52% Off 2006 Price and Under Contract in a Day: 2250 W. Chicago
Yes, some properties are selling.
Some are selling within a day (or hours.) For the right price.
Take this 3-bedroom penthouse unit at 2250 W. Chicago in West Town that came on the market last week. It was under contract the first day on the market.
Why?
How about a 52% price reduction from the 2006 selling price.
The listing describes it as having 15-foot high ceilings, a private deck and a wine refrigerator in the kitchen island.
Here’s its history:
Unit #401: 3 bedrooms, 2 baths, 1650 square feet
- Originally listed in October 2005 for $529,000
- Sold in September 2006 for $460,000
- Bank-owned in 2008
- Listed in early December 2008 for $219,000 (parking included)
- Under contract in one day
- Assessments of $274 a month
- Taxes of $5557
You can see a picture of the exterior and the listing on Baird and Warner’s website.
(Because I can’t link directly to the listing due to the set-up of their website- go to Bairdwarner.com and put in the address in the address feature to find the listing. Sorry- it’s a pain, I know.)
Dayum I totally would have bought that even though the taxes are rediculous. With all the money i’d save, i could afford many guns to protect myself in that area of town. Very close to western ave. though and west of western on chicago ave. is really really awful. Call me surprised that a reasonably priced home sold in a day though! There are so many people out there wanting to buy, just not at 2006 prices. Get a clue from this banks/realtors
sounds like a steal to me at $219k w/ parking… i lived in this neighborhood for 2+ years (2 blocks east @ chicago & damen) and never worried once about affording “many guns to protect myself”… 1650 sf, private deck, parking, ect i would have purchased this unit myself were it not already under contract.
I’m not able to find the listing on the website using Sabrina’s instructions. Any help?
OMG! a reasonably priced home priced within the means of the avergae city dweller I cant believe it sold
I don’t think this area is that bad. I’ve been the Darkroom several times late at night and the area is full of white hipsters riding bikes around and hanging out on bar patios until the wee hours. Granted, if you drive up Western from the Eisenhower, you can definitely see that the hipster push stops there, but I this part of west town/Ukrainian village is pretty decent.
Anytime something sells the first day, you priced it to low.
That part of town is OK but the change is rapid a few blocks to the west.
Priced way too low. That is one lucky buyer who stands to make a good penny flipping the place, even in this environment.
The stupidity of these banks never ceases to amaze me. They just seem incapable of marketing or pricing a property correctly, and they’d rather deal with enormous capital losses vs. attempting to learn how to do this.
Don’t poop your pants quite yet people, the purchaser could be another knife-catching specuvestor looking for a ‘deal’. We all think $219k is pretty good but some investor probably thinks it looks even better.
Investors are still out there looking and looking. Since the realtor failed to give even one picture of the inside I imagine it’s probably quite a mess, which doesn’t lend itself well to first time homebuyers looking for a reasonably priced property. I’m thinking, and it’s just my intuition, that the purchaser is an investor looking to fix it up and flip it for whatever he perceives to be ‘market value’.
But yes, it is nice to see sales (and comps!) occurring at lower prices.
Here’s the entire sales history of the bldg:
201 8/16/2004 $355,000 w/pkg
202 3/26/2007 $410,000 w/pkg 11/16/2004 $330,000 w/pkg
203 9/29/2004 $339,000 w/pkg
301 8/30/2004 $365,000 w/pkg
302 9/13/2004 $345,000 no pkg
303 7/29/2008 $378,000 w/pkg 12/28/2004 $349,000 w/pkg
401 5/16/2006 $460,000 w/pkg 10/20/2004 $414,500 w/pkg
402 10/15/2004 $359,000 no pkg
403 9/27/2004 $355,000 w/pkg
The neighborhood never was too bad, and it has gotten a lot better in the past 10 years. I guess you could get caught in the crossfire between the 2 Uki Orthodox church sects which are just to the N and S of this place. The biggest problem with the area is that you are reliant on buses to get anywhere so the commute downtown for the distance traveled can be ridiculous.
There are pics in the mls which appear to show the place intact.
That’s for clarifying the issue G – my intuition was wrong this time. Still, at $219,000 condo prices in gentrifying areas are finally returning to earth.
ok. this is an amazing/super interesting listing. rare! and i would imagine that the agent/bank listed it at this price to inspire a bidding war. the agent didn’t (based on the info/experience i have/had) call back and didn’t return emails. i would guess she just sat there and accepted faxed offers contingent upon inspection for prices over the list price. good for her! we shall see what the closing price is only after the sale is complete, of course.
“prices in gentrifying areas are finally returning to earth.”
a) gentriFIED (hello dominick’s! hello starbuck’s!) and b) this is ONE listing. and this price is not reasonable – it’s crazy. ha! you can rent that place for like 1600-2000 with garage parking and a private rooftop deck. it’s a cashflow investment, yos!
It barely cash flows – just barely. $177k mortgage at 6.00% = $1,061 per month plus taxes ($462) + plus assessments ($274) = $1,797 per month. At 2k a month (on the high end of your estimate) that’s $200 profit. Not exactly a cash cow.
