As the Market Changes, Market Times Increase: 881 N. LaSalle
As we’ve chattered about before, it’s easy to misread this market as it slows. What might have sold quickly in 2005, doesn’t sell in 2008.
This condo at 881 N. LaSalle in River North is an example of that.
It has been on the market on and off for over 2.5 years with over $140k in price reductions. It was originally listed too high and has languished ever since. (Thanks to the Tipster who sent me information on the market time on this unit.)
Unit #C: 2 bedrooms, 2 baths, 1800 square feet, one parking space
- Sold in July 2003 for $460,000
- Originally listed in September 2005 for $670,000
- Reduced to $625,000 and then withdrawn in January 2006
- Re-listed in January 2006 at $625,000
- Reduced to $600,000 and then withdrawn in March 2006
- Re-listed in March 2006 for $599,000
- Reduced to $570,000 and then withdrawn in November 2006
- Re-listed in March 2007 at $570,000
- Reduced to $550,000 and then withdrawn in December 2007
- Re-listed in January 2008 at $550,000
- Currently listed at $529,000 includes the parking
- Assessments of $336 a month
- Sydney Skae at Coldwell Banker has the listing
Whew.
Original list price of $670,000 in 2005. Currently listed at $529,000 in 2008.
The eventual sale price of this unit will be of great interest to a couple of the neighbors who, like the unit #C owner, appear to be just about upside down on their mortgages. The following is from public records.
Unit #A sold in 1987 for an undisclosed sum. According to public records there currently appears to be two mortgages totaling $486,000 on the unit.
Unit #B sold 9/1/99 for $315,000. Many mortgage transactions later, there appears to be two loans totaling $544,985 still outstanding on the unit.
Unit #C sold 7/1/03 for $460,000 with a $368,000 mortgage. The unit was renovated prior to the sale. An additional $102,000 was borrowed in 11/03 for a total of $470,000.
Unit #D sold 6/16/00 for $456,000 with a $150,000 mortgage and no refinancing.
It appears that three units are about to ‘go negative.’ The fourth will soon be losing ‘real’ money.
I was thinking if they were selling for $450K, I’d probably be interested. But it doesn’t sound like the seller would be likely to do that, given the mortgage situation.
Then again, maybe in September…
I agree with Kenworthey and am beginning to wonder if the 2003 sales price is not just about what this should be worth. I just returned from Southern California and many homes and condos there are now priced back at what they would have sold for in 2003. Will we see the same thing in Chicago?
Thirty months on the market? Well at least we know the owner isn’t pinched to sell quickly!
The really timed it perfectly to lose the most money as quickly as possible, which is amazing. I need to follow around the flipper on this who bought it in September-05 and do the exact opposite of them in the next asset bubble.
“am beginning to wonder if the 2003 sales price is not just about what this should be worth”
2003 prices are about right in most places. It’s definitely ill-advised to offer anything more than ’03 prices right now. Could still go lower than that.
Part of the problem contributing to the lack of sales is that many of the sellers refuse to acknowledge they’ll take a loss on the property. Many probably simply can’t afford to (they can’t come to the table with cash at the closing because they don’t have any).
It will all come down to how badly some of them want to sell.
This one doesn’t seem too desperate- not yet anyway.
I don’t think it’s a “one price fits all” market – generalizing that what someone paid in ’03 is what properties are worth now is a little too simplistic. For instance, what if someone “overpaid” in ’03? Then you guys would say “you should offer no more than what the place sold for in ’01!”
Also, good luck trying to find entry level (i.e. 1 bedroom/desirable neighborhood) type properties at ’03 prices. There’s still demand for those units (with the exception of some of the crap conversion buildings where foreclosures are popping up). What I see having the most problems holding value are the mid-tier properties (generally $400-700K condos) that don’t have anything exceptional going for them. Unfortunately, there’s ALOT of that product that has been built in the past 5 or so years.
I do agree with Sabrina on the seller mentality though. I think too many sellers come onto the market with the mindset that real estate always appreciates, and are simply missing the mark on pricing.
IMO 2003 prices are still to high. I remember following prices back then and thinking they were over inflated even at that time. I think we may have to go all the way back to 2002 or 2001.
2003 was the year things really started to get out of hand because of the green lighting of the toxic mortgages but the rapidly dropping rates the previous years made the apprecaition in ’01 & ’02 well bove average too.
It seem to me that most of the IO ARM loans had 2-5 year IO periods before they adust. I average the IO period at three years. If you do that it means most of the 2005 loans are hitting this year and there were a ton of those oans made in 2006 which means 2009 probably wn’t look much better. I’m looking at 2010 as the bottom which would mean there should more and better deals to come.
“generalizing that what someone paid in ‘03 is what properties are worth now is a little too simplistic”
No, I actually think that, generally, ’03 prices are still too high, but that ’03 prices are a good guide for making an offer, if you simply must buy right now. Just b/c a sub-market hasn’t adjusted to reality yet doesn’t mean that the property is “worth” more.
I think 2003 or maybe 2002 prices are about right. Keep in mind that if you thought that say 2000 or 2001 was the last correct price, you’d have to allow for some modest price increase at historical rates for the subsequent 7 or 8 years.
I’d happily pay 2003 prices. But for SFH in neighborhoods we are looking in, sellers are still looking for 2006 prices or higher. We haven’t started making offers yet, but I’m doubtful we’d have much luck getting 2003 prices accepted, perhaps in an exceptional circumstance. Maybe this will change this year but I’m not sure how far it will go down. I’d think it would go down faster with the condo market.
Bob on March 6th, 2008 at 5:22 pm
Thirty months on the market? Well at least we know the owner isn’t pinched to sell quickly!
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Well, 10 years from now when the market goes back over the ’06 peak he will still be waiting.
I’d happily pay 2003 prices. But for SFH in neighborhoods we are looking in, sellers are still looking for 2006 prices or higher. We haven’t started making offers yet, but I’m doubtful we’d have much luck getting 2003 prices accepted,
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I agree with DZ. I am in the same boat. It seems the housing wave stared at the Lake and took it’s time moving westward. I suspect that the price reductions will follow the same path. The askings for the shoebox ranches on the NW side are outrageous.
Ridiculous mirrored cabinets below the sink. Not such a nice touch that you can see and admire yourself on the crapper.
Gotta agree with you Bob. I hate sheet mirrors. Maybe at one time large mirrors were a sign of wealth like large picture windows were, but now they are just tacky. How wants to live in a funhouse especially when using the bathroom. Strange.
I think 1997 prices are right! 2001-2002 was still benefiting from the dot-com bubble. Prices went up in 1998-2000 and stayed up in 2001-2002, then skyrocketed.
No point giving away your hard-earned money by making a reasonable deal – its now time to push for unreasonable deals given the glut. Revenge!