Clocktower Loft Sells: 2300 W. Wabansia in Bucktown
We last chattered about this 2-bedroom duplex in the Clocktower Lofts at 2300 W. Wabansia in Bucktown in January 2009.
See our prior chatter and pictures here.
It closed in May 2009 for $20,000 over the 2005 purchase price.
Unit #309: 2 bedrooms, 1 bath, 1100 square feet, duplex
- Sold in March 2005 for $322,500
- Was listed in January 2009 for $369,000 (parking was $28,000 extra)
- Sold in May 2009 for $342,500 (not sure if this included a parking spot- as it was a different seller who was selling the parking spot in the building)
- Assessments of $274 a month
- Taxes of $4165
- Central Air
- Greg Vollan at @Properties had the listing.
hahahahhaha OWNED!
What do you mean owned some of us were pretty close. The upper end of my range was 320k.
Who pays more than 05′ prices these days?
I love the assumption that EVERYTHING bought in 2005 was over-priced. They could have paid $1 for this place in 2005 and someone would say they paid a bubble price.
This place sold above its 2005 price because its unique. On unique properties like this the $/sf metric isn’t as valid.
The sad part is some appraiser or prospective seller of a cookie cutter place around here will try to use this place’s $/sf as a comp.
Cool timber loft. Not for me though, I couldn’t get used to hearing my neighbors’ every word.
ALL Y’ALL WRONG:
This property sold because of funny money, the government’s intention to reinflate the housing market and the traditional ‘howmuchamonth’. $336,295.00 mortgage for a $342,500 purchase. 98.1% financing. That’s why it sold above the 2005 price.
“$336,295.00 mortgage for a $342,500 purchase. 98.1% financing.”
So, HD, does the mortgage cover two PINs? If so, what’s the deed amount for the other PIN (ie, the parking)?
Or did the deed cover two PINs, in which case, it sold for more b/c of the parking.
“$336,295.00 mortgage for a $342,500 purchase. 98.1% financing.”
Any bets that the remaining funds came from first time home buyer credit?
My guess is that they did FHA and had the sellers bring money to cover closing costs (but buyers financed that extra money).
Apparently the fact that someone liked it and could afford it has nothing to do with someone buying it.
I don’t know if it covered two pins, even so, the second pin is parking – not housing. This unit was 98.1% financed. No fricken surprise it sold above the 2005 price.
There was foreclosure in my hood that recently sold about 10% over the list price within 10 days. The buyers were a young couple with 96.5% financing. No wonder there was a bidding war because every clown with a 720 fico has funny money. Households like mine who are holding onto cash so their downpayments actually have meaning are being swept aside by 24 year olds with 720 fico scores and a tax refund check.
It was FHA financing. 3.5% down or 96.5% LTV and then the upfront mortgage insurance of 1.75% is financed as part of the mortgage.
$342,500 x 3.5 down = $330,512 principal
Add in 1.75% x $330,512 for UFMIP = final loan amount of $336,295.
FHA is the only financing available for condos in Chicago with less than 10% down since you can’t get mortgage insurance on a conventional loan.
No lenders are allowing the tax credit to be used as down payment money. However, some are allowing it as a “second mortgage” if the money is fronted by a nonprofit or government program.
> Households like mine who are holding onto cash so their downpayments actually have meaning
what “meaning” does your down payment have exactly?
“what “meaning” does your down payment have exactly?”
It means he can budget and save the money and his mortgage won’t pose a risk to taxpayers or the bank if he defaults as there is enough of his equity in the game to shield against potential default losses.
It means if this person defaults our collective taxpayer dollars are at risk as well.
When you are purchasing something with someone else’s money (bank’s) almost entirely, the purchase price likely isn’t as relevant. If they default what do they care they’re only out 12k. Taxpayers and the bank stand to be out a lot more.
The FHA is basically supporting a large amount of the transaction volume as of lately. I doubt when it was created they had the intention of lofts like this one.
In fact the FHA started out providing affordable housing for working class families and had downpayments as high as 50%. 3.5% downpayment is a joke and us taxpayers shouldn’t be assuming their mortgage risk.
Meaning? It’s a sad day when a 20% down payment buyer will be outbid for housing by bozo the clown with 2% down. Furthermore, the 20% buyer gets kicked in the shins because the 2% buyer get his/her money back in the form of an $8,000 tax credit. Does anyone honestly believe this property would have sold above the 2005 price if every buyer was required to have a minimum of 10% down?
I was talking to a local community bank about a preapproval for a mortgage today and they want 25-30% downpayment for a conventional loan for a condo. Where are these banks asking for just 10% down because I’m looking for a conventional loan right now.
