950’s.
florida 1920’s bubble, not 1980s!
“You look at this chart and tell me if i’m ’scared $hitless’ or if I’m just waiting out the biggest real estate bubble this country has ever seen, bigger than the florida 1980’s bubble, biggest than the S&L bust, far bigger than them all.”
HD – you are uneducable – just keep waiting then and let life pass you by……maybe when you are 70 or 80 (if you are still alive and in good health), you will find the house of your dreams that is a bargain – but don’t be surprised if your SO gets tired of waiting in the meantime and leaves you. My point is that there are things in life WAY more important than getting the best bargain or feeling as if you got the best deal. The sooner you realize this the happier you (and those around you) will be.
Clio – it’s not a matter of a bargain or a deal. It’s a matter of finding an acceptable home that won’t send him into a financial tailspin. Homes that are in decent condition are way above his ability to comfortably purchase and the ones that are within his range are shit. HD’s situation is not unique by any means.
There are many people ignored their fiscal responsibilities and are now paying for it with bankruptcy and foreclosures.
And it’s a bit rude to suggest that his SO would leave him over an issue as trivial as a housing issue.
“just keep waiting then and let life pass you by”
Why is life passing you by?
I just saw a lovely 3-bedroom Irving Park rental that was updated for $1100 a month. Why shouldn’t you rent it, live your life and wait for the continued price declines?
I understand if you have children and want to get into a specific school district and will live in the house for the next 20 years. Then you should be buying in the suburbs which are simply getting crushed right now and where buying DOES make more sense then renting.
But if you’re even remotely thinking you may or might have to move in the next 3 to 5 years- you’d be a fool to buy a depreciating asset. Heck, those that bought in 2008 are getting crushed right now and they thought they were getting “bargains.” I’ve run this site long enough- that I fully expect to see not just one but TWO foreclosures on the same property shortly. That’s how deep the price declines are now getting.
You’d better be getting in the game for the long haul. In the meantime- everyone else would be wise to rent a place in their neighborhood of choice and enjoy. Heck, rent for a year, move, try another neighborhood, move. Enjoy the city. You have the world at your feet if you’re a renter right now.
Here’s the rental:
http://chicago.craigslist.org/chc/apa/2299571424.html
“Go buy some chinese real estate right now then. When that bubble pops it’s gonna be scary.”
Asia doesn’t interest me.”
Ze- do people talk about Colombia in Brazil at all? What do they think of its possibilities? It seems on the upswing now and has a lot of commodities wealth that could (finally) be tapped.
“Homes that are in decent condition are way above his ability to comfortably purchase and the ones that are within his range are shit.”
Yeah – but he stated that he would be willing to do some work on the house. If he knows what he can afford and stays within his budget, there is no way that he could go into a financial tailspin. So what if the value of his house dips – if he doesn’t plan to sell for awhile it doesn’t matter at all.
“And it’s a bit rude to suggest that his SO would leave him over an issue as trivial as a housing issue.”
this comment was based on a thread a while back where he said his SO would leave him if he lost 80k on a house.
“So what if the value of his house dips – if he doesn’t plan to sell for awhile it doesn’t matter at all.”
I’d rather wait a year or two and get the $450k house at $350k (even with higher interest rates.) We haven’t hit the bottom yet in Chicago. There is no stabilization. So why shouldn’t you wait? You’re a fool to pay these prices unless you HAVE to or it is a unique property of some kind.
“Why is life passing you by?”
Believe me, Sabrina, if you are in the market to buy, you waste a LOT of time looking for and at houses/condos. It takes up a lot of time and mental space when you are in that mindset (and HD IS looking to buy). I would pay a significant amount of money to get OUT of that mindset because, after owning so many properties, I would much rather rent (even if it means paying more than owning). I have too many outside interests/obligations and I am tired of wasting so much time on real estate (although, for me it is an addiction – much like crack to a drug addict). Hey – do you think there is a market for real estate rehab?
‘just keep waiting then and let life pass you by……maybe when you are 70 or 80 (if you are still alive and in good health), you will find the house of your dreams that is a bargain’
Well said clio! Thing is, I think HD and many in his/her generation (I’m guessing early 30’s by the tone of most of the posts here) has already found ‘the house of your dreams’ a long time ago. Okay maybe not the exact house per say, but his/her generation knows *exactly* how they want to live, make no mistake about that, as lifestyle and everything that’s associated with it has been pumped into brains since the day they were born. When the dust clears from this epic in proportion bubble (HD is right about that), they *still* won’t be able to afford the lifestyle/house/neighborhood that they really desire (and deep down they think they’re entitled to… and they’re not entirely incorrect) as their baby-boomber parents have not, will not, and can not pass along the that baton anytime soon.
Ever witness the reaction of a group of women when a truly beautiful woman passes them by? Ripped-to-pieces. A lot of what’s highlighted here is just that, out of their league and easily attackable… even a common 3/2 isn’t within reach when you factor in schools, mortgage, taxes, etc. Looking back and in my 40’s now, I have to say I had a lot more economic/real estate opportunities than this generation had/has, but a f*** of a LOT more risk too… something they are SCARED to death of unlike all of the previous generations. Hell, I’d be pissed-off too if I knew somewhere deep, my ultimate future was a ‘bland and soulless’ suburb.
“We haven’t hit the bottom yet in Chicago. There is no stabilization. So why shouldn’t you wait? You’re a fool to pay these prices unless you HAVE to or it is a unique property of some kind.”
Sabrina, that is your opinion – not fact. Many people are very smart and do their own research/homework. I think many are frustrated because they are NOT finding the house of their dreams at reasonable prices (and they NEVER will). Sure prices in Englewood, Humboldt park, etc. may go down more – but I don’t think desirable places are going further down. In fact they are going to be going up (as more people flock to these “safer” areas).
jay – I totally agree. There is a lot of anger in that generation but what I don’t think they realize (and what you point out) is that the same obstacles were in OUR way (I am also in my 40s) but we just weren’t aware of all of the risks. Luckily many in our generation did pretty well. Maybe the solution is for HD’s generation to relax and take some risk and for our generation to be a little more careful/cautious. I think the truth is somewhere in the middle.
“In the meantime- everyone else would be wise to rent a place in their neighborhood of choice and enjoy.”
Sabrina, did you notice why there are so many comments on this thread (other than the fact that LP threads tend to stir the passions of lots of folks who claim to have no interest in the area)?
