Flipped Once, Can it Flip Again? 845 N. Kingsbury in River North
We last chattered about Village Pointe, at 845 N. Kingsbury, in River North in April 2008. The building started closings in 2007 and several flips came on the market.
See our April 2008 chatter and some pictures here.
One of those was Unit #611, a 1-bedroom plus den, that flipped in December 2007.
It is back on the market 14 months later.
Will it flip again?
Unit #611: 1 bedroom plus “den”, 1 bath, 909 square feet
- Sold in July 2007 for $291,500
- Listed in December 2007 for $287,500 plus $30,000 for parking
- Sold in December 2007 for $315,000
- Currently listed for $319,000 plus $30,000 for parking
- Assessments of $433 a month
- Taxes are “new”
- The den is 11×7
- David Plotkin at Dream Town Realty has the listing. See interior pictures of the unit here.
Sure it can flip again…for around $225K. Guess that would be called a “flop”
I’m kind of in love with that 2br. Way too expensive but I love all the windows and how you kind of get views of the two streets converging.
The 1br is nothing special, blegh, 200-225k.
225k for a 1/1 in this economy? This ain’t NYC, this flopper is gonna learn that the hard way.
On an unrelated note, IAR just released sales figures for Chicago PMSA for January. Down 24.5% from 2008, which was down from 2007, which was down from 2006. Long term trend chart here:
http://blog.lucidrealty.com/chicago_real_estate_statistics/
Second graph on page.
Those recent sales stats are scary. We are in a real estate depression and prices are going back to 1999 on a nominal basis not adjusted for inflation. Interestingly enough, prices are going back to 1999 throughout the entire industrialized world. Here’s an interesting article about the crazy office buildings in China with a nod to ‘luxury’ condos in an area where the average salary is less than $6,000 a year. How low will these prices go? This doesn’t bode well for the $300k one bedroom condos overlooking Cabrini.
http://www.latimes.com/business/la-fg-beijing-bust22-2009feb22,0,1213023.story?track=rss
HD, that story about beijing is nuts. This quote really struck me:
By Rodman’s calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan.
homedelete –
you always back up your statements with stats, so i was hoping you might be able to help. I am currently on the market to purchase a home either in Lincoln Park or Bucktown, and I am working with an agent who keeps telling me it’s not that bad in those areas. I was hoping to find stats/info specific to those areas that would quantitatively prove/disprove what he is saying. Is there somewhere I can find this info? Basically, I am looking for data that shows what has sold, at what price, where it was last listed, how long on the market, and maybe some historical data on the area overall. Of course, any suggestions for other information that I should look at would also be welcome. Thanks in advance for any info anyone can give me.
That’s absolutely insane, isn’t it? China overdeveloped on a massive and unprecedented scale unseen anywhere else in the industrialized world, maybe even in the history of mankind. I love how some of my coworkers (and NPR) try to blame George Bush and Republicans for the housing and economic crisis when in fact the crisis is worldwide and the American component of it, while significant, is not the sole cause of the world’s economic troubles.
“By Rodman’s calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan.”
#Bob on February 25th, 2009 at 9:16 am
225k for a 1/1 in this economy? This ain’t NYC, this flopper is gonna learn that the hard way.
Do you think it will go lower? I’d love it to go lower 😎
How much though, 150..?
a,
I don’t have a Doritos crystal ball. But I could see 1/1’s dropping to 180k (with parking). We’re already heading there in the South Loop which will crumble quicker, but given RN a couple years.
1999 prices sounds about right. I am looking at something in Lincoln park right now which is at 2001 pricing.
That’s a pretty nice 1.5 bedroom place. Not 320k +30k for parking nice, but probably will sell for 275ish (with parking). So this guy is gonna take a huge bath!
Correct me if I am wrong but last time I checked, isn’t China’s average gross income around 8k a year? Meaning, the average person will need about 8 co-signers to own a luxury condo there….WOW. That is almost as silly as Trump Tower New Orleans. Half those people couldn’t afford a $200 plane ticket to escape but they’ll be able to qualify for a 400k mortgage….once again WOW.
No the average gross income in China is like $2k a year. The 500 million people in that country that live on $1 a day really hurt that average wage.
“Half those people couldn’t afford a $200 plane ticket to escape”
Now, that’s unfair. There weren’t any flights leaving. You may as well say they didn’t have the $$ to have Scotty beam them up.
The problem I’m seeing is that we’re headed towards 1999 pricing but many sellers continue to list at 2005 plus some undeserved appreciation. Therefore the only properties that are selling are the accurately priced properties. For example the median SFH listing price for my ‘hood according to redfin is about $800k, whereas the only SFH that closed in January sold for $420ish. The disconnect is huge, gigantic.
