Buy Now or Wait? Many Buying in Chicago as Prices Drop
Despite all the doom and gloom, sales are still happening. People are still buying condos from flippers. Million dollar homes are still being sold. And even 20-somethings are buying in Lakeview and Lincoln Park for nearly half a million dollars.
From Smart Money Magazine:
INDIFFERENT TO THE bleak real estate headlines, 26-year-old Michael Klauer and his fiancée recently bought a two-bedroom condo in the desirable Lake View neighborhood in Chicago. They weren’t in a rush to buy, but when an opportunity presented itself only a month after they started looking, they jumped on it.
The apartment, listed at $519,000, was theirs for only $480,000 — an initial offer they didn’t back down from, even though they knew the seller had bought the place 10 months earlier for $512,000. Factoring in the broker’s fee and sales taxes, the seller lost more than $44,000 on that deal, according to the couple’s realtor, Jay Michael, owner of the Estate Property Group in Chicago.
“We leveraged the fact that they’d already moved out and were in a [financial] struggle to keep two places,” Klauer says. And even though the condo’s value may drop further, the couple wasn’t concerned since they plan to live in the place for at least three to five years. “It was a good time to buy,” he notes. “Prices are on the down low, and it’s something I could sit on for a while.”
Several things:
Just because you buy something under the price the last owner paid, does that make it a “deal”?
Is three to five years long enough to wait out possible future price drops? The Chicagoland area has seen periods of 5 to 7 years in the past where prices remained flat.
The 20-something’s realtor, however, seems to be lowballing more than his clients did.
Jay Michael, the Chicago realtor, is in the market for a condo himself these days. But when he sold his apartment in December last year, he moved into a rental so he can take his time.
“I’m looking for someone who wants to sell far more than I want to buy,” he says. When he finds that seller, he won’t hesitate to low-ball. A month and a half ago, he made a $750,000 offer on an apartment with a $1.175 million asking price. “The agent told me the client was so insulted they didn’t even want to counter,” he says. “So I told them to keep the offer on file. Further down the line they might find they want to sell at $750,000.”
The Lakeview condo referred to in the story is at 3024 N. Sheffield. Mr. Klauer bought it last June for $480,000.
I think he’s being a little optimistic about the 3-5 year time frame.
The big variable buyers should think about is not nominal returns but real returns.
With inflation running at 4%-6% yoy (and the potential for higher county/city property taxes) even if your home rises at 5% a year (which is significantly better than the 0% to -3% nominal change from last year), your real gain is negligible or negative.
but then again people have been harping on and on about opportunity costs, real v. nominal, etc. here and other websites and some people still don’t get it.
What a great example of a used-home salesman encouraging a fool to catch a falling knife. And this one readily admits that it is not a time to buy for himself. There must be different rules when commissions are at stake. His memory also appears faulty. The previous sale was 7/31/06 for $509,000 (not $512,000). It was originally listed for $514,900 (not $519,000) and reduced to $499,900 when this agent found the knife-catcher. The unit was only on the market 85 days at the time of the contract, good to see they made the seller sweat. Now I see how Jay Michael can afford such a nice home for himself, when he decides it is a good market for him, that is.
The not atypically young and foolish purchaser apparently needed help from a family member to get a mortgage according to public records. The deed was originally acquired for $480,000 in June, but other Klauers were added to the deed in August when Old National Bank made two loans totaling $463,500 on the property. It is an odd timeline, but maybe the loans were to cover cash that someone provided to the buyer. Regardless, the young Klauer did not get the mortgage on his own. Perhaps this explains his seeming inability to comprehend that he is playing with real money?
At least this knife-catcher didn’t include his fiancee on the title and mortgage. His family members were not so lucky.
The 3-5 year time frame was very, very optimistic back in June; now it is just insanity.
Sabrina, could you tag this one as a “knife-catcher” so that we can check back again in the future?
So he borrowed $463,500 on a $480,000 home? I thought that wasn’t even possible any more! It’s going to be a long, long way to the bottom, kids…
It was still possible in August. Some just believed it would never end and failed to see the effect on demand that the predictible end would cause.