Didn’t buy the parking–or at least a deed for it was not recorded. Mortgage covers only the Unit PIN.
I really wonder about the FHA sometimes and more broadly government intervention in the housing market via Fannie, Freddie & the FHA.
Fannie and Freddie seem to be taking the approach of attempting to mitigate future losses by introducing more stringent guidelines on buyers and buildings.
The FHA on the other hand, seems unconcerned about future losses and is still providing the financing option of 3.5% down loans. I guess thats the government mentality vs. Fannie and Freddie that used to be run like private business.
Agree with HD here. I hate that the government is so eager to have broke people “own” property that they create something like the FHA.
20% down should be a requirement for every housing transaction. Period. It would make the market stay in line with income/savings and completely prevent any future housing bubbles. But then again, there are too many poor people and “get rich quick”-ers that have the government’s ear.
You guys (bob&HD) whine way too much. There’s nothing wrong with FHA! You do realize that on less than 20% LTV loans people have to pay PMI (roughly 8% extra added onto your mortgage payment), and with FHA, there’s an additional up front mortgage insurance premium, which you can only get back if you sell the place after 3 years, so yes there is “some skin in the game, 12k isn’t a small amount of money and people with 720 FICO’s aren’t exactly deadbeats.
The lenders make sure your income and expenses aren’t overstretched, and these loans are fixed at 30 years at all time low rates…
Why would you want to put so much more cash into an illiquid asset? Wouldn’t it be better to have it around in case you get laid off, or disabled, or spent a little too much that month so that you can keep paying the mortgage? With rates this low, it certainly makes sense to me.
What “meaning” do you want your down payment to have, other than the fact that you just took a crapload of money and put it in a very illiquid asset. Sounds pretty dumb to me!
maybe we are the only ones but we put 20% down and bought the points so we wouldn’t have to pay PMI (or take a small 2nd mortgage) since they require 25% down on condo’s now to avoid it. Points were cheap at the time… maybe we should have played the 3.5% down game like everyone else? i know i’ve read on here some people say it’s better to put less down and have more cash in the bank. Or is that just if you only plan to live in it 5 years or less?
I think the free market would still allow down payments smaller than 20% with prudent underwriting, although I would be surprised if zero down ever came back. Right now, banks are too reliant on Fannie/Freddie for their lending requirements and this strips innovation out of the market and also leads to specious underwriting as well since banks underwrite to the guidelines, not necessarily what makes sense. I have often wondered what the mortgage market would look like if Fannie/Freddie weren’t in the middle.
I like you Sonies but you sometimes …. we disagree.
If you only have enough money for an emergency fund or for a down payment – the you shouldn’t be buying a house. For many many years people in your situation were purposely kept out of the housing market.
Yet 2000+ some buyers think it’s sophisticated to purchase homes with borrowed money so they can keep the cash around. That’s financial wisdom right up there with ‘debt=wealth’ and ‘liberate the equity trapped in your home!’
And furthermore, when you’re laid off or disabled one of the most important things becomes cash flow on a fixed income…smaller mortgage payment mean it’s easier to make on a fixed income.
“Wouldn’t it be better to have it around in case you get laid off, or disabled, or spent a little too much that month so that you can keep paying the mortgage?”
So HD are you going to save up 150k before you buy a 300k home?
I’d much rather have a slightly higher payment and 100k in my bank account than 25k and a slightly lower payment. Plus your interest is paid with pre tax dollars so its nearly a wash, and with the unstable market the way it is today, would you rather have 75k wrapped up in your house or a money market account?
“Why would you want to put so much more cash into an illiquid asset? Wouldn’t it be better to have it around in case you get laid off, or disabled, or spent a little too much that month so that you can keep paying the mortgage? With rates this low, it certainly makes sense to me.”
From a consumer’s standpoint you make some valid points. I’d bet the extra expenses associated with being below 80 or 75% LTV is some pretty expensive money, however. Even if liquidity is that highly sought after, the point I was trying to make is that the government is helping keep valuations high due to these taxpayer supported agencies.
I agree with HD this place would not have sold under conventional underwriting. It could very well be that they aren’t capable of budgeting to save up the downpayment as much as having a preference for liquidity.
Err…I’d bet the extra expenses associated with being above 80 or 75% LTV is some pretty expensive money
“I agree with HD this place would not have sold under conventional underwriting. It could very well be that they aren’t capable of budgeting to save up the downpayment as much as having a preference for liquidity.”
I also agree that this place sold at a high price due to unconventional financing… but thats up to the buyers now. If they default on their overpriced 2/1 crib in bucktown that’s their problem, but to say FHA is “the worst thing ever” and “funny money” is just wrong.
