Flipper Alert: Reductions in One Museum Park: 1211 S. Prairie
We chattered about One Museum Park, at 1211 S. Prairie in the South Loop in April. Closings were just beginning and flips were coming on the market.
None of the flips we chattered about in April have sold or rented. One has had a price reduction and another one a rental price reduction.
Current stats on the building (out of 300 units):
- 20 for sale
- 15 for rent
Units may be both for sale AND for rent.
We now have closing price info on these units.
This big three bedroom unit has been reduced by $150,000.
Unit #901: 3 bedrooms, 3 baths, 2924 square feet
- Sold in April 2008 for $1,391,500
- Was listed in April 2008 at $2.075 million
- Reduced
- Now listed at $1.925 million
- Assessments of $964 a month
- Coldwell Banker has the listing
Unit #1203 has reduced its rental price by $1000 a month.
Unit #1203: 2 bedrooms, 2 baths, den, 1460 square feet
- Sold in April 2008 for $627,000
- Currently listed at $869,000
- Parking is extra
- OR– you can rent it
- Was listed in April 2008 for $4000 a month
- Reduced
- Currently listed for $3000 a month plus $200 a month for parking
- Assessments of $414 a month
- Coldwell Banker has the listing
The rent on 1203 is getting plausible now, although probably still a bit high given the condos coming online this year (and probably being rented out).
The original purchase price of $627K is pretty close to rent-buy parity with the $3200/mo that is being asked. Plus, if the investor can actually rent it out they will be fairly stable. At 6.5%, interest on $627K is about $3400/mo.
these apartments could not be more mundane, more dull.
no one will pay +800 for that kind of mediocre space.
Wow, I was thinking maybe there might be some deals in here with some price drops but it seems that sellers are still off their rockers.
These prices need to come substantially below their closing prices to even be in the ballpark. In the Gold Coast buildings the prices may be able to hold up simply because that is still a good location (and you know what they say about that). They aren’t going to go up, but they might be able to hold.
But in the South Loop you have an area that just isn’t all that great and is EXTREMELY overbuilt. While some areas (Lincoln Park, Old Town, Gold Coast, maybe Streeterville) are going to go down only a little bit, the bottom is just going to fall out of the overbuilt areas that just aren’t all that great (aka the South Loop). A 3 bed condo for over a million is a bit crazy in the South Loop regardless of how nice it is. Two million is just wild.
(I should say that my comment at 1:34 is a different Kevin than that at 1:25. Which is funny, cause I have never thought my name that common…)
Kevin,
Not so sure. That 3 bedroom condo is huge, even by SFH standards. Its certainly not worth 2MM but I could plausibly see it going for 1.
Also 6.5% rates on a jumbo loan? These days try 7.25-7.5%. If they got their loan last year then 6.5% is plausible.
(The 1:25 Kevin — a top-20 name each year from 1957 through 1979. Made #11 in 1963, based on Social Security card applications — essentially American newborns.)
The 6.5% was a guess at the investor’s rate, when I was thinking that this closed last fall. With an April close (fast flipping), the rate is likely at least 7% and probably much higher for a not-owner-occupied condo. That will add a bunch to the monthly interest cost, pushing it close to $4K on a 100% loan.
The 3BR is huge, and I think that the original purchase price is plausible. That would be a bit over $400/sqft. It wouldn’t be out of line in Streeterville/Gold Coast, so it would probably find a buyer at that $1.3M level.
Of course, that buyer would then loose their shirt as the wildly overbuilt South Loop continues crashing, probably approaching $200/sqft…
I’ll give you 1MM. But it should be noticed that it sold in April for 1.39 and now they have it “reduced” at 1.93. Both of those numbers are unrealistic.
I was a bit sarcastic earlier. It could for 1, maybe 1.1+, but not 1.39 and certainly not anything near 1.93.
i lived in an almost identical 2BR on a high floor in 1235 Prairie next door last year. Rent was $2400 with parking, heat, basic cable and internet. Not sure why a low floor of 1201 should command a premium.
$2400 monthly rent doesn’t begin to justify the ask price of the comparable for sale, not even close.
These are wishing prices, and I don’t care what they sold for in 2006. 2006 was another epoch and absolutely nothing that happened then has anything to do with now.
Somehow, $1MM ought to buy a much better lifestyle than this. These are humdrum apartments.
humdrum is being nice. these are drywall palaces with cheap cabinets. that ship has SAILED!
From a rent perspective I guess you would have to really like high rise living to want to rent 1203 for $2/sq ft per month when you can pay just a bit over $1 in other parts of the city.
I did really like the neighborhood.
1) The proximity to the park and lake is outstanding.
2) 20 minute walk to work.
3) Great access to “basics” shopping on Roosevelt Rd.
The building managment was very accomodative and the service staff were outstanding. At stupid prices these units make no sense but if they could come back to some sort of reality this would be a nice place to live.
Gary – I believe $2/sf is the going rate for high end rentals which these seem to resemble. Certainly not luxury condos.
wait. how is this even close to rent/own parity? if he gets 3000/month (which i’m not sure he can get) … this guy is bleeding money, especially if prices don’t appreciate (see NYtimes rent vs. own). For example, his mortgage (if he put 10% down) is around 3.5K and with assessments at 414 and taxes at least another 600/mo … we’re looking at 4.5K as the break even point.
This guy should try to sell… fast. He is bleeding 4.5K/mo without a renter and 1.5-2K with a renter (i’m assuming it’ll end up getting rented for around 2.5K).
Obviously, the last post assumes he got a standard mortgage and not an Option-ARM which buys him a little bit of time.
trader,
Aren’t there tax breaks for the first two-three years of new construction? As in it takes awhile for the property to be properly assessed? Probably just a minor detail and definitely doesn’t affect the result much.
Renting from a failed flipper is a risk I wouldn’t take. There’s too much of a chance that he’s tettering on foreclosure anyway. What flipper can realistically afford to lose money every month of the lease? I’d be really pissed if the flipper pocketed my rent and failed to pay the mortgage. Or if he tried to double my rent after the reset forcing me to move yet again.
Marco – I agree. The only thing is that I don’t understand why people are willing to pay for the high end when you can get pretty good places for a lot less. Some people must just have money to burn. Then you read articles about these people who lose their job and have nothing saved after living the high end lifestyle.
Is 901 still for sale? I didn’t see it listed at:
http://www.condosatmuseumpark.com
What other condo developments do you Chicagoans recommend if someone is looking to move to a highrise in Chicago?
Thanks
Stan: Yes- #901 is still for sale. Coldwell Banker has the listing and you can find it on their site.
There are too many highrises to list! Take your pick (will depend on neighborhood, views, price point, size, amenities etc.)
#901 remains on tthe market, and I toured it yesterday. What you guys are failing to realize from a picture of a kitchen is the view. It is incredible from each and every window. Nothing will ever be built to take it away. There is not another building in the city with comparable views.