Someone like this Jay Michael “real estate professional.” ON second thought, he did seem to know this given his personal decisions. Interesting.
You can actually make quite a bit of money lowballing people in real estate. It takes a lot of time and you really have to treat it as more of a fanciful hobby than a guaranteed way to make a buck, but I had a professor (behavioral finance, no less) who did this and picked up a really nice estate at a fire sale price.
Old widow was living there alone and on her way to a smaller pad or nursing home and her kids didn’t want the place or lived someplace else or didn’t exist. She liked my professor and his wife.
His stories about insulting sellers with an offer they considered too low were more humorous, though. I guess this insult phenomena goes to show a lot of people’s ego’s are tied up in the perception of their home valuation.
Theres going to be a lot of bruised egos in the near future.
G:
I added a category called “knife-catcherrs” so we can track some of these properties later.
I thought the comments from the agent were interesting as well. It was okay for his client to get a property only 2% off the asking price but he’s lowballing by 30%?
What does he know that he’s not telling his client?
Why is he waiting but his clients are not?
Obviously, it’s not the job of an agent to tell a person to buy or not to buy.
But it’s interesting, nevertheless.
I’m also seeing a lot of 20-somethings buying condos right now. Many are eager to buy- more so than ever. They see the low interest rates and think they’re getting a “deal.”
Most have never experienced a down housing market. They have no idea of what that means.
I’m also seeing downpayments being provided by well-off parents. You’d think they would know better. But the mantra that “real estate only goes up” and the brainwashing that owning is always better than renting is really entrenched in America right now.
It’s going to take several more down years in housing to wash that “belief” out.
Sabrina on March 10th, 2008 at 5:50 pm
I’m also seeing a lot of 20-somethings buying condos right now. Many are eager to buy- more so than ever. They see the low interest rates and think they’re getting a “deal.”
—
…and the Chicagoland median home price goes up.
***I’m also seeing a lot of 20-somethings buying condos right now. Many are eager to buy- more so than ever. They see the low interest rates and think they’re getting a “deal.”***
haha…I’m 31 and don’t understand how my parents ever raised a family/bought a house from 1976-1986….with double digit/high single digit inflation and interest rates.
Here’s hoping that the Fed/next president don’t screw things up even more and bring back Welcome-Back-Cotter-era stagflation.
Yikes.
Simple, your parents bought less house. Now a days, everyone has to have their own bedroom, many with their own bathroom etc…… Americans have bought 10%-20% more house as a percentage of their income. That’s a high fixed priced to meet every month.
I understand the logic of the parents: they likely are near retirement, still in their peak earning years and have accumulated enough assets to retire comfortably.
Giving a 50k advance on their kins inheritance if it means they might have grandchildren sooner from their kins perceived added stability of owning probably plays in to it (and if a poor investment its still not an expense).
I also understand the faulty logic of the purchasers: it probably a part of they think they will live there X+ years, probably part of its better to own than to rent as in ownership you build equity (without doing any CF analysis), part of they can now say they’re a condo owner vs. renter. Doesn’t renter sound so like you’re in your mid-20s?
Maybe if you’re married and taking heat from the wife to own I could see paying a small premium. But as a single guy: theres no incentive. I can tell any girl I meet I’m an owner and still save hundreds a month. They like it being spent more on dinners anyway 😀
If you’re going to make a mistake in the market, doing it at 26 is the right time to do it. Even if “he” (read: his parents) loses money on the house, it’s a mistake he wont make again. People lose money on investments all the time, make ill-informed decisions, engage in poor judgment, yet somehow survive and, sometimes, even thrive. 40% of all billionairres (or the patriarchs of billionairre families) in the US have gone bankrupt at some point in their careers.
As a side note, I think too much is being made of people losing some money in the housing market. The obsession with, and euphoria regarding, making money in real estate during the housing bubble is now an obsession with, and euphoria regarding, bad deals, stubborn sellers, and certain losses. How many here get a secret satisfaction watching people lose money in housing now?
