Vintage Bucktown Cottage Sells: 2110 N. Hoyne
We chattered about this 1891 brick cottage at 2110 N. Hoyne in Bucktown in March 2009.
See our prior chatter and pictures here.
It sold in June 2009.
2110 N. Hoyne: 2 bedrooms, 2.5 baths, 2 car garage, no square footage listed
- Sold in April 1999 for $240,000
- Sold in February 2004 for $370,000
- Was listed in March 2009 for $595,000
- Sold in June 2009 for $530,000
- Taxes of $6,864
- Central Air
- Skylights
- Bedroom #1: 16×13
- Bedroom #2: 13×13
- David Wolf at @Properties had the listing.
Hope the buyer enjoys losing $100K+ within 2 years.
that’s relevent…if they plan on selling it within 2 years.
Kitchen needs an island.
Wow, looks like the sellers found that one person!
“looks like the sellers found that one person”
And took 11% off of ask.
The buyer must’ve just moved here from NYC and thought a half million dollar cottage was a steal.
Anyone that pays ask or above ask price today is a moron.
Wow. That’s gonna hurt.
I have recently paid above ask for a property. guess that makes me an moron.
but this is a cute house and i think the price seems fair, assuming the renovation was reasonable quality.
“I have recently paid above ask for a property. guess that makes me an moron.”
Nah, it’s that stray “n”.
I don’t think that this was such a bad deal considering what tear-downs in the area go for. There are condos in the area that are more expensive than this house and you are getting some land which is nice for some people.
all house prices are going to be $0.00 in 4 years.
Not a bad price imo.
“all house prices are going to be $0.00 in 4 years.”
C’mon brad, get serious.
Within 4 years, the *median* house will be $0, with 50% of sellers giving buyers cash at closing. And this will continue for at least 25 years.
Some people will never be satisfied, no matter how low prices go. I don’t think this was unreasonable. Will it lose value in another year? Maybe, maybe not.
Chicago is not a cheap city and never will be relatively speaking. If you want a 3/2 for $150k, then you can move to Plainfield or some other former cornfield out in the middle of west bumblestank and get a crapbox from XYZ home builder.
If you must live in the city, there is always Austin or something. Brush up on your gang signs.
btw, I think this is a fine price, but I have a hard time seeing real dollar appreciation for them in the future unless they undertake an addition to the house.
And, of course, it sold for an amount that works with a conforming loan.
“that’s relevent…if they plan on selling it within 2 years.”
It’s relevant if they plan on selling it within 5-7 years, because once values bottom out there will be zero to very little appreciation for the next five years.
“And, of course, it sold for an amount that works with a conforming loan.”
C’mon you really think they brought 113k as a downpayment? You really think they only have one primary mortgage on this place and no seconds?
When I see 500k condos and cottages I smell creative financing b/c the purchasers aren’t good at valuing RE they probably aren’t good savers (theres a strong correlation).
Someone feel free to prove me wrong but I say no way theres only one conforming mortgage on this cottage. This place and this purchase price scream Countrywide and WaMu special to me.
“Chicago is not a cheap city and never will be relatively speaking.”
I was about to take issue with your sentence until I read the last two words. True, relatively speaking Chicago may never be as cheap as other, smaller midwestern cities like Cincy and Indy. Compared to NYC/NJ it is much cheaper.
But in absolute terms Chicago could certainly become a cheaper city. The real estate asset bubble is deflating and Chicago could definitely become a lot cheaper.
Who is to say a lot of land in Chicago is worth $x and always will be? Do you think a lot of land in Detroit is worth more today than it was in the 50s?
Prices should be determined by demand and unlike Manhattan, the city center has a much more gradual tapering off in all directions but the lake. I see no catalysts for maintaining current land values in Chicago in the near future.
Glad everyone here is so clairvoyant that they can predict the future and pawn it off as fact. Why not put your money where your mouths are?
“This place and this purchase price scream Countrywide and WaMu special to me”
So, they paid the seller with defaulted bonds and a claim against Angelo Mozilla? I guess they *did* get a good deal.
“Someone feel free to prove me wrong”
Can’t get onto ccrd right now for some reason; will try to remember to re-visit.
