First Lis Pendens in Fairbanks at City Front Plaza: 240 E. Illinois
We’ve chattered about Fairbanks at City Front Plaza at 240 E. Illinois in Streeterville before.
Closings began on the lower floors of this building in 2006 and they continue on the tower portion.
This is the first lis pendens, that I’ve seen, in the building.
Unit #602: 1 bedroom, 1 bath
- Sold in August 2007 (I couldn’t find a sales price)
- Lis pendens filed in August 2008
- Wells Fargo has the mortgage of $384,951
Unit #402 is currently on the market. We chattered about it in May 2008.
It has been reduced $30,000.
Janet Ecker at Prudential Preferred has the listing (more pictures on the website).
Unit #402: 1 bedroom, 1 bath, 933 square feet
- Sold in December 2006 for $401,000
- Was listed in May 2008 for $420,000 (parking additional)
- Reduced
- Currently listed for $390,000 (parking $55,000)
- Assessments of $392 a month
- Taxes are “new”
The owner of unit 402 is clearly praying for a greater fool. We all know they got a free parking space with this unit at 401k, now they’re trying to eke out a 44k profit (10% gain) on the unit despite that the market has moved away from them, significantly.
Poor Wells Fargo..if only they had exercised some due diligence.
This might help determine how much of a greater fool they are seeking. Here are some rented ’02’ units (with parking):
unit rent date rent
302 12/22/2006 $1,500
402 5/7/2007 $1,900
2902 5/31/2008 $2,100
My rubbernecker’s guess is that starting in November a lot more people are just going to give up their property rather than paying the carrying costs through to the ’09 selling season.
So if you have the $$$$ and willing to move in February, you may want to keep your eye out for some good deals.
hello, I’ve been of the same opinion for a while now. I think this winter should prove very interesting.
I’ve been tracking a few buildings in Streeterville, and I think a few of them are primed for major problems soon.
Those problems will only be the start this winter. Declines will continue throughout 2009.
Here’s the only flip I could find in the mls for this building:
Unit 1307 sold 10/24/2007 for $456,900. This contract was signed 9/30/05.
Unit 1307 sold again 6/6/2008 for $465,500
There are currently 20 active listings in the mls. The race to the exit has begun, all that is left is to see what it costs to depart.
Wow — so unit 1307 tied up a deposit for two years and then consumed 8 months of interest payments (plus assessments and taxes) for a “profit” of $9K.
The deposit probably wasn’t very big, but the opportunity cost could easily be $1K. (10% deposit with 2% interest, 5% deposit with 4% interest)
At a 6% rate, the mortgage would require 0.5% per month in interest — about $1250. Eight months of that is $20K.
Then the realtors, city, and other folks want a cut at sales time — call it 6%. (Even if this was realtor owned, they could have been out earning a commission rather than selling their own property…) That makes the transaction costs some $25K.
So, $9K paper profit, less costs of $46K — net loss of $37K. The flipper probably should have walked away from their deposit if it was much less than 10%.
Are you sure about that interest calculation?
Regardless, it is a cautionary tale for those who have deposits on any of the 6,000 units yet to come.
G,
can you give us updates on recent closing and rental rates in 600 N Fairbanks?
Thanks G — I apparently made a typo and then dropped a digit when calculating. Two errors in different directions that cancelled out enough to match my WAG.
0.5% of $450K is $2250 (not $1250), which means the interest paid over 8 months is $18K (not $20K). Net loss is $35K, which doesn’t change the conclusion much.
(Original calculation: 0.005*450K is 2250. 8*250 is 2000. 2000 is off by error of magnitude from estimate [20K based on my $30K/year $417K 6% mortgage]. Assume I screwed up the interest multiplication so 20K is right.)
Seems to me like they staged this place in Ikea. I think anyone spending 400K on a 1/1 is probably looking for something nicer than that. I do like the wide-plank floors, though. very nice touch.