Pete9441 – While I agree that there was a national obsession with housing prices over the last seven years, esp. with information readily available now, I think it is extremely important to be prudent when deciding to get into the housing market now. If you’re not in it, there is no rush. If you’re moving from a low cost area to a high cost area, renting for a 1-3 years is probably the most prudent thing to do. Yes, people lose money all the time and many people are only losing paper wealth….but many also are losing real money or HELOC’d their homes and are now underwater on their loan obligations. 1/3 of Americans haven’t saved money and now there is a big problem in the U.S. economy from The Great Housing Bubble. This is a gravely serious matter. Perhaps you need to go make a trip to California and see for yourself what is going on. This is bigger then the tech bubble. So, I believe the matter is much more serious than you have indicated in your post.
John – I may not have been as clear as I should have been in my post. I was really limiting my comments to people like the 26 year old cited in this article and other more (relatively) affluent types often referenced in posts on this site. For example, individuals or families who bought in 600 N. Fairbanks, 340 OTP, $500,000 – $1,000,000 places in the gold coast, river north, the loop etc. I wasnt talking about the national real estate bubble which, I agree, is undeniably a very serious economic event that will discussed and studied for decades. I didnt mean to minmize that; rather, I was only referencing middle to upper income, non-investor home purchasers in the above median price price-point. If people like this mis-judge the market, or dont time it perfectly or even reasonably well, from their own microeconomic perspective it oftentimes is nothing more than just an expensive lesson learned. And since this site addresses particular properties (for the most part), I was just offering my general observation that sometimes things seem worse (or better, 5 years ago) than they may seem. Obviously, it will be easier for all of us to comment after dust has settled…which I agree will be years from now. Whether the fallout is worse than the tech bubble (a fallout that has not yet been resolved) will be impossible to determine for at least another 10 years. But it certainly is interesting to talk about:)
I can understand rich parents wanting to give their parents the downpayment on a single family house. But a condo? That’s a complete waste of money.
Most 20-somethings live in it two or three years. They have a kid and then discover a two bedroom condo doesn’t work with a 1 year old. This happens fairly quickly- from what I’ve observed.
And then they’re stuck there. Or they take a huge loss and now have nothing to put down on the single family home.
It makes no sense to buy the condo- but most of the housing boom didn’t make sense.
Back to the girl comment: When I lost money (and years off of my life from stress) from my rehab-flip project that I was stuck in for 3 years I had a girl that wanted me to get my own place instead of living with a roommate. (Long story). Anyway, after I took my losses I ended up moving into my parents vacant townhouse (they’ve owed it for years and live in Florida). Then my sister got a divorce and moved in with me. So, though I pay rent, an argument can be made that I am 35 and live with my sister!! (But my new girl is fine with that, she likes me for who I am.) Who is the dumb one now!!) haha. 😉 Helps I have that law degree to fall back on….
Sabrina,
I really think that everyone on this site will find this a s amusing as I did.
http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true&ref=patrick.net
Click on the link and enjoy!!!
A touching presentation.
Alt-a loans will be just as bad. Then even prime will be affected by the drop in prices.
There is nothing that can be done about it now except to wait and see how far it falls.
Thanks for posting that Jason. It was very clever and easily explains what is going on with the “credit crisis”.
The bank was asking $230,000.00 for a 2br 2ba (small unit) at 811 W. Eastwood. (Unit 504) No appliances, everything is gone, even a toilet. I offered $150K and it was rejected within 24 hours with no counter. I wonder if the fly by night listing agent even presented it to the bank.
Jason: Who knows?
It will likely stay on the market for awhile. Stay the course on your offers.
I’ve seen offers nearly 50% below asking in some of the buildings with massive foreclosures and they’re seriously considering the offers.
Hey,
Check this out. There is a 2br/2ba I am looking at listed at $230,000.00. No appliances or anything in there. It is a foreclosure. I made an offer on it for $150K 2 days ago, and the listing agent sent my agent a fax cover sheet sith the words “offer rejected” on it. Then, 2days later the prcie dropped $20K on the MLS.
We doubt if this “Fly-by-night” agent even presented the offer to the bank. What do you think?
I’ll keep you all posted on what happens.
Jason,
You are in a good position. With no appliances they can’t rent the place out and banks aren’t in the business of sinking additional money into foreclosed properties. Theres a good chance your unit will come down more as a vacant unit is a money hole to the owner.
