Flipper Alert: The Columbian Flippers Face Reality
The Columbian at 1160 S. Michigan in the South Loop started closings in late summer of 2007.
At the time of closings, it was only 70% sold. The developer still has dozens of units for sale.
I haven’t been able to find any units that have flipped even though there are 38 units on the market (including developers units) out of 220 total units.
I’ve already chattered about the rental deals in this building (on two bedroom, two bath units, for instance.)
But let’s look at a few of the units currently for sale from flippers. The first unit faces North with some views of the lake (but not dead on views.)
Unit #3304: 2 bedroom, 2 bath, 1582 square feet
- Sold in October 2007 for $642,000 including the parking
- Currently listed for $635,000 (parking is extra)
- Assessments of $415 a month
- Listing says this tier is “sold out” from the developer
- Listing states “New incentive of $5,000 cash toward closing for contract by March”
- Keller Williams Gold Coast has the listing
These two units are Northwest facing.
Unit #2205: 2 bedrooms, 2 baths, 1479 square feet
- Closed in December 2007 for $507,500
- Currently listed for $575,000 (parking is $35,000 extra)
- Assessments of $356 a month
- Baird and Warner has the listing
Unit #3105: 2 bedrooms, 2 baths, 1479 square feet
- Sold in October 2007 for $540,000
- Currently listed for $599,000 (plus parking at $35,000)
- Assessments of $371 a month
- Sudler Sotheby’s has the listing
If you visit the Columbian’s website and check out the “news” section- the developer still has the old news story about the “grand opening” several years ago. It turns out over 500 people showed up to put their money down on pre-construction condos that year.
The Columbian [website]
The units look sad/depressing to me. Perhaps, paint and some staging would help.
I have still not been able to figure out the whole South Loop thing.
For 550,000 I can get a 2bd in some of the best parts of the city right now, why would I want to be down there?
anonconfused,
what are the best parts of the city where you can get a 2bd for $550K?
Stan,
River North.
Kenworthey,
there is a reason you can get a 2bd for $550K in River North, but not in, say, Streeterville or Gold Coast. Because River North is NOT the best part of the city (if for no other reason, it’s too far from the lake). As such, River North is comparable to some South Loop neighborhoods, such as Museum Park, for instance, which is located practically on the lake and where you get way more bang for your buck.
So, contrary to what anonconfused is saying, it is very difficult, if possible at all, to find a 2bd in new construction for $550K in the best parts of the city.
Hmmmm, I looked at a 2bd/2ba at 1400 North State Parkway in the Gold Coast that is listed at 500,000. True, it is an “older” building built in the 70’s, but it is modern and had amazing views and is a corner unit that has been fixed up. At this point, I am waiting for some deals in new construction, but the way things are going, I think I will be able to buy a 2bd/2ba in Streeterville for 550,000 by May or June.
Stan,
This listing is not good “bang for your buck.” Even if your comparison between South Loop and River North is accurate (which I personally disagree with), bang for your buck would mean getting MORE in the South Loop than you get in River North. Right now you can get a 2BR / 2BA in a 2-4 yr old River North building for around $425k. This building isn’t even fully sold!
PF
But I don’t think I agree with you re: having hard time finding new construction 2Br/2BA in Streeterville, either. Unit 2409 at 600 N. LSD, for just one example, is asking for $579,500 (and likely will get less).
no wonder they have not sold! $635,000 for a 2 / 2 at Roosevelt and Where??? no way. next.
anonconfused,
1400 North State Parkway – not downtown.
built in the 70’s – old.
PF,
where in RN can you get a 2bd for $425K? RN is not homegenous. just like SL.
2-4 yr old – not new construction.
Kenworthey,
$579,500 != $550K
So, as I can see, right now there are no 2br new-construction units for $550K in the best parts of the city. You all seem to assume that prices will come down. Maybe they will, maybe they won’t. We’ll see.
Stan:
Is Streeterville the only neighborhood you consider to be “prime” downtown then?
What about Lakeshore East? (close to the Lake- which was apparently one of your criteria.)
Gold Coast won’t fit the criteria you lay out because there isn’t land for new construction there.
I enjoy that Stan believes that either (a) there are enough potential buyers with 6-figure down payments and 6-figure incomes to soak up all of the coming inventory or (b) most of the sellers will be able to float their debt service for long enough to wait out the slow increase in the number of buyers in category (a).
I’m quite sure that prices are going to come down or, at best, stay flat for a long time. At some point, developers (and everyone else, one way or another) recognize that selling for 10% less today is better than a 10% ROI 12 months from now.
I agree with anon here and in anaother of his posts regarding where prices will end up. It seems much of the upscale condo craze was based on the assumption that these ARM’s, negative amortization, no doc and other exotics would provide an endless supply of buyers for units costing 500k and up. Guess what-those buyers are gone never to return and we’re seeing demand fall off beyond expectations. A personal example: My spouse and I were shopping in late 2003 for a condo/townhouse. We applied for a loan with one of the large banks. We’re both teachers with a combined income of 122k. The mortgage broker must have shown us six different non-traditional loan products, one of which we could have borrowed up to 625k. We took the basic 15yr fixed loan based on 2.5x our income and bought within our means. How many $122k households are being offered jumbo loans now?
To quote Stan:
“Kenworthey,
$579,500 != $550K
So, as I can see, right now there are no 2br new-construction units for $550K in the best parts of the city.”