The whole point is that the subject property – 419 W Grant – has just been purchased for $355k. Try to apply your own advice: Say, for instance, I want to live in a 2 or 3 bed/2.5 bath place, with a/c and w/d, a parking space, some type of outdoor space, in Lincoln attendance area and within a couple blocks of the park – much like the place these buyers just acquired. Can you find me such a rental? How much a month? How much do you think the buyers of 419 W Grant will be paying?
“Maybe the solution is for HD’s generation to relax and take some risk and for our generation to be a little more careful/cautious…”
Clio – I looked at the risk you took on your farm deal and I decided to pass.
Wow HD – do you base all of your life decisions on one event/transaction? Why don’t you look at the risk/reward ratio i experienced in Boston in the 90s (during a downtime in real estate – similar to the one we are experiencing now). Also, remember that I still sold the farm for 50k more than I paid for it – bottom line is that you have to grow up, bite the bullet and take the plunge – the water is not going to get any warmer.
THe older generations will need to sell to my generation and the generation younger than mine. We can only pay what we can afford to pay, and not what you want to sell for.
Sabrina, today I had a couple of minutes so I ccr’d about 9 or 10 sfh purchases in Park RIdge from the first of the year to now. I focused mainly on sfh selling for less than $400,000.
I was shocked by the results. Of 8, I casually looked at, 7 had been updated in ccrd, and of those 7, only one (1) put 20% down. The remaining 6 were all purchased with presumably 95% FHA financing. I thought some people had saved a little down payment, but no, take out the FHA financing for the lower end and there would be one transaction.
1004 Canfield
$300k mortgage/$320k selling price
1107 S COURTLAND
$280k mortgage/$292k selling price
1000 S. Greenwood
$337,250.00 mortgage/$355k selling price
709 S. Vine
$394,250.00 mortgage/$415k selling price
etc
Whatever, old man.
“bottom line is that you have to grow up, bite the bullet and take the plunge – the water is not going to get any warmer.”
I attended a RE seminar/event at Roosevelt U. once and the head of the event Gerald Fogelson quipped (in only semi-jest) that letting one’s children enter the RE biz is like child abuse. Today I read in the Trib, Blago says politics is so bad he’d never want his kids to pursue it Clio is negative on medicine. HD is pessimistic on the law… Show biz people say no way that for their kids…
“bite the bullet and take the plunge – the water is not going to get any warmer.”
yo HD if your looking at that part of park ridge be sure about the airplane routes that’s more of a risk than falling house prices.
* pollution noise etc
Yeah that part of pr is all airport but I found it shocking there were so many low down payment oans. The party ccontinues.
Dan – great observation!!!! I think the reason for all the negativity of one’s profession is the result of over-glorification by tv/movies/media. The truth is that there is positive and negative in EVERY profession. Sometimes I look at the people putting the sandwiches together at mcdonalds and get really envious/jealous!
Clio you are completely out of your mind.
HD- with regard to your post about pr – what is you problem with someone who wants to put 5 percent down (there is no percent symbol on the iPad!!!!)?!!!! Good for them -at least they have the balls to make a move!!!!!
It’s doesn’t take *cajones* to buy a house; it takes a paper and a pen and an 8th grade home economic budgeting class.
“Good for them -at least they have the balls to make a move!!!!!”
Still waiting to see a single rental listing that is comparable to the subject property.
“I thought some people had saved a little down payment, but no, take out the FHA financing for the lower end and there would be one transaction.”
What is funny is that FHA is helping to maintain those “lower end” price ranges in the 400k range. Without FHA loans those valuations would plummet to much more affordable levels in line with people’s incomes of the area.
Bob, prices will drop when the market runs out of first time homebuyers who can afford the higher monthly nut due to no money down. Things are slow now and volume is down. Once this round of buyers is expended what will be left to support prices? There wont be anybody left! These fha buyers could never coome up with the 70k necessary to buy a 350k house; there was hardly a buyer who could scrape up 20k! This will not end well. More patience. It is annoying to compete against buyers who have a little more thana tax refund and a w-2 to buy a house.
“Sometimes I look at the people putting the sandwiches together at mcdonalds and get really envious/jealous!”
Sometimes I get jealous of messengers because they don’t have to sit at a desk and computer all day, they get to complete a task from point A to point B without interruption and they get to wear jeans and sneakers to work.
HD: I give you credit, your analysis about the PR buyers: 5% down, was great, VERY enlightening.
“These fha buyers could never coome up with the 70k necessary to buy a 350k house; there was hardly a buyer who could scrape up 20k! This will not end well. More patience. “
PS but at the above $500K level, in good areas, Clio is probably right too. The USA is becoming like Brazil, a very few good areas, and a bunch of everything else. The good areas will always be well-bid, and this is unfortunate that people are migrating to only a few areas.
McDonalds has always been much more expensive in Brazil. Its marketed and priced more as more of an upscale meal, and not a cheap everyday option.
If you want good cheap fast food, stop at a habib’s – and be sure to enjoy the wonderfully politically incorrect logo.
Buyer got a good price here. If you’re in it for the long haul, and can’t find a comparable rental, I don’t see the downside to buying.
“Sometimes I get jealous of messengers because they don’t have to sit at a desk and computer all day, they get to complete a task from point A to point B without interruption and they get to wear jeans and sneakers to work”
I’ve been at more than one Fortune 100 where jeans are allowed attire. No one in their right mind would wear sneakers but there are shoes that look like dress shoes that really feel like sneakers.
I think your envy of people that work outdoors is nostalgic and misplaced. Working outside in inclement weather makes life much more difficult & miserable than indoors–it’s not like the end of the movie Office Space at all. Having a job where you work outside is probably 85% sucky vs. indoors and only 15% being better than in some cube under fluorescent lights.
On this property I think this is one of the 5% of properties featured here on CC where the buyer made what I could consider a sensible choice. Were I in a position to purchase today I might pick something like this.
“Short sale 3/2 in ELP listed 50k below ‘03 price (per redfin):”
Two issues with this:
1) It is a short sale meaning the listed price may bear no relation to reality insofar as determining the closing price. Short sale ask prices are a joke as it’s not even the borrower’s money on the line.
2) Its on Commonwealth. This is right near the lake and hence subject to assessment creep which most all of the highrises near the lake are. You’re paying over $500/mo to live on the second floor of a highrise where likely a bunch of older people live on fixed incomes who will vote in any assessment increase.
I know someone with a lakefront highrise in a 2/2 and they’re paying $922/mo in assessments & taxes alone. One of their most frequent gripes is the amount of old people in their building who seem to be for taking on additional expenses (projects) with little regard for those on a more stringent budget. A place on Commonwealth definitely falls into the same category.
The place on Commonwealth isn’t a highrise (it’s only a few stories).