Given the condition (applianceless properties don’t show well) and that you’re going to have to spend at least $10-20k to make the place livable your price doesn’t seem that unreasonable.
I agree, and it’s in Uptown. Other 2br/2bas are on the market for $289,000.00 in the building. (Of course, they are finished.)We’ll see.
hey jason
i have heard there is a termite problem in that building. i will get some more info from my friend. her cousin lives there. be careful 🙂
THANK YOU LAURA!! LET ME KNOW. I am at falco_esq@yahoo.com
No sign of termites in the building Laura. I checked it out.
Sabrina and all,
I think it would be cool if you added a section on the site for “stories” meaning that people can post their experience dealing with buying property.
I have gotten so much BS from realtors in negotiations it is just funny now. (Not to insult anyone here, I love your comments.)
I can also post some stories about my dealings with the banks. Anyway, have a good one, but too tired to draft it now.
Jason,
Totally agree — I think this site would lend itself perfectly to a forum where people could relay their stories and ask for opinions about properties they’re looking at. As far as I can tell, the real estate industry tries to make the home-buying process as insular as possible, and sites like this go a long way in breaking that.
Sabrina, this site is great — good or bad (and I’m pretty sure it’s good), it’s kept me from buying in this market, at least until some of the problems in the system have had a chance to work themselves out. I’m now planning on renting for at least another year. Like Jason, I’ve dealt with enough “situations” in the process of looking for a house to realize that the market has a LONG way to go before it’s close to rational again.
Anyway, thanks!
For anyone looking at condos in the Loop area, the idea of “buy now” is ludicrous. Thousands of units are still under construction and due to close, with the majority buyers who were speculating.
They lost, big time. It’s going to be a very painful shakeout.
“the real estate industry tries to make the home-buying process as insular as possible”
Of course they do. If they didn’t people would start to question whether the service is worth 6%. Most realtors don’t add any more value for a $500k property that they did 10 years ago when a similar property would have sold for $200k. Why should they impose a $30k cost on the transaction, when $12k was enough? When everyone was making a ton of money, no one questioned it. I think that’s going to change.
Well, here’s my storny. (Not drinking wine now, so I can write.) This condo went for $188K in 2004. The owner supposedly put $30K into it to rehab it. It went into foreclosure late last year and the bank bought it back at the judicial sale for a whopping $299,999,00. It went on the market for a price of $230.000.00. I wanted to see the place, but the listing agent was stupid and the supra box was broken so it took forever. So, for kicks I made a “blind” offer for $150,000.00. (That sounds a little crazy but I am very familiar with the building. That offer was rejected. The next day however, the price on MLS dropper to $209K.
So I finally got into the place and everything is gone. No appliances, toilets, light fixtures, even the kithcen sink. But I still like the place and I am pretty handy so I offered $170,000.00, figuring how much it would cost to rent a comparable unit, used the 2004 price minus rehab costs.
They came back with an counter of $205K, saying “this is a multiple offer situation.” I laughed at that.
Today I am countering at $174 and giving them until close of business on Monday until my offer expires. Also a little note explaining why my offer is the correct one.
Comments?
jason
friend’s cousin said too many young buyers got over their heads. he thinks the termite issue was a rumor…. realtors are getting nasty these days. he loves his unit and his boyfirend bought the unit next door… go for it. you deserve a great place. we are in similar looking scenarios, but i am not the least bit handy. good luck.
Thanks Laura!
Jason, You might convince them that your offer “is the correct one” by offering $5K less on Tuesday. That is if they don’t accept the $174K. If they counter with anything at all, lower your offer and include the question “How far down do you want to chase the market?”
G,
Playing the real estate market is tricky because when trying to find bargains you’re dealing with people. People’s egos definitely get intertwined with what they perceive as the value of their unit. If they get offended then they will very likely turn down the offer even if it is in their best economic interests. People aren’t as emotionally detached and rational as economics textbooks prescribe they should be when you throw in ego, etc.
He might have better success sticking by his offer and trying to let them know it is absolutely the highest he can afford/has received approval for (even if not true), etc and really likes the unit.
