Is Southport the Most Expensive Neighborhood for Condos? 3506 N. Greenview
This 2-bedroom condo at 3506 N. Greenview in Southport is on the market at $350 a square foot.
It is a 2004 conversion in a 20 unit building and has 2-bedrooms, 1 bath for 1000 square feet.
On a per square foot basis, is Southport now the most expensive neighborhood for condos outside of downtown?
This unit has central air and an in-unit washer dryer but it has no parking. The listing says it has 42 inch kitchen cabinets and granite counter tops.
Terry Max at Century 21 M.B. Real Estate has the listing. See the pictures here.
Unit #2: 2 bedrooms, 1 bath, 1000 square feet
- Sold in April 2005 for $318,500
- Currently listed for $349,500
- Assessments of $217 a month
- Taxes of $3806
- Central Air
- In-unit washer/dryer
- No parking
- Bedroom #1: 12×9
- Bedroom #2: 10×9
- Living room: 23×12
- Kitchen: 10×12
Here are the problems as I see them:
* No parking (big problem in that neighborhood, so you need a garage)
* Very small master bedroom – with a tiny closet
* Black appliances
* Not many kitchen cabinets
* Not the top floor
* One bathroom and it’s not great
In other words, there is NOTHING about this place that warrants a high price per square foot. For that price/square foot, I want top of the line appliances, a decent closet, a second bathroom (or at least 1/2 bath), top floor.
The price on this should be dropping in 5, 4, 3, 2…
For comparison, what is the price per square foot for condos in River North?
The bedroom sizes made me LOL. $350? Lucky to get $300 on this one.
That place is so 2006! Get a clue!
A real craker box of a place
bathroom is cute but not practical
whole place is way too small
Parking is tight and then there are the 80 days or so when the cubs are home – then even walking is tough
Priced way too high – say $279 is more realistic
The southport corridor, while an ok place for a 22 year old to watch a cubs game, post party and get a decent dinner at, is a far less desireable hood than River North IMO.
Price per sqft in RN can vary from $250-500 a sqft. I paid about $285 for the place I bought.
You could rent that apartment in that area for around $1300. There’s no way it goes for anything close to the 2005 price, let alone what they’re asking.
Sonies – “Price per sqft in RN can vary from $250-500 a sqft. I paid about $285 for the place I bought…”
Thanks — I’m looking at some property in RN and prices vary…I guess depending on what the person paid vs. what the market dictates
The $318,500 purchase in 2005 was financed with two mortgages totaling $310,900. That might explain the asking price.
There are currently 147 active 2BR/1BA listings in LV, 38 of which have SF listed. The stats for those 38:
max $353 psf
min $198 psf
mean $272 psf
med $268 psf
There are currently 47 active 2BR/1BA listings in RN, 17 of which have SF listed. The stats for those 17:
max $436 psf
min $250 psf
mean $345 psf
med $341 psf
Thanks G — good data
Damn I was close just from memory! I’d expect the top end to be a little higher for new construction condos, but then again new places like trump and that blue building on superior probably don’t list sq footage in the listings, and they probably won’t sell anyway 8)
“The southport corridor, while an ok place for a 22 year old to watch a cubs game, post party and get a decent dinner at, is a far less desireable hood than River North IMO. ”
Speak for yourself. I like the Southport Corridor. What I find funny about it is RE valuations in this plain hood approaching those of RN. RN should have higher valuations due to its proximity to downtown as well as that these highrises are generally more expensive to maintain.
The only thing that makes this more desirable than a RN/LP condo are the assessments
Don’t get me wrong bob, i liked to party in the corridor too, but the quality of restaurants in RN, the proximity to the loop, lake, shopping, carpetbaggers, prostitutes, etc. is worth much more of a premium, and that’s why typically these new builds in the southport corridor are still empty after being on the market at rediculous prices for two years.
Nobody has the heart to tell this person not only did they overpay for owning relative to renting over the past four years, but they also have accrued zero equity and are probably underwater on their mortgage.
350k for a 2/1 in this area? Hah! You can get 2/1s in Lincoln Park proper for around 300k these days. This owner was living the status dream of “owning”, probably bragged to their friends during the boom to show some increased level of status and responsibility and got their hand caught in the cookie jar when the bubble popped.