That said, Bob’s correct about lakefront highrises in general, in terms of (i) the (increasingly) elderly populationn in many buildings and (ii) the assessment creep, specials in particular.
We nearly purchased a place last summer in a highrise on Lakeview Ave. Pretty good building, pretty unit, great location. And I actually quite liked the fact that the place had a large percentage of older folks (it felt very civilized and friendly). But they’ve been putting off a major project for some time now (the replacement of all windows – which constitute the vast majority of the building’s exterior – along with the HVAC units and sleves). It might cost the owner of one of the 3 beds upwards of $50k in special assessments. Obviously, there’s a contingent in the building (and on the board) who want to defer that project for as long as possible. But it’s not getting any cheaper to fund the project, and every potential seller needs to factor this contingency into a deal. Once the project is done, it will be a solid purchase, but until then…
How good is the owners’ association? Enough in reserves? Everyone paying their assessments?
“Ever witness the reaction of a group of women when a truly beautiful woman passes them by? Ripped-to-pieces.”
Who says that? I for one love looking at anything beautiful, art, person, or animal. I don’t know where from do people pull these stereo types about women all the time!
“The USA is becoming like Brazil, a very few good areas, and a bunch of everything else.”
I don’t feel like this at all. What is a “good area”? Where just the rich live? There have always been the rich neighborhoods and the rich suburbs. The problem with the housing boom is that it extended the “rich” areas to places that otherwise were formerly middle class (i.e. million dollar homes in North Park or North Center.)
There are plenty of “good” middle class areas that are now coming down in price so they will be even more affordable for families. And they have good schools.
“Once this round of buyers is expended what will be left to support prices? There wont be anybody left! These fha buyers could never coome up with the 70k necessary to buy a 350k house; there was hardly a buyer who could scrape up 20k!”
Homedelete- I couldn’t agree more. I know 4 people buying homes in the suburbs right now. All of the buyers are DINKS with significant income. Not a single one has the downpayment (or any savings whatsoever.)
They are buying with help from the bank of Mommy and Daddy- to the tune of $50k to $100k (or sometimes more.) But these buyers aren’t the norm. Oh- they are also all looking under $400k (for the most part.) Even the parental help only goes so far.
“I thought some people had saved a little down payment, but no, take out the FHA financing for the lower end and there would be one transaction.”
This is why FHA is now 40% of ALL mortgages (and growing.) The head of FHA has said that it can’t continue and they have to ratchet back because of the risks (ya think?) but so far- other than instituting some more fees effective Apr 1- they haven’t done much to change the scenario.
You should have at least 10% down (but really 20%) down to buy a property now. Buyers need to have some skin in the game so there is no incentive to walk away when 3 years from now they want to move again but prices are lower. If they have their own skin in the game they might think twice about what/where they are purchasing the property.
1225 Brophy Ave
$294k mortgage/$310 purchase price
01/14/2011
910 FRANCES Pkwy
$306,450 mortgage/ $310k purchase price
01/14/2011
Sold on 01/12/2011
$473,000
100 Imperial St
$47,300.00 and $378,400.00
Sold on 02/22/2011
$395,000
906 S ALDINE Ave
$382,992.00 mortgage
GRanted, in my research, some put down 20% down payments, some significantly more…but sort of interesting to think those with large downpayments are competing against bozos with a tax refund and a w-2. Imagine what would happen to the $300k priced homes if 20% down payments required for everyone. i imagine, estimating, prices would drop another 10% or 20% in a matter of months. But those higher income buyers with their tax refunds are supporting the market. $300,000 and $400,000 homes are both above average and above median priced homes. decent incomes are required for these homes especially to qualify for the higher monthly payments given no money down, and absurd taxes.
“Say, for instance, I want to live in a 2 or 3 bed/2.5 bath place, with a/c and w/d, a parking space, some type of outdoor space, in Lincoln attendance area and within a couple blocks of the park – much like the place these buyers just acquired.”
Someone renting wouldn’t rent there. You don’t get everything you want in real estate! Sorry. So they would look at the available crappy listings and decide, “you know what? We can rent a townhouse or a 3-bedroom duplex down for $2500 a month in the Blaine school district. So let’s do that instead.”
And they WOULD!
They would “sacrifice” living next to the park anonny. Those are the decisions I see every single day with renting AND buying.
You’re not always going to get what you want. I’ve had some people tell me they looked at rentals in Bucktown and found them overpriced. And while they REALLY wanted to be in Bucktown they settled on Ukranian Village for $500 a month cheaper. They’ll take a cab up to the restaurants in Bucktown when they want to go there. That’s life!
Most buyers are NOT as set in stone as you are Anonny. If they have kids- they’re more concerned about the school district than being in a 2 block radius next to Lincoln Park and the Zoo. ESPECIALLY at this price point (of $350,000.) It’s a different analysis if we’re talking a bigger budget.
People with kids are also very aware of storage/space. They don’t want 1650 square feet (which is what this property was). They want 2000 square feet and plenty of places for toys, bikes etc. You CAN get those rentals in other places in the city. Many people would choose to rent those places.
“Imagine what would happen to the $300k priced homes if 20% down payments required for everyone. i imagine, estimating, prices would drop another 10% or 20% in a matter of months.”
There would be NO housing market at the low end. There is barely one at the upper end- where the 20% is already required.
If they required 20% AND mortgage rates rise- imagine what will happen? This is why the government powers that be aren’t pushing to fix the housing mess (and 20% down would fix the foreclosure situation- at least going into the future.) Somehow our ancestors were able to save 20% in the 1930s-1980s. So why do they think americans now can’t do it?
It would deflate the housing market even further though. The government is terrified of further price declines.
“I think many are frustrated because they are NOT finding the house of their dreams at reasonable prices (and they NEVER will). Sure prices in Englewood, Humboldt park, etc. may go down more – but I don’t think desirable places are going further down. In fact they are going to be going up (as more people flock to these “safer” areas).”
Where are prices going up in Chicago? I only see prices going down. I only see 50% of sales being distress properties. Distress sales are even large percentages of sales in “safer” areas like the Gold Coast and Streeterville.
Don’t make me post on house after house in LP and Lakeview where the seller is taking a 30% loss. It gets boring after awhile. There are SO MANY other interesting areas of the city right now.
“A lot of what’s highlighted here is just that, out of their league and easily attackable… even a common 3/2 isn’t within reach when you factor in schools, mortgage, taxes, etc.”
Jay- then who are these homeowners going to sell to? The 3/2 over $400k is in every single neighborhood of the city thanks to the housing bubble. There are hundreds of these on the market right now.
Will some baby boomers suddenly appear to buy them all up?