When dealing with banks on foreclosures disregard this advice: banks are businesses and treat these transactions as such and won’t get offended. They take your offer and give it to a quant geek who crunches some numbers and sees if it will work for the bank.
Bob – that is sage advice. People’s egos really do get in the way when they are negotiating. I think G’s idea of lowering the bid is fun and sassy, but i think it’s likely to generate ill will from a large percentage of sellers and agents, and would therefore not be effective.
All that seems fun. But I am dealing with a bank, and they only take offers by fax. I did tell them my counter expires at the close of business on Monday.
As far as fun and sassy, there is another place that hasn’t sold that I was looking at. The listing agent saud she had an offer for asking price. Apparently, that deal fell through, so for kicks I want to go in at a lower offer.
Any advice on dealing with the bank?
What are your thoughts on their statement that this is a “multiple offer situation?”
Jason HAS been dealing with the bank, with a unit that is not only in foreclosure, but that has essentially been looted by the previous owner. The amazing thing in, even faceless, business-only entities like banks get their “feelings” hurt and behave in ways that harm their owners/shareholders.
Jason: Think unemotionally. This is a business transaction.
“Multiple offer situation” when it has NO appliances and no toilet? (I HAVE seen multiple offers on a foreclosure- but that was immediately after it was listed and in River North.) Once a listing has been on the market awhile- even for the foreclosures- it gets stale and no one notices it much anymore.
Most people aren’t that handy. The properties I see selling right now are those that are move-in ready.
Stick with your original offer and deadline. If the bank doesn’t like it- offer them even lower a month or two from now.
Good advice. I will let you know what happens tomorrow. Most of should be out playing today instead cribchatting. IT IS SO NICE OUT!!! 😉
The only thing that bothers me is that I think the realtors screw around, not so much the banks.
There was also recently a price drop, so that helps with getting attention on the MLS.
I’m seeing new Construction near by United Center. Most of the new construction is done by New West Realty (West Haven) and D’Aprile Realty. I saw the Pre-Construction Codes for $265K (2Bed and 2 Bath) 1153 ST. Realtor was asking 22K for Parking and I said Are you kidding me? In the West Loop, You are asking for 22K for Garage Parking. Next day, he calls me and says I’ll offer free parking. I was like either you cut 5% price or give me free upgrades. He offered me almost every free upgrades including my wife wanted free hanging Closet near by Kitchen. He said it costs 2300. but finally he agreed. But I’m little hesitate to buy near by WEST LOOP (United Center). Any input would be appreciated.
Sumit:
You might also want to check YoChicago’s webpage for information about new developments in that part of town. They do a great job in covering new construction.
Sumit, I was taught long ago that if a seller meets all of your initial demands, then you didn’t ask for enough.
I never understood the asking prices around the UC. The Horner Homes are gone, only to be “scatter-sighted” throughout the ‘hood. This area is sure to be a disaster for a long time to come (as is always the case at the margins.)
Update:
The bank came back with $200K. My plan is to go up to $175K, and present a earnest check and say take it or leave it.
Thanks for the update Jason. I was wondering what was happening.
Hey- if they don’t want to negotiate, there’s always another property. There are NO applicances or toilets for goodness sakes. The banks are overwhelmed with foreclosures right now so that makes it even harder to negotiate.
Jason,
As Sabrina noted you are right. The bank will not be able to offload this quickly simply because it is not in move in condition for most homeowners. I’m betting the bank will come down further: a unit without basic appliances is of no use to them. Just think of how handy your typical banker is to give you an idea.
Also as it is a bank don’t fear lowballing them, although it will diminish your chance of an acceptance it won’t hurt your bargaining position in the future on this unit. You won’t offend any egos when dealing with banks.
Look at it this way: the bank already came down 100k, so you’re 80% of the way there 😀
Erm sorry 55% not 80% but still it shows the bank is willing to drop the price. Kenworthey I don’t think the bank is acting emotionally. They are just using the wrong risk model. Some weenie analyst came up with some model telling them this property shouldn’t go for less than 15% what the bank owes on it or something similar. The thing about weenie models is that they are based on a plethora of assumptions and when any one of which changes it can drastically affect the final answer.
