Edgewater American Four Square Under Contract in 2 Days: 1456 W. Norwood
Thanks to the tipster who sent me information regarding this 4-bedroom American four square in Edgewater Glen at 1456 W. Norwood that went under contract within 2 days.
The listing says the kitchen has been renovated with honed granite, Viking, Miele and Franke finishes.
It also seems to have all the bells and whistles including central air and a garage.
And to top it off, the house has some lovely vintage wood work.
Was this just priced right for the neighborhood?
Peter O’Brien at Arnel, Inc. has the listing. See the pictures here.
1456 W. Norwood: 4 bedrooms, 2.5 baths, 2337 square feet, 2 car garage
- Sold in May 1999 for $355,000
- Currently listed for $649,000
- Under contract within 2 days
- Taxes of $8155
- Central Air
cute! Anyone know where you can buy kitchen cabinets exactly like those?
Looks like a great deal to me. Once I saw that it is brick and not stucco, that further confirm my position.
That’s a great buy.
This is a nice, large house in good condition. I know that compared to yesterday’s prices this is a ‘deal’. But it’s still a little disconcerting that with 20% down, a $520k mortgage at 4.75%, the monthly housing payment PITI is about $3,400 a month, which requires an income of $150k. Factor in that a $520k is a jumbo and it will be difficult to get a 4.75% interest rate, the monthly payment and income requirements only go up from there. So yes this is a ‘deal’ but even this ‘bargain’ is still unsustainable in the long run.
The above assumes a down payment of $130k too.
Homedelete –
A lot of people make more than $150K. Not sure I understand your point.
Does it absolutely make you insane to see someone buy a great house?
HD – There are still lots of financially secure Chicagoans left. Sorry to bust your bubble, but $150k household income is not really remarkable.
Exactly, paulj.
Not to mention the fact that a lot of people have more money to put down on a house than $130k, so the loan need not be a jumbo, necessarily.
“Anyone know where you can buy kitchen cabinets exactly like those?”
They look a lot like KraftMaid to me. Square Door, White Recessed style. Website is http://www.kraftmaid.com .
“Sorry to bust your bubble, but $150k household income is not really remarkable.”
Agreed. Not remarkable, but the way the market is these days apparently not too common, either.
“Not to mention the fact that a lot of people have more money to put down on a house than $130k”
I’d bet the amount of people who could put down more than 130k on a house (barring inheritances) is less than 150k income couples, to be honest. Afterall these days they need to SELL their old house to come into that kind of money.
Again the market will show which of our positions is closer to reality these days. Tomorrow the Case-Shiller Chicagoland numbers come out, we shall see.
“Not to mention the fact that a lot of people have more money to put down on a house than $130k, so the loan need not be a jumbo, necessarily.”
Also, just b/c it went under contract in two days doesn’t mean it sold for asking price–the sellers may have been happy to take less for a quick sale–maybe no financing contingency and a large earnest money deposit convinced them to take somewhat less. Two years ago, sure, but we’re in a different market.
Bob – I’m sure you’re right; it’s not common. But millions of people live in downtown Chicago, and let’s face it – not everyone in Chicago is going to be able to live in a house this nice. Nor should they.
5% of a population of millions is still a lot of people.
Another thing–the ‘hood Elem school appears to be improving. Test scores for the younger kids are *much* better than for the older kids and the younger kids are testing well above city averages.
Personally, I think this house in on the wrong side of Ridge, but it’s a *very* nice looking house in the few pics presented. If I could have this house in my present location, I’d trade in a second, w/o knowing anything more than the pics–and I like my house most days.
Actually, can anyone dig up a graph of the income distribution for the City of Chicago? I’d like to see how the percentiles break out, and I’m not having much luck finding the data.
I found some national numbers: http://www.visualizingeconomics.com/2006/11/05/2005-us-income-distribution/
Looks like 5% make > $166k. I’m not sure whether metro Chicago would be higher or lower than the average.
Per capita income for the 2000 census. A little dated at this point.
http://www.lib.uchicago.edu/e/su/maps/percapitaincomecity1999.html
Wow, the projects really stick out in some places.