But homedelete,
Zillow says my home is worth X and my property tax bill that I pay taxes on shows a simliar amount. With these two datapoints the reinforcement has to be reality, I can see no other scenario!
LMAO!
Prices aren’t going back to 1999 levels unless the government completely abandons everything that its trying to do to prop up home prices. As a buyer you can hope for a good deal, but unless its a super janky part of town that has 4 forclosed properties per block, prices aren’t dropping to 1999 levels.
Sonies, again, no one will buy at current prices. The government can attempt to prop us prices all it wants but all that means is that buyers will continue to disappear and the market will head to a damn near complete standstill.
“The disconnect is huge, gigantic.”
True possibly. I had a talk with a SFH owner who honestly does not think his property has lost much value from when he bought (3 years or so ago).
Of course he is not looking to sell which would wake him up I’m sure.
I think they call that phase “denial” which means anger cannot be too far behind.
“my property tax bill that I pay taxes on shows a simliar amount”
My property tax bill uses a “value” that has little relationship to what I could sell my house for today–it may be over 50% of market price, but not by too much. Maybe condos are different, but you and HD would be much happier with the market if everyone used the “market value” indicated by their Cook County tax bills as their asking prices.
’99 prices wouldn’t surprise me one bit. It was there once before so it is possible that it can go back there once again. There will be no condo buyers this summer. Period!
“Prices aren’t going back to 1999 levels unless the government completely abandons everything that its trying to do to prop up home prices.’
I don’t know where prices are going to bottom, but NOTHING the government has announced it will do is going to have any impact on prices at the bottom. At most, the government action will slow the arrival of the bottom, slightly. Which isn’t even necessarily a good thing.
I’m curious what everyone thinks a standard 1bed/1bath condo in River North will be worth 6 months from now? I’m in the market to buy, but obviously I’m not going to buy at this prices and it seems most condo’s in River North are still in the $225k – $250k.
Can you see those same places dropping near $175k-$195k in the next 6-12 months or am I expecting too much?
Also with home prices dropping so much can we expect the property taxes to follow closely behind them?
The $8000 tax credit and the final passing of the stimulus bill should get people off the fence that were thinking about buying because prices have dropped so much. Nobody was buying with all this porkulus bill talk going on, because why not wait a week or two to get 15k? (which was the original idea)
1999 prices are reaaaalllly low, I won’t expect them to drop that much unless wages drop to 1999 levels. That’s 10 freakin years ago! Cigarrettes in 1999 costed $2.25, today $7.00! A 30 pack of miller lite was $10, today $18! You were ballin if you made 150k, today its $250k!
Sonies,
I dunno about your data points. I recall distinctly in 1999 ML had a promo where 15 packs were $6 and this was in a state with lower alcohol costs than IL.
Cigs went up because of newer taxes, thats it. And I doubt real incomes have went up much from 1999. In fact they’ve probably fallen.
America is now paying a heavy price for its reliance on debt for growth. The problem with debt is that it is expected to be paid back one day. This generally restricts its availability to those who might actually pay it back. All those years of artificial GDP growth now need to be extracted from the economy.
Rising RE valuations were the biggest ponzi scheme in the history of the world.
1999 prices indeed, maybe even lower. 14T of wealth has been wiped out in RE and the stock market. This is no regular recession–this is the big one.
Noone under 75 has any idea how bad its going to get. Baby boomers, as a group, are completely unprepared for this.
“I doubt real incomes have went up much from 1999. In fact they’ve probably fallen.”
Median household income in 1999 was 41,994
Median household inome in 2008 was $50,233
Ok so only about a 25% increase in wages over 10 years, but still.
“Rising RE valuations were the biggest ponzi scheme in the history of the world.”
No, that’s Social Security.
“1999 prices indeed, maybe even lower. 14T of wealth has been wiped out in RE and the stock market. This is no regular recession–this is the big one.”
So based upon wages that’s another 25% drop? Possible I suppose but that would mean prices are 50% off the peak which I just don’t see happening. Yeah it would be great to get a nice Bubble 2/2 in RN, LP, LV for 200k instead of 400k, but its not going to happen in the good hoods where people actually make money and still have jobs. These lesser drops in prices will be added to the extreme (75+%) drops in places like Roseland, Englewood, Garfield Park, Austin, etc. where people don’t make money and were tricked into buying too much house by teaser rates and IO loans and are now unemployed.
“Noone under 75 has any idea how bad its going to get. Baby boomers, as a group, are completely unprepared for this.”