Since that’s not going to happen- I’m assuming that in order to sell they’ll have to lower the price until they find someone who CAN afford it with the taxes, assessments etc.
We’re a long way from finding the bottom.
“Believe me, Sabrina, if you are in the market to buy, you waste a LOT of time looking for and at houses/condos.”
Actually Clio- this is wrong. From every agent I’ve ever talked to- they tell me that many buyers will look at 5 or 6 properties and simply choose one. (hard to believe- actually).
That’s it. It doesn’t take months. It doesn’t take years. Most buyers (but NOT crib chatter readers, obviously) aren’t that curious about what is out there.
You and your real estate addiction are well outside the norm.
“The head of FHA has said that it can’t continue and they have to ratchet back because of the risks (ya think?) but so far- other than instituting some more fees effective Apr 1- they haven’t done much to change the scenario.”
The head of the FHA recently jumped over to…the head of the Mortgage Bankers Association.
“Most buyers are NOT as set in stone as you are Anonny.”
This is why I like to laugh at anonny. He thinks his mindset of set in stone is the norm for everyone. Most people make compromises, something I’m not sure he has grasped.
Sabrina don’t most people do their research at home before going out with an agent though? Even back in 2001 we bought a place we found online, after going out with the agent and looking at 3 really crap places that he had lined up for us (that should have been our first clue about how useless he was!).
I know I’m not going to drag my realtor around town looking at 30 places, but I must have looked at a couple hundred places in the last 6 months online.
It would help if any of the RE sites allowed you to filter by TOTAL monthly outlay – I look at the taxes and assessments before I look at the photos these days!
“We can rent a townhouse or a 3-bedroom duplex down for $2500 a month in the Blaine school district.”
But Sabrina, that would be contrary to your own advice, which was:
“In the meantime- everyone else would be wise to rent a place in their neighborhood of choice and enjoy.”
I know at least a dozen (maybe two dozen) small (one or two kids) families who live directly on, or within no more than a couple of blocks of, the park (from about as south as Dickens up to Diversey). Some are renting, some have purchased. I’d bet that no more than one or two of them would consider moving within the Blaine attendance area. Many live in the Lincoln attendance area, but even for those who live in the Alcott attendance area, the quality of life trade off as between living within Blaine (even with a bigger place) versus living east of Clark between Fullerton and Diversey is a non-starter. In order words, they already have a “neighborhood of choice.” And if child-related factors (space and schools) are going to force them out of ELP (or ELV), most will head for the burbs (Evanston, Wilmette, Oak Park).
“They don’t want 1650 square feet (which is what this property was). They want 2000 square feet and plenty of places for toys, bikes etc.”
I wouldn’t trade my 1,600 sq ft 2 bedroom condo in the Lincoln attendance area for a 4 bedroom house in the Blaine or Burley attendance area. I have no desire to spend more than an occasional couple of hours in those areas (i.e., to go a party at someone’s SFH, or perhaps somewhere to eat, etc.).
p.s. While I recognize the very high regard in which Blaine is held, last week, just last week someone told me that she had pulled her kid out of Blaine. She said it was great for the first couple of years, but then she had increasing trouble with the school (a teacher), and the administration was totally unwilling to address her concerns. That kid’s in high school now, and now her younger kid is attending LaSalle Language, quite happily.
“Most buyers are NOT as set in stone as you are Anonny.”
Sabrina (and Bob): You what buyers ARE as set in stone as me? The thousands who live in my prefered area. Or do these folks pay a premium because they hate money? Oh, that’s right, I forgot: all the folks who pay so much to live in the nicest areas along the lakefront are idiots!
“Or do these folks pay a premium because they hate money? ”
Newsflash: many of the folks in your area never paid a premium to live there. There were a lot of millionaires minted via Lincoln Park appreciation over the past 20 years and most of that appreciation is still intact.
Do you really think people were paying $1MM for a SFH in this part of town even 20 years ago?
No, Bob, and folks weren’t paying $1 million 20 years ago for houses trading for that amount today in, say, Wilmette.
When was the most expensive condo building on, say, Lincoln Park West built? Newsflash: not that long ago. Care to guess how long most of the highly educated, affluent residents of ELV/ELP/GC have been living in those areas? I can assure you that most are relative newcomers. Or do you think that a majority of affluent or upwardly mobile residents of ELV/ELP/GC are at the end of their working lives (or older)?
“I wouldn’t trade my 1,600 sq ft 2 bedroom condo in the Lincoln attendance area for a 4 bedroom house in the Blaine or Burley attendance area.”
It is really matter of what is nonnegotiable to a buyer. To some it is location, to others space, and etc… We are all only negotiable up to a point and beyond that not willing to compromise. For instance, I would never ever move to a suburb under any foreseeable circumstances.
“For instance, I would never ever move to a suburb under any foreseeable circumstances.”
The one thing I have learned is to never say “never”. Miumiu, when you have children, things COMPLETELY change. You will soon see….
Clio:
Reactivated – the previous offer fell though! Get in on this quick now’s your chance!
http://www.redfin.com/IL/Chicago/3734-N-Harding-Ave-60618/home/13457019
Weird – this was a MULTIPLE offer situation. I wonder what games the bank is trying to play. I wish I knew the rules of the game (or how to play it). As usual,something fishy is going on…..
“Or do you think that a majority of affluent or upwardly mobile residents of ELV/ELP/GC are at the end of their working lives (or older)?”
The only people who can afford ELP and GC and stay there awhile are older (because that’s who earns the high income.) ELP has always trended older for that reason. In the Gold Coast- it is VERY old (depending on what building you’re in.) Those co-ops and high rises? People are at the end of their working lives (and likely haven’t worked for 20 or 30 years.) Go into some of the lobbies. You’ll actually see wheel chairs there.
You see a lot of estate sales in the older vintage units along LSD and Lakeview in ELP and the Gold Coast.
HD & Clio:
I just looked up that property and the agent remarks now say this:
“Structural damage. Garage is a teardown. CASH or if you attempt an offer with financing contingency, a letter from an appraiser stating the property will qualify for conventional financing must accompany offer.”
“Most buyers are NOT as set in stone as you are Anonny.”
We’re talking about someone who can afford $350,000 here. That is who just bought this 3/2. So if they can’t find a rental in the neighborhood they buy this. And then they are locked in for 10 years or more.
Most buyers in this price range are realistic and know they probably can’t be in one of the most prestigious neighborhoods in the city and get EVERYTHING they want. Some will sacrifice space or parking or even central air- to live near there. Many, many others will not. $350,000 buys you a lot more in many locations.
