Fulton Market Modern Masterpiece Reduces $100k: 1418 W. Fulton
We last chattered about this rare single family home at 1418 W. Fulton in the Fulton Market District in the West Loop in October 2008.
Since October, it has been reduced $100,000.
See our prior chatter and pictures here.
Many of you thought it would be hard to sell a single family home in that trendy, industrial neighborhood.
Ed Hester at Dreamtown Realty still has the listing. See pictures of the modern interior, pictures of the rooftop deck and a virtual tour here.
1418 W. Fulton: 6 bedrooms, 3 full, 2 half baths, 3 car garage
- Prior sale looks to be in May 1998 for $181,500
- Was listed in October 2008 for $1,099,000
- Reduced
- Currently listed for $999,000
- Taxes of $7,020
- Hot tub
- Rooftop deck with wet bar
6BR(!), 5BA(!), 3 car garage(!), masonry construction, nice finishes (though a true commercial kitchen really isn’t a great idea in a residence), and IMHO the location is decent for the dough. I don’t mind industrial though.
I’d hit it if I had an extra couple hundred grand.
Just realized from the prior chatter that it’s not a detached SFR, but rather attached to a 3-4 flat on the West side. Skip.
I was about to say, last time I check detached SFH aren’t inside a MF lol Beautiful unit and almost worth the price if you don’t mind the expensive i-rate on your jumbo loan.
Jumbos and pretty much all mortgages are cheap these days what are you talking about? You just can’t 90-100% finance jumbos anymore. Which is the way it should be.
The jumbo rate hit has gone from a quarter or three eighths a couple years ago to about a point and a half currently. $417k+ is ugly these days.
Sonies-you are right. I stand corrected. In the NY times article I was reading, they do mention that the jumbo rates are decent for those who have 25% or more to put down.
I disagree – jumbo mortagage rates, while higher than conforming rates, are still low versus most times over the past 30 years. it’s the ability to get the loan that is more difficult – the interest is nice.
If you can put 25% down and are not buying a condo, jumbo rates aren’t too bad. ARMs are also significantly better priced vs a 30 year.
Edumacated-Why is the jumbo i-rate on a condo higher?
“Why is the jumbo i-rate on a condo higher?”
Because condos that require jumbo loans are way, way too common and so are a greater default risk–because the buyer/borrower might not be able to sell in the future.
We are returning to a world were interest rates price in asset value risk. The more likely that a property will sell for less in the future, the higher the rates.
Tell that to the feds, who want 4.0% mortgage rates.
“We are returning to a world were interest rates price in asset value risk. The more likely that a property will sell for less in the future, the higher the rates.”
“Tell that to the feds, who want 4.0% mortgage rates.”
Look at who has proposed it–it’s a bunch of knuckleheads.
But, that also wouldn’t be for Jumbo Condo loans–they’d be more expensive reflecting their greater likelihood of decreasing in value–that is, pricing in asset value risk.
Anon(tfo);
That is only partially right. The secondary mortgage market for jumbo loans is pretty much dead, so the loans don’t have any value except for lenders who plan to hold them in their portfolio. Same with second mortgages. The only reason conforming loans are attractive is because banks can sell to Fannie/Freddie.
Banks do not make loans because they make sense or are low credit risks. They make loans because their is a secondary market for the loan. This is why you have situations where millionaires can’t get decent rates on jumbo loans, but a 3.5% down with a 650 FICO score can go FHA all day long at really attractive rates. This is also why all the crazy stated income/stated asset loans and other stuff we laugh about today were made during the run up. There was a market for it, so banks made the loans. Had nothing to do with credit risk. Jumbo loans and any loan that isn’t being sold to Fannie/Freddie are basically worthless on the open market. It has nothing to do with default rates, asset prices, or credit risks.
What is ironic is that the government keeps trying to keep rates low, but all the other components of the mortgage market are steadily increasing the costs. Rates go lower, but PMI costs get more expensive and MI guidelines more restrictive. Rates go lower, but Fannie/Freddie come up with new loan-level price adjustments for everything for FICO scores below 740 and condos. The right hand has no idea what the left hand is doing.
“the loans don’t have any value except for lenders who plan to hold them in their portfolio”
Right. And what do those lenders do? They price in asset risk. And they do real underwriting. Thus, risk pricing is returning to a segment of the market. Conforming loans represent “risk-free” costs for lenders, anything higher is based on some (likely inadequate) pricing of the additional risk.
Anon (tfo)
Interest rates are not that high on the Jumbos if you qualify. Sub 6% 30 year, 5% ARMs. Pricing does not reflect substantially higher risks, although bank are definitely reflecting asset risk in required down payments now. The market wants X and the banks will deliver X. If any one thing is out of whack, regardless of how stupid or illogical, X is no longer worth anything to the bank. I don’t disagree that banks aren’t trying to protect themselves from falling values now, but that isn’t the sole reason, nor was it the initial reason these loans started drying up.
Edumakated,
Even if it were true that the mortgage originators securitize and sell all of their loans to the secondary market (which isn’t completely true as they hold some on their books), the risk still matters in the secondary market, therefore it matters to the primary market. The price that the secondary market pays is related to how risky they deem the mortgage securities. The secondary market has always received data on the borrowers and built models to assess risk, although they were clearly miscalibrated because, in many ways, there has never been a housing market like this.
BTW, it’s not like the banks sell all of the conforming loans to fannie and freddie – banks and funds buy pools of loans that are simply backed by fannie and freddie in case of default.
Ed:
You started this with this statement: “If you can put 25% down and are not buying a condo, jumbo rates aren’t too bad”
Now you’re slicing and dicing and seem to have lost track of the question, which was “why are condo loans subject to higher rates?”.
8 months since original post, still listed at $999,000.
Sorry for the plethora of updates. Went to meet friend at house party in Avondale under great pressure to attend despite my objections; When I arrived he wasn’t even there.
Way too many hipsters in attendance and you know how I feel about that. Had one beer, talked to a handful of under/unemployed musicians for a few minutes. One hipster with hair halfway down his back thought I played percussion in the band! Decided to leave before my friend showed up. Returned home to watch TV with significant other. Nothing on TV. Cribchatter instead.
Hipsters are only good for bumming pot.