Baby Boomers overall have been a waste of a generation. I really fear for the future when the Children of Baby Boomers will be running the country. God help us all!
“Sonies, again, no one will buy at current prices”
I just bought this month. 2/2 duplex.
8k is a drop in the bucket for most of the medium/higher end properties featured here; and buyer’s qualifying for loans on those properties probably won’t qualify for the 8k due to income requirements…8k might help the 150k studio get sold-but most buyers for the past year were mistakenly considering the 7500 as a tax credit already (not a loan), so behavior may not change much.
We are back to the 90s for the stock market – there is no reason to expect the real estate market to bottom at 2004 prices. I would be curious to see stats on real income – but am too lazy to look them up.
Agreed and I’m not looking to own in these hoods though. I agree that I’m not going to be able to afford a detached SFH in LP or LV on a low six figure salary (and I wouldn’t want to live in RN), but there are other hoods in Chicago not as crime ridden as Austin, Englewood, etc (and with better demographics). I could envision 40% drops from peak in these ‘hoods over a few years.
RN is actually a mixed bag: you have the already established RN near the river, then you have the new developments near cabrini green. Got news for the owners in these new developments: if subsidized housing stays around those propery values aren’t going anywhere. Subsidized housing is a killer for property values.
“Yeah it would be great to get a nice Bubble 2/2 in RN, LP, LV for 200k instead of 400k, but its not going to happen in the good hoods where people actually make money and still have jobs.”
“if subsidized housing stays around those propery values aren’t going anywhere.”
Sure they are Bob; they’re going down.
Ok so not “no one” but few people are buying at today’s prices and they’re just setting comps for everyone on the way down. I think it’s funny that Sonies was all about RE prices falling until he bought, and now he’s all like “housing isnt going back to 1999” but it is. I said 1999 last year and I was laughed at like a sideshow freak whereas now today people agree with me and give my ideas credibility.
Census data is here:
http://www.census.gov/hhes/www/income/histinc/inchhtoc.html
Anon(tfo) I’ll let you take the time to interpret it; i have court in 19 minutes. But my understanding is that median inflation adjusted income was flat.
“brad on February 25th, 2009 at 2:00 pm
“Sonies, again, no one will buy at current prices”
I just bought this month. 2/2 duplex.”
The place I bought in RN is far away from that garbage on Oak and Orleans 🙂
And is north of Chicago Ave. Considered River North still? I thought it was “Near North Side” (aka projectville)
Im saying 99 prices are possible HD, but not as likely to happen in nicer areas. That’s all. And yes i’m a total RE bull now that I bought! Lol!
So Sonies how are those beautiful views from that high floor?
http://www.strath.ac.uk/Departments/CBE/Chicago%20visit/Photographs%20from%20Chicago/Cabrini%20Green%20Social%20Housing/Small%20Size/Cabrini%20Green%20social%20housing%20in%20Chicago%20(3).jpg
“my understanding is that median inflation adjusted income was flat”
Yep. Real median individual income (not household) has been basically flat for 30+ years, since the early/mid 70s. Household incomes have gone up, b/c there are more workers per household.
“I said 1999 last year and I was laughed at like a sideshow freak”
Whenever you’ve said that, I’ve always banged on the difference b/t nominal and real ’99 prices. I don’t see a return to ’99 nominal prices (in general–obviously there will be some properties that do–there always are), but think that ’99 real prices are a distinct possibility (and fear ’99 nominal prices, which would be about mid-90s bottom real prices, but for larger, more-expensively-appointed houses).
LOL @ Bob! Hey it beats living in an uptown studio! I have a gang of friends to protect me!
“Im saying 99 prices are possible HD, but not as likely to happen in nicer areas. That’s all. And yes i’m a total RE bull now that I bought! Lol!”
Sonies, As I said above I am about to move on a place in lincoln park at 2001 pricing. I hope that meets your criteria of good neighborhood. I am well aware that prices will go below 1999, but my payment (taxes, etc) will be much less than rent so its time to make a move. 10 years from now what happens, who knows…
Homedelete, I am noticing that vast majority of folks are just stuck, they don’t have money to bring to the table and their purchase is to recent to NOT be under water. So we have a deadlock. The only bargains are foreclosures, developers, and folks who bought more than a decade ago wanting to get out.
Exactly. We went into it not looking at it like an investor trying to time the market. We wanted to own a place as a SHELTER! And 2001 pricing in LP, very nice! Was it a REO or forclosed property? Or just a very motivated seller?
Sonies, thanks for asking, a very motivated seller and original owner from early 90’s, so they didn’t do too badly either. Just not as well as they could have….