Not that it makes much difference (the flipper still took a bath after costs), but deposits are placed in interest bearing accounts and the purchaser gets the interest. They should have earned about 2% over the last year or two.
OT, and I understand this is CA but we may see this in midwest soon…
“The foreclosure crisis gnawing away at overbuilt suburbs has accelerated that migration, and the problems. Antioch is one of many suburbs in the midst of a full-blown mortgage meltdown that has seen property owners seeking out low-income renters to fill vacant homes.”
http://www.nytimes.com/2008/08/09/us/09housing.html?_r=2&ref=patrick.net&oref=slogin&oref=slogin
sartre,
I doubt northeast IL will see a full fledged meltdown even if we do enter a severe recession. Some suburbs will surely fall, yes. But the run up here since 2000 prices has only been around 67% at the peak, nowadays its only around 50% higher. This pales in comparison to California or Miami where the median price to income ratios are still far higher than 4x.
I’m not trying to talk up this market as much as I’m trying to say CA and FL are in for _severe_, extended, decade long problems. You can’t have price runups of 180% and not expect your economy to significantly tank for the next decade when the music stops.
Chicago might suffer the most in the midwest in terms of depreciation from peak, but the correction will probably be far more gradual than other areas, leaving the government time to push initiatives to placate homeowners. I don’t like it at all either but it seems to be a politically popular topic of bailing out irresponsible homeowners. Also DC takes a long time to act so I predict it will mostly only benefit slower declining markets like the midwest. By the time Washington gets around to acting it will be too late to stop the slide in FL & CA is my prediction.
I’ve never bought the argument that “prices will drop less here because we didn’t appreciate as much”. You could be right about Chicago, but there are too many factors determining real estate prices for this to hold as a reliable principle.
I’ve heard it said here before by G or homedelete, and it’s very spot on: Just because prices didn’t go up by a lot doesn’t mean that the given city isn’t in a serious bubble. Perhaps this speculative frenzy kept prices in a given city stable when they should have tanked (based on fundamentals like jobs, salary levels, population change, etc.).
Also, how has Detroit fared in all of this. I remember last year when things started to really go wrong Detroit was among the biggest losers.
Perhaps someone can bring up more reliable data, but I do believe that Detroit is an example that proves my point.
They completely missed out on the RE boom, yet they managed to be among the poorer performers in the bust. Per Case-Schiller, values there are now below 2000 values.
Detroit (Wayne County) is falling apart because of a lack of jobs. The only places to own real estate in Michigan are Ann Arbor, Grand Rapids (mabye), and on lakes. On Diamond Lake (approximately 2 hours from Chicago), frontage goes for $10,000 a foot because of Chicago area people bidding up the prices.
Chicago is not as bad off as you all think. If you want to see problems, go to Ohio or Michigan where jobs have been disappearing fast. Young people want to live in Chicago and this is critical to a city’s longevity. Public transit, affordable office space, 2 airports, and a reasonable state income tax rate will keep people coming to Chicago. The long term macro factors look great IMHO.
JL: Reasonable STATE income tax doesnt mean crap when Chicago has the highest tax rates in America
wren,
Here’s the 600 N Fairbanks closed/rented in past 60 days:
#1301 Closed 8/4/2008 for $805,000
#2606 Closed 7/28/2008 for $386,000
#3402 Closed 7/21/2008 for $752,500
#3305 Closed 7/15/2008 for $725,000
#3705 Closed 7/8/2008 for $1,255,500
#3701 Closed 6/27/2008 for $2,153,132
#3803 Closed 6/18/2008 for $1,702,000
#3206 Rented 8/1/2008 for $2,100 no parking
#3001 Rented 7/25/2008 for $4,900 with parking
#2908 Rented 7/13/2008 for $2,400 with parking
#3306 Rented 7/9/2008 for $2,350 with parking
#2907 Rented 6/25/2008 for $3,150 with parking
#1506 Rented 6/25/2008 for $2,000 with parking
#1508 Rented 6/20/2008 for $2,150 with parking
#3407 Rented 6/12/2008 for $3,200 with parking
Chicago is a hub for the midwest and primarily for grads from big 10 colleges. However, people aren’t moving in great numbers like they do to the sun belt.