“the monthly housing payment PITI is about $3,400 a month, which requires an income of $150k”
A more realistic number is about $4200/month. So, if they have no other debt*, their gross annual income (at 33%** DTI) needs to be ~$152k.***
*yes, HD, we know you don’t believe these people exist. trust me, they do, but not in numbers to support the whole real estate market. Just enough to take advantage of nice houses like this.
**Yes, this is still a fair underwriting standard, even with tighter lending.
***Yes, HD, you wouldn’t feel comfortable borrowing that much, but I have a friend in a low, low cost area (think high plains) whose business makes him $400k+/year and *he* isn’t comfortable having *any* mortgage–you’re less extreme/prudent than he is, but most people are equally less extreme/prudent than you. And some 55 yo couple w/ no retirement savings shouldn’t qualify for that loan with that income, as they have little prospect for increased future earning.
“Per capita income for the 2000 census. A little dated at this point.
http://www.lib.uchicago.edu/e/su/maps/percapitaincomecity1999.html
Wow, the projects really stick out in some places.”
Yeah Cabrini and Lathrop really pop out in the sea of red. :-/
Interesting map. I’d like to see more resolution in the higher income levels…
http://www.censusscope.org/us/m1600/chart_income.html
Household Income, 2000 (1999 Income)
Percent of Total
Number Households
Total Households 2,972,373 100.00%
Less than $9,999 229,661 7.73%
$10,000 – $14,999 136,542 4.59%
$15,000 – $24,999 286,340 9.63%
$25,000 – $34,999 317,379 10.68%
$35,000 – $49,999 456,182 15.35%
$50,000 – $74,999 620,628 20.88%
$75,000 – $99,999 384,277 12.93%
$100,000 – $149,999 330,550 11.12%
$150,000 – $199,999 100,312 3.37%
$200,000 and above 110,502 3.72%
Household Income, 1990 (1989 Income)
Percent of Total
Number Households
Total Households 2,667,182 100.00%
Less than $9,999 329,659 12.36%
$10,000 – $14,999 171,790 6.44%
$15,000 – $24,999 383,676 14.39%
$25,000 – $34,999 394,299 14.78%
$35,000 – $49,999 517,312 19.40%
$50,000 – $74,999 507,372 19.02%
$75,000 – $99,999 190,473 7.14%
$100,000 – $149,999 108,442 4.07%
$150,000 and above 64,159 2.41%
So 7% of Chicago. That seems pretty reasonable to me.
I wouldn’t expect 93% of the city to be able to afford a place like this.
If you do the math above in 2000 based upon 1999 income there were 210,741 with incomes higher than $150,000 in Chicago.
$650k is a lot of money. This is not an elite home for the top 7% of all Chicago households. It’s a nice home, yes, but Viking appliances do not make it elite. Knifecatchers abound.
“I wouldn’t expect 93% of the city to be able to afford a place like this.”
Which is probably why most profiles of properties similarly priced to this one don’t sell immediately and linger and collect dust on the MLS. Obviously this property was the outlier (and if it sold in 2 days was underpriced). And it looks larger than 2,300sf, too.
“looks larger than 2,300sf”
Seems about right for the first and second floors. Certainly doesn’t include the basement and probably doesn’t include the attic.
Now can anyone dig up the corresponding listing price breakdown for Chicago? I’d like to see what percentage of listed homes are $650k+.
Anyone care to wager whether the number is > or
Looks like a house from Oak Park was airlifted into this hood. Good price, I guess, that’s why it went under contract in two days?
That should read: “Anyone care to wager whether the number is GREATER THAN OR LESS THAN 7%”?
http://zipskinny.com/index.php?zip=60660
2.4% of households make over 150k in that area… (I’d say that qualifies as “remarkable” or I would prefer to say “rare”. This ain’t LP we’re talking about here.)
Personally don’t see the appeal of this property. So-so area and ugly architecture, obviously somebody loves it enough to buy it however.
“Anyone care to wager whether the number [of houses listed for over $650k] is GREATER THAN OR LESS THAN 7%”
Using Realtor.com (someone else will need to do MLS), the numbers for the City of Chicago are:
up to $649,999 = 26,714
$650k + = 3,471
So, it’s 11.5%. Which isn’t too far off, really, esp. b/c the >$750k number (above which any given seller is v., v. unlikely to accept a ~$650k offer) is 8.87%, and I’m pretty sure that the percentage of taxpayers over $150k in Chicago is actually slightly higher than 7% (but I can’t find the damn chart–based on AGI).