Hey Sonies:
We closed on our place this last weekend at the Grand Orleans, 330 W. Grand. What a great neighborhood for walking even in the slush. Lots of things to see and do nearby. Fabulous views from the 18th floor.
Nice Steve A! One of the big reasons we wanted to move to RN was the fact that its not in the loop, or south loop, but we can walk to work, and its a very dog friendly neighborhood. Glad to hear you like it, since i’ll be about 2 blocks from you 🙂 Closing next month! Wooo hoo
can someone point me to a place i can look up detailed sales stats for LP and Bucktown?
So Steve A, do you hear any neighbor noise? Flushing or showers? I still like the building and location.
funny how most people on this board ignore the posters that are actually buying. I guess we like to focus more on the negative. sad really.
No brad, we don’t see the glass as half empty, we see the glass as half full. Prices are plummeting making it easier for us that stayed out of the mania to soon purchase homes at prices that don’t ‘break the bank’, quite literally. I would like to buy a nice home in a nice area for 2.0 to 2.5x my household income. Preferably a bungalow in a north or northwest side neighborhood near the metra or the el or the interstate. At the height of the boom my price range wouldn’t even buy me a 2/1 condo conversion on the northwest side! Today my money is going a little farther. The speculators, investors and passive investors (homeowners with toxic financing intending to flip after a few years) helped drive up the cost of housing to such unsustainable levels that it has destroyed our economy. Affordable housing is the first step towards recovery.
Actually, Brad has a good point. I am a definitive buyer. I have now posted 2 notes (this will be 3) asking for help in my purchase, and have been ignored twice. We all get it, things are bad. You all are arguing about exactly how bad. However, i would like to buy a house, and would relish the opportunity to speak with anyone of you very intelligent, knowledgeable people about how best I should price the homes I am considering. Is anyone interested in pointing me in the right direction? Thank you in advance for your help.
new buyer, check out redfin.com they have some detailed information, and gary’s blog (click on his name) also has some more detailed info. you know our warnings; prices are falling, medians are coming down, and to quote my favorite quote of this year (Thanks G):
“If you think there are good deals today, there will be even better deals tomorrow.”
G, that quote is great. I use it on a fairly regular basis. Thanks.
“However, i would like to buy a house, and would relish the opportunity to speak with anyone of you very intelligent, knowledgeable people about how best I should price the homes I am considering. Is anyone interested in pointing me in the right direction? Thank you in advance for your help.”
If you are in no hurry you could possibly get a decent deal on a short sale, but if you are buying from someone, look at some things like
– Demand Buyer Incentives (we are getting 10k from the sellers for closing costs)
– Start at at least 20% below asking price, and work up to the price you are willing to pay. If they won’t budge then walk away, there will be plenty of deals over the next few years.
– Tell your realtor what to do in negotiations, do NOT listen to them. They will be pussies about negotiation prices, take what they reccomend and lowball it by about another 5%-10%.
– Don’t buy a “bargain” property for appreciation potential. With the real estate outlook as it is, you aren’t going to find much appreciation, so pay a little extra and live in a good hood.
– Work with a good mortgage professional who knows what they are doing. Also get a fixed rate!
– Do a LOT of research yourself. Your realtor will set you up on the crappy MLS automatic e-mail thing. Look beyond that. Most realtors have search engines with maps and other things that you can see pictures and information about the place before you bother going to see them.
– If the place you want to buy or your budget allows you to buy a 300k place on the top end, look at places selling for 325 or even 350. You might find a desperate seller (like we did).
– Don’t fall in love with places, unless you feel like overpaying.
– Remember you are paying for shelter, not an ATM.
– Don’t sign any exclusive realtor agreements (if you’re selling) until you know your guy or gal isn’t a complete lazy idiot.
– Also before you start looking, obtain a pre-approval letter from your mortgage person. This is a great bargaining chip.
– save lots and lots of cash for the nickel and dime expenses involved.
That’s about all I can think of. Hope it helps!
Congrats, Steve. You will love RN. Sign up for the RNRA (River North Residents Association) newsletter; also for the Alderman’s regular reports (Brendan Reilly, 42nd Ward).
Sonies offers excellent advice. I would only add: Wait another year to buy unless you absolutely MUST buy now, or are a first time buyer looking to buy a sub $200K property using the $8K tax credit. If you plan on spending over $200K I am 99% certain you will save more than $8K by waiting until next year.
new buyer – your first post yesterday indicated you needed data to disprove what your agent is telling you. WTF? Just ask YOUR agent for “what has sold, at what price, where it was last listed, how long on the market, and maybe some historical data on the area overall.” If they cannot provide it to you in a format that is helpful (say, Excel), then can their sorry ass. You seem like you are asking the right questions. There must be a hungry agent out there who can work five minutes and get you the data you request.
