CMK Offers Incentives on its New South Loop Condo Tower: 1345 S. Wabash
In May 2014, CMK announced it would begin selling the first new condo building in the South Loop to be built and marketed after the crash.
1345 S. Wabash will be a 15-story building with an attached parking garage.
It will have 10 foot ceilings and, as is the CMK style, exposed concrete.
The kitchens will have European style cabinets with quartz counter tops and stainless steel appliances.
The bathrooms will have Duravit floating vanities.
The units will have central air and washer/dryer hook-ups.
This is the first “affordable” condo building to be announced since the bust.
The available units are priced as follows:
- 1 bedrooms from $228,900
- 2 bedrooms from $289,900
On Sep 30, CMK sent an e-mail to Chicago brokers informing them of incentives on the building.
For contracts secured between Oct 1 and Oct 31, 2014, the broker will be paid a 2.5% COOP Commission plus a $2500 broker bonus.
Similarly, for contracts signed during October, buyers will receive a buyers incentive in the form of a “closing cost credit” of $2500.
Are incentives at a building that just launched its sales center a few months ago a bad sign?
With no new construction for years in the South Loop, shouldn’t there be a lot of pent up demand for new product?
For pictures and floorplans, check out 1345 S. Wabash’s website here.
I’m seeing a TON of reductions on properties that have been sitting there unsold since the summer.
If you really have to sell, you have to get more aggressive. Things have slowed dramatically. We’ll see who REALLY has to move instead of those who are just listing to see what they can get.
But I’m still shocked at seeing incentives in a building at this price point. This should be selling. It’s cheaper than renting in the neighborhood.
Is the down payment a problem for these buyers?
Or is it that these are targeted at Millenials, who don’t want to be tied to a property for the foreseeable future?
It’s perhaps partly our distrust of builders, which we’ve seen pretty much all be irresponsible in regards to construction diligence, and the price differential between this and other units in the area that have a bit more living space than a shoe.
The down payment isn’t a problem. We just don’t need a new dorm room.
Terrible floor plans on the one side with a good view, wtf this is dreadful. With my current issues at a 9 year old CMK building, I would certainly get a very good inspector and have him double and triple check the balcony construction. I know these are “affordable condos” but buyer beware
what sort of issues sonies? wasnt your place vetted by hgtv?
(if this is a duplicate post I apologize)
LOL it was on HGTV actually… but yeah, they um… took some shortcuts with the balcony construction. Pretty nice special assessment we have had to pay… Don’t really feel like talking about it, makes me annoyed.
And Joey Z appears in 3….2….1…..
White “white” Eero Saarinen style in vogue, someone could simply paint the exposed concrete and make the unit hip.
“And Joey Z appears in 3….2….1…..”
Groove: Just as the market is weakening (again)- he (who shall not be named) will appear here again. ha! ha!
“And Joey Z appears in 3….2….1…..”
Will you settle for Dan instead?
Ha! ha!
This site is now cracking me up.
“Or is it that these are targeted at Millenials, who don’t want to be tied to a property for the foreseeable future?”
It’s not targeted at retiring baby boomers with concrete ceilings and those layouts.
Of course it’s targeted at Millenials. Generation X is married and has kids.
The reason why these are not selling is because the cheapest 2 bedroom in the building is a 4th floor, 939 square foot, partial height 2nd bedroom, which is listed at 289,900. I lived at 235 Van Buren. I cannot imagine why anyone would pay that amount for the finishes, square footage, location, closet space, and amenities that will be provided.
Ha ha, I like that “he who shall not be named”. All we need sisince Dan popped back is that guy with the red socks
IF even possible the finishes look cheaper than CMK’s previous projects. I’m surprised they just didn’t go all out IKEA CABINETS, probably better quality than whatever they appear to be using. But seriously look at the floor plans and you can see exactly why these aren’t selling. Brutal to say the least.
Careful Millennial, otherwise you’ll be getting a cease & desist letter from Joe Zekas.
Offering incentives at this time of year? Sabrina is shocked! That’s just par for the course in a development that’s under construction. Look around Chicagoland and you’ll see more instances of developer incentives.
There may have been no other new construction in the area in years, but people familiar with the South Loop know that Related has recently brought 500 unsold new construction units to market.
Not selling? 1345 Wabash is more than a third sold pre-completion. The fact that construction lenders green-lighted 1345 without a pre-sale requirement is an enormous vote of confidence in CMK, the product and the location.
Cheap finishes? Tell that to the buyers at 4 East Elm, a $2.2M to $7M Gold Coast development that’s also using Florense cabinetry. Duravit floating vanities, Toto toilets, TransCeramica architectural tile are cheap finishes? Did anyone here actually read the specs?
What is it about CMK that drives the veterans at CribChatter over the edge? Is it CMK’s long track record of architecturally-distinctive developments that have attracted 1,000s of buyers? Is it the fact that you were massively wrong when you brayed repeatedly that CMK would go bankrupt over the now sold-out 235 Van Buren? CMK has sold out several developments in the interim.
And talk about missing the big picture! 1345 Wabash has a terrific location, with 5 great restaurants on the same block and dozens more within a short walk, Trader Joe’s and Jewel just up the street, the CTA stops at Roosevelt Rd just over a block away, etc.
Note: CMK is a YoChicago advertiser.
bahahaha nice going guys you got the shill over here comparing finishes of this place to 4 East elm… bahahaha!
If you read the amenities page they are are actually quite laughable, especially after looking at the floorplans and the “luxurious 9×10′” soft lofted bedrooms, or just the wierd corner units with the big giant rooms in the middle of hallways (or computer alcoves they call it) going on
these are some of my favorite “luxury” finishes lol
Individual HVAC system, offering on-demand A/C or Heat (wow!)
Surface mounted dome lighting and track lighting (per plan) (the $20 kind, trust me)
Engineered flooring (cheap substitute)
Vinyl-clad wire closet shelving (lol!)
Switched outlets (whoah!)
I will agree with him that the location is quite nice, and well for the price I guess you shouldn’t be asking for luxury anyway, but of course they’ll market it that way.