“Err…I’d bet the extra expenses associated with being above 80 or 75% LTV is some pretty expensive money”
And not really, on our place which has a similarly sized loan our PMI is $145 a month. Big whoop as we got a 4.875% 30 year fixed. $145 a month is probably the equivalent of paying an extra .25% on your rate.
A home is $300k because somebody puts down 3.5%. If everyone were required to put down $40-60K on that $300k suddenly that $300k house would sell for a lot less because the number of people with $40k-$60k and willing to spend it on a down payment is less than the number of homes for sale at any given time. I’m sure there is some sort of chart showing the relationship/correlation between housing prices and down payments but hell, I hated stats in college, it’s not my thing.
I believe the FHA is funny money as well, Fannie and Freddie are currently losing hundreds of billions of dollars. The FHA doesn’t have to report results like a public company but I wonder what their financial position would look like if they did.
A home is $300k because of a combination of inflation, low interest rates, city demand, and obviously last but not least, lowered lending standards.
If you think FHA or 10% down is going away any time soon, i’ve got some oceanside property for sale in Arizona.
Why not take advantage of a government program now that the market has pretty much collapsed and prices are starting to reflect reailty?
Sonies, your an idiot unless you put 20% down! You’re doomed to foreclosure! You over paid for your home by 50%! There is no way you could have afforded your home! You big freaking deadbeat FB!!! Thanks for pricing the rest of us out of the market!
The FHA isn’t going away, however in its history it has changed the percentage down a buyer would need. When it was first created it required a substantial down payment. This was slowly lowered over the decades until we arrived at 3% in 2006. For the first time ever it was raised to 3.5% shortly after. Coincidentally the FHA never had to request money from congress as a backstop until 2008.
If it keeps coming back to congress for ever increasing bailouts (and it will) changes will likely be made.
Why won’t I use the FHA?
1) You are locked into PMI for five years regardless of whether you get down to 78% LTV.
2) You are charged PMI for LTVs above 78% vs. 80% for conventional financing on SFHs (irrelevant on condos now)
3) Its expensive money when you add up all the additional PMI fees.
“1) You are locked into PMI for five years regardless of whether you get down to 78% LTV.”
Incorrect, you can always refinance and get rid of the PMI, although my predictions is that rates will be higher in the future so refinancing might not be your best option.
And for #3) $150 a month is nothing really compared to the lower interest rate we obtained
and LOL @ Russ’s comment @ 1:47
Yes, DOOOOMED I AM!
> Furthermore, the 20% buyer gets kicked in the shins because the 2% buyer get his/her money back in the form of an $8,000 tax credit.
I think you can still get the tax credit if you use 20% down.
“I think you can still get the tax credit if you use 20% down.”
Yes, but I think HD’s point was that $8k is reasonably likely to be all (or at least most) of a 3.5% DP. It’s most/all of your 20$ only if you’re buying in Detroit*.
*hyperbole.
They said you can’t use the tax credit for downpayment assistance. I’m just waiting for the payday loan operators to come with sub 1-yr bridge loan to take care of this credit and effectively bring back 0% down loans.
You don’t get the 8k until you file your taxes, or file an amended tax return, its near impossible to use it as a down payment.
Ha nice sarcasm. No Sonie’s not doomed and I’m sure he could afford the payments every month but the point is that he is driving up the cost of housing for everyone and when the market runs of out people like him , then , prices are poised to fall and He’ll be underwater. If he does 20% underwater he has a 33% chance of defaulting.
HD/Bob – You’re living in a world of ‘ifs’. For better or worse FHA and other methods of financing where you need less than 20% down are here to stay. Every single sale it’s always, “if the buyer had to put 20% down it would have sold for less”. Agreed – but that world doesn’t exist and point understood. I understand you are frustrated, as a matter of fact I would rather live in your alternative universe were 20% down is required, but it doesn’t exist. No need to bring it up over and over and over and over. Write your congressman if you want to keep wasting time.
Also – it will be interesting to see what happens to the buying power of all that hard-saved cash of yours when hyper-inflation kicks in. And it will kick in, because it is the only way to reset the amount of debt this country has. In trying to do the ‘right’ thing the only person you are hurting is you.
Subtract the emotion and do the math.
> You don’t get the 8k until you file your taxes, or file an amended tax return, its near impossible to use it as a down payment.
Yup I got mine! Cha-Ching! Added it to the principle right away.
So did anyone ever figure out if there was some kind of crud on the ceiling/roof?
Why no picture of the scaffolding that’s up around the building?
Who’s paying the special?
I hope those skylights don’t take direct sun in the summer. You’re A/C will be running non-stop to keep up with the heat gain.
The picture is from months ago- so if they just put up the scaffolding then that’s why it’s not in the picture.