Their proprietary risk based market assessment models are about as useful as the guesser of your age and weight at theme parks. But banks don’t like paying carrying costs either so their models will change as they retool their models.
Jason,
Did the bank only counter your offer? What about the multiple offers?
You are their buyer. You will set the price on this unit. If they continue negotiations with you then set a firm deadline or lower your offer. You are definitely in falling knife territory with this one. Better deals will be out there when the long trench at “the bottom” is reached.
Ugh. I was thinking if I got the place for under $188K then I would avoid falling knife.
The place originally sold for $188,000.00 in 2004. (Pre-bubble?) It was totally bare. Then the owners paid for the upgrades to the tune of $30K.
I know that there are no appliances, but the floors are new, the cabinets, the tubs (2 full baths) new sinks. There is still one toilet left.
It is still pretty nice, 2br 2ba 2 balconies.
Well, I am faxing my final offer here so I’ll keep you posted. I know that the listing realtor is full of SH&%%.
1997 was “pre-bubble.”
If it makes you happy to get this specific place at whatever price you decide, go for it. Just don’t assume that it won’t go lower if/when you “have to” sell. Also don’t assume that rents will not drop (if renting is a fall-back option.)
If it is the place you desire, so be it. If it is the “deal” you desire, there will be better.
Opinions as to what level was “pre-bubble”. IMO it was 2001. This was before 9/11, after which Americans left the stock market en masse, before the Bush administration deemed every guy off the street should own a home, before the easy loan money started flowing and everyone started speculating on real estate instead of the stock market.
When you look at price increases in Chicagoland they really took off 2002-2007, much faster than their historical norm.
Well, I guess you are right that the bubble started way earlier. I guess I meant, pre-burst. Well, we will see what happens. The new comps in the building are much higher than the price I am seeking, so at least I have that going for me.
I am also going to live there for awhile. I’ll have you all over for cocktails!
Bob, the bubble began in 1998 and would have corrected in a “typical” mild manner for Chicago starting in 2001. Instead, we got even more bubbly due to what you point out.
Check out the Case-Shiller numbers for Chicago. We were at least double the “historical norm” for appreciation in 1998-01. It doesn’t look so bad in retrospect, but it was unsustainable even without the suicidal bubble extension that followed.
Bank has not responded to my offer. I noted that it was final and good through May 6.
Just heard that the bank is ‘thinking about’ my offer.
How sweet of them, but that was yesterday’s price in a declining market. If they try to counter higher than you want to pay, do not change your offer and include the reduced price you will be offering next. You’ll be doing them a favor by giving them a free glimpse at the future.
I like that idea. That is ‘sweet’ of them.
Jason, I think the bank might be doing you a favor… do you really want to pay $175K for a place that has been stripped? The place is essentially in the condition it was in in 2004 when it sold (for too much, almost by definition given the year) at $188K. Weren’t prices clipping along at almost 10% appreciation per year after 1998 or 1999? If prices should be at 2003 levels (generous given this neighborhood), wouldn’t that mean you should pay no more than 188K – 10% = about $170K?
Jason,
If the bank is thinking about your offer it means they’re still willing to negotiate. When they come back with a lower price stick by your original offer. Banks are bureaucracies like any large organization so exploding offers of a short-term may not be as effective a tactic, however it certainly can’t hurt.
Kenworthey:
I see your point. I think I am really about 5K over what it should be. So really, as G would say, I am in knife-catching territory already.
I will say that the other foreclosed units have been going for $203K to $215K for 2br 2ba. These were also finished, but the layouts weren’t as nice.
My realtor seems to agree that that is as high as I should go. That is intersting because that position is really against her own interest. She owns two units in the building.
Jason,
Its still in her best economic interest to get the sale closed. Sure she takes a small hit on the comps in her building but a bird in the hand is worth two in the bush.
Just wanted to thank Jason and Bob and G for an enjoyable and informative conversation. Excellent after-lunch reading!
JK
Update:
Apparently the bank has accepted another offer. Funny, I was told I was the only one bidding.
I thought they told you it was a “multiple bidder” situation.
But honestly, don’t cry over this one–I think you dodged a bullet.
YEah, today they told me I was the only one. Oh well.