I’m not talking about the single person who just wants this location. I’m talking about the couple with children. I would not say that someone wouldn’t raise their kids at this address. But, again, given the number of cribs in the second bedroom in many condos in this location and all over LP and Lakeview- I’m assuming quite a few people are making the determination that they would NOT raise their kids in that space despite the location and the school.
Most people do the math and realize if they’re going to have to live there for 10 years or longer- then they need to be thinking what their needs will be.
And thank goodness we have buyers who are finally coming to the conclusion that, no, they can’t buy the 2/2 and move in 3 years when they have a baby (or 5 years or 7 years.) That maybe they need to look at single family homes or townhomes if they’re going to be in that space and actually raising their child/children there well into high school.
Some will choose to stay in the dense city neighborhoods. Without a doubt. But not everyone is willing to live in 1650 square feet for the next 10 years when there are so many other options.
“Structural damage. Garage is a teardown. CASH or if you attempt an offer with financing contingency, a letter from an appraiser stating the property will qualify for conventional financing must accompany offer.”
Wow- this sounds like a real fixer for serious renovators.
“And thank goodness we have buyers who are finally coming to the conclusion that, no, they can’t buy the 2/2 and move in 3 years when they have a baby (or 5 years or 7 years.”
Yeah – but they still want to live in the city – so this is why you are (and will be) seeing rents skyrocket. Because these people WILL pay a premium to live in the city (what is the alternative) rents will continue to increase and will be higher than what it would take to buy a place (and, like I said these people WILL pay this premium because they don’t want to buy for all of the reasons we talk about everyday). This will keep sales prices high (for investors). Using this logic, prices in these sought after areas are NOT going to go down (other areas – who knows)
Are you talking about multi-unit properties prices not going down in those areas, Clio?
There is definitely demandn for the multi-units. In fact sales are pretty strong in Lakeview for those types of properties (because, yeah, more people will be renting, than buying.) Eventually- it will be cheaper to buy than to rent. But that’s still going to take awhile.
Right now we are at or below rent parity in the best locations (and best buildings). This will soon spread in the next year or two – but I predict that it will only be in the GZ.
There’s a ton of demand for multi-units right now. I’m not quite sure on how the finances work out, but I do know that when a lot of money chases higher yielding assets, it drives up the price and lowers the yield. I think the benefits are in the tax deductions and after 30 years the landlord owns the asset. Doesn’t make a lot of sense to me but others feel the need to park their money in real estate…
“Doesn’t make a lot of sense to me but others feel the need to park their money in real estate…”
It’s called diversification….. and investors know that we are at the bottom and, as long as their costs are covered, appreciation will yield a significant return in 10 years.
I think there are some great multi-unit buildings where you can become a landlord and cover the costs. But many of them are still money losers (especially in the “prime” areas). Yet they’re selling anyway. I don’t get it.
” But many of them are still money losers (especially in the “prime” areas). Yet they’re selling anyway. I don’t get it.”
Appreciation….
You are right Clio, hence, I put the lawyer phrase “any foreseeable circumstances”…lol
miumiu – how much longer?
What appreciation?
So you’re supposed to take a loss for several years on the “hope” that you may get miniscule appreciation 10 years from now? I don’t get it.
The stock market is soaring. You can get more just buying dividend paying stocks. Maybe for someone who has massive amounts of assets and can sit on it and take the losses. But even then- it’s a dumb investment.
Sabrina,
I have lost way more money in the stock market than I ever will in real estate. Why? Because stocks can actually go to zero (fannie mae, lucent, AIG, worldcom, pets.com, etc etc) whereas real estate will always have some value and that value will always go up over the long period.
Yes- I’m sure the person who bought this Humboldt Park house in 2006 for $276,000 thought real estate always holds some value. Currently listed for $25,000.
http://www.coldwellbankeronline.com/ID/1681510
So you’ll say: “but that’s Humboldt Park.” And I’ll say, “Apple is no pets.com.”
It all depends on where you put your money, right?
There are currently around 300 houses for sale at $25,000 or less in Chicago.
Oh- and here’s one that’s actually listed for $1 in South Chicago. You’re buying the land. But still no one wants it.
What is land worth anyway?
Not even a lotto ticket in this instance. They can’t even give it away.
Last sold for $35,000 in 2005.
http://www.coldwellbankeronline.com/ID/1497036
“And thank goodness we have buyers who are finally coming to the conclusion that, no, they can’t buy the 2/2 and move in 3 years when they have a baby (or 5 years or 7 years.)”
I know at least a few couples who purchased 2/2’s at the peak (2005-06), who have had to move because of the birth of a first or second kid. One couple is renting their place out for about $200/mo less than their total mortgage/assessment/tax obligation – not ideal, but they don’t seem too worried about it. The other two couples sold for about what they paid, i.e., zero appreciation.
“The other two couples sold for about what they paid, i.e., zero appreciation.”
When was it? A year or two ago? After they paid their realtors- they took a 6% loss right? Plus the transfer tax of 1.5% and selling costs- right? So probably a 8% to 9% loss?
I have seen very, very few people who owned 2/2s sell for “about what they paid.” The Crilly Court units are selling for a slight premium. Other than them- nearly every property I see is going for less than the purchase price of the last 5 or 6 years (and even longer now.)
I always want addresses. Because people always seem to stretch the truth. I hear from friends “oh- we’re not selling for too much of a loss” and then you hear later it’s $75,000 or whatever. People don’t want to admit they made a mistake.
If you can break even after paying all the fees- you are extremely lucky.
Yes- plenty of other people are renting out their places. But many can’t buy a new home because the bank won’t give them the loan on the second property (especially with NO downpayment on the second property usually.) I’ve heard from many people that they are simply renting a larger property somewhere else. It works for them but they’re still just renting.
Miumiu stay in the city, the silence out here is deafening!
Seriously leaving the city was the worst thing we ever did (ok not the worst but it was bad). Having to get in your car to go EVERYWHERE is a nightmare. Especially when you have a baby and your friends are all still back in the city.
Jennifer- what suburb did you move to?
Won’t you make new friends with the parents of your kids (from school, in the neighborhood etc.?)
I know Jennifer. I have heard this from few of my friends. It is so nice to be able to walk to places. Also I love the tourists….lol…I know it is tacky but I like watching all the diverse people on Michigan Ave. and guessing where they are from and all : ) I also like walking through the crowd. I just love crowded places and people.
That $1 home in South Chicago is almost lakefront. Someday (maybe even in my lifetime) the South Works site will be redeveloped. What is the risk of purchasing this crap shack and just letting it sit all boarded up? The land will eventually have some value someday maybe.
