Bank Owned Lakeview 2-Bedroom Reduced Another $35K in Last 6 Weeks: 3014 N. Sheffield
We last chattered about this newer construction bank owned 2-bedroom unit at 3014 N. Sheffield in Lakeview in October 2010.
In the last 6 weeks, it has been reduced another $35,700.
It is now listed $168,400 under the 2006 purchase price.
From the listing pictures, the kitchen and baths appear to be intact.
It has the new construction kitchen with the granite counter tops, stainless steel appliances and 42 inch cabinets.
When we last chattered about this unit, the foreclosure moratorium had just been enacted. But that has now been lifted.
Will this unit ultimately sell for under $300,000?
Jason Shapiro at Rising Realty LLC has the listing. See the pictures here.
Unit #2S: 2 bedrooms, 2 baths, no square footage listed, 1 car parking
- Sold in October 2006 for $499,000
- Lis pendens foreclosure in July 2009
- Bank owned by Bank of America in August 2010
- Was listed in October 2010 for $366,300
- Reduced
- Currently listed for $330,600
- Assessments of $140 a month
- Taxes of $7110
- Central Air
- Doesn’t list washer/dryer but there would be a hook-up in the unit
Wow, thats dropping quickly… Can only imagine what’s going to happen in 2011 if speculation around Chicagos heavy concentration of ‘shadow inventory’ is accurate and those defaulted/foreclosed properties start to come to market…
Plus this seems to be suffering the current 2br north side curse.
Wow, is exactly my reaction too.
Although I’m not particularly enamored with the unit, something like this listing at $330,000 says a lot about where we’re at. 2/2, central A/C, parking, W/D, in a great area. This was unheard of when I started looking a few years ago.
Close enough to Wellington to hear those Masonic ambulances. What a disaster and I hope the person who bought for 500k back in 2006 never owns real estate again.
Wellington has signs posted telling emergency vehicles to turn their sirens off. I think most turn them off once they get off Halsted. Don’t think it would be too much of a problem.
We can only dream of the day when most 2/2’s along the southport corridor sell for less than $299,000.
But wait, dreams do come true, if we only wish hard enough…
You’re two blocks from the hospital–yeah I’d suspect its quite the problem. But back in 2006 people weren’t concerned with such pragmatic things such as this they were more interested in resale value. Now that stupid money is going to the wayside things like proximity to a high traffic hospital route do matter. It was dumb dumb dumb to buy a McCrapBox here for 500k.
“in a great area”
maybe to some, I would not want to live here.
If the ambulances didn’t get you, perhaps you might have noticed the el directly across the road?
Ah, forgot about the el right there. The red line that comes plowing through here without a stop would be much more a problem than any ambulance noise.
If you look closely at the 3rd picture they actually captured the train outside the window. Great area indeed…
Enough with the noise, I’d like to talk about the pricing of the property.
Even with all it’s flaws, this place sold for $499k back in 2006. And although that may have been a little high, newer 2/2’s in this area were going for a minimum of $450k during bubble times. This is now listing at 34% off. Talk about cyber Monday.
I’d like to know if others think this is indicative of where we’re heading for this type of unit? I think so because a) a ton of them were built, and b) they’re just not a viable long term residence for the type of people that bought them. At 26, a 2/2 is fine for a young couple. At 31 with 1-2 kids, a 2/2 is unlivable for those same people. They may be holding out for now, but the time is coming when they will have to sell. And when they do they will be hit with a one-two punch of many less qualified buyers only willing to offer much less than what they paid.
priced right (very near rental parity especially if you manage to get the homeowners exemption to lower those ridiculous taxes.