It doesn’t bode well for Chicago when a guy earning $70k or $80k a year with 1 or 2 kids and a stay at home wife can’t afford a $450k unit in a three flat unless he wants to live in Pilsen or Portage Park.
“guy earning $70k or $80k a year with 1 or 2 kids and a stay at home wife can’t afford a $450k unit”
5-6x income? I’d argue that this guy probably shouldn’t be considering anything over $250K, and won’t be able to get it until the banks lose their minds again.
Banks won’t be losing their minds again any time soon. Instead they will be losing the bank. You’re going to see a lot of name brand banks collapse from this. My next prediction is Washington Mutual if the bond market is any indication.
“a guy earning $70k or $80k a year with 1 or 2 kids and a stay at home wife”
Why SHOULD this guy be able to afford to buy property in LP or LV? It’s like complaining that a similar guy can’t afford to buy in Manhattan or Bel-Air or Winnetka–it’s unreasonable to think that people of slightly above-average income SHOULD be able to buy property in the top 5% neighborhoods anywhere.
anon, spot-on commentary.
“reasonable state income tax rate will keep people coming to Chicago”
What about the 10.25% city tax? that certainly wouldn’t entice me if I didn’t already live here
ChiGuy,
It depends on whether you are a spender or saver. The 10.25% sales tax is a consumption tax. If a large portion or most of your income goes to savings it will not be hit with this tax.
The income tax is a savers tax: regardless of your consumer behavior you get hit on it.
I’d rather have a higher regressive sales tax any day of the week than a draconian high incomme tax. At least with a sales tax everybody shares the burden equally. Also the sales tax is remarkably easy to avoid (although this is technically illegal of course and not an endorsement).
I guess I wasn’t clear enough with my posting. I was trying to say that housing in Chicago is too expensive to purchase for the average guy with a wife and two kids unless he wants to live in gang infested barrios or ‘hoods. One unit in an ubiquitous three flat usually sells for $400k or $450k – which is way too much for our regular joe with an above average income, a wife and two kids.
““a guy earning $70k or $80k a year with 1 or 2 kids and a stay at home wife”
Why SHOULD this guy be able to afford to buy property in LP or LV? It’s like complaining that a similar guy can’t afford to buy in Manhattan or Bel-Air or Winnetka–it’s unreasonable to think that people of slightly above-average income SHOULD be able to buy property in the top 5% neighborhoods anywhere.”
Substitute the “one unit in a 3-flat” for “bungalow” and you get the same result. Bungalows in move-in condition in OK neighborhoods on the northwest and west sides cost about $400k. For a hundred years these homes were considered affordable starter homes for familes. Only in the last 10 years have they gotten to be so expensive that regular or above average income folks cannot even afford to buy in OK neighborhoods.
HD: I don’t disagree about the bungalows, but …
Say the deflation of the bubble causes the bungalows to drop 25% (in line with reasonable expectations) so they’re $300k. Then they would be “affordable” on “traditional” underwriting for a borrower with a $100k income. Two CPS teachers (or two city employees in union or professional jobs) with a few years experience make about $100k+. The fact that “affordable starter homes for familes” now require two incomes (or a much-better-than-average single income, as they did before WW2) is no mystery and is not a result of the bubble.
homedelete, go look at Garfield Ridge on the southwest side of the city. Many firemen and policmen live in this neighborhood, you can purchase a small house for 200k-250k easy. The problem on this site is all the discussed properties and the expectation are for prime locations with high-end finishes. There is affordability out there it just means buying a small 2br or 3br house with one bathroom, with dated finishes. Take for example 4807 S. Keating a 3br house, asking price is $219,000.00
Bungalows used to sell in the high 100’s and middle 200’s – no more than ten years ago. They’re now selling in the 300’s and 400’s.