‘Jennifer- what suburb did you move to?’
Does it matter?
I live in Lake Bluff. A surprising number of moms here work actually, well if you’ve seen house prices around here it’s not that surprising. I’ve made a few friends but it’s not the same. And yes I miss people watching too!
Some people are just city folk. We used to live in the Loop with all those El trains passing right by our window and it didn’t bother me a bit. Some people can’t stand it. And I hate having the family spread out over several rooms, I like to hear what everyone is up to. It feels closer that way. Must be the European in me.
I know a realtor who landlorded and bought about 5-6 multi-unit bldgs. from about 1996-2008 (when he finally got out/sold the last one) and he didn’t make a dime overall for all that trouble. People were OK with feeding a negative when their jobs had income, thinking “appreciation” would make it all worthwhile. Didn’t happen. Plus, these people were continually leveraging their investments along the way to pay for the next building and alot of other stuff.
Real estate is essentially an INCOME business, and you create wealth when you pay loans down, not by taking out new loans and doing a bunch of leveraged acquisitions.
“What appreciation?
So you’re supposed to take a loss for several years on the “hope” that you may get miniscule appreciation 10 years from now? I don’t get it.”
“Does it matter?”
Sure. Did she move out to St. Charles and get 5 acres and horses? Or did she move to Oak Park where she is 1 block from the downtown and the El/Metra?
Someone who is a “city person” and whose friends are in the city might be a lot happier being only 9 minutes away in Oak Park then 50 minutes (or more) away in St. Charles.
Jennifer: I like Lake Bluff but it would be very, very quiet if you are used to city life- that’s for sure (especially the loop.)
Danny- I was wondering the same thing (when I saw that it was by that proposed huge new development.) True- it might not happen for 20 or 30 years (maybe more.) And you’d be paying the taxes on the land all that time.
“Some people are just city folk. We used to live in the Loop with all those El trains passing right by our window and it didn’t bother me a bit. Some people can’t stand it. And I hate having the family spread out over several rooms, I like to hear what everyone is up to.”
I could not agree more especially on the liking to hear what everyone is up to part : )
When someone says ‘the silence out here is deafening’ it wouldn’t matter to me if it were St. Charles, or on the lake in Lake Forest; I’d bet that Jennifer isn’t happy where she’s living… regardless of where that actually is.
“I know a realtor who landlorded and bought about 5-6 multi-unit bldgs. from about 1996-2008 (when he finally got out/sold the last one) and he didn’t make a dime overall for all that trouble. People were OK with feeding a negative when their jobs had income, thinking “appreciation” would make it all worthwhile. Didn’t happen. Plus, these people were continually leveraging their investments along the way to pay for the next building and alot of other stuff.”
So true, I’ve seen this too. Some of them using mom and dad’s retirement to do it as well. Sad.
Dude, Lake Bluff is FAR north; over the county line into Lake County, past Deerfield, further north than Lake Forest, into the tiny community of Lake Bluff. Head any further north and you’re in North Chicago. The town north of that is Waukegan. No surprise it sucks out there. There are plenty of other places much closer to the city with a lot more going on. Staying in cook county helps too. St. Charles is the same, far out there, not a whole lot going on, small community. The suburbs all share common themes but there are differences between some of them. Living in Oak Park, Evanston, River Forest, are closer to the city with a lot more congestion.
“#jay on April 3rd, 2011 at 9:37 pm
When someone says ‘the silence out here is deafening’ it wouldn’t matter to me if it were St. Charles, or on the lake in Lake Forest; I’d bet that Jennifer isn’t happy where she’s living… regardless of where that actually is.”
Dan is right: landlording is about income. You make your money after the loan is paid off. YOu get a little tax deduction on your regular income from teh depreciation. The more income properties you have the larger the write off. After 15 or 20 years when the loan is paid off, the rents are just income or you can sell the property. The issue w/ selling though is that if you’ve been taking depreciation you have to pay taxes on the entire tax basis (until you 1031 transfer to another property); and the value of the property is nice but nothing substantial…many many of these $200k two flats all over the city need work and haven’t been updated or had any major repairs in, 15, 20 or 30 years. $200k isn’t anything to ‘shake a stick at’ but pay taxes on that and transfer fees and it’s not anywhere near $200,000 for 30 years of landlording. You need multiple properties at with a low cost basis, at which point, landlording takes up more and more time. My landlord has owned his building for over 20 years, paid off, it’s all income at this point. He had dozens and dozens of unsolicited offers to sell his property during the boom for a conversion – he used to pin the letters to a clothline hanging behind his desk in his office… one letter for 1.4, another for 1.2, another lowball for $900,000; he said “I want 2.4$ which is F-U money” he never got an offer that great. he said anyways where would he put the moeny
I have family in LF, and I always get the ‘why don’t you come visit’ routine every time we talk; LB isn’t too far from there.
I’m guessing Jennifer moved to the burbs because of a child, she got more for her money, safe, cleaner, all the regular reasons. But… she still misses the city. Amazing. There are reasons why so many of us stay *regardless* of the pain city life can inflict.
The green zone 2-3 flat, or 4-6 unit rental investment, that sold at breakeven or cash flow negative after debt service never made sense to me. I didn’t “get it” either Sabrina. For over ten years these so-called investments continued to attract buyers, most of the time the buyers were mini-trump that had never heard of a cap rate. These buyers couldn’t explain why their investments were good, other than saying “appreciation” and having a sumg attitude that they owned GZ property. It was a long ten years being a real estate interested person and seeing these lousy/negative cash flow deals the entire time. Turns out that eventually rationality will return to a market, but wow, it took over 15 years now for multi-unit bldgs. to sell at decent cap rates?
1) what are the cap rates?
2) all this demand out there for rental bldgs. in the GZ, please tell me we’re still not at breakeven and negative cash flow.
They say never to take a stock tip from someone in a bar, but i recall one time, it was probably in 2004, at Tuman’s bar in Ukranian Village, I got to talking with an older resident and local business owner. He told me guys he knew were SELLING their GZ rental bldgs. and buying in Joliet for far better/positive cash flow. I wonder how that’s turned out.
I think investors are realizing that it is going to be very hard for families to buy homes in the green zone – yet it remains extremely desirable place to live. They are snapping up these investment properties because they know demand for rentals in the GZ is going to be ENORMOUS (as we keep saying – the young want to live in the city and don’t want to buy until they are ready for a house so they are going to rent).
In the past, investment properties made a lot of sense not only because of depreciation but appreciation was a HUGE factor. Even now, if you buy a bargain property in the GZ – you know that you are going to get significant appreciation and increasing rents.