I have a friend who lives across the hall from one of these units and have been inside before. they aren’t very big probably 1100sqft and the stairs up to the bedroom in the back is kind of strange, but overall they are nice places in a good location
Those taxes are scary.
the El isn’t bad here either, its a whole block from the units and if they ever build something across the street (which they will someday) it will totally be a non issue. The bedrooms are in the back so you might get slight noise in the living room but thats about it, you probably wouldn’t even notice it with the TV on
Rental parity will not be the bottom for these cookie-cutter 2/2 condos. They will also have to provide a return to investors. They were built in large numbers to meet a demand that no longer exists without easy credit and a belief that “RE always goes up.” Demand destruction will outlast market tastes for pergraniteel. Then what happens to the “wait to sellers”?
“They will also have to provide a return to investors”
just like bonds right?
“I hope the person who bought for 500k back in 2006 never owns real estate again”
Some nice holiday spirit from Eboneezer Bob! After this transaction I suspect that it will be a long time until they are able to own real estate again but there is no reason to be a hater. Some people learn from their mistakes. Hopefully they have received an education on this place.
“I’d like to know if others think this is indicative of where we’re heading for this type of unit? ”
I think we’re actually heading quite a bit lower for the exact reasons you later mention…
“I think so because a) a ton of them were built, and b) they’re just not a viable long term residence for the type of people that bought them. At 26, a 2/2 is fine for a young couple. At 31 with 1-2 kids, a 2/2 is unlivable for those same people. ”
Don’t forget that at 26 these people frequently used funny mortgages to buy these places with 5% down (on a 500k place no way most Chads had 100k is my guess). Those mortgages are gone now unless the building is FHA qualified. If its not FHA qualified valuations in the building are going to drop precipitously.
At the end of the day the only reason this makes sense at the 330k pricepoint was the same reason one could use to justify the 500k pricepoint back in 2006: future appreciation. And I’m taking that out of the picture. Places like this are a financial minefield for the prospective new owners.
“just like bonds right?”
Apples and oranges.
But it will be just like investment RE at any time but during a bubble mania.
my point was, bonds offer zero real return and are as popular as ever right now…
I recently read a theory by some nobody on the internet..which usually means nothing, but in this case was actually quite interesting, and he says (and I paraphrase) (and I may not do the best job at this due to time constraints):
He says that money in and of itself has no value in a fiat system because it can be infinitely created and destroyed i.e. QE2 or running the printing presses. And since there is so much money currently floating around out there due to its infinite nature, money chases yield. It chases bond yields, rent yields, mortgage interest yields, any type of yield. As the money flows to the assets with the highest yields, the value of the asset increases and the yield decreases. The example he gives is real estate: landlords used to demand yield to make it worth their while to be a landlord but the real estate bubble drove prices so high that the yield went to zero; and in fact many investors lost money every month. Same with Sonies bond examples, yields are damn near zero as asset prices are high.
Furthermore, the entire concept of yield and interest rates is passe; think of the yield curve: 1 day, 3 month, 6 month, and so on up to 30 years.
Who actually pays yield on something for 30 years? The average 30 year mortgage is held for 7 year; 30 bonds are held for no more than a few months; even the federal government refinances its 30 year bonds when interest rates are low. and so on and so on. So think about it – if you are paying interest on money, which is something that can be infinitely created at will and has no value in and of it self; He asks “What is the right interest rate to be paid on a risk free 25 year security that changes hands once every couple of months?”
Regardless, I’m probably not doing his theory justice (And he may not even have the kinks worked out) but he says that the end game in our fiat system we will eventually have zero interest rates, near zero yields all the time, and the only way to make money is to participate in asset bubbles. We’ve already had a couple bubbles in the last few years and we may be in a few more more as we speak.
Now I”m not saying I believe in this theory and it’s quite far outside the box so to speak but it sure explains a lot of what’s going on out there.
“my point was, bonds offer zero real return and are as popular as ever right now…”
Like I said, apples and oranges. Not just between asset classes, but between asset bubble timelines, too. “Been there and done that,” says the RE market.