Can sonnies make a more lame effort? Rounding 9’7″ and 9’11” to 9′ tells you all you need to know about where he’s coming from. The snarky reference to “luxurious” is sonies’ description, not CMK’s. Not to mention that CMK provides dimensions on the floor plans while not every builder does.
Note that sonies ignores the very real high-end finishes: cabinetry, vanities, etc. and totally lacks a real buyer’s perspective on what he does mention.
Individual HVAC systems are a very big deal to anyone who has ever suffered through Chicago’s seasonal temperature fluctuations in a building with a 2-pipe common system that serves up only heat or a/c at a given time There are many luxury buildings with that type of system.
Engineered flooring isn’t simply a “cheap substitute.” It has a number of advantages, and it’s more costly than the carpet that many builders have offered as a standard. Other builders simply reference “wood flooring,” so sonnies wants to penalize CMK for its integrity in marketing.
Switched outlets – again not a feature that every builder includes.
And once again, talk about missing the big picture – no mention of the 10-foot ceiling heights. They make a difference in the feel of the space.
from the website “Offering luxurious living spaces – in an incredible location – at affordable prices, 1345 Wabash is unlike anything on the market”
Oh sorry, Unit 2 has a 8.5′ x 10.5′ bedroom, I guess i was just rounding, and sorry comparing the bottom line of a particular brand as some sort of high end finish is laughable at best. Especially when you are putting in “european-style kitchens” aka dinky with little cabinet space. Although I’m sure if you want actual high end finishes they will be very costly upgrades.
By “Unit 2” sonies means “two floors of Unit 2,” i.e. two of the building’s 144 units. And so what if the size is 8’5″ x 10’6″? The overall value proposition is what matters to a buyer.
Does sonies know for a fact that 1345 is offering “the bottom line” of the Florense brand? Does he have enough familiarity with Florense cabinets to know that any part of its line is not high end? Dazzle us with your knowledge of the details, sonies. In the meantime, I’ll consider your statement to be pure BS.
Umm yeah the level of the cabinet makers line is the reason for the units being 100 to 150k over priced. Yep that’s it
A troll has taken over the Groove77 identity with a comment clearly aimed at embarrassing him.
“the Florense brand”
Which of the 9 lines of kitchen cabinets is is, Joe?
II don’t know off the top of my head. Visit the sales and design center at 1620 S Michigan if you genuinely want an answer. You can see sample installations there.
Fuck you Groove, why did you have to say his name? You fucking asshole. You fucking know better than that. God damn you, shit for brains..
“helmethofer on October 1st, 2014 at 9:37 pm
White “white” Eero Saarinen style in vogue, someone could simply paint the exposed concrete and make the unit hip.”
This is the real deal too, because this is the only guy in the history of CC who liked painted concrete.
These units are a steal. BUY BUY BUY!!!!
homedelete,
Your unhinged rant should be directed at 1) Sabrina for posting about 1345 Wabash, 2) Google for alerting me to the post and 3) sonies for making false statements about the finishes.
See what happened?
I TOLD you not to say his name.
Nothing funnier than a proud whore!
“Not selling? 1345 Wabash is more than a third sold pre-completion.”
I’m shocked by this. I would have thought the number would be much, much higher. And this has nothing to do with CMK or their buildings. I would have thought ANY new building in the GZ in this price point would sell fairly quickly.
There hasn’t been new product in this price range in the GreenZone in 6 or 7 years. Everyone has been talking about pent-up demand. I also thought there MUST be pent up demand. Don’t the millenials want to own? This is cheaper than renting in a new construction building in the same neighborhood.
Or is it that they simply don’t have the $30,000 or $40,000 needed now to get in?
How else are they renting out 6,000 apartments with studios starting at $2000 a month all over downtown? There MUST be demand (and those luxury apartments are at an even HIGHER price point.) But maybe it’s simply, again, lack of a down payment.
So why are only 47 of these sold after 6 months of marketing? Obviously, the building isn’t completed yet so some people will not buy until they can immediately move in.
But that didn’t stop the apartment rentals from “pre-leasing” many of their expensive apartments.
I don’t get it. I was excited for this building because I thought it meant the start of a lot of announcements about new condo towers. I thought the condo market had recovered enough (and inventory is definitely low enough) for the developers to start building again.
But I was wrong.
Only the “luxury” buildings are selling decently. I’ll be interested to see what happens on the Lincoln Park/Lakeview border with that new building that is planned on Diversey. They are going to start the 2/2s in the $600,000s. By the time they start marketing those next year mortgage rates will be rising.
“There hasn’t been new product in this price range in the GreenZone in 6 or 7 years.” Yet another big picture fail!
Real world – for most of that time there was a glut of new product in the area, and there’s still new product available from the boom years building spree, including the Related buildings in the South Loop There’ve been no new starts other than 1345, but that’s a far cry from no new product.
1345 has been marketing for 6 months, but significant construction activity on the site only began 2 months ago. It’s one thing to pre-lease apartments that are nearing completion and quite another to pre-sell condos further from completion in a normal market.
“Does sonies know for a fact that 1345 is offering “the bottom line” of the Florense brand? Does he have enough familiarity with Florense cabinets to know that any part of its line is not high end? Dazzle us with your knowledge of the details, sonies. In the meantime, I’ll consider your statement to be pure BS.”
Actually yes dickhead I happen to live in one of your previously poorly constructed CMK buildings DIRECTLY ABOVE THE FLORENSE SHOWROOM
I thought you had to say his name 3 times while rubbing your belly and typing out how many short cuts CMK does on its building.
With that said, at least we know why, how and where Joey sayswhat he says. He is biased for a paycheck.
The real worry should be the origins of Homedelete, ssonies and the grooves comments come from.
sonies lives above the Florense showroom (not disputing that), and as of yesterday morning didn’t know that CMK was using Florense cabinetry:
“IF even possible the finishes look cheaper than CMK’s previous projects. I’m surprised they just didn’t go all out IKEA CABINETS, probably better quality than whatever they appear to be using.”