“They are snapping up these investment properties because they know demand for rentals in the GZ is going to be ENORMOUS (as we keep saying – the young want to live in the city and don’t want to buy until they are ready for a house so they are going to rent).”
This has always been the case (or at least since 1995) and it affects the PRICE one has to pay. Who cares how great demand is if the asset has that baked-into-the-cake already, and you’re only getting to breakeven on monthly cash flow? Just because Pebble Beach is awesome didn’t make it a good investment for the Japanese in 1989 at the price they paid.
Dan, you say “Who cares how great demand is if the asset has that baked-into-the-cake already, and you’re only getting to breakeven on monthly cash flow?”
They’ll lose money every month but assume that they’ll make it up with the capital appreciation. They’ll sell to another fool who thinks the same thing. This goes on seemingly unending until there are no more fool or money chasing GZ multi-units. It might be a while. Two-flats in portage park, albany park, NW side were selling in the high ones just last year and now they’re firmly in the $200’s, which at those prices, if there was no maintenance, taxes stay the same, rents went up every year and there were never any missed rent payments or vacancies; they might break even after 20 years…everybody wants to be a land baron.
“Oh- and here’s one that’s actually listed for $1 in South Chicago. You’re buying the land. But still no one wants it.
What is land worth anyway?
Not even a lotto ticket in this instance. They can’t even give it away.
Last sold for $35,000 in 2005.”
I’d rather have a sausage mcmuffin than a contingent liability like this. The entire gentrification of certain areas was always smoke and mirrors and never supported by incomes. It was just speculation.
What is the land worth? However much lead or other heavy metal contamination is in it. But then you gotta pay taxes.
The southside of Chicago is doomed for the same reason Detroit is: deep blue governments think they can hold future owners liable for all taxes in arrears–it just ain’t happening. Instead the land will just sit vacant and these lots will return to mother nature.
Just to chime in:
I’m raising 3 children in a 1500 square foot townhome in the green zone–and could not be happier! I’m like Annonny; It is far more important to me to be near downtown and its cultural attractions (which we use weekly, as a family) than it is to have more space–which people just fill with useless possessions. Have you all see Hoarders? Americans have a ridiculous (laughable and sad) relationship to consumption.
Raising kids in the suburbs mostly sucks. I know lots of people who do it and hate it. You are isolated, car-dependent, and there are few cultural attractions (besides the local Applebees). No thank you.
@endora
‘…than it is to have more space–which people just fill with useless possessions. Have you all see Hoarders? Americans have a ridiculous (laughable and sad) relationship to consumption.’
Thanks for making my day! Seriously. And Americans wonder why they’re broke… financially and culturally (spiritually as the right likes to call it).
“Raising kids in the suburbs mostly sucks. I know lots of people who do it and hate it. You are isolated, car-dependent, and there are few cultural attractions (besides the local Applebees). No thank you.”
http://www.kohlchildrensmuseum.org/
“http://www.kohlchildrensmuseum.org/”
I heard they’d sold out to Applebee’s. Was I misinformed?
“And Americans wonder why they’re broke… financially and culturally ”
Americans are broke because their by and large not too educated when it comes to economics but they watch TeeVee and form their political opinions from that.
Ask the average American, heck even college educated American (other than econ grads), whether government backstopping the financing of student loans and real estate was a good thing. They’ll say that yes it’s a good thing because it lowers the financing costs of the purchase.
They can’t connect the dots that that in turns raises the equilibrium price of said goods.
439 W Grant Place Unit D just came on the market with an ask price 419k. MLS 07976807.
These have been selling pretty briskly (not for as low as the other one we chattered about though.) In the end, it still IS only 1400 square feet.
For a 3/2.5, with w/d and a (non-garage) space in LP (Lincoln), it’s hard to beat these places for the price.
Yeah- but it’s 1400 square feet. What’s so great about that? You’re going to raise your kid there? Just buy a townhouse in Blaine for the same price instead. You’ll get 1800 to 2000 square feet (and a basement) and not have anyone above or below you AND a garage.
1400 sq feet off finished is a decent pad if it’s laid out nice. Don’t count unfinished sq ft, the bathrooms, don’t count the laundry room, don’t count the deck in the backyard. But if you have 1,400 sq feet of living space, that’s just fine. I know everybody today is all about 1,800, or 2,000 sq feet and that’s fine and all, but plenty of people have gotten by in smaller spaces. What’s the average sized chicago 2 flat apartment? 1,200 sq feet including bathrooms and closets? I’d personally like 1,400 or 1,500 sq feet, with a garage, a 30×50 outdoor space, 2 bathrooms, a rec room (as part of the 1,400 sq feet), a living room, separate dining room, three bedrooms (they can be small, no biggie). and public good schools – not OK, but top 50% in the state. I’d like that all for under $300,000 please. But that doesn’t exist in the city. Not yet at least, just wait until the banks unleash a tsunami of foreclosures…..
“Not yet at least, just wait until the banks unleash a tsunami of foreclosures…..”
Good Lord – are you still holding on to this fantasy?!! Do you still believe in Santa Claus and the Easter Bunny?!!!
You DO realize that almost all foreclosures are either in bad condition or are in bad areas. The very few that are acceptable to most home buyers (ie good location, livable) probably have a 100:1 ratio of people waiting for them – more importantly these are people willing to pay 100% cash for these good properties (like me). Also, remember that you cannot get a mortgage on foreclosures in bad condition (I have heard countless stories of people trying to get a loan for a decent place that was missing an appliance and the bank denied them because of that – they even tried to buy the appliance and they were not allowed to do so). I am not saying all of this to burst your bubble – but just to put a sense of reality in you fantasy world.
Clio – I work at a law firm that handles foreclosures. ANd sells them too. and closes on them. and short sales them. I know how it works.
What do you do? read charts? y tu habla espanol? That’s your client base, medicaid patients? that’s interesting to know. I learn something new about you every day.
“The very few that are acceptable to most home buyers (ie good location, livable) probably have a 100:1 ratio of people waiting for them – more importantly these are people willing to pay 100% cash for these good properties (like me).”
It doesn’t matter if buyers can buy them or not. They are setting the comp and the new price levels. The more REOs/short sales there are in LP and Lakeview, the further the prices will fall. The banks are non-emotional sellers.
We’re going to see massive numbers of short sales in Lakeview in the next year or two- especially in the condos. The prices are really going to reset there.