Jason, don’t get too depressed about the bank. There will be PLENTY of other foreclosures out there. I see dozens every week. As the months go on, the banks will be desperate to unload them to anyone with a downpayment and decent credit.
Keep me posted. The place checked out basically went from 300K to about $180. Too bad, I liked it.
If you see anything good let me know.
Just got a call from my realtor. She said I should be happy that I didn’t go any higher, as I would have overpaid. She got the contract on a similar unit in the building. Couldn’t tell me the price, bt she was great about not letting me overpay.
Jason,
After a few weeks the sale in that building will be public record. Realtors only really have valuable information in the sense that they will dig for it for you and often times time sensitive info.
If you’re willing to do the digging yourself the only advantage they have is time sensitive info. Most everything else you can find out on your own using the internet.
Yeah, IO know. But at least she was trying to be helpful.
Anybody have a MLS site that I can search by keyword? Thanks.
Jason: I enjoy your condo-buying stories. I think you’ll be glad that some of your offers ultimately fell through.
Eventually you’ll get lucky on something.
I hope you are right Sabrina!! Some of the best deals you make are the ones you walk away from. I actually have a GREAT realtor who I would recommend to anybody. I am a huge pain in the butt, and she is patient and does everything I ask. I’ve been looking for a place with her since I began checking out the site.
Really can’t beleive the bank rejected that offer on 1107 W. Lawrence.
If anyone needs a realtor let me know.
I need everyones help before i put in an offer on this unit.
I was wondering what everyone thinks a fair price on this unit would be. All your comments will be greatly appreciated
The address is 1440 S Michigan
Here is a link
http://sussexandreilly.com/chicago-real-estate/property-information.asp?listid=06838236&SearchType=ln&reset=1
Hope to hear from you guys soon. Thanks
It last sold for $215K in 2004. It is in the deep south loop. Even subbing out $35K for parking, they are asking over $260 a square foot.
Obviously, if you love the place, you love the place, but… I hope you’re not planning on offering anything remotely close to their asking price. In my own opinion, you’d be crazy to pay more than $200K for this… and that’s very much on the high end of what I think it might be worth.
Why not consider one of the CMK developments up the street? 1620 or 1720 S Michigan. I think they’re lovely; well built, brand new, cheaper assessements than this… and I bet cheaper overall than this.
I don’t love this unit….however i do like it. I talked with the owner of another unit(Same everything) said his rock bottom price is $235,000. I think that is still to high…any other good one bed about 800sqft in southloop with parking for under $200k or i am i stupid to expect that price?
#213:
11/3/00 sold $143,500
#313:
sold 11/7/00 $141,000
sold 5/1/01 $182,000
sold 5/15/03 $200,000
sold 8/26/04 $215,000
2 mortages 8/26/04 $204,250 ($172,000+$32,250)
listed 3/24/08 $249,900
since lowered to $244,900
#413:
sold 6/14/01 $190,000
sold 2/10/06 $241,000
mortgage 2/16/06 $241,000
lis pendens 8/23/06
sold at auction to Fannie Mae 4/1/08
I couldn’t locate the property in the Fannie Mae REO database.
#513:
sold 1/29/01 $148,000
sold 3/9/01 $179,000
sold 12/20/02 $202,500
sold 10/15/03 $209,000 to Prudential Relocation
sold 10/29/03 $209,000
sold 8/26/04 $230,000
This is obviously a transient or flipper-filled building. The current asking price on #313 is unrealistic as there is absolutely no market support. I would track down unit #413 if I was interested in this building. Anyone who buys #313 before #413 is put on the market and sold as an REO will be knife-catching, guaranteed.
South Loop buildings like this one will roll back to at least 2002-03 pricing, and maybe more.
Just wait, John. There will be plenty of sub $200K 1BR’s in the South Loop soon enough. There is no way you will miss out by being patient.
Did I say 2002-03 pricing? I meant 2001-03 pricing.
I think I’d only question your brain if you paid more than under-$200K, frankly. You won’t have to be patient much longer. Once sellers see the handwriting on the wall at the end of the summer, realizing that they have just missed the prime selling season without offloading their units–I predict we are going to see some genuine drops.