I was surprised to say the least that they are florense cabinets, as they usually have very nice stuff, which is why its my theory that they are using the lowest of the low end as CMK usually does has quite a bit of heft to it
sonies,
What you’re now acknowledging as a “theory” you stated earlier as a fact.
I’m also familiar with what CMK has done in the past, and the finishes at 1345 are a significant upgrade.
Ok, Joe, so what is the level of the Florense cabinet finishes? Which of their product lines is it? Since you represent the developer we should be able to put this issue to rest once and for all and determine how high end and luxurious the cabinets really are.
comparing the finishes at 1345 S. Wabash to 4 E. Elm is extremely laughable however. This should be a pretty easy thing to tell us though, which line is it?
“so what is the level of the Florense cabinet finishes?”
I have Florense cabinets – The edges yellowed.
In all fairness, my Poggen Pohls were worse – They liked to break.
4 E Elm, re kitchen cabinets, sez:
“Florense floor-to-ceiling cabinetry in choice of wood veneer and matte lacquer finishes”
so no comparison of product line. Seems likely they are both using the ‘Contract’ line, which makes demonstrating placement with the overall product line challenging.
I’m gonna agree with sonies, The level of quality of the Florense cabinets that CMK used in the past is ridiculous, they are cheap, and the veneer edges peeled within a few years.
“I’m also familiar with what CMK has done in the past, and the finishes at 1345 are a significant upgrade.”
Joe, since you’re acting on CMK’s behalf and being paid by them to market their properties, please provide some support for this statement.
What is the level or product name of the finishes they CMK has done in the past, and what is the level or product name of the finishes they put in the current building that you are marketing for them? Please be specific – since you’re making specific assertions like these you need to back them up when you are advertising their properties like this. I’m sure that folks, and definitely anyone considering the property based on your statements made as a compensated marketer for the developer, will want to verify your statements. Trust but verify, right?
Compliance with law is important, and if you/CMK are unable to fulfill the above request it seems to me that you would be in violation of federal and state law regarding truth in advertising and accuracy in disclosure. But let’s not be hasty – I just want to see what the finishes actually are since you are marketing this property to me!
Thanks in advance for providing this information – I know that it’s a hassle but I for one am glad that the applicable law is protective of consumers in this regards. It prevents people who are dishonest from making statements that are not true in an attempt to mislead consumers.
I, too, am curious about how one can not know which model is being used, and still be certain that it is not the “entry level” (aka “cheapest”) model.
The reason the South Loop has not seen any new construction condos buildings recently is due to the entire area was overbuilt, over-densified, and basically downright ugly. The South Loop got strangled post Bush’s Great Recession in 2007 after all the nitwits overpaid for cheap garbage elevator condos built on top of each other. The West Loop did too; but not near as bad as south of Roosevelt and north of Cermak. I say BUYER BEWARE of even considering buying anything in the South Loop. There is a reason it took a huge hit. The location sucks~
What happened to Joe? I’d like an explanation on how CMK can design a building from scratch and have these floor plans be the final product. Terrible.
JJJ,
I’m not part of CMK’s marketing staff. Yes, I’m paid by CMK but I’m also paid by others in the industry. And I’ve done well enough in life that I can afford to independent at the same time.
It’s been a while since I’ve practiced law, but I do stay abreast of federal and state truth-in-advertising laws. It’s central to the business I’m in. And, as the only online site in Chicago that tangles with and criticizes industry players, I don’t engage in the type of conduct for which I periodically blast some real estate players.
The finishes specified for 1345 and viewable at the design center are superior to what I’ve seen at other CMK developments. I don’t need to state specific product identification details in order to comply with applicable laws. You can verify that with any attorney who’s familiar with this area of the law.
If you want to know the specifics, visit the 1345 Wabash sales and design center at 1620 S Michigan Ave. If you want to see pics I’ve taken of some of the finishes, click on one of the photos in the following post to enlarge it:
http://yochicago.com/1345-wabash-raises-the-bar-on-south-loop-style/35200/
If you want to see the finishes in one of CMK’s earlier developments, visit an open house at a resale unit.
One final note: Posting here is something I do on my own dime because CMK is a valued client. My engagement with CMK does not include this activity.
duffer,
What happened to Joe? Joe was spending much of the day doing what he always does, i.e. viewing real estate and talking to the people who design, build and sell it. Beats the hell out of talking to CCers.
When I first saw the floor plans for a CMK development I thought they were terrible. I had a very different and much more positive impression of the plans after visiting a number of the units.
“Beats the hell out of talking to CCers.”
Yet, bro, you’re still here. and I for one love when you come here. You have so much to contribute to the conversation. I’d like to go for a beer sometime and pick your brain. away from the rest of these CC losers. Thanks for coming back!
“1345 has been marketing for 6 months, but significant construction activity on the site only began 2 months ago. It’s one thing to pre-lease apartments that are nearing completion and quite another to pre-sell condos further from completion in a normal market.?”
Who’s the construction lender? Corus? Who cares about these “Florense” kitchens, they’ll just be the 2014 version of: “42” inch maple cabinets, granite counter tops” etc. in a few more years. Espresso floors and white everything is going to look ridiculous in just a few more years.
” Espresso floors and white everything is going to look ridiculous in just a few more years.”
Everything looks dated after 10 years especially when it’s used.
The worst however are those 1980’s euro cabinets with the beige and the brown stripe…
http://forums.vwvortex.com/showthread.php?6001074-1980-s-kitchen-cabinets-remodel-picture
I LOVE those 1980s cabinets with the brown stripe HD. I still see those in some older lofts and in some really old apartments. They lasted FOREVER. ha!
Maybe they’ll come back in style. They’ll be “retro.”
But ALL finishes go out of style. That’s true even of luxury.
But maybe CMK’s “look” of doing the exposed concrete thing has just gone out of favor (kind of like how lofts were once all the rage and now are not.)
Maybe it’s not that there’s lack of demand at this price point but just that tastes have changed?
I have heard of some people in the Helmut Jahn building in Streeterville, 600 N. Fairbanks, who have covered their concrete ceilings in that building over the last few years.