I am glad this place has sold and I knew it would when it was first featured here. How many were wrong about the predicted sales pricing? Didn’t a number say it would not sell at all?
Like many people who are buying homes to raise a family in now, I am thinking the new owners will stay for a number of years. By the time they do move in say..10 to 15 years, they just may have built some equity and realized some appreciation. Right doom and gloomers?
“Glad everyone here is so clairvoyant that they can predict the future and pawn it off as fact. Why not put your money where your mouths are?”
Wait a sec…you implicitly think the buyer overpaid (“found that one buyer”), there are a couple comments that implicitly agree with this and a couple that seem to forecast flat or somewhat better times in the future (most likely from others long RE, like you), and then you crack on clairvoyance? Do we have two Sonies, or are you having a J&H moment?
“By the time they do move in say..10 to 15 years, they just may have built some equity and realized some appreciation. Right doom and gloomers?”
Yes but can they afford the monthly nut for 10 or 15 years? AND raise a family? Kiddos are expensive. Maybe they are from money or DINKs, who knows, don’t really care tbh but I doubt its the demographic you mentioned (family raising young couple).
The point is I guess there is a happy ending for this seller here–they got out. Whether theres a similar happy ending for this buyer we’ll have to wait and see..potentially a long time.
Bob:
There aren’t any second mortgages around. If there is a conforming mortgage, the max any bank is going to with a second is 85% so they would have at least brought 15% as a down payment. There are plenty of buyers bringing 10-20% down to get the loans at $417k. Homes priced around $530 or less will sell.. anything greater is going to sit for the most part due to lack of reasonable jumbo financing.
Chicago is a big city and we have quite a few industries that pay very well. In addition, there is demand to live closer in. While no one can predict the future, I think Chitown is a long way off from being a Detroit. Our economy is not solely based on manufacturing of three companies and bloated union wages.
People buying today generally are folks looking for shelter and don’t mind paying a premium to have it over the long term. They don’t plan on moving anytime soon, they are good credit, good income, and relatively low risk buyers for the most part. I think some of you don’t want to accept that Chicago is not cheap and if you want to own you are either going to have to step up your earning power or find a less desirable part of town to live where prices reflect your means. There will not be any single family homes in LP going for $250k like some of you seem to think.
“There will not be any single family homes in LP going for $250k like some of you seem to think.”
Yes but 250k for a SFH in LP is a pretty far stretch from 520k in Bucktown. I see no reason for Bucktown RE values to be 100% over their 1999 levels when Chicagoland generally shows only 22% appreciation.
“find a less desirable part of town to live where prices reflect your means.”
Very true. Unfortunately even ‘less’ desirable parts of town have $/SF numbers that still seem high to me, especially when you look at earnings there. The median earnings/median RE price ratio isn’t nearly as bad as California but I’d bet its the lowest in the midwest here.
this looks like a pretty decent place in a nice enough location. though the charleston is closing I think, you still have the map room and some good eateries on armitage. still with 2 bedrooms it’s small for a family. I suspect the buyer doesnt have kids.
Buyer’s mortgages:
$417k first.
$60k second. Both from Oak Bank.
10% plus costs down.
Bob:
Bucktown is a vastly different neighborhood than it was 10 years ago. Could prices slide further still? Yes, but the neighborhood is hardly the same neighborhood therefore I don’t think it is accurate to say that the current demand to live there isn’t reflected in current prices.
There are some areas that are on the margin that I don’t think your assumption is unreasonable. Logan Square? Some parts of Edgewater or Uptown? Rogers Park.
Russ,
It appears you stand corrected. They only had 10% down–this was a 90% LTV loan.
In the era of 250k houses that extra 5% might not have meant a lot but it means they had at least $26,500 less skin in the game than you thought..
The cycle continues until the funny money second mortgages are shut down.
PS Russ: even someone of my ‘modest earning power’ can easily save up 54k in a couple years time. Again, the key to Chicago’s lofty real estate valuations has as much or more to do with _creative financing_ as it does with legitimate demand.
There are a handful of portfolio lenders doing jumbos to 90%. Ironically, Bob, it is the smaller community banks that are still doing some of the higher LTV loans. However, they are still harder to come by.
