Are Prices Still Falling for the 2/2s in One Museum Park? 1211 S. Prairie in the South Loop
By popular request, this 2-bedroom re-sale in One Museum Park at 1211 S. Prairie in the South Loop has been on the market since August 2011.
In that time, it has been reduced $50,000.
The listing says it has had $70,000 worth of upgrades in the kitchen and baths.
The kitchen has cherry cabinets, stainless steel appliances and granite counter tops.
There are cherry floors with a split floor plan.
It actually has a 7×7 den in the 1547 square feet, which appears to be a good space for an office.
The unit has Soldier Field, lake, Grant Park and city views.
This property is now listed $69,100 under the 2008 purchase price (if you include the parking).
Is this now a deal?
Patrick Santry at Coldwell Banker has the listing. See the pictures here.
Unit #2302: 2 bedrooms, 2 baths, 1547 square feet
- Sold in May 2008 for $754,000 (I can’t tell if parking was included. It might have included 2 parking spots.)
- Originally listed in August 2011 for $699,000
- Reduced several times
- Currently listed at $649,900 (plus $35,000 for parking)
- Assessments of $692 a month (includes heat, a/c, pool, doorman, exercise room, clubhouse)
- Taxes of $10,442
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 15×13
- Bedroom #2: 11×11
- Den: 7×7
Despite being a real estate bull, I have to say that this unit and building is way over priced. Look around Chicago – similar 2/2s are going for 300-400k. In THIS location, I just can’t believe anyone paying more than 400k.
Maybe someone can explain to me the attraction of a unit like this, because I have never understood it. Lots of times people make the amenity argument of being in a high rise, but with $700/mo in assessments on a brand new building you are obviously paying for it. The finishes are what you would find in a $200K 2/2 in Lakeview, the location isn’t that great, parking isn’t included… so that leaves what exactly? The views?
The fact that someone paid $745K for this and is now trying to get over $600K is preposterous to me, because I cannot fathom why anyone would spend a penny over 300K for something like this.
Interesting. When I was reading the description for this unit, given the 2008 price, that it’s a 2/2, and located in the hard-hit South Loop, the first number that popped into my head was $400k. If that’s clio’s number, it must be the max!
That said, I do think the unit does appear to have high quality finishes along with some very nice views (unless the photos were shot from elsewhere). I’m going to say that it manages to go for between $450 to $500k (total, including parking) if sold within the next year. But it probably won’t, will become a short sale or REO, and sell years from now when who knows what the prices will be.
“The finishes are what you would find in a $200K 2/2 in Lakeview, the location isn’t that great, parking isn’t included… so that leaves what exactly? The views? ”
1. Where in LV is a $200k condo with those finishes? Seriously.
2. Some folks dig the locaiton. I agree with you, but where I live compares unfavorably with Mokea, so what do I know.
3. 1547 sf–even if that includes the balcony–in a newer building, with a view, ain’t anything under $300k yet, even with Menards return bin finishes.
4. A handful have sold in the past 12 months, all over $400 psf. So $600k+ is a market ask.
I’m a big fan of the South Loop and I think this price is crazy. $420 a square foot? This isn’t the Gold Coast. I’d say $375,000 to get it sold. My prediction is that this will languish on the market. If the seller is in goof financial shape, he/she will either stay put or rent it out. Otherwise, it will languish as a short sale and then will be foreclosed.
“I’d say $375,000 to get it sold.”
I’d say you are crazy.
I sort of think of this building as the SL version of the Trump. Both were huge improvements to their respective sites, and both are great additions to the skyline. I wouldn’t want to live in either location (the SL much less so), and thus couldn’t fathom paying the prices that condos fetch in these buildings, but I can see why some folks would.
I suspect the seller is very much in goof financial shape, jenny.
Great views. Finishes look above average, but not the kind of finishes I expect for a $750k 2/2 imho. The issue I have with this building is the neighboring buildings are all just average. Yeah, you get nicer finishes in this building but the MT buildings next door also have the same views and quite a bit cheaper (finishes are junk though). Just seems like most of the folks this building targets would want a little more exclusivity.
sub $400K is silly talk.
but given the fact this building still isn’t close to fully sold…well, i think the market doesn’t go much higher than $500-$550K here and i wouldn’t pay it.
but $375k with parking? that would be a steal.
You people are nuts this will easily sell for over 500k
Good chance of selling for over 600k, in fact.
“1. Where in LV is a $200k condo with those finishes? Seriously.”
Alright, lets just throw that exaggeration aside. I just want to know, or hear an opinion, of what is the attraction of a unit like this? What exactly makes it worth its asking price? Because nothing about it screams luxury to me, or exclusivity… it looks just like every other middling shoebox highrise apartment in my opinion. But maybe I’m missing something?
Silly banter. This condo will sell for over $550M. It’s a gorgeous building, nice finishes, and a great view. If condos like this begin selling for $375M, the $200M Lakeview condo mentioned above will be selling for $95M.
This unit will easily sell for 550+ with parking. Stop comparing new units with above average finishes and views with old units with a 2 story view in need of a gut job.
“What exactly makes it worth its asking price?”
I don’t think it is. But I do think it is worth 500k+ in today’s market.