I wonder when we’re going to see more auctions from either REO or just regular sellers. At some point they may just want the certainty of getting out – and who knows where the bottom is on a p/sf…
Homedelete, what you just related is what everyone learns in B-school… its just that most investors think they are going to do better than the market than the average. The only way to perform better than the market is to take advantage of arbitrage opportunities – recognizing the current value of a purchase opportunity at less than the discounted value of all future cashflows, or recognizing the current value of an opportunity to seel at higher than the discounted value of all future cashflows.
Most often, you’re going to break even (taking into account changes in interest rates over the hold period – which changes the cost to you of the capital that is tied up in the asset and could be deployed in other asset classes and generating a returning).
As far as pricing goes, I bet someone picks this up pretty quickly near ask… especially if they can lower the taxes.
“What is the right interest rate to be paid on a risk free 25 year security that changes hands once every couple of months?” ”
You could use bond ladders for this and actually arrive at an answer its not too hard.
His theory about the global pool of money is well documented. NPR has a good take on it:
Global Pool of Money Got Too Hungry
http://www.npr.org/templates/story/story.php?storyId=90327686
The problem is our Fed is a political apparatus and control’s the money supply. When you have someone doing this (as opposed to say a stated 2% increase/year or something similar to population growth) we’re going to get asset bubbles.
so HD if that is what you really believe it looks like a really good time to get out of bonds/cd’s and put that money to work in some high quality high yielding stocks since that will be the next asset bubble
I don’t know if I believe that but it was an interesting concept. Apparently its taught in b-school. I went to law school so im more familiar with that
Jps: the author was specifically speaking about high speed trading and how it tempers the ability to arbitrage an asset class because it can happen by a computer in an instant as opposed to pouring over charts all night or whatever. And as the opportunites to arbitrage grow less and less, the world of finance will be participating in asst bubbles. No yields, no rent seekingclasses, just asset bubbles. I sometimes find academic discussions interesting.
And today I read silver is up 60pc. Silver doesn’t even yield. Its pure speculation in an asset bubble and keep dancing while there is still liquidity. Of course it is obvoius to some but the larger picture is starting to make more wsense.
HD, you’re riffing on some interesting subjects. Post a link to the original source you’re now trying to paraphrase so that I can read it too.
I’d quibble with a few things you said, if I understand them correctly.
Who actually pays yield on something for 30 years? The average 30 year mortgage is held for 7 year; 30 bonds are held for no more than a few months; even the federal government refinances its 30 year bonds when interest rates are low. and so on and so on.
Thirty-year mortgages do indeed have a weighted-average maturity of 7 years. So, MBS traders do indeed often hedge their duration risk with 7-year Treasuries.
The Treasury’s 30-year bonds are non-callable. So, unlike homeowners with a mortgage who can prepay their mortgage when borrowing cost decrease (because homeowners are long an embedded bond call-option), and thus turn a “30-year mortgage loan” into a financial instrument that behaves like a 7-year Treasury, the Treasury cannot call (refund) its already-issued, high-cost debt when rates decline, though (like any other bond-issuer) it can certainly buy its debt in the secondary market (at a premium) if it wishes.
Corporations & governments have issued bonds with terms longer than 30 years, though I can’t think of any offhand. IIRC there have been railroad bonds with 40 & 50 year terms.
the author was specifically speaking about high speed trading and how it tempers the ability to arbitrage an asset class because it can happen by a computer in an instant as opposed to pouring over charts all night or whatever. And as the opportunites to arbitrage grow less and less, the world of finance will be participating in asst bubbles. No yields, no rent seekingclasses, just asset bubbles.
HFT is a term used to denote a wide-spectrum of trading strategies. The HFT I’m familiar with is almost entirely predicated upon split-second arbitrage opportunities. So, I don’t think HFT creates asset bubbles, I think it punctures them.
But maybe I’m not addressing your line of thought . . . ?
I found a link to his site after he posted the comment above on another website I occasionally read.