If you are intent on buying and can stomach the better deals to come, I wish you luck. I just beg you not to settle for an agent that can’t/won’t give you whatever data you request. If they don’t have a handle on that data, what good are they to you?
Thank you all sincerely for the help.
I know we should wait, but the mrs. and I recently had a baby, and have really outgrown our current spot. I have held her off for long enough, and she is not having any more of waiting. Finally, we are looking at SFH in LP and Bucktown, so if you have any further ideas, recommendations or area specific advice, I’m all ears.
Sonies, your practical advice is excellent, and I will def follow up on all of it. Thanks for taking the time to write all that down.
Homedelete, I glanced at redfin at your recommendation, and am looking forward to really going through it.
G, i was planning on doing so with my broker, but thought i’d wait to inundate him until we found a place we wanted to make an offer on. In the meantime, though, i wanted to do a little work myself, which is why i was asking all of you for resources.
Well you COULD rent a larger place for a couple of years….I realize the extra move probably isn’t very palatable.
But “SFH in LP and Bucktown” is high-end stuff, and these are EXACTLY the places that are going to take the biggest hit over the next few years…
JPS is exactly right. If you can, avoid buying a house now unless you can stomach losing up to 100,000 in value or more in a year. Just think what that money could do to jump-start your kid’s college fund.
North of Chicago Ave.? That’s not River North, that’s Cabrini.
Tulip mania… maybe diamonds.
“China overdeveloped on a massive and unprecedented scale unseen anywhere else in the industrialized world, maybe even in the history of mankind.”
Wrong quote:
“Rising RE valuations were the biggest ponzi scheme in the history of the world.”
No, that’s Social Security.
“No brad, we don’t see the glass as half empty, we see the glass as half full.”
When things look bad, I always say the glass is half full… of poo.
I agree on Bucktown. Frankly I’m not even a wealthy yup but an aspiring one and those pierced MTV2 angst ridden devotees in BT don’t appeal to me. But trust me, if I won the lotto I’d buy a SFH in LP. If SFHs are even remotely similarly priced in Bucktown vs LP then I’d consider that laughable. I doubt LP SFH prices will gravitate towards BT. In fact I’d be willing to pay a multi-100k premium to live in LP over BT. But then again I’m one person and not the market. Its my anecdotal observation though that generally LP people have higher incomes than BT people.
“But “SFH in LP and Bucktown” is high-end stuff, and these are EXACTLY the places that are going to take the biggest hit over the next few years…”
A rising tide raises all boats in the sense that neighborhood incomes and housing prices are relative to each other. LP, being the center of and greatest neighborhood in all of the middle-west, will continue to attract higher income earning households relative to BT, so it follows that LP will have more expensive housing than BT; but make no mistake, tomorrow’s higher income earning households will pay much lower prices than those who bought in the recent past. When the economic crisis subsides the relative difference in prices between LP and BT will remain, but, prices will be substantially lower than the peak prices of 2006.
This thread has some good info. I have a question about preapproval: if I’m not sure I’m buying right now, isn’t it a risk to take the credit score hit for the hard check they will do to preapprove me? I always hear recommendations to shop for mortgages within a condensed time period, so as to not to hurt my credit — but what time period…3 months? 6? 20?
I’m 90% sure on the following (others can feel free to correct me):
A hard inquiry for a mortgage is only about a 5 point hit and multiple mortgage inquiries within 45 days count as a single inquiry – this is not true for multiple hard inquiries for credit cards, etc. Also, it seems that beyond the point hit you take for credit card inquiries, lenders may eliminate you even if you are above the cutoff – the only thing you should be applying for is mortgage loans. A preapproval is good for 30 days, so you really should only get one when you’re about to place an offer.
Also, if you’re the type that doesn’t carry a credit card balance, but would have one in the middle of the cycle (and just pay it off at the end), make sure to pay it down more continually throughout the cycle – it can actually provide an enormous boost.
Thanks, Fullhouse, I appreciate the helpful hints. Guess there is kind of a trade-off between having preapproval in hand as part of an offer if something comes up we want to move quickly on, on one hand, and having multiple inquiries, on the other. Anyone else have thoughts on this?
If you have all of your pay stubs, bank statements, etc ready and a mortgage broker lined up, you can get preapproved the same day… at least that was the case last year.
Unit 612 is a 1/1 listed as under contract @200k.
Unit 516 is a 1/1 also with 909 square feet listed as a short sale for 200k.
Unit 502 is a 2/2 with a parking spot listed for 379k.