” I just want to know, or hear an opinion, of what is the attraction of a unit like this?”
imo, it’s all about the view. I, also, don’t get the attraction to the place at $400psf, but it’s quite a bit cheaper than the reverse view from teh other side of the park, for those who value that enough:
http://www.redfin.com/IL/Chicago/340-E-Randolph-St-60601/unit-1903/home/26814911
“imo, it’s all about the view.”
Agreed. Beyond being visually pleasing, also helps make it feel like you’re a larger space. And watching a summer storm on the balcony is pretty awesome. Still, not the kind of place for me right now.
“But I do think it is worth 500k+ in today’s market.”
Yeah, but I don’t think you’d get this place w/parking at say $550K at the moment. If I were in the market for something like this, a “regular” offer within 5-10 percent of current list, feels too high.
Also, and this may v well just be me, but I’d have concerns about having a kid in a balcony unit at this time.
Why not be and the same tier 10 floors higher for the same price…
http://www.urbanrealestate.com/property/1211-S-Prairie-Unit-3202-CHICAGO-IL-60605-6IZJKXERKQPZC.html
550k w/ parking with get it done.
This is the premier building in the South Loop. Period.
It will command a higher price psf than any other building in the submarket. Views are protected forever, look at the skyline views(!), across from Grant Park, etc. Finishes are nice quality, building is new, clean, and a true world-class skyscraper, not some mediocre SL or WL tower/building.
First of all thank you so much Sabrina for featuring this. I was really dying to know what you all think.
I personally think the unit is overpriced as there are many buildings with nice lake views. Now there are very few units with both lake and sky line view such as:
http://www.redfin.com/IL/Chicago/1211-S-Prairie-Ave-60605/unit-3405/home/17560927
I say this because it is over a year I have looked all over down town nearby areas. Hence I don’t believe this one should sell over 600K.
Now I agree with Chuck’s “I’d say you are crazy” to those of you calling it for under 400K. In fact, there is no way this unit will sell south of 500K in today’s market. The unit is very nicely upgraded; has fantastic floor plan including a den, a huge masters and pretty decent assessments. The location is great IMHO. It is by parks, close to museums, Michigan Ave., and all without being in the middle of tourist action. Also the building has very nice amenities.
For people like Clio who claim there are many other units like this. Pray give me some examples. I want to see something this nice, this high up, with these views and same assessments.
What happens after you live in it for a week, and don’t care about looking out your window anymore? When I first moved to Chicago, we rented in a downtown highrise. View was cool for a bit, then I just became annoyed at the glare on my TV from all those damn windows when trying to watch football on Sundays…
most over priced listing I have ever seen on this site. I wouldn’t pay 300k to live there
“What happens after you live in it for a week, and don’t care about looking out your window anymore? ”
That sucks! I couldn’t imagine ever getting tired of my view.
“That sucks! I couldn’t imagine ever getting tired of my view.”
I guess I like the view on my TV better…haha.
Saying this is the premier building in the sloop is like saying a woman is the hottest girl in boot camp.
I wouldn’t say south of 500k in today’s market. On the other hand in 2015’s market..
I think things are going to get worse over there rather than better. Lots of near empty buildings that will probably go increasingly rental and not high end rental either. The neighborhood lost it’s clout too with the new mayor and new police chief, I already see less coppers around. I lived in the neighborhood 3 years and I’m getting out, I’m glad I rented rather than bought.
They may have to go to 599 + parking list to sell this but I bet that would do it fairly close to list price. They’ve been at the current price far too long. Unit 3102 closed last April at 675 with parking. Unit 3202 is listed at the same price as this one right now and has been listed at that price for a while so they need a price reduction also.
I knew this post had to be for miu!
I can’t believe all of the sub-$400k guesses here. HD must have rubbed off on y’all too much.
This is a good location, great views and nicely upgraded unit. I think it shows nicer than 3405, so over $600k seems reasonable compared to that unit. However, I wouldn’t be surprised if it had to fall slightly under that to sell.
Let me tell you about this building. It has one of the best protected views of any building in the city. This building is all about the views. It is one of the very few buildings that offers views of the lake, skyline and Grant Park at the same time in most of the units. True, it is in the south loop after all and not as glamorous as the north side of Grant Park and you are not as close to Millennium Park or Mag. Mile , but is not as expensive either. It has as good a views as 340 in the park and Legacy with significantly lower price per square foot than either of those two buildings. The common area finishes, lobby and amenities are way above average and assessments are very reasonable. Now some of the units in the building have average finishes but some like this one are somewhat better than that. I think it attracts people that are more interested in the views and want to get more for their money than buildings in the north side of the park. There is immediate accesses to Lake Shore drive and to I55 and the Kennedy without having to deal as much with the traffic. Is it perfect? No,,, but it definitely holds its own when compered to others.It is also very well run…
NYC, I understand your love for your TV but I have none in my in town. If you don’t care about the view, you can get very nice units as most competition is for units with views.
Aren’t you viewing Brazilian bottoms though at the beach? ; )
“That sucks! I couldn’t imagine ever getting tired of my view.”
“Saying this is the premier building in the sloop is like saying a woman is the hottest girl in boot camp.”
good stuff. it will be interesting to see how all the recent buildings in sloop age. it’s a cool area and not jam packed with tourists like most of mich ave. but so much was built so fast.
wonder if the assessments will jump once the building sells out.