300k and they’ll need to bring cash to closing. Toast, although that won’t stop them from going through around three real estate agents and wasting everyones time until they figure it out.
Just curious but, do realtors EMAIL PEOPLE IN ALL CAPITAL LETTERS AS WELL? I PROPOSE A MODIFICATION TO CRIBCHATTER.COM, FROM HERE ON OUT, EVERYTHING MUST BE IN CAPITAL LETTERS. ARTICLES AND COMMENTS.
SO FROM HERE ON OUT, I, A, SHALL WRITE ALL OF MY COMMENTS IN REALTOR TYPE.
No way this place rents for less than $1600-1700 (I just spent 2 months looking at places like this) and I’m also a big fan of this neighborhood.
You might find this interesting, too.
There were 49 sales of 2BR/1BA units in LV since 1/1/09, 13 of which have SF listed. The stats for those 13:
max $302 psf
min $207 psf
mean $255 psf
med $255 psf
There were 12 sales of 2BR/1BA units in RN since 1/1/09, 5 of which have SF listed. The stats for those 5:
max $394 psf
min $303 psf
mean $357 psf
med $372 psf
Comment to “a” – Chicago realtor here, typing in Upper and lower case. In fact, not one of the comments on this thread are in all caps. Oh that’s right, just yours.
Maybe your comment has some textual reference, but it’s not on this post!
Stephanie,
When you click for the pictures and read the description on the MLS, ITS IN ALL CAPS. MAYBE THAT IS WHAT A WAS REFERRING TO?
” I’d expect the top end to be a little higher for new construction condos, but then again new places like trump and that blue building on superior probably don’t list sq footage in the listings”
Even more probably, the high-end buildings don’t have 2 brs with only one bathroom. That’s the limiting factor, I think.
Update to “a” – We realtors are not yelling at you. When we enter the Remarks section on the MLS and save as draft, the system converts the text to ALL CAPS. The only way to avoid this is to enter the listing without previewing it to make sure there aren’t errors. That’s why you see most of the listings in ALL CAPS. Of course, all the other sites pull data from the MLS so that’s why you see CAPS on the other sites.
Thanks for your comment – it’s nice to know how these small changes impact consumers. I’m going to send a comment to the MLS site maintenance and maybe we can change it. CHEERS!
“The only way to avoid this is to enter the listing without previewing it to make sure there aren’t errors.”
Type it in another program and cut & paste? (I honestly don’t know, but that is the way to deal with it on the ‘tubez when the site does not include a spellchecker)
This is grossly overpriced. There are some new construction units at 3400 N Greenview that are much cheaper, have better finishes and are of course NEW.
I agree with Bob @ 300k.
http://www.redfin.com/IL/Chicago/3400-N-Greenview-Ave-60657/unit-3S/home/18967893
Yes, anon – cutting and pasting works but it’s still best practice to preview the listing before publishing to make the sure the photos and other info (room size, taxes, assessments, etc) is correct.
The MLS helpdesk already emailed me back that she’s forwarded to her supervisor for review. I’ve inquired as to why this is, how it makes real estate agents look unprofessional and ignorant to common nettiquette and how we can change it. It’s posts like this that help make things better for the consumer. If we don’t know about a problem – we can’t change it!
Thanks for the clarification Stephanie. I suspected there had to be a reason why listing after listing appeared in all caps. Thanks for the clarification and I’ll take it easier on criticizing the caps from now on knowing this info.
“it’s still best practice to preview the listing before publishing ”
Yes, it is, and the system (as you described it) makes it so every listing that is previewed is “wrong” and should be revised. Perhaps one should check it, see it’s okay, but go back and re-paste the text w/o the ALLCAPS and then publish w/o preview? YWIA.
“There are some new construction units”
Those aren’t new. They are a new conversion. “new construction” means something else.
This is basically an apartment. Units like these should be selling in the low to mid-200’s. . Chop a third off the 2005 bubble price. The target demograpic, the average young professional w/o children or 1 kid, are getting in way over their head with a 300k unit like this. At a rental price of 1700 x 150 rent multiplier this is only 255k. Why would anyone want to buy a unit like this?
if you’re going to play the lotto, $350k is not very ambitious. why not play powerball instead?
