A New Year But No Price Reductions For This 6-Bedroom Gold Coast Mansion: 1538 N. Dearborn Parkway
We last chattered about this 6-bedroom vintage Gold Coast mansion at 1538 N. Dearborn Parkway in March 2011.
See our prior chatter here.
10 months ago, it had a broken window in front and was sitting on the market with absolutely no price reductions.
Flash forward to the new year- and it is STILL on the market with no price reductions. (I don’t know about the broken window- as I haven’t walked by in awhile. I’m sure someone can fill us in on that- see last year’s picture below.)
The lis pendens foreclosure was filed 26 months ago. The average time for the bank to take possession in Cook County is about 18 months.
If you recall, the 6000 square foot house had a “historically correct” complete renovation.
Built on a 25×125 lot, it has a 2-car garage and 6 fireplaces.
The master bedroom is on the third floor, 3 bedrooms are on the second floor and 2 are in the lower level.
There are no interior pictures of the house with the listing.
Will the bank finally do something with this property in 2012?
Or will we still be chattering about it listed at $4.99 million in 2013?
Place your bets.
Mary Bennett at Koenig & Strey Real Living still has the listing. See the listing here.
1538 N. Dearborn Parkway: 6 bedrooms, 5.5 baths, 6000 square feet, 2 car garage
- Sold in August 1989
- Sold in April 2006 for $2.7 million
- Originally listed in August 2008 for $5.98 million
- Reduced in October 2009 to $4.99 million
- Lis pendens foreclosure filed in November 2009
- Was listed in March 2011 for $4.99 million
- Currently still listed for $4.99 million
- Taxes of $35,314
- Central Air
- Bedroom #1: 23×23 (third floor)
- Bedroom #2: 13×13 (second floor)
- Bedroom #3: 15×11 (second floor)
- Bedroom #4: 12×11 (second floor)
- Bedroom #5: 13×10 (lower level)
- Bedroom #6: 14×11 (lower level)
- Family room: 19×16 (main level)
hahahahahahaha – this place won’t go for more than 2.5 million…
Land value plus value of shell…max. With no pictures we assume “historically correct renovation” means blah….gut job.
Unfortunately, situations like this house are still happening all over the city. The banks are reluctant to take the properties back because then they have to actually take the loss, so these phantom properties sit out there for years. Meanwhile- they deteriorate and are bad for the neighborhood (yes- even the Gold Coast.)
How can we be at a bottom when there are properties like this that still have to be dealt with?
And this is not an isolated case in the Gold Coast either.
Those look like bullet holes in the glass.
“The banks are reluctant to take the properties back because then they have to actually take the loss”
Why?
If they take it back, they need to comply with the vacant property regulations and they have direct liability for taxes, maintenance, assessments, etc.
“How can we be at a bottom when there are properties like this that still have to be dealt with?”
Because that’s how all markets work. If it were that simple, everyone would be millionaires.
“If they take it back, they need to comply with the vacant property regulations and they have direct liability for taxes, maintenance, assessments, etc.”
My thoughts:
1.) Properties like this are rare. It’s a trophy property and not many on the market.
2.) There’s probably a hefty 7 figure loan outstanding so it’s cheaper to pay the taxes, minimal maintenance, etc.
3.) Hopefully somone will come by and pick this property up without the bank taking a 7 figure loss.
I’m not so sure that all of these big, grand houses constitute “mansions.” When I lived in NY (and did a little real estate), I seem to recall there being a certain size (e.g., x number of feet wide) that placed a home in mansion territory. I can definitely think of a few mansions on Astor, and a few on the east/west streets in that hood.
“When I lived in NY … a certain size … placed a home in mansion territory.”
According to Wikipedia, “U.S. real estate brokers” (ie, the dreaded “they”) say that a mansion is “a dwelling of over 8,000 square feet”. So, perhaps a Petit-Mansion.
“Looking to buy (January 12, 2012, 9:30 am)
…
My thoughts:
1.) Properties like this are rare. It’s a trophy property and not many on the market.”
There are many places of this caliber on the market in the GC and they are also much cheaper. This will languish. Banks need to get real with their pricing if they want to move the properties. Two common behavioral psychology traps are ownership bias and anchoring. I think the banks are suffering from both. In ownership bias they value something they own higher than if they didn’t own it – this has been documented in many studies. In anchoring they use an arbitrary number to “anchor” their valuation – here that arbitrary value is the amount of debt on the place (ie. their cost basis).
Banks are too overwhelmed to handle the problem. The problem will continue for years. Quite frankly there’s no way to buy in the next 10 years and not take a loss but that’s the rub.
” I think the banks are suffering from both.”
Maybe. But (1) this isn’t yet REO, and (2) “lender” is now an equity fund.
Some detail about the current owner of the 1st lien mortgage:
http://www.fdic.gov/buying/historical/structured/CREBidSummary.html
” Quite frankly there’s no way to buy in the next 10 years and not take a loss but that’s the rub.
”
SO MANY things wrong with this statement:
1. There are examples right now of people making money NOW on real estate purchased in the past few years.
2. Most people don’t buy real estate for the “profit” – real estate is mostly bought to enhance and improve your life. HD – you are so “into” money, you can only analyze things in terms of its financial worth – I feel sorry for your wife……(btw, how much is she costing vs how much is she worth?)
seriously clio, attack me all you want, but leave my wife out of it. that’s just rude.
Fair enough – that was a low blow. I apologize.
“Banks are too overwhelmed to handle the problem.”
I don’t buy that. Maybe at first but the bubble burst years ago. They’ve had enough time to change their paradigm and hire the appropriate people & create divisions that are tasked with handing short sales in a consistent speedier method.
Not that I’m one to defend clio, but he has taken much worse, much more personal hits here than that little quip. I definitely don’t think it should be fair game, but I can understand why clio might get that impression after suffering insults to his children and pets.
The internet can be quite the killjoy…
“The banks are reluctant to take the properties back because then they have to actually take the loss”
I can see this in the case of a property worth nothing or near nothing. I would think though in this case, rather than having a loan for 7 figures that isn’t getting paid on at all (I assume) it would be more advantageous to foreclose on the place and sell it for even $2 million and take what they can get. Why not take the $2 million (or hopefully more that they could get) rather than getting nothing now? The market isn’t going to get THAT much better any time soon!
The odd CEO-type relocated from his Manhattan abode to Chicago may be willing to buy a vintage 25′ rowhouse in Gold Coast to replicate his family’s upper westside townhouse lifestyle – but Jamie Dimon’s already come and gone from this neighborhood, and sold at a large loss, as I recall. MOST buyers at this price point want a newer construction house around Howe Street compound, or perhaps a large concierge-served floor-through apartment, and not a narrow dark rowhouse w/bullet holes in window in apparent need of renovation and “freshening”. Bet this goes down to $1.8 million to sell. Garage helps, but this is a mighty squeezed lot.
.
“Jamie Dimon’s already come and gone from this neighborhood, and sold at a large loss”
Paid $4.7, sold for $6.95. Any guesses at what he spent on reno (most of which, I would argue, wasn’t capital expense)?
“Paid $4.7, sold for $6.95. Any guesses at what he spent on reno (most of which, I would argue, wasn’t capital expense)?”
Some of the media articles said it was several million for the renovation (I don’t remember the exact amount.) It’s unlikely he made much, if any, money on that house.