MPCO, let us know what happens to your unit – and thanks for letting sabrina feature it on cribchatter!!
Clio…. This unit is not mine, I have been in the market for a 2 bdrm condo for a while and I have seen a lot of them. I happen to like the views in this building. Time will tell what happens to this unit.
“wonder if the assessments will jump once the building sells out.”
Why are you wondering that? The condo board takes over 3 years after the first sale OR when 75% of the units sell. It’s already been 3 years since the first sale so the condo board already has control.
“Aren’t you viewing Brazilian bottoms though at the beach? ; )”
My dear Miu, with the effort they put in at the gym to keep them that way. It would actually be taken as an insult not to admire. I admit as evidence, the lyrics… 🙂
“When she walks, she’s like a samba
That swings so cool and sways so gentle
That when she passes, each one she passes
goes “A-a-a-h” ”
Interesting bit of trivia about that song… it’s about a guy wishing he could hook up with a 16 yr old.
Sabrina, the % sold still matters. The board might have control, but the developer could still hold a big block of votes.
Has their been a lawsuit against the developer yet?
No?
Then the board is still under the developer’s control whether through board member alignment, etc. 🙂
cc gold
I live in another Enterprise-built building nearby in Museum Park and love living in the area. Those saying that a space of this quality with those views and in this particular building won’t go above $500k do not know the market or this area at all. I do think that the asking price is too high, but the example of the one that sold for $600,000 shows where the market most likely is for this unit.
“Sabrina, the % sold still matters. The board might have control, but the developer could still hold a big block of votes.”
I never said that wasn’t the case. Sure- the developer could still own enough units to basically control the board. The last number I saw for this building was 48 units still available from the developer but that was awhile ago.
Isn’t this the building that is charging renters a $1000 move-in fee and a $1000 move-out fee to prevent renters from moving in? (without actually being able to ban it altogether?) Seems to me the building might not be under the developers control if that’s the case.
I agree with MPCO. If you are in a market for a 2/2 in the down town area. This building is one of the best in terms of view/assessment/amenities. I have seen units in Legacy and Aqua and still MPO has a better value IMHO. The assessments and heating costs in Legacy is very high. I was utterly disappointed in Aqua when I saw the units and I am not sure I like to share amenities with folks staying at the hotel portion and then there is the rental part.
Clio, I am stil waiting for your comps.
I don’t know I beg to differ on this. The other unit has skyline views as well as lake views. I think there are way fewer units with skyline views as opposed to lake views. Sure the finishes are nicer in this one but nothing that cannot be done with 30K upgrades or so. I would say this one should sell for less.
” I do think that the asking price is too high, but the example of the one that sold for $600,000 shows where the market most likely is for this unit.”
To each his own. I have been living with a lake view for over four years, and I still haven’t grown tired of it; couldn’t imagine growing tired of it. It’s so peaceful. Such a wonderful contrast from the chaos of the city. From the summer sail boats to the majestic ice flows to those sunrises; I have a folder full of the most beautiful sunrise pictures, and I still find that I force myself to get up for yet another picture because somehow the next one is always more beautiful than the last. Lake Michigan puts on a pretty awesome show, IMHO.
“What happens after you live in it for a week, and don’t care about looking out your window anymore? When I first moved to Chicago, we rented in a downtown highrise. View was cool for a bit, then I just became annoyed at the glare on my TV from all those damn windows when trying to watch football on Sundays…”
VA:F [1.9.13_1145]
The board has been in charge for quite a while as far as I know. Wasn’t this over 90% sold a year ago?
I looked at pretty much all the higher floor 2/2s and most of the 3 bed plans in this building. A year ago everyone still seemed to be married to their 700k asking prices and practically all the realtors expressed their frustration with their clients when I touched on that. I think these units should be around 550k, ultimately the deal killer beyond the prices for me was that these aren’t corner units. The only 2/2 corner plans were even more expensive and didn’t have a balcony. I ended up paying less money elsewhere for a corner unit with a balcony, spent 70k on some remodeling and still came in far less than what OMP was asking. Less square footage, but being a corner unit it feels more spacious.
And yes, the standard finishes, while perfectly ok, are a bit insulting for the asking price. 700k and carpet in the bedrooms…
“Seems to me the building might not be under the developers control if that’s the case.”
Not too many landlords looking to purchase these units anyway. Besides, snob appeal appears to be the only consistently effective marketing strategy for finding knifecatchers.
“View was cool for a bit, then I just became annoyed at the glare on my TV from all those damn windows when trying to watch football on Sundays”
Your view must have sucked, as for TV buy an lcd with a matte screen and install some blinds.
“Why are you wondering that? The condo board takes over 3 years….”
I am wondering bc they seem low for a place this size with all the amenities. 2 pools, etc.
“I am wondering bc they seem low for a place this size with all the amenities. 2 pools, etc.”
268 units, so well over $2m per year in total assessments. Dunno if that’s “enough”, but it’s a lot.
“as for TV buy an lcd with a matte screen and install some blinds.”
Great! Thanks for the advice! Now I’m ready to over pay by $200K for the windows!