Otherwise, with little competition at this price point, I don’t understand how this building can’t already be sold out in what everyone is calling a “hot” market that is desperate for inventory. Buyers LOVE new. They are snapping up $600,000 2/2s in those 3-unit new builds all over Lincoln Park and Lakeview.
It’s a strange market.
We’ve found something we can agree on, Sabrina – you don’t understand this market or the sales cycle of a new construction high-rise in a normal market.
Related has been on the market for 18 months at 1629 S Prairie and 1901 S Calumet in the South Loop and hasn’t sold them out despite the buildings’ near-complete state. Yet you don’t hesitate to suggest that there’s something wrong with CMK’s product because it hasn’t sold out 1345, a build-from-scratch, in one-third that time.
What relevance does the $600K 3-flat market in Lincoln Park and Lakeview have to the South Loop high-rise market at CMK’s price point? Hint: zero.
“Maybe fashions have changed?” Maybe developers who are actively in the market have a better grasp of buyer preferences than you do. While CCers were confidently mocking the exposed concrete ceilings at 235 Van Buren I was talking to quite a few buyers who loved them.
You’re merely showing your biases, just as you did when you failed repeatedly and over a period of several years to understand the market for 235 Van Buren and other CMK successes.
“Related has been on the market for 18 months at 1629 S Prairie and 1901 S Calumet in the South Loop and hasn’t sold them out despite the buildings’ near-complete state. Yet you don’t hesitate to suggest that there’s something wrong with CMK’s product because it hasn’t sold out 1345, a build-from-scratch, in one-third that time.”
Related is at a higher price point. There is NOTHING new in the under $300,000 market (i.e. entry level.) Those 20-something buyers should be chomping at the bit to buy something new but, apparently, they’re not.
Remember back in 2000 when they’d announce a new building and it would sell out in days? And no- those weren’t investors and it was well before the actual bubble market 6 years later.
Everyone is going on and on about how “hot” the market is. The apartment rentals are renting out a third of their units before THEY are built and then the rest of them shortly thereafter at MUCH higher prices.
I just don’t understand why this isn’t selling. The South Loop is still popular. Why are they having to do incentives already? There should be plenty of demand.
Unless:
1. 20-somethings don’t have down payments
2. 20-somethings have decided NOT to buy after all until they are in their 30s and buying the suburban house
3. Or they simply don’t like the building- for whatever reason
I had high hopes that the announcement of this building would open up construction for a bunch of other buildings at the lower price point (i.e. NOT simply luxury buildings- which is what else is being built.) And that they would start to convert some of the new rental towers into condos.
But that looks doubtful now.
“Everyone is going on and on about how “hot” the market is.”
who is saying that?
Every real estate agent I’ve talked to recently has been telling me that the market slowed dramatically as of about the first of August.
I don’t think it’s coincidental that, about the same time, the new rental buildings began offering 2 to 3 months’ free rent and 125% to 150% of normal commissions and other incentives to brokers.
Sabrina,
Comparing the rent-up of new rental buildings 2 to 3 months before occupancy to the sale of new construction condos during a period when the building was only halfway to topping out at the end is not something anyone who knows anything about real estate would do.
“…start to convert some of the new rental towers into condos.”
With that hope you’ve completely departed the bounds of reality. The new rental buildings have sold to institutional owners at prices that would result in a large loss on a condo conversion.
You aren’t going to see conversion of the new rental buildings. They’re worth more as rentals to a certain type of buyer in the current interest rate environment than as condos to individual buyers. And it doesn’t occur to you that that fact has anything to do with the lack of new condo starts?
“The finishes specified for 1345 and viewable at the design center are superior to what I’ve seen at other CMK developments. I don’t need to state specific product identification details in order to comply with applicable laws. You can verify that with any attorney who’s familiar with this area of the law.”
So, let me get this straight: you made a statement, that may not be true, when you’re called on it you’re unable to support it, and now you’re saying that we should go look at something else to see if what you are saying is true, and because what you’ve said it not demonstrably false unless someone else does all the legwork to show that you are not telling the truth, that’s your story and you are sticking to it?
JJJ,
I’ve made a statement about what I’ve seen that’s indisputably true, and I believe you know that and are simply trying to sow confusion and jerk me around. Why would I play your silly game?
Wow, when did holding people marketing things to their statements and trying to verify if they’re true become a “silly game”? Can you provide any evidence that the finishes in this new building are actually higher quality?
JJJ,
I’ve given you eyewitness evidence, and suggestions on how anyone can verify it. If there’s any reason at all to doubt that, the ball’s in your court to state your basis for doing so.
Exposed concrete is just used as a cost-cutting measure, they don’t have to drywall it. Can’t believe suckers paid $500 psf for that or that Helmut Jahn let the shatz/shysters make him do that CMK-type cheapness in a building under his name.
“I have heard of some people in the Helmut Jahn building in Streeterville, 600 N. Fairbanks, who have covered their concrete ceilings in that building over the last few years.”
Logical conclusion to the hilarious stupidity of living and looking at harsh unpainted concrete every day. Here’s a good example:
http://www.dreamtown.com/properties/600-n-fairbanks-2507.html
So, when they cover it with drywall, what do they do about lighting/electrical? They’re stuck with track lighting? No can lights?
“Every real estate agent I’ve talked to recently has been telling me that the market slowed dramatically as of about the first of August.
I don’t think it’s coincidental that, about the same time, the new rental buildings began offering 2 to 3 months’ free rent and 125% to 150% of normal commissions and other incentives to brokers.”
Joe- we FINALLY agree on something after all these years.
You can feel the slowdown. You can see it in the listings and the price reductions. But why? Why did buyers suddenly go away at the end of the summer? The economy is improving. The job market is actually getting even better. The consumer confidence numbers are still pretty good. People are spending money. Mortgage rates haven’t gone up or down dramatically. Why did people suddenly say “I don’t want to buy”?
So interesting.
New rental buildings are offering big concessions too?
Then where is everyone living?