I also disagree with your assessment that $100k households are common or plentiful. Two CPS teachers might make $80k or so combined after a few years. But most households aren’t two CPS teachers or city employees and reaching $100k is quite a feat for most people.
The US census report (factfinder.census.gov) says that my zip, 60641, on the northwest side (think irving park stop on the blue line) said that in 1999:
the median FAMILY income was $48k
the median HOUSEHOLD income was $42k.
There goes the $100k dual city employee theory. And we also know from the media that wages have been stagnant since 2000 – not even keeping up with inflation.
So..
60641: The median home price in 1999- $163,000.
(via factfinder.census.gov)
60641: The median home price in 7/08- $264,000
(via trulia)
Hum…..big increase in home prices……not so big increase in wages……something has to give….and it’s not going to be employers increasing wages….
thanks G
G,
Can you tell if many of those sales were flips? They closed several months after those units were completed, so they may have been resold. Those prices are significantly more than the preconstruction pricing, although they may include parking and/or upgrades.
D
I can’t comment well on neighborhoods, but I’m surprised at the number of homes that are reasonably close in at are affordable at the $250K I proposed.
Jameson (www.jameson.com) finds many SFH and condos in the city that are exactly $250K and at least 3BR. (I’m using the neighborhood names they use, even though some seem odd.)
There isn’t much north of downtown and east of the Kennedy — 3500 N LSD (coop) and 1050 W Balmoral (condo) are the closest to downtown.
To the south (still east of the Kennedy), the first places are in Grand Boulevard and Washington Park (e.g., 4627 S Langley condo, 4519 S Vincennes SFH, and 5026 S michigan condo). Fairly dense going further south to about 95th.
Between the Kennedy and Stevenson, SFHs at this price start in Canaryville. Again the $250K houses are then dense down to about 95th.
Nothing much between the Stevenson and the Eisenhower.
There are many $250K SFHs between the Eisenhower and Kennedy, however. Fairly close-in, as well: Humbolt Park (902 N Springfield, 852 N Kedvale, 1051 N Drake), Fulton River (2453 W Jackson), Wicker Park (1040 N Rockwell), Logan Square (1831 N Albany, 1845 N California condo). And that’s before reaching Cicero. Plenty of places all the way to the Tri-State.
HD:
What’s the census say about homeownership rate in 60641? From two minutes on thegoogle, the median person is the city is not an owner; what I find says 60% of Chicagoans are renters. Median income people in the city aren’t buying homes (at least using sane financing).
Yes, there was/is a bubble. Yes, housing in Chicago is less affordable than it was in the mid-90s. BUT, larger parts of Chicago are more desireable than they were in 1995, so there’s going to be some adjustment in pricing expectations.
And a big part of the shift you show in the ’41 can be attributed to mortgage rates being 2 to 2.5 points lower–$165k @ 7.5% has almost exactly the same (amortizing) payment as $215k @ 5%–not that that’s the “right” analysis to make, but it’s the analysis people make.
IMO, one big insanity has been the yuppie-fication of re-habs in lots of “working class” ‘hoods. It would be nuts to spend more than (maybe) $10k re-habbing the kitchen in the house on S. Keating, but many “developers” have done it and then expect to see a return.
HD look at my post, 10 years later and single family homes are still available in the 200’s.
I agree that Chicago is not perfect, but no city is. I travel oftern for work and can tell you Chicago is in great shape relative to most areas I go. Regarding prices, you might have to travel further on the metra to find a more affordable price…it happens.