One thing not mentioned is the fate of its connected building – One Museum Park West – which is in foreclosure with 70+% empty. Hard to say what value is in both buildings let alone the neighborhood until this is resolved. Talk is that it might go rental but if they decide to auction the properties who knows what value these bring. One serious issue is financing – finding reasonable jumbo financing in a building that is not A-OK is tough right now.
many will argue that its the sloop, fine. but until you walk the lobby, hallways and check out the amenities here you will be taken back at the cost compared to 340 OTP and the other grant/millennium park condos with a view.
go to 1211’s neighbor and check out the columbian and its crazy parking unfinished feel and really blah workmanship. you will notice the quality and overall “niceness” and feeling of “openness”
that said would i personally buy in the sloop, nope not stable enough add to Stuart’s point the OMPW makes it worse.
Also i was under the assumption both OMP and OMPWest share amenities and with the 70% unsold in the west building that would be my red flag to run away
My realtor told me this is not the case.
As for effect of OMPWest, it would be very interesting to see what transpires. In fact the units in the west tower are even way bigger and have a lot fancier finishes. I wonder if auctioning will be an option for such an expensive unit. Not that many folks have that much cash in hand. I think it is more likely to go rental.
“Also i was under the assumption both OMP and OMPWest share amenities and with the 70% unsold in the west building that would be my red flag to run away”
“My realtor told me this is not the case.”
i did not see any outdoor pool for the west, and remember the listing for units there having an outdoor pool?
no this is all off two year old memory of stuff i can care less about now, so my facts about these things most likely are off.
my memory of the units and view are intact as something that awesome sticks.
will say that 6 n michigan had a higher quality kitchen and baths by far, but OMP’s elevators and walk from the ‘vators to the units were better. OMP’s natural light was insane as 6 north you still needed lights on in the day time.
never seen a unit in OMPWest but there is a reason its 70% vacant. if it goes rental i may rent a “in town” for dirt cheap 🙂
For all I know you might be right. You never know if the information they give you is correct or not : ) Also these days my brain is working at half capacity at best…lol
“never seen a unit in OMPWest but there is a reason its 70% vacant. if it goes rental i may rent a “in town” for dirt cheap”
I don’t think the bank has said what they’re going to do with it. But given that every other high rise has gone rental and that they are still building rental towers- that makes it a high probability that it will go rental.
More rentals. I can’t wait for the apartment bubble to burst, hopefully in time for my next lease renewal.
This site should be renamed “rentchatter” or “moronchatter” because everyone here seems to be a renter (or pro-renting) and nobody here has a clue as to what is really going on in the world of real estate.
Clio- it makes financial sense to rent an apartment/condo right now. If it didn’t- people would be buying. Single family homes are a different market. If you have a family- you have different priorities. And there are good SFH deals in the suburbs if you know you’re going to be there 10 years or more.
Otherwise- the city was overbuilt with condos. It is STILL trying to work through the inventory.
“Clio- it makes financial sense to rent an apartment/condo right now.”
It does? For who?
“If it didn’t- people would be buying”
Ha. Many people aren’t buying because they are scared. Just like they were when the stock market tanked in 08. Other people aren’t buying because they CAN’T. Many bought during the bubble and are either unable to sell, or they have been foreclosed on and can’t get credit. Also, the inventory is terrible now. There isn’t much to buy. So no, it is not nearly as simple as that.
Chuk:
It makes financial sense for all of us who won’t live in the property for 10 years, don’t want to tie down our cash in some worthless downpayment when it can be making money somewhere else, and for all of us able to rent for far less than it would cost to own (which is STILL the case in my north side neighborhood.)
And who is “scared”? I haven’t heard anyone say they’re scared of buying. They simply don’t have the downpayments to qualify anymore. Anyone doing FHA with 3.5% doesn’t seem “scared” to me. The woman in that FHA article buying with her fiance wasn’t “scared.” Not in the least!
But I agree that many bought during the bubble and are now stuck. Stuck for another decade or however long it will be. I know numerous people like this. They will eventually throw in the towel on their “west bucktown” 2/2 because their child will be of school age faster than they can imagine and they won’t want to stay there (and are massively underwater.) That’s why this market will take many more years to shake out. We aren’t even close to the end of the short sale/foreclosures. It’s like a slow bleed.
Renting is freedom right now for those who want to try out numerous high rise buildings and neighborhoods and simply enjoy the good life.
Clio darling you ain’t a renter. So what does it make you in your dichotomy of the posters on CC?
“This site should be renamed “rentchatter” or “moronchatter””
In my opinion, entireMuseum Park complex is very attractive place for buyers and still sells very well, due to the combination of several factors: 1st – the quality of construction stands out compared to most South loop buildings, (yes, we know that nothing is perfect, but still it looks and is better than most SL places!), finishes look nicer and MP buildings are really classy. Second – Museum Park attracts unique groups of buyers/owners, and cannot be compared with Bucktown or many North/West side neighborhoods because many buyers will never be interested to go further North of Chicago river, due to extra commute during rush hour… Very many doctors from University of Chicago hospitals and in UIC/Rush bought there, as it’s only 10 minutes away from both hospitals, and they have to be on call and be in the hospital within 15 minutes.. I know so many doctors, who bought and happily live in Museum Park… Lake Shore Drive traffic from Roosevelt to Oak street is so heavy from 4-6pm, and at summer park events; for these buyers this eliminates areas North of Roosevelt … Also, many MP owners work in Indiana, at BP refinery and at medical centers there, and for them buying anything North of Roosevelt would be adding another hour a day at least to their long commute. These buyers have good jobs, able to put 10 – 20% down, and view Museum Park as the best out of all their available options, as all their choices have to be in South Loop or further South.