This unit is just one of many right in the heart of the Southport corridor that is priced at this level. I didn’t have to look hard to find a condo at $350 a square foot.
So many condo units are available now, with so many near-identical units, appearing to be similar in layout, style, building size, room size, ameneties, location, etc. A buyer just needs to tour several in his/her/their preferred location and configuration and then aggressively negotiate sales price with selected eager sellers. Optimistic high pricing just delays seller’s sale; often first 12 months market-time has become “price adjustment” phase, to reduce price into the saleable range.
My neighborhood is seeing $250,000+ price reductions on asking prices for older single-family houses in mint condition.
“Optimistic high pricing just delays seller’s sale; often first 12 months market-time has become “price adjustment” phase, to reduce price into the saleable range.”
In theory- the obvious solution is simply to lower the price (to get the property sold.) But many sellers are underwater and don’t have the $20k-$100k available in which to come to the table.
So they price “high” thinking that they may get the one buyer who falls in love with the property and bites.
really cool house- like the option of being able to pull in to garage from street- seems a lot safer. price is at least a million high
“But many sellers are underwater and don’t have the $20k-$100k available in which to come to the table. ”
And in their lifetime they never will. The debt-slave class is easy to identify: they consume at the maximum level lenders will allow. Of course problems eventually surface when the lenders need to pull back the reins in a bad economy.
I laugh at someone who paid 320k for a place but yet can’t come up with 50k cash. Maybe if the mortgage underwriter required a 20% downpayment the debt slave would’ve never been allowed to get themselves into this situation (as they can’t save 50k).
I don’t particularly like this unit but the price per sqft isn’t totally off the deep end (although most things with that kind of price that I have seen tend to have a bit nicer finishes).
Re price compared to LP. Certainly “prime” areas of LP are nicer than this. But I’ll come out and say that the Southport Corridor is much nicer than many parts of LP proper. It isn’t as nice as Armitage & Halsted, but it is MUCH better than all of the new construction you see at similar prices that are on the far west side of LP.
Stephanie, Since you have offered yourself up as the sacrificial realestate agent, cna you please answer this question? Why do RE agents consistant lie on these listings about the finishes? I could be wrong, but after reading the listing that says “42” MAPLE CABINETS”, the photos appear to be standard OAK cabinets.
I predict prices for units like this will stabilize around $200 per sq ft in or around 2011.
“A buyer just needs to tour several in his/her/their preferred location and configuration and then aggressively negotiate sales price with selected eager sellers.”
Sounds great in theory, but has anyone actually done this in southport/lakeview area at less than
at less than $350,000?
For a 2/1??? Dear god yes it can be done, easily.
“I could be wrong, but after reading the listing that says “42? MAPLE CABINETS”, the photos appear to be standard OAK cabinets.”
Oh, c’mon, that’s a mistake, not a lie. There’s nothing on the realtor exam to test one’s knowledge of wood types. The agent probably either (1) doesn’t know oak from maple or (2) copied another description and just didn’t edit carefully enough, or maybe both.
“Sounds great in theory, but has anyone actually done this in southport/lakeview area at less than $350k”
There are at least 87 2/1 condos in 60657 listed for under $300k. The vast amjority of them are east of the redline, but they’re out there.
I’ve seen the quantity in 60657 but I’m asking if anyone has actually negotiated a sub-$300k condo in 60657 to a 10% or greater discount on it’s listing price. I could use some tips!
Nomadic, I imagine it is like most things in real estate right now. Make a low offer and if they don’t take it or don’t come back reasonably just walk away and go to the next place.
There is so much inventory and so few buyers that you will find that people will eventually come back to you or somebody will be desperate enough to accept your lowball bid.
The key is to not get your heart set on any one unit. As long as you are really willing to walk away and play hardball you’ll get a deal in time.
“if anyone has actually negotiated a sub-$300k condo in 60657 to a 10% or greater discount on it’s listing price. I could use some tips!”
look up the recorded mortgages and find someone who can sell for 10% off list. sellers who owe 95%+ of their asking price are much less likely to agree to 10% off w/o getting a short sale agreement from their lender.
Also,
anon, “There are at least 87 2/1 condos in 60657 listed for under $300k. The vast amjority of them are east of the redline, but they’re out there.”