“2.4% of households make over 150k in that area”
Year 2000 stats–which will vary mostly b/c of demographic change, rather than income change; and that’s of all people, not homeowners, which is much more relevant.
So are we trying to prove that this deal shouldn’t have happened?
“So are we trying to prove that this deal shouldn’t have happened?”
Who said anything like that, apart from you?
“Who said anything like that, apart from you?”
coughHDcough
Really? This is what I took to be HD’s main points:
“So yes this is a ‘deal’ but even this ‘bargain’ is still unsustainable in the long run.”
“Knifecatchers abound.”
I take both statements to mean that deals like this should be happening. There will be better bargains in the near future. Knifecatchers are necessary in every correction. There will be mileposts like this all along the way.
““Who said anything like that, apart from you?”
coughHDcough”
He said: “So yes this is a ‘deal’ but even this ‘bargain’ is still unsustainable in the long run.”
Then went on to (again) posit that $150k income is rare and barely enough to make this house “affordable”. Which isn’t saying that *this* is a deal that shouldn’t have happened, no matter how much one might disagree and feel it’s a broken record.
PS, I’m going to keep bumping the Foster townhouse until someone tells me what the “real” problem with it is.
I understood his post as calling the buyer a knifecatcher, which implies that it should not have happened. No?
Current mls att-det listings for 60660:
Total = 437
ask $650K+ = 12 (2.7%)
ask $750K+ = 7 (1.6%)
“PS, I’m going to keep bumping the Foster townhouse until someone tells me what the “real” problem with it is.”
The problem happens to be we have a troll named kp on here. If they weren’t a troll they would’ve have left a leading, open ended implication hanging out there.
“#Bradford on March 30th, 2009 at 10:11 am
I understood his post as calling the buyer a knifecatcher, which implies that it should not have happened. No?”
No. You obviously don’t know the meaning of knifecatcher, do you? Let me guess, you’re also ignorant to the meaning of an FB, right?
I didn’t know what a ‘FB’ was at first but it doesn’t take a JD to figure it out
I guess I am just trying to understand what we are talking about…
For those of you who aren’t in on the 133t$p3@k, http://housingbubblecasualty.com/ has a definition for ‘FB’
“I guess I am just trying to understand what we are talking about…”
It now seems we’re having a meta-conversation, which is probably the only thing significantly less interesting than (again) hashing over what is “affordable” and certain posters showing how much more “prudent” they are than everyone else, followed by a virtual shouting match.
Don’t like the discussion? Start discussing something else. Moaning and groaning about what others are posting ain’t any better than what you’re implicitly complaining about.
Ok, since someone else brought up the fact that this house looks like it would fit in well in Oak Park, I have to ask…why buy this place over a similar (and much cheaper) SFH in Oak Park?
“why buy this place over a similar (and much cheaper) SFH in Oak Park?”
With the edgewater property you get:
1) Lake access
2) downtown access
3) city address
4) edgewater
5) loyola
6) I-94 down Peterson
7) andersonville
8) red line access
There’s a whole generation of people who want to stay in the city, particularly on the northside, and some are willing to pay almost any price to stay, instead of settling and moving to the ‘burbs.
I’m not a fan of edgewater but I know some people who are devoted to the neighborhood. I’ve got nothing against it but its a little too similar to Rogers for me.
That’s stupid that I put 8 ) and it makes an emoticon
“why buy this place over a similar (and much cheaper) SFH in Oak Park?”
The ‘tubez ate my other, longer post. Points and questions:
1. Is there really a similar, brick house, north of the Ike, not on a major street? Nicely reno’d w/o destroying the vintage parts? And still “much cheaper” (which I take to be ~$500k or less)? Huh, didn’t realize–and that’s having friends in OP.
2. Taxes would be the same or higher, even at a lower price.
3. OP mostly draws a certain type. That might not be you, so that’s enough reason alone.
I lived in A’ville and I actually can get to the loop faster on the green line from Oak Park than when I took the redline in A’ville. Oak Park is an honorary city neighborhood. We still get a few crackheads from Austin along with the CTA… hardly like living in Naperville. If this house were in Oak Park, it would be priced the same or more expensive as well.