Thanks you guys have been great….saved me a lot of money!!! I will wait. Hopefully, the rates stay the around 5 percent still. And thanks G i will look into unit #413. If you have idea of how i should go around to buy unit #413 please let me know. Thanks
Great info from G on the units in that building. I agree with all the other comments here. You just need to be patient John. The prices will come down due to foreclosures and the lack of sales volume.
any word on what the Eastwood property finally went for? Or is it still on the market? I didn’t see anything in the Cook County Recorder of Deeds website about it..
“Sabrina on March 11th, 2008 at 7:11 am
I can understand rich parents wanting to give their parents the downpayment on a single family house. But a condo? That’s a complete waste of money.
Most 20-somethings live in it two or three years. They have a kid and then discover a two bedroom condo doesn’t work with a 1 year old. This happens fairly quickly- from what I’ve observed.
And then they’re stuck there. Or they take a huge loss and now have nothing to put down on the single family home.
It makes no sense to buy the condo- but most of the housing boom didn’t make sense.”
Sabrina – This probably one of the wrost comments I have read. If this guy would have purchased a home in the burbs with his parents down payment how would he have done? The burbs (single families) is where the market is struggling because no one wants to live in the burbs anymore. If this guy purchased a condo in the gold coast or streeterville he would be doing just fine. Chicago’s condo prices have held up quite well. Can you say the same for Highland Park, ect?
2 years later and prices have yet to bottom in Chicago.
What’s the consensus on entering the market in early 2011 without catching someone elses mistake?
We are a 26 something couple looking for a 2bed 2 bath walk up condo/duplex in a safe, accessible and walkable chicago neighborhood.
Lincoln park is our cliche neighborhood of choice primarily cause that’s all we know. we’re open to any where with a great location, great food options, safe to walk around at night alone and sub 30 min transportation to the loop.
Any suggestions on market timing?
Any suggestion on realistic expectations of what and where someone can find a 2 bed 2 bath for 300k?
Thanks,
John S (different than the John above)
We are looking to put 20% down with a closing price near 300k and not to exceed 330k.
John S.:
Too many unanswered questions. Do you need parking? Want C/A? Need w/d in the unit?
You’re unlikely to get a 2/2 for $300k in Lincoln Park. I’ve seen them for as low as $350k or thereabouts. But unless it’s a foreclosure or in a high rise- I’ve not seen them that low in that neighborhood.
You might be able to get that in Lakeview, however. You should also check the East Village, Wicker Park, Bucktown. Lincoln Square, Edgewater/Andersonville, Ravenswood are also options- but you won’t be 30 minutes from downtown.
There is also the option of Oak Park- which is easily within 30 minutes of the loop with good public transportation options.
You need to check out other neighborhoods other than Lincoln Park. Spend a Saturday walking around, have lunch, check out the parks, go to a movie in some other areas.
John S
What are your reasons for wanting to buy now?
Thank you much for the response and advice on other neighborhood.
Parking. One spot would be nice, however if street parking is readily available then parking would be optional.
We are ready to have our own place, paint the walls, buy furniture we can keep for years, interest rates are low but rising, and sellers are starting to realize their home is worth less than 2005 and 2006. From a timing perspective, we think we can get the best value now. Also, it would be eAsier to start early and perhaps move in during the summer.
We are thinking a couple years down the road when we’d need room for a kid or two and a small office area. We are willing to spend up to 350k, but wed like to start looking at 300 in various neighborhoods before we revise up our budget.
Any suggestions?
Thanks,
John s
Any suggestions?
I think the unit described in the original story here at 3024 N Sheffield is in Lakeview, but it is close to LP and a couple blocks from the Wellington Brown line. There are a couple units in that complex of McCondos ont he market now
3020 N Sheffield #3S $328k
http://www.redfin.com/IL/Chicago/3020-N-Sheffield-Ave-60657/unit-3S/home/21820395
3020 N Sheffield #2S $304k
http://www.redfin.com/IL/Chicago/3020-N-Sheffield-Ave-60657/unit-2S/home/35600254
I am personally not a fan of the units or the area, but these may suit your needs. Good luck.