East of the redline, while in Lakeview, isn’t all that great. The really nice area (aka Southport Corridor) is rather small and clustered within a few blocks of the Southport El stop.
“East of the redline, while in Lakeview, isn’t all that great. The really nice area (aka Southport Corridor) is rather small and clustered within a few blocks of the Southport El stop.”
This comes up regularly, and there are many here who think exactly the opposite–that east LV is the only acceptable part of LV. I’ve lived west of Ravenswood for over 10 years, so I’ve no dog in that hunt.
But Nomadic asked about “Southport/Lakeview” which implied to me LV, generally.
Most of the sub-$350k 60657 units are located in high-assessment buildings along LSD.
Good advice, but would still love to hear from someone who has gotten a lowball strategy to work.
“would still love to hear from someone who has gotten a lowball strategy to work”
What’s anyone going to be able to say? It’s lowball and hope the seller bites. If they don’t, then you move on to the next one. You can’t get attached to a particular unit or be frustrated when no one bites. It’s like fishing–patience and flexibility will eventually be rewarded by someone who accepts your offer.
10% discounts are not uncommon.
There have been 50 2BR LV condo sales for $300,000 or under since 1/1/09. Of those, 10 (20%) sold at a 10% or greater discount to the last list price. 17 (34%) of the total sold for 10% or greater discount to their original list price.
It is likely that additional units sold for at least 10% discounts to original list price but were relisted after a pause in order to appear new in the MLS.
My friend put in an offer for 48% of the 2005 selling price on a SFH in a close suburb. The bank countered with a price 55%. If you don’t try, then you will never know.
Breaking out the 60657 zip only shows it as slightly less common.
There have been 29 2BR 60657 condo sales for $300,000 or under since 1/1/09. Of those, 5 (17%) sold at a 10% or greater discount to the last list price. 8 (28%) of the total sold for 10% or greater discount to their original list price.
“look up the recorded mortgages and find someone who can sell for 10% off list. sellers who owe 95%+ of their asking price are much less likely to agree to 10% off w/o getting a short sale agreement from their lender”
Agree that this is the correct strategy, but unfortunately, the vast majority of today’s sellers bought between 2005-2007 with very high leverage. To get a good deal in today’s market, you most likely will need to find sellers that have already negotiated a short sale with their lender(s). I have been trying the “lowball strategy” or as I call it the “market value strategy” for over a year and it has yet to work. At some point, the buyers have to prevail.
MJ, your post succinctly represents why this real estate depression will continue for many years to come, and why we still have a long way to go.
I’m 0 for 1 on the lowball strategy so far. Anon is right that this only works if you make sure you aren’t bidding against yourself. You can’t impose artificial deadlines. You can’t fall in love with a place. You have to have the discipline to stick to a price and walk away.
One sign it did influence the seller is that the he had a 10% reduction in offer price soon after rejecting my bid.
Interesting posts…I know I will not accept any lowball offers (anything in the neighborhood of 8+%) on the places that are in the midst of renovations right now, in this market. While I came in gungho with the intentions of selling, it is turing out my $$$ will come in as rental $$$ rather than as sales $$$.
Other than foreclosures or shortsales I believe most owners not having to sell now are of the same mindset.
They might be of the same mindset, but it really is their bankroll which will determine their success, since we all know what they (and you) are stuck with will most likely not cash flow.
So your point is what again G?
I admitted it…I know the value of my investment and the quality of my work so I will hold onto properties that do not bring near the full asking price. Selling or renting, I still have a positive cash flow and my bankroll is not dented in the least. And believe me, I am not “stuck” with anything I feel negative about. No $$$ problems here despite your many attempts to make it seem that way….keep trying….
I am 0/4 on 90% of listing price lowball offers right now with 2/4 of the offers perhaps instigating price drops. My feeling is that most people who can afford a $300k condo are able to rent it or keep it vacant for a while instead of accepting the lowball. Sellers seem willing to price drop multiple times, but don’t seem willing to make the big drop all at once.
I think I’ve got maybe 4-5 more offers in me before I, as a buyer, either capitulate or rent.
“No $$$ problems here despite your many attempts to make it seem that way….keep trying….”
Wrong again, westlessthan0. Just pointing out your “mindset” only works with a large bankroll or parental backstop that 99.9% do not have.