They are building so many new units, I’m not surprised that soon they would have to offer incentives. And prices can only go so high since incomes aren’t rising.
“Everyone is going on and on about how “hot” the market is.”
Just ask Gary. It is hotter than ever. There are still bidding wars. Inventory is low so prices will keep rising.
I don’t think Gary or anyone is saying that… maybe back in 2012/13 but not today right now in late 2014
Millenials don’t want to own. The only buyers are those with families. School started and now families don’t want to move. What is so confusing?
Traditionally, 20-somethings bought year round. Current 20-somethings aren’t buying at all. Therefore no one is buying now that school has started.
The low quality of the interior renderings make this place look really cheap. They look amateurish.
“Exposed concrete is just used as a cost-cutting measure, they don’t have to drywall it.”
Another option is to just skim coat the ceiling (like most high rise construction). Probably more cost effective than drywall.
Regarding the engineered wood floors mentioned above, a high quality engineered product is more stable for high rise construction due to the movement of the building and temperature changes. A high quality product is real wood on a hardwood base which provides more stability and can be refinished a couple of times. That being said, I have no idea what type of product CMK is using.
“Just ask Gary. It is hotter than ever. There are still bidding wars. Inventory is low so prices will keep rising.”
So here is what Gary said today about the state of the market: http://www.chicagonow.com/getting-real/2014/10/september-chicago-real-estate-market-update-home-sales-still-soft/
Again, sales of non-distressed properties are flat to last year, which was a strong sales year. Market times are low, inventory is low. It’s a great market to be selling into and as long as inventories remain low I think we will see rising prices. Maybe not in the double digits but 3 – 5% per year easily – unless the Chicago economy tanks.
To Joe’s point about things slowing down in August…agents are going to react to contracts being written and people getting ready to buy and sell. In addition, I don’t think agents are very good at mentally adjusting for seasonality. Contract activity did fall off in July and August but September was comparable to last year.
“Again, sales of non-distressed properties are flat to last year, which was a strong sales year. Market times are low, inventory is low. It’s a great market to be selling into and as long as inventories remain low I think we will see rising prices. Maybe not in the double digits but 3 – 5% per year easily – unless the Chicago economy tanks.”
Huh. I guess when sellers in River North are offering “decorating allowances” again- that’s no indication at all (that things have slowed.)
Because I haven’t seen a listing with that kind of incentive in a LONG time (maybe since 2009.)
I’m also seeing quite large price decreases now. Some sellers that have been sitting there for 2 months are having their “moment” and realizing that if they want to sell before next February (because the market will slow even more as we head into November) that they had better reduce and get the deal done.
But I agree that inventory is still low. Too bad there aren’t enough buyers- even with this low inventory.
Where ARE the buyers??? Priced out???
“Millenials don’t want to own. The only buyers are those with families. School started and now families don’t want to move. What is so confusing?”
Fred- who is buying the $550,000 new construction 2/2s in all those new 3-flats being built all over the north side? Those are still selling- even in the fall. Are families buying those?
“I’m also seeing quite large price decreases now.”
Show me the data which indicates that there are more and larger price decreases than last year for properties that are priced correctly.
“Too bad there aren’t enough buyers- even with this low inventory.”
Despite the low inventory there are just as many buyers as last year for non-distressed properties. That’s a fact.
On Sep 25 of this very year (yes- just 2 weeks ago), Gary was arguing with me that the housing market was still great.
Here’s just one of his comments. You can go back and look yourself. Gary still believes this market is actually good when, in reality, it’s dead. At least a few months ago, the upper end was selling. Now, even that is slowing. Everything has fallen off a cliff. I don’t know why- but it has.
He keeps arguing that prices will keep rising even though by the end of this year prices will be flat year over year both in Chicago and nationally. In fact, they may be declining again by then.
From Gary in the last Market Conditions thread from September:
“Sales have fallen almost entirely because of a decline in distressed sales so I’m not too worried about that. And inventory is low so it’s no surprise that sales aren’t taking off.
Yes, a bad market requires longer market times and/ or falling prices. We have neither right now.
And, yes, the townhome down the block from you is totally anecdotal data. In general market times are short.”
“I’m also seeing quite large price decreases now.”
And the fact that prices (as measured by Case Shiller) have not declined makes this irrelevant even if it’s true. So what if a house that would have sold last year for $800K sells this year for $800K after a larger price reduction than similar houses last year?
Gary- the September numbers are interesting because that’s where it fell off a cliff last year after the mortgage rates rose. So this September is REALLY bad because last year was also bad.
But we already knew it was going to be bad because of the mortgage purchase applications. They continue to track 10% or more below last year’s depressed rates. That’s not supposed to be happening (because rates are actually LOWER than this time last year) but even these lower rates aren’t getting people to buy.
Why have people suddenly decided not to buy? I know the changes in FHA mortgages are impacting new construction sales but not as many people use FHA for existing home sales. So what is it?
“the September numbers are interesting because that’s where it fell off a cliff last year after the mortgage rates rose. So this September is REALLY bad because last year was also bad.”
No last September was ahead of 2012 by 27.5%. Contracts were flat though.
“But we already knew it was going to be bad because of the mortgage purchase applications. They continue to track 10% or more below last year’s depressed rates.”
You keep talking national and everyone here is focused on Chicago – I think.
“You keep talking national and everyone here is focused on Chicago – I think.”
You think the mortgage purchase applications are going to be “different” in Chicago versus San Francisco versus Miami versus anywhere else? Of COURSE it’s national! It tells you how many people are applying for mortgages. So unless the all cash buyers are suddenly showing up en mass in Chicago- we’ll have slower sales here too (just like everywhere else.) And the last I looked at the data- the investors have left the building. They are no longer here in large numbers.
So we’re left with millenials who have NO down payments (so apparently that’s why they’re not buying- as no one else has given any kind of good reason as to why they aren’t), and many other home owners who are STILL underwater (or going to lose money if they sell) so they’re not selling.
Home prices have gone back to peak. But what have incomes done? Nothing! Actually gone down on an inflation adjusted basis.