Also, related to this professional segment, Museum Park is very diverse; many Asian, European and other non-native American buyers are very used to live in the city only, as close to downtown as possible, not in suburbs. We are accustomed to smaller size condos and do not expect more; this size is normal for many Eastern European and Asian buyers, many are city people and not really interested in large houses if only have one or 2 kids. And, all my MP friends love the convenience of walking to Symphony Orchestra, theaters, shopping.. I loved it so much when lived there
In my opinion, this group of buyers is very large, financially stable and helps to retain MP values really well.
i saw units in OMP West, and cannot say that they are larger than in OMP East – they are the same and smaller. They do not share amenities with OMP East. Their swimming pool is an indoor, very good size, and gym looks great. Even if it becomes apartment complex, who knows what may happen – it will be luxury apartments and will be very popular.
Renters market this year is very interesting and different from what we had even a couple years ago. Two-three year ago renters were mostly professionals, who were planning to stay short term and were not buying. Those who were not planning to move anywhere, were buying even if tehy did not have downpayments, it was so easy and expectations of growing values were all over the place… We had decent stable renters.. not anymore. In today’s market not so many companies move their employees, many young guys stay with parents, and pool of traditional renters is very small. On the other side, we are getting lots of “refugees” moving out of their short sold/foreclosed homes,many lost jobs, have high credit card balances, will have problems with paying rent but still need places to live. They may be often behind on rental payments, may stop paying rent – I think that apartment complexes may start facing lots of problems with rents pretty soon, and this will push apartment complexes to increase rents for everybody, building in it higher compensation for risk. I already noticed increases in rents in apartment complexes and they started adding new fees – for gym, for pool, for storage, to offset their losses, so being a renter will be very expensive… This also may turn some possible renters into buyers.
“Clio darling you ain’t a renter”
Actually, miu, he claims to be renting a room (with private bath!) now, but I’d still maintain both apply.
anon, I thought we had a deal….
“anon, I thought we had a deal….”
Doesnt close for three years …
good one – very funny.
SOLD!
err CONTRACT SALE!
err LEASE BACK
err
“It depends on what the meaning of the word ‘is’ is”
– excerpts from Bill Clinton’s grand jury testimony
“all my MP friends love the convenience of walking to Symphony Orchestra..”
I call BS. Symphony season is during the winter, no chance these dilettantes are allegedly walking there with the wind and cold.
If you’re not talking with your Asian, Eastern European, etc. neighbors you have nothing in common with, at least you can try and have community Mark Giangreco: http://www.chicagomag.com/Radar/Deal-Estate/January-2010/ABC-7-rsquos-Mark-Giangreco-Buys-in-Museum-Park/
As always you are wrong. I have walked to Symphony Orchestra in April and March. It is not always freezing cold in those months. Just because you always lie to support your rhetoric does not mean everyone else does too.
“I call BS. Symphony season is during the winter, no chance these dilettantes are allegedly walking there with the wind and cold.”
“It makes financial sense for all of us who won’t live in the property for 10 years”
I would argue it is closer to 5 years.
“don’t want to tie down our cash in some worthless downpayment when it can be making money somewhere else”
Oh yes, yields are so attractive now. I would argue that levered real estate returns will outperform your investments over the next 5 years.
“and for all of us able to rent for far less than it would cost to own (which is STILL the case in my north side neighborhood.)”
I’d like to see the math on that.
“And who is “scared”? I haven’t heard anyone say they’re scared of buying.”
Uhhh. Look on your own blog.
“They simply don’t have the downpayments to qualify anymore.”
Right. But doesn’t that run counter to your argument of “it makes financial sense to rent an apartment/condo right now. If it didn’t- people would be buying.” The problem isn’t that it doesn’t make financial sense, the problem is they can’t afford it.
“Oh yes, yields are so attractive now. I would argue that levered real estate returns will outperform your investments over the next 5 years.”
LOL yeah the trend is definitely your friend. Oh wait chucky boy let me guess you know when the trend is going to turn? Much like you did in 2006/2007 I’m sure.
“I call BS. Symphony season is during the winter, no chance these dilettantes are allegedly walking there with the wind and cold.”
Ok, I live in Museum Park & seldom go to the Symphony. However, my wife & I regularly walk that far and farther, even in winter. We put on hats, coats & gloves.
“They may be often behind on rental payments, may stop paying rent – I think that apartment complexes may start facing lots of problems with rents pretty soon, and this will push apartment complexes to increase rents for everybody, building in it higher compensation for risk.”
Was the rest this nonsensical?
“Oh yes, yields are so attractive now. I would argue that levered real estate returns will outperform your investments over the next 5 years.”
Yep. I can get anywhere from 4% to 10% in dividends (paying only 15% in taxes just like Mitt!) AND possible growth. It’s a great time to be a stock investor. Cheapest stock market in generations. Improving yields (if you’re picky.) You can double your money in 5 to 7 years.
Chuk- stocks have historically outperformed real estate by a WIDE margin. But you go and invest in your real estate and I’ll buy stocks. We’ll both be happy that way.