Realtors never seem to account taxes and assessments into the price of properties. Why is that?
Because they cannot imagine someone buying to leave there. They think of the place only as a flipper, so only the potential for appreciation is relevant for them. The rest is just noise that distracts you to see the “potential” in the place.
Sarcasm off.
Oh God.
Bloomberg.com
Fannie, Freddie May Waive Appraisals for Refinancings (Update1)
By Dawn Kopecki
Dec. 10 (Bloomberg) — Fannie Mae and Freddie Mac, the mortgage-finance companies seized by the U.S. government, are considering waiving a requirement for new appraisals on refinanced loans, their regulator said.
“If they refinance someone, rather than doing a loan mod, do they need a new appraisal if they already have the credit?” Federal Housing Finance Agency Director James Lockhart told reporters after a speech in Washington today. “That’s an issue that’s being discussed. They’re looking at it.”
“Fannie, Freddie May Waive Appraisals for Refinancings”
Well, if it’s already a Fan/Fred loan (i.e, they’re already going to take the loss) and there isn’t anything more than a payoff going on (yes, a BIG assumption), then isn’t this just kicking the can and avoiding the cost of an appraisal (and also avoiding documentation of the fact that it’s an underwater loan)?
Not that it’s a *good* idea, but, assuming no $$ except payoff, who gets hurt other than appraisers?
Banks are stupid. I called to see this property 10 times the day it came out and never received 1 call back. You have to wonder if the property was sold before anyone was able to see it? After the 1st call, the agent’s voice mail was full for each future call. The same day the property was moved to “Temp” status. It returned to the market the next day under contract.
I don’t think this is the best way to receive the highest offer.
Here’s the next three paragraphs of the article:
“Fannie and Freddie, which own or guarantee $5.3 trillion of the $12 trillion U.S. home loan market, must consider that some homeowners who need to refinance owe more than their property is worth and wouldn’t qualify for the necessary mortgage insurance, Lockhart said. Another consideration is the issue surrounding the valuation of refinanced loans on the companies’ balance sheets.
“It sounds like a disaster,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia. “What you’re doing is postponing the problem into the future and not giving the system time to fix itself,” he said, adding that regulators are bowing to political pressure.
Doing away with appraisals may allow the government- sponsored enterprises to get around a law that prohibits them from financing loans to borrowers who hold less than 20 percent of the equity in their home without mortgage insurance. “
Zero down, stated income, teaser rates and cash back at closing helped overinflate the bubble. Foreclosures, down payments and the return of underwriting standards will help the overcorrection. That is a fact.
We shall see what effect this one has. It appears that nearly everyone in this bldg bought with little to no down, so their refi’s might be interesting. Especially with this new comp for the nicest unit in the bldg.
As for the Phoney & Fraudie appraisals, how many people will choose to refi an underwater mortgage anyway? So what if the few who can actually make payments on their underwater mortgage choose to continue to do so? This is more pissing in the wind.
“postponing the problem into the future and not giving the system time to fix itself”
Huh? I can make this make sense, but it’s pretty tortured. Why are journalists so lazy with quotes?
“As for the Phoney & Fraudie appraisals, how many people will choose to refi an underwater mortgage anyway?”
This was part of my thinking–but with the add’l paras posted by HD, looks like they may be trying to capture the 85-90% ltv folks and avoid having their DTI ratios get out of whack from having to pay PMI. Not sure it helps, but not sure it hurts too much either. Sound and fury, no?
Don’t forget the mindset they are dealing with. These are the same type of debtors who believed their HELOC appraisals. Even if the govt allowed them to lend 120% of the value, I don’t think they want the FB to see an appraisal.
As long as you can rent a property for more than it costs you in principal, taxes, and assessments, it’s cash flow. How much do you want to make per month, $1k?
If you can own the property and get paid $2,400/year to keep it, I’d say you’re sitting pretty well.
I wasn’t able to get at this on the B&W website either…
Sorry everyone. I had a defective link in there. It’s been fixed.
If this bailout free-money-for-everyone stupidity keeps up, a year from now the only question on anyone’s mind will be about what will happen when the U.S. government defaults on their debt.
Ah Turtle…. Once again someone separating balance sheet and cashflow for the sake of an argument. Think about this for a moment. Bad behavior.
We’re not going to default on our debt. Our grandchildren will pay for it.
“Pete on December 10th, 2008 at 11:51 pm
If this bailout free-money-for-everyone stupidity keeps up, a year from now the only question on anyone’s mind will be about what will happen when the U.S. government defaults on their debt.”
ok, maybe you’re right, but still an easy rental I think and wouldn’t cost you much to hold.
I wouldn’t be a landlord for $2,400 a year.
HD, $2400 on $219000 is about 1% return. Who in his right mind would be a landlord for 1% return, when you can get risk free return of 3% on a FDIC insured CD?
“I wouldn’t be a landlord for $2,400 a year.”