You can’t get blood from a stone.
The only explanation for the dead market is affordability because mortgage rates can’t go much lower.
“No last September was ahead of 2012 by 27.5%. Contracts were flat though.”
Oh yeah- you’re right. I must be thinking about the purchase apps which were weakening by September. Sales weakness must show up in the data a few months after that. And we know it’s been weak in 2014. Sales have been down year over year every month this year.
It’s funny to go back and look at the January/February/March sales numbers which were blamed on the polar vortex weather. But sales never improved even after the weather did so. So was it REALLY the winter or something else?
Oh- and I have that sales jumped 23%. I don’t know why your data is always different from the IARs but it is. Yours is always higher. I’m not saying your data is right or theirs is right (we KNOW they had a data problem a few years ago) but for consistency sake- since I have always used the IAR data, I will continue to do so.
“You think the mortgage purchase applications are going to be “different” in Chicago versus San Francisco versus Miami versus anywhere else?”
Obviously, yes. They are different markets.
“Home prices have gone back to peak.”
No they haven’t. We are still 22.5% below peak.
“I don’t know why your data is always different from the IARs but it is. Yours is always higher.”
IAR is doing a very bad thing. They always compare the most recent preliminary numbers to last year’s final numbers. I compare preliminary to preliminary. Preliminary numbers are always lower because some of those lazy agents can’t get their sales recorded within one week from the end of the month even though it’s required by MLS rules to be done within 2 – 3 days of the closing.
@ Sabrina
“You think the mortgage purchase applications are going to be “different” in Chicago versus San Francisco versus Miami versus anywhere else? Of COURSE it’s national! ”
The mortgage bankers association provides both national and state data.
http://www.mortgagebankers.org/ResearchandForecasts/ProductsandSurveys/SMAR.htm
“No last September was ahead of 2012 by 27.5%.”
Wow, sounds terrible.
Sabrina, you contradict yourself so much its hard to keep things straight. You say yourself, real estate in Chicago is hyper local, as in only places in RN/GC are selling, then go on to say that national mortgage app numbers matter! Which is it?
“Home prices have gone back to peak.”
I thought everyone was still underwater…
I think that what I am hearing is, anecdote and “hot”ness are poor measures of real estate as an asset class.
I have to laugh at this string. CMK is advertising some of the cheapest prices for two bedrooms in the South Loop. JJJ and helmethofer complain that the CMK product is cheap — a prior building has problems and the finishes are cheaped out. Zekas defends that the finishes are not cheap, perhaps overstating his argument. Obviously, the finishes are fairly cheap because developers won’t get financing to lose money on a product. Cheap prices = cheaper finishes.
The CC crowd complains when something is cheap, but then complains that higher quality products are expensive. Glad to see things have not changed.
“Home prices have gone back to peak.”
“I thought everyone was still underwater…”
They’ve gone back to peak in the downtown area and some other parts of the GZ (but, unfortunately, not in other areas.)
But that was a few months ago. This market continues to change. There are prices being cut all over the place on the north side. People selling right now HAVE to move- apparently. I expect the downtown high rise prices to be pretty sticky until inventory picks up next year. It always takes awhile for sellers to figure out the market has changed.
“Sabrina, you contradict yourself so much its hard to keep things straight. You say yourself, real estate in Chicago is hyper local, as in only places in RN/GC are selling, then go on to say that national mortgage app numbers matter! Which is it?”
You’re not buying without a mortgage. So yeah- if purchase apps are down, sales will be down in Chicago. Because Gary has told us that distress sales are plummeting. Investors were buying those with all cash. That has gone away.
Purchase apps were down 8% last week year over year. That decline isn’t as bad as we’ve seen the last couple of weeks but mortgage rates DID come down slightly again. But it still tells you that sales will continue to drop the next 60 days or so.
“IAR is doing a very bad thing. They always compare the most recent preliminary numbers to last year’s final numbers.”
How can the 21st of the month be “preliminary” though? That would make sense if they were putting out the data on, say, Oct 5th or something. But it comes out on Oct 21 for September. Or do they just tabulate the data on the 7th of the next month and don’t update it again when they release it to the public 2 weeks later?
I have no confidence in the IAR, as I said. We’ve already seen how they’ve messed up the data in the past and didn’t catch the mistake for several months.
“Home prices have gone back to peak.”
“No they haven’t. We are still 22.5% below peak.
No- that’s wrong Gary. In the downtown- prices are basically at peak (and well past peak depending on which building you’re buying in. Check out the resale prices in 600 N Fairbanks and some other Streeterville towers. They were super hot last year.)
http://www.chicagobusiness.com/realestate/20140923/CRED0701/140929972/downtown-condo-prices-back-near-2008-peak
“No- that’s wrong Gary. In the downtown- prices are basically at peak (and well past peak depending on which building you’re buying in. Check out the resale prices in 600 N Fairbanks and some other Streeterville towers. They were super hot last year.)
Tale of Two Cities. Downtown is back. The relentless newspaper stories about how Millennials and downtown living are having impact, or are they merely reporting the news, not creating it? In places like Oak Park, condos have not recovered. A 1 bd condo there went from $79K in 2002 to $129K at the peak, down to $65K at the bottom, and not back to $100K yet.
“How can the 21st of the month be “preliminary” though? That would make sense if they were putting out the data on, say, Oct 5th or something. But it comes out on Oct 21 for September. Or do they just tabulate the data on the 7th of the next month and don’t update it again when they release it to the public 2 weeks later?”
That’s exactly what they are doing.
“In the downtown- prices are basically at peak (and well past peak depending on which building you’re buying in. Check out the resale prices in 600 N Fairbanks and some other Streeterville towers. They were super hot last year.)”
I’m referring to the Case Shiller numbers, which represent an average for the area.
“I’m referring to the Case Shiller numbers, which represent an average for the area.”
Case Shiller for single family homes? Or for condos?
Case Shiller includes the ENTIRE metro area all the way out to Joliet and Lockport. It’s also delayed by several months (as the last data was for July- right?) So it’s really backward looking. That’s why I don’t crib on it. But at least it’s a data point of some kind.