Income taxes. If you think Illinois is bad, look at other states.
http://www.taxadmin.org/FTA/rate/ind_inc.html
Sales tax. You only have to buy food in Chicago and the tax is 1% on that.
http://www.taxadmin.org/FTA/rate/sales.html
One more thing, HD, per the CPS website, the STARTING teacher salary for 08/09 SY is $42,021–with no advanced degree–plus they have a pension and better medical coverage than you or me. So, two first year teachers make $84k; two 5th year (no adv. degree) teachers make $102k, plus their pension contribution. And they have 12(!!!) weeks off and have a 6.25 hour scheduled workday–plenty of time to run a side business (kind of like firemen).
Also, Asst. Principals start at $90k and Principals start at $110k–again plus a pension and with better, cheaper medical coverage than you or I have.
I love it. Nothing is selling in Old Irving and the rest of 60641 is foreclosure central; yet people keep saying that Chicago is affordable.
“Its different here.”
anon, you clearly do not know any teachers.
“Nothing is selling in Old Irving and the rest of 60641 is foreclosure central; yet people keep saying that Chicago is affordable.”
Huh. I didn’t realize that all of Chicago was 60641 or more expensive neighborhoods. I (and I think valsko) have been making the point that you seem to have unreasonable expectations, not that the market is “affordable”–whatever that means to you–in a city that is 60% renters.
“anon, you clearly do not know any teachers.”
I take it you mean that in reference to the “plenty of time for a side business”. I know/have known plenty of teachers. Many of them have had side businesses, second jobs, summer jobs and the like. Certainly not anywhere near all of them, and many of them put so much non-classroom time in that they don’t have enough time for anything else.
HD, You state, Bungalows used to sell in the high 100’s and middle 200’s – no more than ten years ago. They’re now selling in the 300’s and 400’s.
Yet, I show you property in the low 200’s in a good neighborhood- whats your response, besides the world is falling.
Also take a look at MSNs national interactive foreclosure map for the U.S. and tell me it indicates for the Chicago metropolitan area.
Well if “MANY of them put so much non-classroom time in that they don’t have enough time for anything else.” why use them in the arguement?
You showed me one property for $250k. So what, that’s like Steven H. pointing out one property in LP. 60641 is a typical northwest side neighborhood, average income, average home prices, etc. Good areas, bad areas, wealthy areas, lower income areas, etc.
Listing prices as of today for bungalows in 60641 (excluding Old Irving):
4736 W Warwick Avenue, Chicago, IL 60641 $325,000
5428 W Warwick Avenue, Chicago, IL 60641 $299,999
4701 W Berenice Avenue, Chicago, IL 60641 $325,000
4838 W Cornelia St, Chicago, IL 60641 $349,900
4910 W Waveland Avenue, Chicago, IL 60641 $359,000
4129 N Laramie Avenue, Chicago, IL 60641 $299,900
5129 W Barry Avenue, Chicago, IL 60641 $369,900
4747 W Berenice St, Chicago, IL 60641 $241,900 (REO)
5339 W Wolfram Street, Chicago, IL 60641 $299,900
3427 N Kenton Avenue, Chicago, IL 60641 $300,000 (short sale)
3123 N Luna Avenue, Chicago, IL 60641 $210,900 (REO)
4836 W Waveland Avenue, Chicago, IL 60641 $349,000
5335 W Addison Street, Chicago, IL 60641 $330,000
5023 W Oakdale Avenue, Chicago, IL 60641 $194,900 (REO)
4181 W Fletcher Street, Chicago, IL 60641 $329,900
5224 W George Street, Chicago, IL 60641 $369,900
4118 N Kilbourn Avenue, Chicago, IL 60641 $349,000
4550 W Wellington Avenue, Chicago, IL 60641 $225,000 (REO)
3016 N Lotus Avenue, Chicago, IL 60641 $299,900
5037 W Waveland Avenue, Chicago, IL 60641 $450,000
3320 N Kilbourn Avenue, Chicago, IL 60641 $250,000 (short sale)
2842 N Linder Avenue, Chicago, IL 60641 $270,000 (short sale)
4864 W Eddy Street, Chicago, IL 60641 $289,900
4721 W Grace Street, Chicago, IL 60641 $250,000 (REO)
5355 W School Street, Chicago, IL 60641 $275,900 (short sale)
3434 N Lowell Avenue, Chicago, IL 60641 $340,000
3305 N Kildare Avenue, Chicago, IL 60641 $373,000
Notice a trend? The REOs/Short sales are all priced in the 200’s – well below the normal resales. The previous owners couldn’t afford the payments when their mortgages were in the 300’s and 400’s. Prices are sticky on the way down but prices returning to the 300’s and high 200’s.