But it’s not $2400/year, total (not that I’m trying to convince you, HD). It’s $2400/year PLUS a bit of an inflation hedge thru rent increases (not necessarily likely in the near term) PLUS $220k (2008 dollars) in 2038. That’s why people invest in real estate even when there’s “normal” appreciation–you get someone else to pay for an asset you will own at some point in the future.
I know (or know of) plenty of small-time investors who made themselves quite wealthy (enough to not work and be more than comfortable) during the 70s, 80s, 90s through this model. It’s not pie in the sky, but you need properties that are realistic cashflowers (i.e., not $500k 1br, unless you’re in Manhattan) and the time and ability to do your own management and basic maintenance(so, it doesn’t work too well if you have only one property or they’re scattered all over the place).
“HD, $2400 on $219000 is about 1% return. Who in his right mind would be a landlord for 1% return, when you can get risk free return of 3% on a FDIC insured CD?”
You paying cash, CF?
Again, that misunderstands the model–it’s $43,800 (20%) invested for $2400/year (5.5%), that’s supposed to grow some w/ (hopeful) future rent increases, plus the long term cap gain (and a homerun if there’s a decent bubble during your holding period). That still isn’t going to be enough for the headache for many, but it’s not as bad a deal as you make it out to be.
I 100% agree with your assessments anon(tfo) and I’m not saying that real estate is always a bad investment. What I’m saying is that I don’t think it’s worth it for me or most people to take such risk for only $2,400 a month (plus inflation in the near term).
For example, my landlord on the otherhand bought a courtyard building in the 80’s and he’s sitting pretty. He has a small mortgage he took out to renovate the units a few years back but other than that hes sitting on a great cash flow. This is his only building and he lives 15 minutes north on the edens on the north shore. He’s living very comfortable.
He told me that he charges below market rents but because of that he gets his choice of the best tenants. He’s evicted only 1 person since he bought the building. The building is always full. Now that’s how to make money as a lardlord. Being a little piddy land baron with one condo at a time with $200 cash flow per month isn’t worth the effort for most people.
sorry I meant $2,400 a year….I’d take the risk for $2,400 a month!
“Being a little piddy land baron with one condo at a time with $200 cash flow per month isn’t worth the effort for most people.”
Yep, much better to go the junior slumlord route with place like the Central Park house or two to six flats where you actually have control over the whole place, rather than dealing with an association (who could determine to screw you, if you’re the one non-occupant). And it’s all about finding the good purchase deals (much rarer right now) and accepting some (often significant) risk.
anon,
Couldn’t agree more. But if you look at the attempted mini Trumps who are bleeding cash they all have one thing in common: they are all so small time and bleeding cash at such a rate typically that the difference can be covered by a 60-100k/year day job. So while they continue to cover the cashflow shortfall in a futile hope that the RE market will turn around and give them riches, they probably aren’t doing other things like saving for retirement.
Guess who is going to plug that shortfall? If you pay taxes look in the mirror.
This place was probably a steal.
Sabrina,
Most of the major broker Web sites, including Baird & Warner’s, resolve to a particular listing through a property ID or the MLS number, which you’ll see on the listing itself.
So, to go direct to this listing at B&W, use:
http://bairdwarner.com/07085915
Thanks for the tip Joe- because B&W is one of the few that doesn’t show up like that if you put in the property address. But I see that your link does work if styled that way- so I will use it from now on.
Actually after seeing that picture of the listing, I was going to see that one this weekend 🙁 Rats!
http://www.usatoday.com/printedition/news/20081212/1ahouseprices12_cv.art.htm
Yes it’s a USA Today article but it’s very interesting. It says that home prices may not recover for decades.
I am the previous owner. The new buyer is in for a surprise. The building was never water or vapor sealed. When I bought the unit the previous owner never disclosed these issues and we went after her only to find out she was in bankruptcy. Due to water leakage I had already paid $21,730 dollars to fix water damage(ceiling fell down in two rooms.) Even after fixing it and the association doing some tuck pointing the water kept coming. The kitchen ceiling was already falling in again.
During the big storm last summer I literally got hundereds of gallons of water in my unit. You could actually hear a water fall in the walls. The guy next store collected two 70 gallon drums of water as further proof. The water also caused a huge mold issue causing respiratory/allergy problems for me. Because the units were never vapor sealed I had a persistent carbon monoxide issuse. The ducting was also poorly put in and all the tubes in my unit from below were also leaking fumes into my unit. Thus I could not use my furnance and was forced to open windows in the dead of winter to air the unit. Prior to me buying it the fire department paid a visit because the carbon monoxide was at a deadly level. They even had to break into one unit. I had two hand held room monitors and I had seven times in which the fumes reached a deadly level.
After talking with my attorney he said I should just walk away. Because I had the ability to pay my mortgage holder sued me. The suit was eventually thrown out based on prior history. Realistically I never could have sold the unit knowing you have to disclose issues if they happened in the past two years. While it may seem a bargin I would beg to difer if the issues persist.
Editor’s Note: Given the nature of an anonymous chatboard, there is no way to confirm this poster’s allegations. They are his/her own opinions.