The 10 year is at new 52 week lows at 2.27%.
The weekly jobless claims are at 15 year lows.
Wow.
Which data point is “right”?
What interesting times we’re living in.
“Case Shiller for single family homes? Or for condos?”
I gave the SFH numbers. Condos are down 18.9% from the peak.
Case Shiller includes the ENTIRE metro area all the way out to Joliet and Lockport. It’s also delayed by several months (as the last data was for July- right?) So it’s really backward looking.”
The CS data is consistent with the fact that many, many people in Chicago are still underwater so I believe it. Sure there may be some small neighborhoods that are back but not overall Chicago.
Sabrina we won’t have any inflation without income growth, we won’t have any income growth without a labor shortage. With technology replacing jobs even more rapidly then ever do you see either of those things happening any time soon? Jobless claims are so low due to the extended unemployment benefits running out.
You say mortgage rates can’t go any lower, why not? Have you seen rates and terms in Europe? Ireland has like 1% 60 year mortgages LOL, in switzerland and Japan they do 100(!) Year mortgages! Or are you like the clowns on CNBC that say OMG WE ARE IN A STOCK BUBBLE BECAUZE I SEZ SO AND HIGH NUMBERZ!!!!
“Sabrina we won’t have any inflation without income growth, we won’t have any income growth without a labor shortage.”
I think income growth and inflation are highly (but not perfectly) correlated outcomes of a change of a different variable. If they happen it should occur more or less simultaneously.
“The CC crowd complains when something is cheap, but then complains that higher quality products are expensive. Glad to see things have not changed.”
There are exceptions here and there, but or the most part CC is a paragon of a Chicago buyer. It doesn’t matter if interest rates fall to 1%, you have relative job security and a nice salary, the kids are attending a decent public school, the neighborhood is safe, there are *always* reasons from a seemingly growing number of Chicagoans to why the city/they/their family are on the brink of disaster – it’s just a matter of time before both happens.
I can’t tell you the number of former Chicagoans I know who were like that, and then moved to more expensive cities like Boston, LA, NY, even Seattle, while keeping a similar salary/position. Suddenly they went from obsessing over not having enough closet space, to obsessing over the perfect vintage Noguchi table.
How anything gets sold in this city that’s now inhabited by way too many people who refuse to assimilate to the fact that they’re living in a major c-i-t-y is beyond me… I’ve come to believe that it’s no longer a Chicago thing, it’s a suburban thing.
“JJJ and helmethofer complain that the CMK product is cheap — a prior building has problems and the finishes are cheaped out.”
You really missed the point. To be clear, I don’t really care about the finishes in this particular building. What I care about is people being paid to make statements of questionable accuracy.
JJJ,
You haven’t demonstrated that anything I’ve said is inaccurate, and you can’t.
You’re clearly bright enough to understand that one of the reasons major companies work with me is that I won’t make questionable claims on their behalf. And you’re dishonest enough to pretend otherwise. What motivates you to be that way? Do you work for a CMK competitor? Been fired by CMK? Turned down for a job with them?
Continue to take your cheap shots. The honest readers here don’t attach much importance to anonymous trolling.
“Sabrina we won’t have any inflation without income growth, we won’t have any income growth without a labor shortage.”
We HAVE a labor shortage. Numerous industries, including in manufacturing, are reporting that they can’t find employees and are raising salaries. You just happen to be in the wrong industry.
http://www.kcrg.com/subject/news/dubuque-manufacturer-struggling-to-hire-employees-20141007
http://www.journal-news.com/news/news/ohio-manufacturing-roaring-back-but-skilled-worker/nhZRZ/
http://www.myrecordjournal.com/wallingford/wallingfordnews/5785666-129/wallingford-manufacturer-determined-to-find-skilled-workers.html
http://www.businessinsider.com/startups-offering-1-million-signing-bonuses-2014-9
“Jobless claims are so low due to the extended unemployment benefits running out.”
Jobless claims are NEW filings. You know that right? When they go low like this it means that fewer people are getting laid off and those that do are finding work right away and not even bothering to file for benefits. It has nothing to do with extended benefits running out. (And actually- the super long extended benefits started “ending” in January of this year. Remember that? Supposedly there were going to be over a million people with no way to pay the bills. What happened to them?)
“Or are you like the clowns on CNBC that say OMG WE ARE IN A STOCK BUBBLE BECAUZE I SEZ SO AND HIGH NUMBERZ!!!!”
The bond market is in a bubble but not the stock market. Stock market valuations aren’t high enough to be in bubble territory (nor is sentiment.) I don’t know anyone buying stocks right now, do you? But everyone I know owns bonds. It’s considered a “sure thing.” Until it’s not.
I don’t know why people are so negative on the economy. It’s one of the best economies we’ve seen in many years- certainly since the dot-com boom. It’s like the perfect conditions of record low interest rates, low unemployment, stock market at all-time highs, housing prices at all-time highs, art prices at all-time highs. And now even commodity prices are coming down so we’ll have cheaper gasoline.
Wow.
It’s perfect.
“I don’t know why people are so negative on the economy.”
You do realize that you were one of those people until now, right?
chukdotcom, you do realize that you are getting trolled by sabrina now, right?
LOL@ Joe Zekas lecturing people on taking pot shots, you should read his shit hole website, not only is there one sided dialogue but he constantly is throwing unwilling people under the bus, like people with mental illnesses, hard working rental agents, you name it, if you aren’t going to pay Joey Z some dough to promote you, he’ll bash the ever loving shit out of you until you submit. In true Chicago shakedown fashion!
“The bond market is in a bubble but not the stock market. Stock market valuations aren’t high enough to be in bubble territory (nor is sentiment.) I don’t know anyone buying stocks right now, do you? But everyone I know owns bonds. It’s considered a “sure thing.” Until it’s not.”
I know shit tons of people buying stocks (well mainly because its my job) especially quality ones due to them actually paying a decent income compared to bonds. Conversley I know many people who are investing in the stock market because things like CD’s don’t pay anything. What are you long TBT or something? Your reasoning is so bizarre
“chukdotcom, you do realize that you are getting trolled by sabrina now, right?”