Slowly but surely we’re returning to affordability lead by the
banks.
I’m not trying to troll here folks, but those bungalows I listed above are gonna return to upper $100’s and $200’s by the time we reach the bottom of this housing mess – which is the point where average households can afford the monthly mortgage payments at 6.5% interest rates (which is where they are now for prime borrowers).
Properties all over the city will also drop in price as drastically. Granted the nicest areas will still be expensive as they should be but this $400 a sq ft hogwash for 240 E. Illinois has nowhere to go but down.
Flae
HD, with this great housing downturn I am sure you will get a great deal on a bomb shelter when it all shakes out.
Stephen–MANY city employees supplement their income through potentially illegal activity; MANY also are squeaky clean. Does that mean I shouldn’t discuss corruption (or honesty) among city employees because MANY fall in the other category?
I love how HD is able to completely predict the future and educate us so thoroughly. It’s amazing that a law student who admits he knows nothing about finance has such an amazing grasp of economics. Hard to believe he is a renter in Irving Park, you’d think such a brilliant mind would be able to live in a nicer area!
D
Deaconblue –
You don’t agree with my analysis so you respond with the ad hominem attacks. The ad hominem attack is of course the best response when you have nothing else to say.
The real estate market is a bitch, huh..it’s crashing before your very eyes…and it ain’t coming back for a while…it’s really too bad that your income depends on it. So let me educate you some more since I can “completely predict the future and educate [you] so thoroughly”:
FIND A NEW CAREER. THE SOONER THE BETTER. FIND A CAREER NON-REAL ESTATE RELATED. Only the strong are going to survive this depression, and judging from the intelligence of your posts – you’re not going to make it.
Harper College has an excellent nursing assistant’s program….
“HD, with this great housing downturn I am sure you will get a great deal on a bomb shelter when it all shakes out.”
Hopefully it won’t get that bad. Although some of the worst hit neighborhoods on the southside are starting to look like a bomb tore through the neighborhood, with lots of houses boarded up and lots of deserted blocks.
Ok guys lets play nice, enough with the personel attacks.
Maybe instead of making a rediculous statement you should use some facts. Something along the lines of average family household incomes for the neighborhood or the average schoolteacher pay in the city. You cant support an arguement without facts.
And where the hell did you pull corruption from?
The median income household income for 60641 in 1999 based on census figures was approx 48k. The median home price was 162k. That’s slighty more than 3x income.
The median price of a home in 60641 as of july 2008 was 264k. I don’t have figures for median income for 2008 but do you really think the median income surged to 3x today’s median home price? Is the median household in 60641 is currently 80k a year?
Not likely.
I realize my views may be somewhat unorthodox and particularly bearish, but we are all reasonable people looking at the same facts yet reaching different conclusions.
don’t forget a solid recession in progress. Cash ( and mobility) does tend to become king around these times…
Home Delete – Slowly buy surely we are returning to calling a shitty neighborhood a shitty neighborhood. The run up in pricing in neighborhoods that did not warrant it was pure speculation (Rogers PArk, South Loop, North Center, ect). Again, the fact that people began to pay $300 per sq ft in Logan square is beyond stupid. Lincoln Park for $300 per sq ft or Logan sq per sq ft? Where is the value? You can say the same for the South Loop. Why wuld you pay best neighborhood prices for a property WHEN YOU ARE NOT IN THE BEST NEIGHBORHOOD? Just stupid people doing stupid things…
Sartre – We are not in a recession per Q2 GDP. Are you speculating or just stating false information? Not that I don’t think we are in one, but I have no proof and either do you.
