Are Chicago Prices Stalled? A 3-Bedroom at 1342 W. Belmont in Lakeview
This 3-bedroom at 1342 W. Belmont in Lakeview came on the market in June 2019.
This building was constructed in 2017 and has 6 units, an elevator and garage parking.
This unit has upscale finishes including white oak hardwood floors throughout.
It has a custom kitchen with modern cabinets and high end European appliances.
The master suite has a walk-in-closet and a spa-like bath with herringbone porcelain tile, heated floors and dual vanities.
This unit has a large covered terrace which faces the street and has lighting and a gas line.
It has the other features buyers look for including central air, washer/dryer in the unit and garage parking is included.
This unit was purchased in February 2018 when it was new construction for $725,000.
It came on the market 16 months later at $749,000 but has now been reduced to the 2018 purchase price of $725,000.
Has the Chicago housing market, outside of the hot West Loop/Fulton Market area, stalled out?
Jeff Lowe at Compass has the listing. See the pictures here.
Unit #3W: 3 bedrooms, 2 baths, no square footage listed
- Sold in February 2018 for $725,000
- Originally listed in June 2019 for $749,000
- Reduced
- Currently listed at $725,000
- Assessments of $225 a month (includes scavenger and snow removal)
- Taxes are “new”
- Central Air
- Washer/dryer in the unit
- Garage parking included
- Bedroom #1: 11×14
- Bedroom #2: 14×11
- Bedroom #3: 14×10
- Living room: 26×17
- Kitchen: 15×11
- Walk-in-closet: 7×5
- Terrace: 26×8
I think it is more of an indication that the seller overpaid for the not top floor, not a desirable street, odd terraced unit.
I think new construction has to be seen as having some similar characteristics to a new car, in that it sees its value drop the minute you drive it off the lot. Your fixtures, your finishes, will never have as high a value as the day you buy. What’s more, you paid a premium to get exactly what you want, and that same option is available to all of your potential buyers. Why would they pay the same premium for your dated choices, when they can have their own choices brand new for effectively the same price (and maybe under warranty)?
1n a time of slow fundamental appreciation, I would expect essentially anyone selling a new build one year after buying to take a small loss.
In a more sane time before FED induce asset bubbles there were rules of thumb like it takes a min. 5 years to live in a home to recoup closing costs and fees due to natural inflation. My favorite is the historical pricing method; a home should be worth 14 years’ worth of rent. It’s surprisingly accurate and can identify bubbles. But to answer the original question, yes, prices have stalled. There’s simply too much tax dread out there. It’s the first topic of discussion amongst neighbors at coffee shops, stores, sidewalks, everywhere now days.
“In a time of slow fundamental appreciation, I would expect essentially anyone selling a new build one year after buying to take a small loss.”
Exactly this.
“there were rules of thumb like it takes a min. 5 years to live in a home to recoup closing costs and fees due to natural inflation.”
Maybe I’m old, or maybe I came from a more fiscally scared/scarred background, but I had always thought it was 7 years.
Not a fan of the exterior but the interior seems attractive enough. Nice finishes, and a usable terrace. Even a dining area!
I do think this is a lot of money for something that’s basically above a storefront with the noisy Belmont buses going by 100 times daily. Maybe that’s the problem.
Also, it’s definitely walking distance to Southport Corridor, but I never thought of any address on Belmont really being “Southport Corridor.” Just the way I see it; others may disagree.
@Dan #2 – Agreed. I live pretty close to this and I tend to think of SoPoCo starting at Henderson (where the east side is more commercial) or Roscoe (where both sides are commercial). South of Henderson it’s residential with a couple corner places like Schoolyard and dry cleaners, with the stuff at Belmont (Schuba’s, etc) more associated with Belmont than SoPoCo.
Also, it’s way more than 100 Belmont buses in a day. It’s over 150 each way, over 300 total. 150 stopping a couple doors down (“ROUTE 77 BELMONT TO “) and another 150 stopping across the corner (“ROUTE 77 BELMONT TO “).
For someone that does like the location, there are 2 brand new buildings going up as competition (NW and SW corner of Belmont/Southport) where someone can pick their own finishes instead of yours as @The Dr mentions.
@Nonya
Live in area too. I think this is SoPoCo, you are basically two blocks away from the start of it. Re noise, yes you would hear buses if you had all your windows open all day, but I think the noise is over rated concern. On the new buildings I think the NW side is an apartment. The SW building 3 beds are selling for 800k+ and you are arguably on corner of two busy streets.
Overall not surprised on the price, I think the finishes are a little contemporary too so might not have as broad of appeal.
“Maybe I’m old, or maybe I came from a more fiscally scared/scarred background, but I had always thought it was 7 years.”
7 years used to be the average number of years Americans lived in a home, pre-housing bubble. Maybe that’s what you’re thinking of?
Your breakeven will depend on a lot of different factors. For instance, Chicago enacted that sellers fee a few years ago which now has to be factored in.
But having run this blog for 12 years now, it’s still amazing to me how many properties I see over and over again. Obviously, if you bought near the “low” in 2012 or 2013, you likely have some appreciation now. But there are plenty who bought just 2 or 3 years ago already selling.
You might make something if you upgrade the all important kitchen/baths. If you’ve done nothing, then good luck. It’s really difficult to make more than the 5 or 6% realtor fees in that short period of time. And then add on the other fees which are, what, about 1-2%?
And suddenly you need your property to appreciate 6% to 9% just to break even.
Long ago in the early 90’s I watched relatives in the outer burbs get stuck “upside down” in townhomes. They were a few years in and could not break even on a sale. At the time Lakeview and the condos/2 flats/SFH where I lived were going up significantly. It seemed to be 5-7% appreciation or more per year.
My take at that the time was that thier entire street was exactly the same. And two streets over they were building new versions of thier exact homes. In an apples to apples comparison I argued that who would prefer to buy the “used toilet” vs the “brand new toilet?”
There were a few outliers and exceptions such as the resale of a specific lot or location within the community that had added benefit or appeal. Or perhaps a timeline that could not be met by new construction schedules. Overall they were upside down for over a decade.
The developer continued to build the same exact layout in the immediate area. Over time, mainly due to inflation in construction costs, there became a point at which things were neutral. But again most individuals payed a slight premium to be in new construction. Those 10 year old finishes were getting worn and slightly outdated.
This will be the case in the Green Zone. The modern finishes no longer compare to those 20 year old oak floors and wood cabinets. The cost and hassle of replacement have to be calculated into the price.