Now I do…
I’m probably an idiot, but they always say that the retail investor has the worst timing and buys at the top and sells at the bottom…and with the stock market at all time high, I don’t want to be the foolish typical retail investor…
“I don’t want to be the foolish typical retail investor”
Find a nice mulberry tree out in Long Grove? Or did you have to change species?
This is the only real estate blog that allows pathetic liars like sonies who have no knowledge to offer to spew venom instead.
Why does Sabrina encourage this behavior by repeatedly tolerating it? Doesn’t grotesque lying defamation bother you at all, Sabrina? Do you have any principles, Sabrina? Any sense of decency?
Calling me a liar does not make it true. I am stating FACTS. The only person here lying is you, by covering up truths you are just as much a liar as any of these people you smear on your website. Hell don’t belive me just take a look at some of his more recent posts…
such as ‘whats up with edgewater’s park towers’, some non profit bought up some units and you might be living next to MENTALLY ILL PEOPLE! OMG! Even though that isn’t true…
http://yochicago.com/whats-up-with-edgewaters-park-tower-condominium/36675/comment-page-1/#comment-133262
Then there’s the extremely classy ‘Want a Chicago leasing agent with a criminal record?’ post.. makes you wonder what he did to Ol’ Joey to post such an unwarranted smear piece. Guy did his time for the crime, why does he deserve this treatment?
http://yochicago.com/want-a-chicago-leasing-agent-with-a-criminal-record/29531/comment-page-1/#comment-132792
These are just recent examples of his bully tactics. And these are just the comments he actually is dumb enough to post on his own website, you can imagine what all the banned or censored folks have to really say about some of his “sponsors”
“You do realize that you were one of those people until now, right?”
What are you talking about? I’ve NEVER been negative on the economy. On the housing market- hell yeah. (and we’re going down into the quadruple dip this winter- or is it the quintuple dip? I forget how many downturns the Chicago real estate market has had in the last 6 years. I think this will be #4 though.)
Who could be negative on the economy with the Fed at record low interest rates and all asset classes at record highs? Who cares that the middle class can’t afford to buy a house and spends, in many cases 40% to 60% of their income on housing?
But American businesses are kicking ass right now. It truly is remarkable how resilient the American economy is and how great our entrepreneur-based system is. NO ONE in the world can compete.
Joe is right on one thing though- the new luxury apartment buildings ARE starting to give incentives again.
I just saw a big advertisement in the Chicago Tribune for 850 N. LSD. It is offering one month free rent for a 12 month lease and 2 months free for an 18 month lease.
Now’s the time to bargain- renters!
http://www.ft.com/intl/cms/s/2/ab6f49ea-489b-11e4-9d04-00144feab7de.html#axzz3FT0oudE0
But according to the Financial times, Chicago’s real estate market is BOOOOOMING
Just have to be smart and understand where demographic shifts are happening and buy there before the mainstream figures it out!
“You’re clearly bright enough to understand that one of the reasons major companies work with me is that I won’t make questionable claims on their behalf. And you’re dishonest enough to pretend otherwise. What motivates you to be that way? Do you work for a CMK competitor? Been fired by CMK? Turned down for a job with them?”
No, I really know nothing about CMK, except that they develop large apartment buildings aimed at the lower end of the market and seem to have very poor judgement as to the people they hire to represent them. Until this latest episode, I always thought of DMK the burger place when I heard of them, but you have managed to turn my neutral opinion of them to a negative one.
I don’t like you because I believe that you are dishonest. I work and live in the professional world, where people’s reputations and honesty matter. I will leave the final judgment to everyone else – everyone can make their own decision about whether to work with you and whether it makes sense to avoid CMK simply because you represent them. I sure will!
JJJ,
When you’re unable to dispute facts I’ve presented you simply fall back on calling me dishonest.
Over the years you’ve given no one here any credible evidence that you “work and live in the professional world …” unless you’re referring to the world of professional trolls.
You clearly have no regard for the standards that govern the behavior of true professionals.
sonies
http://www.dnainfo.com/chicago/20141013/river-north/man-joins-chicago-marathon-while-trying-run-from-police-prosecutors
There’s a reason I warn young renters about repeat criminals.
“But according to the Financial times, Chicago’s real estate market is BOOOOOMING.”
Good article Sonies, thanks for posting it.
But did you even read it? It wasn’t about the residential market- but it was about the commercial market. Crain’s reported a few weeks ago that the downtown market was at its highest occupancy since before the recession.
This is what I’ve been saying. The economy is crushing it. Why does everyone feel so badly about things? There’s a company that is going into the Target building on State Street that is hiring 2-3 new workers a week. Every week! And then there is GrubHub and Potbelly, both in new and large spaces downtown. There are plenty of new office buildings going up which is a great sign. Look at what is happening in the Fulton Market. Because Google is taking a whole building there, they are opening up new hotels.
Jobs, jobs, jobs!
Look at the 6th graph here: http://ChicagoHousingStats.com Employment is coming way back.
“Why does Sabrina encourage this behavior by repeatedly tolerating it?”
JZ just shows his true colors. He doesn’t want to tolerate. He’s intolerant. This is why nobody trusts his blog. Censor, intolerant, and therefore nobody can trust his content.
helmethofer,
I am intolerant of anonymous defamers, foul-mouthed vipers and disgusting anti-semites. You’ll find very few websites that aren’t.
That’s one of the reasons people trust what I write, and why my site has a far larger audience than this nearly-abandoned backwater of haters.
“Over the years you’ve given no one here any credible evidence that you “work and live in the professional world …””
Nah, I’m not one to often side with JJJ, but you can tell from how he speaks (I can at least, not sure if you can)… He definitely has his technical skills down, well beyond normal layman.
“That’s one of the reasons people trust what I write”
But people DO NOT trust what you write, or what’s on your blog, because it’s sponsored advertising masquerading as unbiased coverage. (Should we call it disgusting or merely clever?)