I think HomeDelete might be only 12 years old. I feel bad now that I have made fun of him for making so little money. HD’s salary is actually quite high for a 12 year old. Sorry man!
Kevin – There is no opportunity cost on the down deposit. The alternative was to be invested in mortgage backed securities. They should call it a “Opportunity Gain” with the markets over the past year.
Bank financing has gotten so tight.. with the cold coming in… if you were trying to sell this past season and you weren’t agressive enough to get it done my bet is you are starting to sweat.
Steve, No proof of a recession? which planet do you live on? Oh I forgot, you move amonst the upper curst LP types, you don’t see a recession. Yes NBER has not called a recession, but NBER NEVER calls a recession while its happening. Check your facts from 2001-2003.
Have you checked the retail sales, unemployment, consumer confidence, auto sales numbers. I would advise that you not wait for cnbc to call a recession cause thats not going to happen anytime soon.
BTW, japan and europe’s gdp numbers were reported negative this quarter , but then they don’t cook the books like we do.
also did you notice that lending is tightening (another recessionary symptom) or do you want proof of that also?
“There is no opportunity cost on the down deposit. The alternative was to be invested in mortgage backed securities. They should call it a “Opportunity Gain” with the markets over the past year.”
How about investing in real estate shorts? Now thats what I call a gain.
How could it be that SH missed such an obvious RE play as you suggest, sartre?
He claims to have superior RE investment skills to everyone here and yet he missed all the signs about shorting RE? His last comment seems to indicate he wasn’t even aware of the opportunities.
Its pretty clear that a knowledgeable RE advisor would have known this. A shill, not so much.
Satre,
By definition we are not in a recession (2 consecutive quarters with negative GDP). We have not had one yet. We all know things are tough out there but I for one am am sick of the negativity of the media and people in general. If we all work harder & smarter with a positive attitude can you imagine where we can be.
There were 500,000 consumer bankruptcies in 2006 but the US is on track for over 1.1 mil this year. Bk’s up 100% it’s a bankruptcy bubble!!! Yeah the economy is doing great.
hd–re:bankruptcy
don’t be dense. the bankruptcy “reform” flushed out everyone who was close to filing and it created an artificial low for 2006. Saying thing like that makes you sound uninformed (which I don’t believe you are).
Stephen:
Your “if ‘many’ don’t … why use them in an argument” implied that you feel that if a group doesn’t act uniformly that group shouldn’t be used as an example. Corruption was just the first thing that came to mind. Also, are you SERIOUSLY contending that the “average” CPS teacher makes less than the current STARTING salary? Are you disputing the two-teacher couple? That was used b/c HD insists that two city employees couldn’t possibly make $100k–clearly he’s wrong.
Finally, you want me to present data–I do, you don’t do anything other than make vague challenges to said data–decent criminal defense tactic, but there’s no “beyond a reasonable doubt” here.
HD,
Why do you think I work in real estate? I certainly don’t, never have and never will. Plus, the real estate market is not crumbling before my eyes where I live. According to the data that G posted about 600 NF, where I live, I’ve made about $55k on my unit since preconstruction and the prices are holding up MUCH better than even I thought. Thanks for the advice, though, I rarely have the chance to get financial advice from broke, anonymous law school students, so this is a real treat for me.
D
It doesn’t bode well for Chicago when a guy earning $70k or $80k a year with 1 or 2 kids and a stay at home wife can’t afford a $450k unit in a three flat unless he wants to live in Pilsen or Portage Park.