I had the same choice a number of years ago and this type of house would work great if you are commuting to the loop or going to north suburbs. It would suck though if you have to commute to the west suburbs which is what ultimately got us out of the city.
The red line up that far north takes a while, 35 or 40 minutes, to get downtown. Plus time spent on the platform waiting.
It’s probably closer to 45 minutes from Granville.
“Looks like a house from Oak Park was airlifted into this hood.”
There is a large swath of Edgewater Glen that looks just like this.
Anon said:
“Is there really a similar, brick house, north of the Ike, not on a major street? Nicely reno’d w/o destroying the vintage parts? And still “much cheaper” (which I take to be ~$500k or less)?”
You should try searching the MLS for stuff under 500K in OP. Here are just a few examples:
http://www.realtor.com/realestateandhomes-detail/320-S-Maple-Avenue_Oak-Park_IL_60302_1105789994
http://www.realtor.com/realestateandhomes-detail/332-Wisconsin-Avenue_Oak-Park_IL_60302_1100000655
http://www.realtor.com/realestateandhomes-detail/721-S-Scoville-Avenue_Oak-Park_IL_60304_1094763470
And I don’t know what people’s beef is with living on the south side of the Eisenhower in OP. If you don’t mind being on the blue line instead of the green line, you can get a SFH foreclosure or fixer right now for well under 200K in OP.
Sabrina, don’t be mad at me for plugging Oak Park! I couldn’t resist.
I have a Miele dishwasher, and it is a royal POS.
/just sayin’
One more thing…I get people wanting to live along the red line and be close to everything on the north side. However, I think it’s silly to say some people don’t want to move to OP because they don’t want to move “way out to the burbs” and give up city life. My neighbors have two kids under four years old, no car, and they get around just fine in Oak Park…plus they don’t have to worry about moving when it’s time for their kids to go to school. My ride to the loop on the blue line is shorter than that of all my coworkers who live on the far north side ‘hoods. If lake/red line access and cheap cab fare are on your wish list, I totally get the desire to be on the north side. But let’s not lump Oak Park in with the real suburbs where you have to have a car, the architecture sucks, and your only option for public transit is to take the metra to union station.
“they don’t have to worry about moving when it’s time for their kids to go to school”
Neither do a lot of people in the city. It’s silly to say that one “has to” worry about moving for school issues, unless you don’t consider that *at all* when buying a home. But you are correct, OP isn’t really farther (timewise) than much of the northside.
Also, since you live out there Danny, you must know where to find the 2300+ sqft, renovated, brick houses for under around $500k or less–since you brought it up. Ed disagrees about the pricing, but you must have a secret stash, no? And nothing south of the Ike.
I just posted links the THREE properties in great parts of Oak Park all for under 500K and now you’re going to complain that none of them are brick? I guess stucco won’t do either? Fine, pay an extra 100K for brick and another 100K for lake/red line access. I give up.
“homedelete on March 30th, 2009 at 10:33 am
No. You obviously don’t know the meaning of knifecatcher, do you? Let me guess, you’re also ignorant to the meaning of an FB, right?
”
I know the meaning of both. Unlike yourself, I don’t think anyone who makes a real estate purchase is both.
“I just posted links the THREE properties ”
No links posted. Held for moderation, most likely (check next to your name–you can see it, we can’t), as most (all?) multi-link posts are at the CC.
10% off zillow’s 2006 price isn’t a deal. 1999 pricing plus a nominal amount for used high-end appliances and fixtures is fair. A bank owned REO is a bargain.
“1999 pricing plus a nominal amount for used high-end appliances and fixtures is fair.”
If it gets bad enough that you can get a SFH in a nice Chicago city ‘hood, in a good Elem School attendance area, at the prices the unreno’d house sold for in 99, we’re all going to have bigger issues than whether it is a 99 price or a 2001 price.
“A bank owned REO is a bargain.”
Redundant and absurd. A winning combination, HD.
“we’re all going to have bigger issues than whether it is a 99 price or a 2001 price.”
And we do. This site just happens to focus on the housing aspect of things. Did you see Q408 GDP? On what basis does the government or private economists have to forecast their recovery scenarios from this trough? Wishful thinking, methinks.