Financing did have an impact on values, however, I think only in so much as it allowed people to buy based on their income moreso than their liquidity. Down payments by themselves do not determine whether a loan performs well or not. Lenders lost sight of all the other risk factors which is the problem.
Until loans are underwritten individually and not as a securitized and salable product, I think banks are always going to struggle with making good loans.
“I think only in so much as it allowed people to buy based on their income moreso than their liquidity”
Very true. I don’t think no docs and option-ARMs were a huge issue for Chicago overall as they were a small percentage of transactions.
However even if people are buying with documented loans based on their incomes instead of liquidity, thats a huge risk factor in and of itself. I’d bet the number of six figure earners in Chicago is much higher than the number of six figure earners able to save up 100k for a downpayment on this place, for instance.
Before when larger down payments were required the pool of qualified buyers was restricted to the smaller subset of those with the earnings power and the fiscal discipline, demonstrated over time, of having the ability to save. Its a much more prudent (and lower risk) subset of the high earner population.
Not that I’m saying these buyers are any sort of a risk specifically it could just be that they don’t want 100k tied up.
Agree 1,000% with your last statement as well.
Russ,
As always, thanks for the helpful update on financing & rates… you’re certainly one of the top 3 true contributors to this site.
I’m looking into a property that would be at an all-in price (including closing costs) of ~$470k. If I finance with a confirming loan beyond 80% LTV up to the $417k limit(=89% LTV), I’m stuck with monthly PMI over $200/month (so I’ve been quoted). Russ mentions above that a few lenders are offering 2nds up to 85% (would take me up to $400k) — this would increase my down payment by only $17k and would save quite a bit in my monthly nut (at least a $140 depending on the rate on the 2nd… and that doesn’t even consider the tax shield).
Important Note: Before uninformed Bob jumps all over me for stretching beyond my means like he did with a prior financing related question I posted last month — I have the cash for a 20% DP and then some, and my debt service/income will be well below 25% even if I financed up to the $417k — however I value liquidity and have other considerations in play with my cash.
Here’s my question for Russ or anyone else who has recently locked in financing: I’m a very strong underwriting credit, and the property is in an A+ location — who do I need to be talking to get a 2nd??? (I’m not hearing that they’re available from other sources)
I hope that all of my potential competing bidders are having as many frustrations with the financing markets as I am…
Thanks!
You can’t fool me dogowner. You’re bidding on a piece of overpriced real estate and you likely don’t have the money for 20% down. Even if you do you’re still whining about extra expenses and fees you’ll have to incur since you don’t want to put 20% down.
LOL at you. Have you ever heard of risk adjusted rate of return? It means the bankers are going to charge you more because if you default you don’t have enough skin in the game.
Boo hoo you have to pay more for a piece of overpriced property. Maybe we should have a charity fundraiser for you.
“I’m a very strong underwriting credit, and the property is in an A+ location — who do I need to be talking to get a 2nd??? (I’m not hearing that they’re available from other sources)”
As noted above, Oak Bank gave the buyers of this house an 80-10 loan. Maybe they have some other relationship with them, but it can’t hurt to call OB and ask.
dogowner – I am in the exact same position as you. I talked to a broker who will do a 80/10/10 as long as your FICO is over 740. (I doubt they are hard to find and I will give you his info, not sure if posting it would be against the rules tho)
Why would I put the extra 10% in even when I have it? Not only do I like keeping the cash on hand BUT the second loan has a lower rate than the primary loan (becaue it is based off LIBOR) so the rate on the second loan is 3.5%. So it is actually cheaper for me to do the loan this way than putting down the full 20%. When rates shoot up (which I doubt they will for a few years) then I pay off the second loan (no pre-pay penalty). I suppose you need the disipline to make sure you keep that extra money in a liquid spot and don’t spend it but I don’t see why I wouldn’t do a loan this way.