I’ve been watching certain areas reset. It’s interesting to watch. The ppsf has been in a tight range since the 08/09 crash and the suddenly it drops 25% in a matter of months. For example, most of 2010 Arlington Heights* was in the 180-200 ppsf range, only to reset from 190 psf to 150 psf during 2011.
http://www.redfin.com/city/29458/IL/Arlington-Heights
(a suburb, I know, easier however to go by suburbs with homogenous housing rather than city neighborhoods that are block by block)…
The resets will keep happening for years to come. Amazing to think that someday the standard 25×125 cottage home in lakeview will be $400,000 or less; and it will be far cheaper to own a 2/2 condo than to rent one. I’m guessing the final price range for your run of the mill GZ 2/2 will be $150-$250k. Conversions, less. nicer blocks, or luxury upgrades, slightly more. The GZ for the most part is a transitory place, and will become more so as today’s parents with elementary aged children reach high school age. Prices will drop to reflect that.
Don’t forget 10 years from now, most of these 2/2’s will be 15 to 20 years old, and will look/feel dated and worn. Who’s going to want to pay $250,000 for a 2/2 with an early 2000’s GE stainless steel/granite/laminite cabinet kitchen? We see what happens to dated homes in the suburbs that need complete updating – they sit on the market forever or they sell cheap. The same will happen to 2/2 condos in the GZ. Mark my words. AS the housing stock turns to crap and does not become renovated, the prices will drop to reflect this.
““Not yet at least, just wait until the banks unleash a tsunami of foreclosures…..”
Good Lord – are you still holding on to this fantasy?!!”
Honestly clio when checking the MLS before posting this I’m pretty sure it just happened. 😀
Number of new listings in LV in past 1/2/3 days, respectively: 7/17/3
Only five (5) have pictures most don’t have even sqft details. Looks like the others were a group MLS dump.
Number of new listings in LP in past 1/2/3 days, respectively: 5/11/1.
Maybe Fannie/Freddie read this article and finally discovered it’s not their place to assist banks in residential real estate price asset manipulation?
http://www.marketwatch.com/story/payroll-tax-law-may-starve-reform-fannie-freddie-2012-01-17
Certainly looks to me like someone was working overtime at a TBTF financial institution or Fannie/Freddie to put all of these listings on the MLS the past two days.
I don’t think continued groupthink is going to pan out too well for our new listers–it certainly hasn’t thus far.
You would have to find it funny the Fed and the powers that be working the past few years to try to re-inflate the residential real estate asset bubble if it weren’t so sad.
They didn’t know two things shrewd investors and business leaders were able to figure out two things relating to “stimulus” more generally:
1) the market can stay slower/lower longer than they (govt) can stay solvent or have political will
and
2) they adjust their expectations based on events based on #1.
Just because residential real estate didn’t take a _continued_ beating after the $8k methadone tax pop instituted to prop asset values didn’t get me off the sidelines: I know a (debt) junkie when I see one and no way could even slightly turning the tide of this ginormous asset bubble deflation turn the downturn around overall.
“Amazing to think that someday the standard 25×125 cottage home in lakeview will be $400,000 or less”
Yeah, under $400k for a teardown does seem likely…
“Don’t forget 10 years from now, most of these 2/2?s will be 15 to 20 years old, and will look/feel dated and worn. Who’s going to want to pay $250,000 for a 2/2 with an early 2000?s GE stainless steel/granite/laminite cabinet kitchen?”
Also – don’t forget about inflation. Look at the history in real estate prices in 20 year increments. Real estate has NEVER EVER gone down in the GZ when you talk 20 year increments (and I’m pretty sure houses still aged the same back then). Seriously, dude – just because you WANT something to happen doesn’t mean it is going to happen. I honestly wish you were right (for many reasons), but it just ain’t gonna happen.
400k for your house anon(tfo)….
“Yeah- but it’s 1400 square feet. What’s so great about that? You’re going to raise your kid there?” Sure, why not. It’s certainly a perfectly suitable place to get started with up to two kids. Most families have and continue to get by as such.
“Just buy a townhouse in Blaine for the same price instead. You’ll get 1800 to 2000 square feet (and a basement) and not have anyone above or below you AND a garage.” I certainly appreciate (especially in the dead of winter) the larger place, basement, garage and privacy that can be had in certain areas. But for the one 1,000,000th time: as nice as the Blaine, etc. areas are (and I recognize that they are indeed quite nice), I have no desire to live there. I have no desire to visit there (other than for the rare visit to a particular store, kid’s party, etc.).
Generally speaking, whether looking at the entire country, an entire state, or a particular city or town, I want to live in an area that people have a desire to visit. I realize that this can mean added crowds and traffic (we know how Groove loved the LP traffic), and by no means am I saying that I want to live in Orlando or on Michigan Ave or in Times Square. I want to live in areas where a residential feel meets with the sense that people desire to spend some of their precious free time there (be it visitors who live on the other end of the city and take a train and two buses in order to spend a few hours there, or visitors from other states or countries who, when in the area, make a point of spending some time in the neighborhood). I cannot begin to estimate how many times over the past few years that I have taken (after being asked or by volunteering) pictures of elated individuals, couples and families using their cameras or smartphones. Had I spent the last few years living in Blaine, as nice as having a basement family room would have been, I doubt that I would have been asked to take a single picture.
F the rich!
Title of mrs. ze’s guide to holey matrimoney?
“Seriously, dude – just because you WANT something to happen doesn’t mean it is going to happen.”
Isn’t the same thing true for you Clio? Just because you’d like to see housing market pick up does not mean it is going to happen.
Homedelete and Sabrina: I completely agree with HD on this one. I’m raising 3 kids in 1400 square foot townhome in the city. We are 100 feet from a park, have two roofdecks and a patio, but only two bedrooms! (And 1.5 baths). But we ‘invested’ in smart home organization tools (closets, etc) and we don’t buy any extra stuff. The result: our home is less cramped and cluttered than most homes with twice the space! It is all about mindful consumption and organization; no one *needs* more space than this. Think of all of the homes from the 1950’s and 1960’s–3 bedroom bungalows where men and women raised 4-6 kids. Americans want to supersize everything, even their homes. As a result, we have lost any sense of taste and/or proportion. We are home gluttons.
Ha! My apologies! I scrolled up and noticed I made nearly identical comments last April. At least I am consistent:)
“400k for your house anon(tfo)….”
Not in lakeview (or lake view) and not a cottage.
You realize that you are therefore predicting that land values go *below* zero, don’t you? That a vacant lot will be a liability, not an asset, right?
“matrimoney”
well done!!!
Nah, she met me when I was just a poor algo trader…. 🙂
damn, thought I could instigate archithelmuthoffer.. like they say, you can never find a good Nazi when you really need one…