His site is a little offbeat and it often veers off into a philosophy or cultural anthropology and somehow relates it all to modern finance…
Regardless, here’s a link:
http://liminalhack.wordpress.com/2010/11/05/reality-bites/
I’m not endorsing the site but it is an interesting read compared to say Krugman or even Mish or calculated risk. As a lawyer I have to listen to all the arguments in order to fashion my own opinion.
The worst lawyers I’ve ever met choose one position at the beginning of the case and stick with it all the way to the bitter end without listening to all the evidence and they usually get screwed…
But Sonies above tried to say that this is what I believe….I don’t believe this, this is not my opinion, I’m merely posting n interesting link to this this guy’s blog because I found it to be interesting and ‘outside the box’ so to speak.
“so HD if that is what you really believe …”
To grasp how insane the bond market is… Mexico just issued 1 billion (us dollars of ) 100 year bonds @ 6 percent….
MEXICO FFS! you know… the country that 20 years ago had to knock off 3 zeros of its currency?
http://online.wsj.com/article/SB10001424052748703298504575534621044294114.html
“Only two sovereign century bonds have ever been brought to market before Mexico. In January 1996, China sold $100 million in century bonds while the central bank of the Philippines followed in June 1997 with its own $100 million sale, according to Dealogic. “
yeah sorry HD I didn’t mean to say that was your opinion, I could have worded it a bit differently, I was saying that based upon my deductions from that, either real estate or stocks would be the place to park your money, and one seems much more likely to appreciate (or risk adjusted yield) at the moment than the other
HD, LH’s post on sublimation might have been what you were trying to channel:
http://liminalhack.wordpress.com/2010/11/22/sublimation/
I couldn’t follow his logic; he writes like Slavoj Zizek — and then he quotes Zizek (sigh) in his post on psychoanalysis. I’m out on that stuff. I’d rather hear what you think about these two stories:
1) The price paid for defaulted loans has actually fallen from 8-13% of face value in 08 to only 4-8 cents on the dollar in 2009! And the courts are supposedly swamped.
http://blogs.wsj.com/law/2010/11/29/boom-in-collection-suits-threatening-to-clog-some-courts/
2) The average length of time between default and foreclosure has increased to 492 days!
http://blogs.wsj.com/economics/2010/11/27/number-of-the-week-492-days-from-default-to-foreclosure/
Is that 492 days really “free” or does the IRS hit such house-squatters with a tax on the imputed (unpaid) housing value they received?
Thanx for the Econ for Dummies round-table, folks, But now back to topic:
Suppose a family of 3 or 4 did buy + move in here. (It can be done;you just have to be very vigilant about “de-cluttering yor life.”) Is this a good choice in terms of schools, playgrounds and other kid-friendly aspects?
“Is this a good choice in terms of schools, playgrounds and other kid-friendly aspects?”
Its a good place for 20-somethings to hook up at the various bars around here. Its 2 blocks away from a heavily trafficked 4am bar and liquor store, to boot.
Whether having access to drunk singles, dollar beers and liquor until 4am is congruent with your definition of family life I suppose depends entirely on the parent.
I think a family of 3 could work here (couple and small child). I have a similar sized 2/2 in Old Town and have always thought that it would work for a “starter home” for a small family.
I like the area this unit is in but I’m also a 20 something single dude. Overall, the quality of the real estate and the low assessments make this a pretty good buy in this area… and if you can get the taxes knocked down to $4500 or so, I’d say its a pretty reasonable asking price.
Well, Bob, my mom’s parents lived on a busy “urban” street back in the 20’s with several taverns (some of which were rumored to have “ladies living upstairs”) and my mom, aunt & uncles all managed to grow up without becoming alcoholics or other miscreants, as far as I know.
Whenever I drive into that neighborhood (to go to either the Illinois Masonic medical complex or a nearby unisex hair salon; name supplied on request), I see LOTS of kids heading to the local public and Catholic schools and there are also some day care centers around there, so SOME parents apparently think it’s a good “fit.”
