Crib Chatter

 

The Farallon at 600 N. Dearborn in River North is famous in Chicago housing market history if only because it was the building that seemed to set off the condo boom in River North and Streeterville.  When the sales center opened in the late 1990s after years of little new construction, condo units sold out in only 24 hours. There was craziness in the air.  From New Homes Magazine in 1999:

Magellan Development Group set a record for the year with its one-month sellout of the 183-unit 28-story highrise at 630 N. State Parkway – and then broke that record with an immediate sellout at the Farallon Condominiums, 600 N. Dearborn. President Joel Carlins says that the 171-unit planned highrise sold out in one day.

“We had a list of about 400 prospective buyers that we had to turn away from 630 N. State Parkway who expressed interest in our next building in the neighborhood,” Carlins says. “We notified them that we would start taking applications for the Farallon on Sept. 2, about two weeks before we planned to start our advertising and public relations program. There were about 100 people waiting for us to open the sales office and there was a steady stream of buyers throughout the day. By day’s end we were sold out.”

It was the first signal that demand was there for new construction condos.  Developers have not looked back since.

The building was completed in 2001.  How have owners fared since all of the big hoopla?

It has been difficult for many owners in the building. Original owners have made some money, but not as much as you might think. And owners who bought in the last several years are basically losing money after paying realtor fees and closing costs. Let’s look at several units recently on the market and their sales history:

Unit #603: 1 bedroom, 1.5 baths, 760 square feet, 300 square foot terrace

• Sold in August 2004 for $280,000
• Recently on the market for $309,900 plus $35,000 for parking

Unit #902: 1 bedroom, 1.5 baths, 925 square feet, corner unit

• Sold in March 2002 for $267,000
• Sold in May 2004 for $297,500
• Recently on the market for $309,000 plus $35,000 for parking

Unit #1209: 1 bedroom plus den, 1.5 baths

• Sold in July 2004 for $292,500
• Recently on the market for $299,000 plus $35,000 for parking

Original investors from 2001-2002 have managed to “make” at least $50,000 to $75,000 but what is that when investors in new condo towers like Avenue East, 600 N. Fairbanks, MoMo, the Columbian and 340 on the Park are trying to flip for $100,000 to $200,000 or sometimes more- in only two to three years?  (If those investors can get their flipping prices.)

Any owner who bought in the last three years in the Farallon is stuck, as you can see from the prices listed above.  Appreciation has been virtually nothing.

Making money off a one bedroom condo in only a few years is difficult, even in the best of markets.  It’s been even more difficult in the Farallon.