Right now the CS futures aren’t predicting a drop of near that magnitude for Chicago, but its not a very fluid market either. I think this downturn, this time, IS different. I hope I’m wrong.
It doesn’t surprise me at all that this house sold so quickly. $650k is a very reasonable price for a 4 square in this little pocket of Edgewater, especially one that appears to be in such good condition. Hood, Glenlake and Norwood are all great streets with great neighbors and don’t see a lot of turnover.
“If it gets bad enough that you can get a SFH in a nice Chicago city ‘hood, in a good Elem School attendance area, at the prices the unreno’d house sold for in 99, we’re all going to have bigger issues than whether it is a 99 price or a 2001 price.”
People keep saying that but it’s just not true. Stocks briefly hit 1997 prices; oil crashed to sustainable levels too. Life goes on. Housing returning to realistic levels won’t be any different.
“Housing returning to realistic levels”
No, you want housing to go to UNrealistic levels. You’re proposing that this house–which has been substantially and meaningfully improved since its purchase in 1999, in a neighborhood that has gotten better and with a Elem school that appears might soon qualify as “decent”, is worth maybe $375k.
If this is $375k, then whats the stick house next door worth? $250? What’s a 3br condo on the block worth, $175k? If you think mortgage defaults are bad now, if that happens, *nothing* built or renovated since 1999 will have a performing loan.
You want something that is out of proportion with your willingness (not ability) to pay for it. And you’re just going to de-camp for the ‘burbs anyway, so you think **everything** in the city is overpriced, b/c it ain’t what you want long term.
“Right now the CS futures aren’t predicting a drop of near that magnitude for Chicago, but its not a very fluid market either. I think this downturn, this time, IS different. I hope I’m wrong.”
Bob:
Are there two of you? Or do you occassionally sit down with Ze for a break and then post here? Because there are some wild swings, man.
anon(tfo),
My assessment of the current situation is, I admit, biased. Indeed the further RE drops the better off I will be–I have a vested interest in seeing it drop. That being said, I don’t ignore meaningful data that supports different conclusions. I was a bit surprised myself today when the CS index only showed Chicagoland going down to 125, I disagree with it but it could be construed as valid data given people are voting with their money.
Anon.. I am always consistent.
BTW.. I will say the situation in Florida and Chicago are completely different as of right now. Florida is a freakin disaster.
Anon(tfo),
Current price levels are unrealistic. Prices are going to 1999 a/k/a pre-mania levels – whether you’re on board or not. Oil, stocks, commodities – all have dropped to pre-bubble prices. Housing will be no different and we’re trending that way anyways. My god the horror if housing is cheap and takes up less than 28% of a household’s income!
Regarding this property: Maybe you haven’t traveled two blocks to the east of this property on the otherside of broadway, near the El stops; I’ve been over there quite a few times in the last few years and it hasn’t improved much since I lived in Rogers Park in 2000. Same riff-raf, same nonsense, except maybe the pumping company reopened with a kitchen. BFD. Didn’t some guy light his wife on fire in a cab just a few blocks from here????
“Anon.. I am always consistent.”
No doubt. My suggestion was that, perhaps, Bob reacted a little differently to the “break”. Occassionally, as here, he seems much more relaxed.
“the CS index only showed Chicagoland going down to 125”
Two things which I might become a broken record on:
(1) Need paired sales to get it to go down; if SFHs aren’t selling, nothing to move the index
(2) Doesn’t include condos.
Ok oil is at 2004 pricing but its down 70% from it’s high last summer.
HD the mass delusion persists that RE values will maintain as so many have so much tied up in their previously lofty valuation and were counting on that to get them through retirement (reverse mortgage, HELOC ad infinitum, etc). Not gonna happen anymore.
The baby boomers were a demographic tsunami when it came to sheer numbers and overconsumption. There just aren’t enough people waiting in the wings to step in and fill their role and spending habits to keep these valuations afloat.
Sorry just because somebody paid some price for your place in 2004 when the economy is good doesn’t mean its worth that price today.
HD,
Can’t confound commodities such as oil, corn, ect with the price of a house. Just because oil is at ’04, condo need to go to ’02, stocks are at 1997-99 levels doesn’t translate to the dollar at ’05 and gold at 1983. It is not an argument.