“This site should be renamed “rentchatter” or “moronchatter” because everyone here seems to be a renter (or pro-renting) and nobody here has a clue as to what is really going on in the world of real estate.”
i know exactly what going on in real estate, to sell my home i have to competitively price with the foreclosures around me, and i aint doing that and selling that low for no one or any reason.
do you have a clue whats going on outside your mommy’s basement?
I think that neighborhood is going to end up with lots of Section 8 and student housing. I see day to day signs of the neighborhood going down and it doesn’t appear as healthy as it did 3 years ago when I moved there.
“LOL yeah the trend is definitely your friend.”
Right, just like it was in 2007? Using your logic, only fools sold in 2007. Market was just going to go up up up! So, since the trend is down now, you believe it’s going to go down down down! I believe we recently had a discussion about “bear market geniuses”….
“Oh wait chucky boy let me guess you know when the trend is going to turn?”
Better than most people.
“Much like you did in 2006/2007 I’m sure.”
Correct.
“Yep. I can get anywhere from 4% to 10% in dividends (paying only 15% in taxes just like Mitt!) AND possible growth.”
And possible decline. You sound an awful lot like real estate investors in 2006…PS, what about 0% taxes on real estate gains on your primary residence?
“Cheapest stock market in generations.”
Ha. You might want to stop listening to Suze Orman and CNBC.
“You can double your money in 5 to 7 years.”
I’ve been hearing that for over a decade. Did you double your money in the last 5 to 7 years?
“Chuk- stocks have historically outperformed real estate by a WIDE margin. But you go and invest in your real estate and I’ll buy stocks. We’ll both be happy that way.”
Who said anything about history? I said for the next 5 years. Not the last 5, not the next 100. The next 5 years. Also, you are forgetting about the leveraged return in real estate. You know, the same thing that buried buyers 5 years ago.
Did you buy yet, chuk?
“Did you buy yet, chuk?”
Nope. My last deal fell apart the day before closing. Back to square one.
There’s plenty more out there in the SL, why aren’t you under contract again?
“There’s plenty more out there in the SL, why aren’t you under contract again?”
Actually, there really isn’t. At least not what I am looking for. I hate 1620 and 1720 S Mich. That’s 50%+ of your inventory right there. I have been trying to buying another place that keeps falling out of contract, but they keep on not accepting my offer (I am offering over ask). I either want a 1/1 with parking for 130-150kish and low assessments. Or I want a 2/2 with parking around 225k with low assessments. There was a 2/2 at 1600 S Indiana that I just looked at, but it had 3/4 walls in one of the bedrooms, so that was a deal breaker. So, I’m open to suggestions! The most important thing to me is the monthly costs (taxes+ assessments).
Also, being out of state, it is very hard for me to shop around. I don’t want to fly out just to look at some crappy 1/1. So I either have to rely on my friends in Chicago, or offer blindly. At this point, I’ve worn out most of my favors from friends. The last place I was under contract for was sight unseen. I flew out the day before to close, and saw it for the first time during my final walkthru.
chuk,
have you thought about renting? I am renting a 2/2 w/ a friend as my intown. You really can’t beat the rental prices. As a permanent place, I can see buying – but as an in-town, why not rent?
“have you thought about renting? I am renting a 2/2 w/ a friend as my intown. You really can’t beat the rental prices. As a permanent place, I can see buying – but as an in-town, why not rent?”
Renting is much more expensive. Buying a 1/1 would cost me around $800 in taxes/hoa/int/op cost but would have cost me $1200-1400 to rent. The 2/2 I was under contract for would have run me around $1400 but would have been $2000-2200 to rent. Plus, I believe buying real estate now will pay off in 5-7 years.
Clio, I thought renting was for losers?
And chuk, are you comparing the same places here on the rent vs. buy prices? Any 1 bedroom I know of that would rent for $1200-1400/mo would cost more to buy than you would be able to, if you want to keep total payments to $800/mo. My monthly expenses would go up at least $600 if I bought the place I now rent.
Pete – chuk would pay cash for his unit – so the 800 is taxes/assessments. No mortgage – that is the way to go!
clio never gets anything right.
“taxes/hoa/int/op cost”
“And chuk, are you comparing the same places here on the rent vs. buy prices?”
Yes.
Price: $130k
DP: $26k
Mort: $104k
Monthly:
HOA: $319
Taxes: $219
Interest: $260
Insurance: $21
Utils: $50
Op Cost on DP: $65
Tax savings: -$134
——————————-
Total: $800
You can’t rent a decent 1/1 with parking for $800 in the sloop.
You can’t buy one either, apparently.
“You can’t buy one either, apparently.”
It’s funny, buying is easier said than done. I don’t like to have multiple places under contract at once, so you have to put an offer in, and you are sometimes tied up for months. In the meantime, other properties come and go that would have worked out as well. The properties have all sold, just not to me.
1st property:
630 N Franklin – REO. Put in offer for 130k. Sold to someone else for 113k
2nd property
1601 S Michigan – Short sale. Went under contract. Waited 6 months while 1st and 2nd lien holder battled over a couple grand. 3rd property came up that I preferred, so I walked away from deal. They then approved short sale that day, but I had made up my mind.
3rd property:
1600 S Indiana. Short sale listed at $139k. Made full price offer. Waited 2 months for BPO to come back. Bank wanted 180k. I walked away. Sold for 164k.