Meant to say that in the 20’s there were speakeasies nearby. By the time my mom’s generation became teenagers these establishments became legal.
#”2) The average length of time between default and foreclosure has increased to 492 days!
http://blogs.wsj.com/economics/2010/11/27/number-of-the-week-492-days-from-default-to-foreclosure/
Is that 492 days really “free” or does the IRS hit such house-squatters with a tax on the imputed (unpaid) housing value they received?”
This is a very good question!
And, what if it’s a 2nd go-around on the foreclosure process? I know of a foreclosure that was simply dismissed (either due to a “loan mod in progress” or maybe worry about robo-signing??) that will need to begin all over again. If it takes another year + to get through another foreclosure proceeding (that hasn’t even been filed yet), this will mean no payments to the bank since early 2009! This family could live in the house another year. They’re still juggling somehow to keep the utilities on, which I suppose at least keeps the house from being destroyed.
Wojo,
1) I’ve heard stories of debt buyers purchasing second mortgages at 1 cents on the dollar and declining to make another purchase because the ROI was so crappy. For every case you file there are significant costs that need to be recouped, like filing fees in the hundreds of dollars per case, plus sheriff’s service fees of $60.00 per defendant, plus citation fees of $45 (iirc); only to have the defendant file BK on you or assert their $4,000 wildcard exemption on frozen assets. I know a handful of collection attorneys in cook county (it’s a small world with only a handful of players) and they say volume is obviously way up but recovery per file is down. Many collection attorneys think that the only people making any money are the debt brokers who buy it for 1 cent on the dollar in bulk and resell it by zip, demographic, etc, to the final purchasers for 5 cents on the dollar. I don’t do any collections personally but I’m familiar with how the process works.
2) The 492 days is totally free and that’s pretty typical. I’ve got foreclosure defenses and prosecution files on my desk and that’s about right. As far as the defense files, we have a little competition around here to see who can keep a non-paying defendant in the house the longest. The record is five years before the Sheriff showed up. LIterally showed up and threw him off the back deck but that’s a story for another time. My personal record is a little over three years and it’s on going. I got one now, the last payment was November 2007, and OAS is set for December, so he’ll get 60 days from the end of december to move out. That’s my record right now. A lot of people are just getting loan mods and then dismissals before I can continue the case that long. I mean we’re not presenting BS arguments or anything, just simple stuff…ask for discovery; brief all motions; file affirmative defenses, ask for more time. Real basic stuff here, I don’t have the time or patience to get into the robosigner arguments or take deps. I tell my guys when they walk in the door they get a year and a half and anything longer is a gift.
“Is that 492 days really “free” or does the IRS hit such house-squatters with a tax on the imputed (unpaid) housing value they received?”
I don’t think so. If you rent from someone and pay below-market rent (say for example, $500, or $100 or even $0 per month), does the IRS tax you on the difference between what you pay and “market-competitive” rent? I think not. They will, however, forgo the home mortgage interest tax deduction, but that’s a small price to pay for living rent-free for 16+ months.
I love reading the totally random and made up type comments from people on this site. I live 2 blocks from this unit. Some points:
1) The hospital really is not an issue for noise. Rarely use the sirens and never at night. Quit assuming hospital = noise. 2) The el is REALLY LOUD right here because there are no buildings between it and the street. 3) Nice little park (Weissman) was just completely redone this year two blocks away (Oakdale and Mildred). Nice for families. Also not far from the lake, library, etc. 4) I suspect the bigger problem from noise isn’t Big City Tap at Belmont but Mad River and Kirkwoods on Sheffield (block away). Lots and lots of drunk folks wandering the streets from those places.
Overall, this is an amazing location/neighborhood.
“so SOME parents apparently think it’s a good “fit.””