People should buy only as much house as they can afford, not as much as they THINK they can afford, or what they feel like they are entitled” to. It’s that attitude (along with “keeping up with the Joneses”) that gets people in over their heads to begin with.
Also? Please be quiet about neighborhoods you obviously know nothing about. Thanks.
DB, you wouldn’t be my favorite arrogant fool if you didn’t say things like “I’ve made about $55k on my unit since preconstruction.”
“Made.” LMAO.
haven’t read the site for awhile cause i got tired of the personal attacks and increasingly arrogant assumptions about being right, but when i saw that sabrina posted on 240 e. illinois, i had to bite. i bought in this building earlier this year and have nothing but good things to say, but this lis pendens is a real red flag. cannot tell you how dissappointed i was that this turned into another juvenile conversation that had nothing to do with the bldg. still making fun of someone for renting? seriously?
Pilsen’s Finest
WARNING NOT SAFE FOR WORK
http://www.youtube.com/watch?v=uQVTPuE_qRU
My point about the $450k condo was that it is too expensive for families with one well paid wage earner to live in many parts of the city.
What do you mean “made”? Based on the info you’ve provided, I could sell my place for $55k more than I paid for it. Sorry if you don’t understand math but thanks for the info.
“According to the data that G posted about 600 NF, where I live, I’ve made about $55k on my unit since preconstruction”
“What do you mean “made”? Based on the info you’ve provided, I could sell my place for $55k more than I paid for it. Sorry if you don’t understand math but thanks for the info.”
*You* said “made”, which (in this context) most people will associate with some sort of profit.
The most reasonable interpretation, given the circumstances, is that you have “made”, on paper, some $55K. That is, the market value on this asset is (maybe) $55K more than you had purchased it for. This value is, of course, not actually available to you. Months ago you probably could have found a bank willing to write a loan against this value (usually with some fees and substantial interest payments), but most banks seem to be out of that business.
Properly accounting for your costs to date, however, your paper profits are much smaller. You have been paying interest on a mortgage and incurring opportunity costs on your downpayment since closing — probably around 0.5% of the purchase price per month, or about $4K on an $800K condo. You also should have been paying HOA assessments and probably have liability for some property taxes. If you’ve owned it more than a year, you probably have a paper loss at this point, even including the $55K. (Of course, if you are living there or renting it out, the property is earning some income.)
Further, to actually convert this $55K “profit” into real money, you would incur substantial transaction costs. 5% ($40K of $800K) is probably a decent estimate.
Wow…so you get your information from YouTube? That’s like judging Lincoln Park based on news reports of the many rapes that happen in that area, or from reading the “Police Log” in the Chicago Journal.
Woman, you disappoint me! At least regale us with some colorful Pilsen stories about the time your sister’s boyfriend’s niece’s car got bricked by a wild-eyed Latino youth (complete with bandana and sneakers, homes). Or about the time you got tricked on Halsted by two hobos with their faces painted like mimes who told you they needed you to “help” them with a street art performance, then snatched your purse and ran away? *sigh*
It’s also interesting to note that you picked a video that fits your stereotype of an area that I’m now quite sure you’ve never been to, rather than something credible like crime stats.
I will NEVER say that Pilsen doesn’t have its problem areas or issues. What neighborhood doesn’t? More than likely it would not be considered a “good” area to live in for a good two-thirds of people who visit and post here. But it hardly qualifies as the gang-infested “barrio” hellhole that you seem eager to paint it as.
You guys are missing the point. The people who closed on their units for around $750k paid, at most, $715k and probably a lot less. Therefore, they have made a good amount on the unit and I, by extension, can feel good about carrying my home value on the balance sheet at much higher levels than I paid for it. I never said I made a huge annualized return on the investment, although your analysis was quite incomplete. My point is that this building is holding prices about the same as they went for back in mid-2006 at the peak of the bubble. Thus, even though transaction volume is low, the units (particularly on the high floors with great views) have lost $0 value since the “bubble” burst here in Chicago.