You might want to head over there tomorrow and not wait until Saturday…
http://www.sj-r.com/business/x631616035/More-failed-banks-in-Illinois-than-any-other-states
“Illinois Bankers Association president and CEO Linda Koch said additional bank failures are likely, including in Illinois, as a result of the financial crisis that hit the country last fall.”
a steal. looking forward to looking back at these comments in a few years. how come when something sells, the nega-toids rise up and protest. morons. really you guys, grow the f*** up.
and how come no one has mentioned how HOT the broker is…
one more moronic statement from Homedelete:
“They cannot bring money to the table to close. They price their houses at these unrealistically high prices; now they’re stuck”
“a steal. looking forward to looking back at these comments in a few years.”
So, you really think that this prop will appreciate at inflation + [some 3-digit positive number] bps over the next 5 years? That in 2014 someone will pay over $600k (2009 $$) for it? Huh.
“how HOT the broker is”
He’s a decent looking guy, but I don’t know if I’d call him “hot”. And certainly not “HOT”.
US Bank was offering up to 90% LTV with a HELOC as of a month ago. I ended up getting a 75% first and a 5% HELOC to take advantage of lower Fannie/Freddie rates for a 75% LTV first (I purchased a condo).
Paulj, in retrospect the xooment may appear to be premature, but cribchatter has show us dozens of similar homeonwner who lose sleep at night as their properties languish on the market month after month.
Well said B – It is apparent that this blog is a couple credits short of a finance degree.
B my apologies. I was under the impression most 2nd mortgages carried a higher rate than the primary one.
80/10/10 financing to ‘keep your money liquid’ is only a small step away from the goofs that used option arm loans because they thought they could ‘sell or re-fi’ in 5 years.
And paulj, the seller had $526,000 in mortgages for a sale price of $530,000…..that’s quite the monthly mortgage payment to walk away with nothing.
B, appreciate the insight — we indeed are in the exact same position and mindset. When did you get this latest feedback from your broker? (mine didn’t share the same offering yesterday)
Sabrina, would you be willing to act as the intermediary for contact info or at least the name of B’s broker?
grillman, also a big thanks for your info. I’m also modeling out all-in costs if I could bring the 1st down to 75% to escape the condo adder, and will give US Bank a call soon.
Steve H, while I often don’t share your view on the real estate market, couldn’t agree more on your comment. For how important financing is to the real estate world (and so many others), there are a surprising number of posts on this blog that make one scratch their head…
Thanks for the helpful feedback everyone, much appreciated. Hope that no one is relying on or is long CIT — cracks are starting to show in their day-to-day operations and funding ability.
The broker is pretty hot, but that’s beside the point.
I think this was a good buy. There are townhomes and larger condos nearby that sell for this price, and I’d rather own this than a condo, and most buyers would too. It only has 2 real bedrooms, but there is also a “loft” and a “study” up on the third floor, which is what many buyers want, 2 real bedrooms plus room for an office. There is probably room to dormer and expand up there at a later date, which would really add a lot of value. This is a nice area of Bucktown, with Holstein Park nearby, and the aforementioned “stuff” on Armitage, not to mention Damen being a block away.
“There are townhomes and larger condos nearby that sell for this price”
Really? Can you post any recent transactions that closed to back up this statement?
There may be other properties listed for these prices, and that sold a couple years ago, but I am suspicious of recent closings on condos in this area for the mid-500s, to be honest.
I looked on redfin and there’s a handful of condos/homes in the immediate vicinity that have closed in the last three months and very generally they are in the high $400’s.
The closings I was referring to:
2150 W. McLean #2E – 3 bed/2 bath duplex Closed 7/14/09 for $736,000
1939 N. Damen #3S – 3 bed/2.1 bath duplex Closed 5/18/09 for $650,000
2236 W. Armitage #401 – 3 bed/2 bath duplex Closed 6/23/09 for $588,500
2330 W. Armitage #G – 3 bed/3 bath townhome Closed 6/22/09 for $517,000
2300 W. Armitage #5 – 3 bed/3.1 bath triplex Closed 6/17/09 for $505,000
I could go on, and I recognize many of these condos have more square footage, and I recognize that there are also cheaper condos/townhomes out there besides these, but my point is that many buyers would much rather have their own single family home with a yard and 2 car garage than have to live in attached housing, for the same price, if not more.
http://www.redfin.com/search#lat=41.91958684997487&long=-87.67973899841309&market=chicago&sf=&sold_within_months=3&status=1&uipt=3,2,1&v=5&zoomLevel=15
I take back my comment from above about the $400’s, I looking at something completely different. Sorry.