Stan, I assume that Kenworthey was referencing a resale and so it is realistic to expect it will come in around 550k (if not less). Also, there are plenty of 2/2s in streeterville in the 500s now. Ask about incentives from developers 😀
For instance, even before incentives there are units in Park View Condos by MCL starting at 515k for 2/2s. There are several available.
Speaking of the Parkview, some of the corner 2bd units look pretty good, at least on their site, but it looks like in the low 500’s you don’t get much of a view. It is on my list to check out however. I cannot imagine spending 600,000 to live all the way down at the Columbian. There is so much available now in the “better” neighborhoods that it is impossible to keep track of it all, let alone try to make a decision.
One of the reasons I started this site was to monitor what was going on with flippers/investors in many of these buildings.
I don’t think most of them have yet figured out that almost nothing is being flipped. We’ve seen relatively few flips even in buildings I consider to be quite nice product in a good location- like 340 OTP.
Why?
I think the flippers are still way too greedy. The few units we’ve seen actually flip in these buildings have been when the flippers have priced for very little gain. They basically sold before prices fell even further.
And the buyers have gone away. As has been stated: no one can get the loans they got before. Now, you have to come with cash to the table.
I’m still waiting to see some foreclosures in these new buildings (but that’ll probably take to the end of the year.)
The next shoe to drop, so to speak, will be that flippers finally figure it out and stop closing on units. They’ll walk away from their deposits- but it will be less of a loss than if they close.
But for now, the flippers still think they can flip.
I love both neighborhoods don’t get me wrong!!!The “South Loop” is a great neighborhood in my opinon and should be considered equal to a “River North” right now… It all depends on who you ask though. Near North Side is its true orgin and I consider any condo building from Michigan Avenue to Clark street Near North Side. Everything from Clark over to River to me is “River North”… Same “North” “South” boundries used with the Chicago River and North Avenue(64)…
People like and think River North is better because you have 5 star restaurants like “Japonais” or “Brasserie Ruhlmann” or becuase you have a chic nightclub across the street called “manor,sound bar, y bar or rino and or the art galleries up and down huron, erie and wells”
If the “South Loop” could ever get a couple of these five star restaurants/(1 or 2 clubs) into the neighborhood it would be a different trendier place right now. More places like “Room21” and or Chicago Fire House are great starts but they need more recognition like a “Japonais”
South Loop
Minute- 10 Minute Walk
Grant Park, Lake Michigan, Millennium Park, Soldier Field, Burnham Harbor, Shedd Aquarium, Adler Planetarium, “LAKE SHORE DRIVE” Path all the way down to “The Museum of Science and Industry”(this is not a 5 minute walk but is one of the best public paths in the city if your a runner/walker), The Art Institute of Chicago, Monroe Harbor, Musuem Campus, Macy’s on State Street, Michigan Avenue, The Bean Sculpture, Buckingham Fountin, Field Musuem, Northerly Island (aka Charter One Pavilion/ Megs Field), etc…
People clearly under estimate the location of the South Loop which I rightfully understand…For so many years it use to be nothing but train yards/ abandoned Mansions from early 1900’s when Prarie Avenue used to be considered a modern day Elm street… None of this justifies the crazy prices people are trying to achieve but when everything is all said and done this will be one of the Best Neighborhoods in the City…
Kenworthey
Just curious about your citing a unit for sale in 600 N. LSD. Where is that listed? Those units aren’t due for devlivery until this summer/fall. Is someone trying to flip the contract before delivery?
” Unit 2409 at 600 N. LSD, for just one example, is asking for $579,500 (and likely will get less).”
Wally:
600 N. LSD started closings about two months ago. You can move in right now.
There are a dozen units or so listed on the MLS right now.
Wally–Sabrina is right, just search the building on mls. There are many units listed.
Stan–$550K is about 5% less than the asking price of $579K. Do you really think in this market any buyer would pay asking? In fact, I’m sure this flipper will get LESS than $550K. Moreover, the comparison was to 2/2s in the Columbian. The asking price as 600 LSD is in between the two asking prices in the Columbian post. It is about as perfect a comparison as you can get.
oh, and Sabrina, by the way, there are far more than a dozen. There are 31. My guess is either that your intel re: there being a ban on resales for one year is wrong, or that a lot of people are desperate enough to take on the risk of a lawsuit. Also, I have friends who bought there, and they told me the construction had been delayed long enough that should they want to get out of their contract (they don’t), they would get their deposit back.
oops… my bad. The 31 is for 600 N Fairbanks, not 600 N LSD. For LSD, it is indeed 12. Sorry…
Sabrina,
RE: your comment on 600 N LSD:
The 09 tier units (Kenworthey mentioned Unit 2409) are in the south tower which won’t start closing till this spring. The north tower started closing last October.
As for the 12 listed, only two are resales, the rest are listed by Belgravia, the developer.
But you’re right about plenty available — last I heard the north tower was nearly sold out but the south tower has about 50% left. By my calculations, thats about 125 still available out of 400 total in both towers. (That’s not real current info, but I doubt that it’s changed much in this market.)
Wally:
Thanks for the clarification.
The building also has a “non-flip” clause in the contract (where you can’t re-sell for a year) so that’s probably why there aren’t that many for sale. I’ve seen a decent number of them for rent however.
Seems that the flippers will try and rent it out a year and then sell in 2009.