Pricing will return to the intrinsic value people place in them, for investors where they feel they will get cash flow. These will be at different points. Chicagoland doesn’t unnecessarily need to return to ’99 price to make housing affordable, but I do agree, pricing during the bubble years was unsustainable and needed to be tempered.
Prices and as well the house itself will forever remain local phenomenon, with macro economic forces affecting it temporarily, until the true local market forces correct the imbalance, whether is going up too high or crashing too much.
The longitudinal studies about how housing tracks inflation will lead to a general ballpark of where prices will end up. Then we can argue whether there will be lots of inflation/deflation.
You and I are on the same page Bob, we totally agree. There may be some people with $130k in cash and a great job and a burning desire to buy a four square in Edgewater…but there aren’t enough of those people to sustain a market or lofty price valuations forever.
“Didn’t some guy light his wife on fire in a cab just a few blocks from here????”
Didn’t some guy light his kids on fire in Glendale Heights; didn’t some guy kill his wife and stepson in Wilmette? Crazy stuff happens all over man. Anecdotes =/= data and a few blocks always makes a difference.
“Oil, stocks, commodities – all have dropped to pre-bubble prices.”
Gold, Copper (was 70 cents in 99, now $1.80), lumber is way down but non-pine timber is generally up from 2000, Corn is 2.5x 99 prices, wheat is close to 3x 99 prices, silver is 2x 99. Sugar is almost 2x, cocoa is nearly triple.
Yes, aluminum has fallen off a cliff, as well as stocks (the growth stock ponzi hit the wall). But that’s not nearly as broad as you make it.
ChiREvassel, you’re right about cash flow; it’s merely one valuation among many but if you try running cash flow numbers for investment purposes, then the 1999 numbers look too optimistic. 1528 W. Hood – four bedrooms listed for $2,700: (nice looking place too)
http://chicago.craigslist.org/chc/apa/1098807847.html
HD maybe you and Bob can pool your assets and buy this place together. If all goes well you two can can rent a couple bedrooms to some hipsters to help pay the mortgage. Otherwise I wish you the best of luck.
“but if you try running cash flow numbers for investment purposes, then the 1999 numbers look too optimistic. ”
If you think of your home as only an investment, that’s your choice. Most people do not.
You know I think there was a big, nasty bubble. You know I think the asking prices are generally too high still. But I still think you’re way off base on a lot of this b/c (1) of the really wacky stuff in your ‘hood and (2) you place a *discount* on homes in the city, b/c they are not long-term homes for the life you want. Fine. But it skews your perception–you treat bascially everything here as if it should be a rentsaver, and that just won’t happen barring things getting much, much worse in the general economy, and then things will become much, much worse.
“Most people do not.”
Incorrect. Most people did NOT treat their homes as a value stock with a high dividend yield–those were for investors. In Chicago those were few and far between in my opinion. Seriously I feel bad for aspiring landlords here now because the opportunities for high-capex buildings are few and far between and financing is scarce.
Most people who bought 2003-2008 instead treated their home as a speculative growth stock, counting on asset appreciation as these properties that were not cash flow positive vs rents. They bet wrong. Now unlike stock market speculators our government is committed to not letting the market punish them for their mistakes and erroneous judgment, nor the financial institutions that enabled them.
Look at the chart in this link; it’s a bit dated (2008) but it has existing home sales and volume on the same chart.
http://www.iaconoresearch.com/BlogImages/08-04-22b_existing_home_sales.png
I can’t anything of anything that will get us out of this depression except for a wholesale reduction in prices. What else will get the economy back into the 5,000,000 and 5.5 mil and even 6.0 mil home sales per year range?