“Down payments by themselves do not determine whether a loan performs well or not.”
I mostly agree, but there is this article about how this zero money down loans perform the worst. http://online.wsj.com/article/SB124657539489189043.html
The more someone is underwater the more likely they are to default. Something along the lines that 33% of mortgages default at 20% or more underwater. No money down made it that much easier to be underwater.
single family home = big loud speakers
condo = little quiet speakers
“condo = little quiet speakers”
Nah just get a place with cement walls like I did… mah speakers are boomin!
homedelete – I agree with your sentiment. I think the banks should require a full 20% down or at least give a large incentive to do so. But they don’t. So why should dogowner and I put up the full 20% when my monthly nut will be cheaper (at least for the near-future) to put less down? Cash is king (at least until the US loses their AAA status). Am I more likely to walk away if things go really south because I have less skin in the game? Short answer: yes. But I am playing their game and until they change the rules this is the best way to play it.
Dogowner – you can hit me at jimbobob at gmail and I will send you the name of the guy I am using. Recommended from some friends who have used him but caveat emptor (of course).
Hey Bob-
You sound like a do nothing, chicken little chump. You are operating under a lot of murky assumptions, the least of which is that everyone and their situation is the same- the worst being that everyone is a moron but you- but I wont even attempt to deconstruct that one here.
At the very least- check your simple math. Assuming it was sold in 99 for 240k and just resold in 09 for 530k that works out to just over an 8% IRR over 10years. Thats assuming NO money was invested on improvments over that same period – which I am almost certain is not the case (notice the lack of an absolute statement here?? Learn it). Either way youre looking at 8ish% at best and while thats higher than historical appreciation around 4%, California it aint. Stop blogging for a minute and go find somewhere to put your giant brain to work on a productive task.
PS- “catalyst” by definition is a change agent. You cant have a “catalyst for maintaining” It is an oxymoron. I’ll give you the benefit of the doubt that maybe youre just a Real Estate savant and not necessarily a math or language genius.
JS – Nice work on bringing real, substantiated facts into this conversation rather than just loud mouth blathering.
Thank you for the grammar lesson. I’ll rephrase: I see several catalyst for the destruction of Chicago land values.
“thats higher than historical appreciation around 4%”
Given inflation was a modest 2.6% in the time period since the 1999 sales price, assuming no money was put in pegs it at $311k. Lets assume they sunk 100k into the place, with a return on investment of -50% (home improvements typically do not add dollar for dollar to the resale), that puts the place at 361k. So somehow the neighborhood magicially gentrified to the point to justify a 47% price increase?
Boy genius, do you really think its going to appreciate 4%/annum from its 2009 sale price? Lets go forward ten years and make a guess using your cheerleader logic: that puts this cottage at 800k in the year 2019.
Yeah you’re livin’ on fantasy island with that compound math alright unless you switch the argument to nominal values. The real cost of this place in inflation adjusted terms is doing down over the next decade, not going up.
“in the time period since the 1999 sales price, assuming no money was put in pegs it at $311k.”
two things:
1. I think it’s safe to assume that in 1999 it was a barely habitable (or worse) multi-unit building. The $240k should be thought of as ~$200k (or more) for land, ~$40k (at best) for structure.
2. Given 1., it’s not so much “home improvements” as new construction. Probably $150k+ of work, total, with less of a deduction than typical “HI”.
I’m still of the opinion that this house isn’t likely to see above-inflation appreciation unless they make the place bigger. Which isn’t saying that they overpaid, just that the price wasn’t a “steal”.
http://www.redfin.com/IL/Chicago/3445-N-Kenton-Ave-60641/home/13458072
3445 N. Kenton (Kilbourn Park)
$89k listing price today!
$484k mortgage from 2007!
3445 N kenton.
-Not a bad find, for an owner-occupant this would be a great property for a 203(k) rehab loan.
I’ve starting to passively look for something similar, but east of kedzie & north of irving, to pick up at foreclosure and rehab for myself.