Not to say that I’d ever become a doting parent but I think there’s significant overlap between those parents who see the area as a good “fit” and those parents stuck in their condo because they were stupid enough to pay egregiously too much for it during the boom..
Just sayin’.
I love the hood, but if I was going to try to raise a family it would not be in this part of Lakeview. Plenty of other parts of LP & LV that are far more family friendly.
“Lots and lots of drunk folks wandering the streets from those places”
This could be a good thing….just think of it as increased opportunities for dating.
LJ – Right, why would anyone associate hospitals with “noise?”
I mean, there’s a REASON why you see “Hospital Zone” signs in those areas, right? And it doesn’t mean “Honk like a goose.”
It’s easy to associate a hospital with noise. Anyone who works downtown near Northwestern can talk about the amount of ambulance sirens they hear on a daily basis. Even Swedish Memorial is noisy with sirens. Living near a hospital, even a couple of blocks away, is going to provide the residents on the routes leading in with noise.
Sirens are about safety. Emergency vehicles drive fast to get to their destination. A silent ambulance is putting themselves, their passengers and the general public at risk. So I’d say it’s a safe bet that living near a hospital is going to be a bit on the noisy side.
Interesting reply HD.
1) I should’ve known that the bulk-debt traders are making more than the debt-sellers & -buyers. (How are the lawyers doing?) But I was surprised to learn the prices paid for defaulted debts had fallen so dramatically YoY (no doubt, for the reasons you cited), which I take as yet another bad sign.
2) As per the 492 days between default & foreclosure, that stat by itself isn’t very edifying. I want to know more about the dollar value, quantity, and geographical distribution of Chicago-area foreclosures, including the shadow inventory.
As per your experience, do foreclosures of higher-valued homes inside the greenzone move thru a bank faster than those homes located outside the gz? Obviously, 492 days between default & foreclosure takes on different significance if the home in question is located in, say, Oak Brook versus (your example) Englewood.
(I know of householders in Maywood who haven’t paid their mortgage in almost three years. Their lender, BofA, hasn’t initiated foreclosure precedings presumably because the collateral’s value would fall even faster without occupants.)
“(I know of householders in Maywood who haven’t paid their mortgage in almost three years. Their lender, BofA, hasn’t initiated foreclosure precedings presumably because the collateral’s value would fall even faster without occupants.)”
I’ve long suspected banks are using this strategy but suspected its more to do with the banks trying to hide the foreclosure losses on their balance sheet. The underlying value of the collateral one would think could only be lower if nonpaying occupants were living there. Order of economic value impacts I would think would be, in ascending order: 1) nonpaying occupants (possible negative impact on collateral due to wear and tear, zero cash flow received), 2) vacant property (no wear & tear, zero cash flow received), 3) paying renters (wear & tear, cash flow received), 4) paying owners (less wear & tear, more cash flow received). Or am I missing something?
Wojo,
Debt collection is all about a pyramid volume with the guy at the top making all the money. The bigger the shop, the more money to be made. I get the impression that the guys at the middle or the bottom of the ladder aren’t making a lot of money. And by not a lot of money, I don’t mean lawyer not a lot of money, I mean, not a lot of money.
Not all debt is sold off for pennies on the dollar. Capital One, Citibank, AmEx, they hire outside attorneys to collect the debt. Chase has their own in-house counsel of three very professional attorneys that files lawsuits before anyone else so they get first dibs on any debt.
GE, HSBC, retail cards, Citibank retail cards, discover, and a handful of other are the only banks that sell off their bad debts to brokers who resell them.
Actually there is a high profile BK of a major debt collection firm going on. We actually represent a creditor of this firm (there are LOTS of creditors) if you’re interested…http://articles.chicagotribune.com/2010-07-06/business/ct-biz-0706-chicago-law-20100706_1_norman-wexler-firm-debt-collection-industry
2) I’m sure studies are out there but it’s most of what you already know. The bad areas are swarming with foreclosures, the marginal areas have fewer, the good areas have fewer and the best areas have the least. This is for Chicago, places like Phoenix, FL and Vegas are totally different. Regardless, the Crain’s foreclosure map (google) shows recent foreclosures by zipcodes and dollar amounts on a zoomable map.