~ Not Wages – they aren’t going up, in fact we’re starting to see wage deflation (financial sector, publishers, newspapers, auto)…
~ Not Toxic financing – including zero downs, IO ARMS, NINJA Loans, are gone and they aren’t coming back. IF someone could afford $650k with an Option ARM or a 40 year IO ARM with zero down they may not be able to afford a 30 year fixed with 10% down…
~ not the wealthy – few people have saved or inherited money for large down payments….a Met Life survey a few weeks ago said that “A disturbing 50% of Americans say they are only one month — or only two paychecks — or less away from not being able to meet their financial obligations if they were to lose their job, and more than half of these, a startling 28% of the total respondents, couldn’t survive financially for more than two weeks. Even the “mass affluent” — those making $100,000+ in income per year — aren’t immune with more than one-quarter (29%) saying that they couldn’t meet their financial obligations for more than one month following a job loss.” (no link so my post won’t get eaten) …
anon(tfo), I completely and 100% respect your opinion, and we agree on a lot of things, but we disagree on the eventual outcome of this bubble.
It’s going to take a long time for Americans to save for down payments and for prices to come down. Unless we reach capitulation, this is going to be long, slow and drawn out, especially in the higher end areas with higher priced properties.
The government is trying desperately to fix the depression: lower interest rates, housing credits, tax deductions, TARP, and others, but all it’s doing is prolonging the inevitable. Look at the chart again, see the enormous gap between existing sales and inventory; I just don’t see any other way those will level out without the glaringly obvious solution: wholesale housing deflation back to levels that even today people are still calling obscene.
“You know I think there was a big, nasty bubble. You know I think the asking prices are generally too high still. But I still think you’re way off base on a lot of this b/c (1) of the really wacky stuff in your ‘hood and (2) you place a *discount* on homes in the city, b/c they are not long-term homes for the life you want. Fine. But it skews your perception–you treat bascially everything here as if it should be a rentsaver, and that just won’t happen barring things getting much, much worse in the general economy, and then things will become much, much worse.”
“Not Toxic financing”
HAH its funny you mentioned that. As it turns out the last vestiges of toxic financing are what is keeping the market alive, or a big portion of it. Hohoho our taxpayer dollars at work helping those who can only afford a 3.5% downpayment achieve the “dream” of home loanership and leveraging themselves to a declining asset.
From a WSJ article today:
“The FHA’s share of the U.S. mortgage market soared to nearly a third of loans originated in last year’s fourth quarter from about 2% in 2006 as a whole, according to Inside Mortgage Finance, a trade publication.”
Bob,
When I buy a building , I’m looking to hold it for the long-term.
So I’m a little less hung up on how my cash flow is the first year out.
My building is a few blocks from here, and let me tell you, there is a huge difference between pricing on lovely, vintage houses with tasteful kitchens and multi-unit buildings that need some work. Back to the two markets theory happening in Chicago right now.
HD: “It’s going to take a long time for Americans to save for down payments and for prices to come down. Unless we reach capitulation, this is going to be long, slow and drawn out, especially in the higher end areas with higher priced properties.”
I had a long response, but lost it. Summary is: I don’t disagree with the quote, but I don’t see homes that are currently 3-6 times median (about $650k-$1.2mm) becoming 2-4 times ’99 median (which was ~$170k). I see the ratios bascially remaining–at least with SFHs. Maybe we get the 99 median back–and then this house, about 3x current median, could be reasonably $500-525k; that I can see.
Your belief that this house will return to ~2x median is what I take issue with–even in ’99, when it wasn’t as nice and fewer people would consider the ‘hood, it was over 2x median. Just b/c you don’t think the kitchen adds sufficient value doesn’t mean it won’t for lots of others–it’s clear you wouldn’t pay anything like 3x median for it b/c you don’t like the area and you don’t **prefer** the house to a more “average” Chicago house.
How can an individual, non-broker or lawyer, access historical sales data (per an address) on the net?
How do you get all your sales data? going back to the mid 90’s?
thanks!
Dan:
I should really have a link on the site as to where you can access this info.
It’s all public information in Cook County.
If it’s new construction (last 2 years or so)- look on the Chicago Tribune’s website in the real estate section under “latest sales.” They won’t have all the info, but it’s pretty decent (as developers sometimes don’t post closing info on all units.)
For existing homes, find the Property Identification Number (PIN) on:
Cook County Assessor
Then, take the PIN and plug it into:
Cook County Recorder of Deeds
sometimes the PIN is on realestate listing too.
For those who were asking, I believe the cabinets are the Brookhaven line from Wood Mode – I dont know the exact style. You can find more info at http://www.wood-mode.com/STYLE-OPTIONS/DoorStyles_BH1_1.htm