4th property:
1717 S Prairie. 2br REO. Went under contract. 1st attempt at financing was denied the week we were scheduled to close due to pending litigation (even though this was known from day1). Went to another lender and told them the entire story. They said “no problem, as long as you put down 25%”. Did appraisals, inspections, etc. Flew out there for a closing scheduled the next day. Unit was winterized when they did appraisal, so they had to wait to turn water back on. Stayed in Chicago for 5 days waiting for it to happen. Get a call on day 6 from lender saying “sorry, building is on our do not lend list”. This is 2 months after starting the mortgage process with them.
5th property:
1717 S Prairie. 1 br REO that has been on the market for 6 months. I offered 5k over ask in cash. Has gone under contract FIVE times to other people. Keeps falling out due to large special assessment balance and pending litigation. I keep re-submitting offer. Can’t get them to accept my offer no matter what.
Chuk, that’s common these days. The market is a mess and its only getting worse. Its amazing how therecan be hundreds of properties for sale in any given market but so difficult to find one that will actually close.
“It’s funny, buying is easier said than done. I don’t like to have multiple places under contract at once, so you have to put an offer in, and you are sometimes tied up for months. In the meantime, other properties come and go that would have worked out as well. The properties have all sold, just not to me.”
chukdc, a (mostly) sincere question. Don’t you have to place some value on your time? I’d understand if this is your main residence, but this seems like an awful lot of work for basically an in town crash pad. Would you still have done it if you expected what you’ve had to go through so far? Do you expect less hassle going forward?
“Don’t you have to place some value on your time?”
Well, I haven’t personally spent a ton of time. I have friends in town who have done most of the physical looking for me. I do check the web every day for listings though.
“I’d understand if this is your main residence, but this seems like an awful lot of work for basically an in town crash pad.”
It is a bit more than that. I have a large client in Chicago, and if I can’t be out there on a more regular basis, I run the risk of losing that client.
“Would you still have done it if you expected what you’ve had to go through so far?”
Probably not. Or at least I would have done it differently. The problem is, everything is one day at a time. Like the short sale. Every week I was getting told “just another week or two”. If I was told it was 6 months on day 1, then I wouldn’t have done it. But when you have already waited two months what is another “two weeks”? And another. And another. etc. In Dec, I thought the 2/2 was a done deal. Mortgage was approved. Closing set. I even ordered a TV and bed that are now sitting at a friends house.
“Do you expect less hassle going forward?”
I am wiser now (I think) about the process. I am not bothering with any short sales. I am going to avoid the mortgage process in CHI. Instead of trying to get a mortgage in CHI, I will just take equity out of my primary home. I have a HELOC in place already.
“Don’t you have to place some value on your time?”
Also, to some degree, I actually enjoy it. I like reading this site, and looking at listings, even if they aren’t in my ballpark. I enjoy studying the financial aspect of it. Price declines from x year, relative valuations, etc. Not entirely sure why, but in some ways I see this as a “hobby”. I have a feeling that even after I buy something, I will still read this site and check redfin on a regular basis.
“It is a bit more than that. I have a large client in Chicago, and if I can’t be out there on a more regular basis, I run the risk of losing that client.”
Didn’t mean you shouldn’t have a place to stay, just that it’s not as important since you’re coming in mostly for work, and you’re not getting as nice of a place, as you would for your primary residence. So wouldn’t spend so much effort for it. E.g., if I’m picking a hotel for work trip I don’t really care but I’d think a lot more about a hotel for vacation.
“Also, to some degree, I actually enjoy it. I like reading this site, and looking at listings, even if they aren’t in my ballpark. I enjoy studying the financial aspect of it. Price declines from x year, relative valuations, etc. Not entirely sure why, but in some ways I see this as a “hobby”.”
Understand this and agree personally. It’s more the paperwork, waiting to hear back, having to stay in town for 5 days, having to deal with getting a friend to hold my bed/tv, and not having a permanent place to stay while I’m waiting (if true for you), that would be a pain.
“just that it’s not as important since you’re coming in mostly for work, and you’re not getting as nice of a place, as you would for your primary residence. So wouldn’t spend so much effort for it.”
I tend to over analyze everything. I have to “maximize” every decision. If I am buying a $1000 TV or a $150k condo, I mentally must try to get the best “deal”. Not just best price, but I try to optimize all variables. It is a bit of an OCD thing.
“having to stay in town for 5 days, having to deal with getting a friend to hold my bed/tv, and not having a permanent place to stay while I’m waiting (if true for you), that would be a pain.”
It is. I didn’t really expect that to happen. That was unpleasant. But I can’t just bring myself to pay $180k for a place I know I can get for $150k just to get the deal done. Or I can’t just buy a crappy 1/1 at 1620 S mich for 99k, when I know I can get a better value elsewhere (even if its more money).
The problem for me is, knowledge becomes somewhat crippling (otherwise known as ignorance is bliss). When I bought my house, I was pretty clueless. Looked at a few places, bought one. I didn’t look up blogs on housing. I didn’t obsess over the MLS data every day. Didn’t worry much about the comps. Found a place I liked and I bought it. If I knew then, what I know now, I’d still be looking for the “perfect” place 10 years later.
channeling anon(tfo): I have to “optimize” every decision.
“I have to “maximize” every decision.”