I’ve noticed that the foreclosures have moved into prime areas, they usually call out the address on the 28th floor if you’re hanging out there (not pleasant!) – and it’s not so much the south and west sides anymore, but places like berwyn, cicero, hoffman states, schaumburg, hazel crest, wheeling, des plaines, etc. Places with lower middle and working class areas but not the toxic wasteland like the dumpy areas of the city.
The green zone properties are generally sold faster than the bad areas, simply due to supply and demand.
However, the green zone areas are more likely to get loan modifications or workout agreements because the residents have jobs and are able to pay something. The only time the green zone resideents don’t get loan mods is when the owner never could afford the unit in the first place.
Furthermore, don’t forget that foreclosures don’t always arise from a purchase money loan, quite often they came from refinances. I”ve showed plenty of properties on this site where the owners (and their neighbors in portage park in one case) borrowed their way from $100k properties in the 1990’s to $300k mortgages in the mid-200’s.
I’ve seen one property where the bank, sua sponte, filed a release of mortgage, and then stuck the debt collectors on the debtor. They gave the debtor the house, for free. It was cheaper than paying the taxes and paying lawyers to appear in housing court and foreclosure court. I’m not joking. I keep the document after my client dropped it off. It was in a terrible area in pullman, but its habitable (except for porch issues), in decent condition and had renters. Now of course the client messed up the rental situation with 2 non-paying tenants and he tried to walk away and that’s when the bank said, “no no no, this property is solely your problem now, buddy.”
Bob,
There are many properties in many areas where the value of the collateral is below zero. First and foremost there are property taxes. Then there are costs to board up and winterize. Then there are insurance issues if something happens to someone in the house. Then there always housing court issues – which cost money to send lawyers to court for. The city ALWAYS sues the lien holders to get them into court to pressure them to fix dangerous conditions. The city doesn’t want to risk the lives and resources of safety responders because the damn bank is too cheap to pay money to board up a vacant property. Then, there are situations with squatters. They need to be evicted. And in Cook County squatters aka people who claim they had a lease with the previous tenant, they get 120 days or something ridiculous to move out. And to curtail that, they may have to even pay ‘cash for keys’ – they literally pay $1000 bucks or whatever to whomever is living there to move out without trashing the place. Then after all is said and done, the property may only be worth $10,000 if it’s in good condition, because the entire block is full of foreclosures, the residents of the neighborhood have bad credit and unemployment is high…I showed a nice look $25,000 two flat today in englewood. That was one of the more expensive properties sold in the area in the last few months.
Here’s a foreclosure recently sold in Roseland – $155,000 mortgage in 2007; and sold for $7,000 two weeks ago.
http://www.redfin.com/IL/Chicago/34-W-110th-Pl-60628/home/12583785
http://www.redfin.com/IL/Chicago/4943-W-Van-Buren-St-60644/home/13251988
$140,00 mortgage in 2005; listed for 48 days now at $12,000.
At what point do the banks just decide that the taxes, attorneys fees, realtors fees, insurance and water bills is more than the value of the property?
Multiply this by tens of thousands of properties all over the city, county, state and country and it’s not too difficult to understand why the banks can’t process or sell the properties fast enough.
The only hospital I’ve ever lived near is Illinois Masonic (one block away) and we rarely ever hear sirens. So let me rephrase, quit assuming Illinois Masonic = noise. Its really pretty quiet.
thanks hd.
last question:
If indeed “There are many properties … where the value of the collateral is below zero” why aren’t the banks giving (or putting) the properties back to municipal governments, and thus ridding themselves of actual & potential costs greater than the property’s value?
(“sua sponte”? — nice.)