HD – read the last paragraph in Chuk’s last post over and over again. You really need to understand it and embrace it……
@chuck, This might be out of your price range but it is a nice unit:
http://www.redfin.com/IL/Chicago/100-E-14th-St-60605/unit-1508/home/16891873
Miu,
Absolute price is actually not a huge deal for me. Let’s pretend for a minute that I am right and prices will be flat or higher in 5-7 years. If I buy a place for 130k and its worth 130k in 5 years, it’s the same to me as buying a 200k place that is worth 200k in 5 years. $0 change. The only difference is carrying costs. And the 200k place may have lower assessments than the 130k place, and actually end up costing less over that period of time. I am of the belief that whatever I buy now, will be worth about the same in 5 years. So my #1 concern is my carrying costs. What I don’t want to do is pay 150k now for a place that is really only worth 130k. But I’d be happy to pay 200k for a place that’s worth 225k.
Basically, I am looking for a deal.
Then I think 1508 is a much better value compared to other units you mentioned. The only thing is that you cannot rent this out according to the comments in the listing.
Here is a good example of what I mean:
This unit sold for 195k in July:
1717 S PRAIRIE Ave #2206
Sold on 07/22/2011
$195,000
MLS#: 07781175
I happen to know that they also had to pay around 27k in special assessment. Bringing their total cost to 222K
This is the unit I was under contract for that fell through at the last minute:
http://www.redfin.com/IL/Chicago/1717-S-Prairie-Ave-60616/unit-2006/home/12644749
I was under contract for 165k, and there was 23k remaining on the special. I got the seller to kick in 6k of that, leaving a remaining amount of 17k for me. That was a total of 182k then all in. 40k less than an identical unit that sold 6 months ago. Now, I could have used my HELOC to pay cash for this deal, but the fact is, the building is a bit sketchy to say the least, and I was a little too confused and chicken to do it at the time. It is now under contract to someone else. However, I think that was a good deal.
chuk: some call it analysis by paralysis. I call it being able to upgrade one’s lifestyle (or the abode part) to one previously unattainable by playing one’s hand right.
Or paralysis by analysis..whatever
“Then I think 1508 is a much better value compared to other units you mentioned. ”
Maybe. Just ran the numbers on that and it would run me around $1050 a month at $200k. Certainly well below rental, but it’s easy to just go x+1 and end up with something much more than what I need (like this). I first looked at places without parking that would run around $600 (630 N Franklin, 1601 S Mich). Then I looked at nicer places with parking for around $850 a month (1600 S Ind.). It’s easy to just say “oh, it’s only $200 more”. The next thing you know, I am paying almost double what I set out to spend initially.
Basically, I am looking for a hotel alternative. One week in a hotel will run me around 500-1000 depending on where/when I stay. I’d like to have a place where I have a kitchen and can leave my clothes, and just hop on the plane with my iPad to get there.
“it’s the same to me as buying a 200k place that is worth 200k in 5 years. $0 change. The only difference is carrying costs.”
Don’t you also have higher opp cost of money or higher interest payments (versus potentially higher gains in 5-7 years under your assumptions)?
“Don’t you also have higher opp cost of money or higher interest payments (versus potentially higher gains in 5-7 years under your assumptions)?”
Yes, I include both of those (opp cost/in) in carrying costs. And with interest rates so low (and deductible for me), A place that is 50k more, but has $90 less in assessments has the same carrying costs (and vice versa). 50k costs me around $90 per month (3% interest, tax deductible). So to me, I don’t really care much about the “mix” of my carrying costs. Just the final number. And yes, the real formula is far more complex. What if I’m wrong and prices go down? 200k place will probably lose more. Have to assign a $ amount to that risk, etc etc etc. I’m trying to keep this decision as simple as possible, and go on the assumption that I am right about prices being flat or up.
OT: Sabrina,
Any chance you could make a weekly “other chatter” or “off topic” post as a placeholder for conversations like this (and many others) that don’t relate to the subject property?
“Not just best price, but I try to optimize all variables. It is a bit of an OCD thing.”
Throw in a bit of the feeling that if you do not, you are allowing yourself to be taken advantage of… Totally understand. I have literally walked 3 blocks and wasted 30 minutes because a package of cookies was 30 cents too high. Who cares that I could have made 4 dollars and 12 and a half cents in that half hour. I will not overpay for cookies when I know they should not be THAT price!
“What if I’m wrong and prices go down? 200k place will probably lose more. Have to assign a $ amount to that risk, etc etc etc.”
Would just be offset by the assigning of an amount, in case it went up. Worth recognizing the possibility of the loss to determine if the risk is something you can handle, but assigning a value to it would be an unnecessary endeavor.
although on second read.. i might have interpreted what you were saying, incorrectly.
I needed a whole bunch of twist ties once. Maybe 700. I could have bought 1,000 for $10 from one seller, or 5,000 for $12 from another. Even though I didn’t need more than 1,000, I still bought the 5,000. I couldn’t stand the though of “overpaying” even though I wasted $2.
“although on second read.. i might have interpreted what you were saying, incorrectly.”
No, I think you are correct. I’m not sure I worded it correctly.
was in the sloop for dinner last night, man is it dead on monday’s.
so much potential yet it looks like its going backwards?
To those of you who called it for under $400K: sold for $630K – only $20K below the asking price.