Nomadic I’m 0/2 in 60657 trying to go 90% of ask. In fact one was within 8.5% of ask on a property listed nearly 120 days with no price drop.
So offer 10% below their new ask and see what happens… what do you have to lose?
Nomadic and Bryce, they saved you from knife-catching.
There were 120 condo sales in 60657 for 5/1/09 – 6/15/09, a decline of 38% from the 193 in the same period in 2008, which was a decline of 33% from the 287 in the same period in 2007.
There were 161 condo contracts in 60657 for 5/1/09 – 6/15/09, a decline of 40% from the 267 in the same period in 2008, which was a decline of only 2% from the 273 in the same period in 2007.
The same irrationally when they bought is also being displayed as they sell. A years worth of interest payments to the bank plus assessments and taxes has got to cost more than a measly 8.5% price drop.
“My feeling is that most people who can afford a $300k condo are able to rent it or keep it vacant for a while instead of accepting the lowball”
Maybe I should change my handle to Knifecatcher?
Nothing wrong with catching a falling knife if you can afford it and can handle dismissing the thought of your home as an investment.
But if it is a deal you seek or you will regret seeing others pay less in the future, there is no reason to raise your offers today in 60657. The lack of sales is only delaying the price reductions, not eliminating them.
“I admitted it…I know the value of my investment”
The value of your investment is only the present value of the cash flows received from owning it OR what the market will support if trying to sell it. The vast majority of properties in Chicago, at least the desirable neighborhoods, are not cash flow positive, leaving what the market will support.
You can ascribe whatever value you want to your investment, you can tell yourself its worth millions. Its a meaningless fact until it comes time to sell.
And if you think the market is not recognizing the intrinsic value of your properties when put up for sale and they don’t get bids at ask, well the markets perception, for all intents and purchases, is the intrinsic value if the present value of cash flows approach is not being used.
It makes perfect sense that RE prices were not sticky on the way up but are more sticky on the way down. On the way up almost or unlimited leverage and exotic financing allowed people to vastly overpay for properties relative to the near past.
On the way down the sellers have mortgage obligations to service, often based on those bubble prices, that prevents them from making a clean break with their property at pricing the market will currently bear.
If you are seriously interested in getting a deal you might want to broaden your chosen neighborhoods AND look at foreclosures as well. The banks aren’t constrained by a mortgage on a property once it goes foreclosure and they are stuck maintaining it. The banks are the ones cutting the deals now, not underwater poseur debtslaves livin’ the highly leveraged dream.
Here’s some data points for people trying to employ the “lowball” strategy. Over the course of the last 16 months, I have submitted offers on 6 places in LP ranging from 2/2 condos to single family homes. My “lowball” offers ranged from 8%-25% below ask, depending on how unrealistic the seller was. Although I have been unsuccessful, the sellers have also been unsuccessful. Out of the six places I submitted offers on, only one has actually traded.
“Wrong again, westlessthan0.”
And may I point out again G, green is definately not your color.
Love how you have taken to starting your replies with “wrong again”…laughable at best, pitiful and resentful at it’s worst.
MJ,
Good information to know. At a certain point if there is one of those places that you are still interested in you should try and contact the seller again to see what their positions is (although at this point you might want to only give them even less than you offered before!)
“At a certain point if there is one of those places that you are still interested in you should try and contact the seller again to see what their positions is (although at this point you might want to only give them even less than you offered before!)”
Of course you do, even if it’s only slightly less. If they’re offended, too bad.
If they’ve been at all sensible and lowered their ask, then you can point out that your offer is for 92% of list instead of 88% of list (or whatever), so in one sense you’re actually offering more.
People get emotionally attached to their assumed RE valuations as well. If they were offended by your first ask, it is doubtful that most would come around in the future unless they were businesspeople, psychologists or had a behavioral economics/finance class.
If you were going to re-submit your offer, in order to not offend it might be best to offer a nominal amount more (like 1-2k) and/or go through an intermediary and try to keep your identity secret before offer acceptance if that’s at all possible.
They’ve done studies on monkeys and the fairness principle runs deep. A monkey would rather see both him and another monkey go hungry if they had both completed the same task and only the other monkey was slated to get the reward–even though the monkey would not have the food in either case.
Err that should’ve read “offended by first bid”.
I don’t know…I know I and most ppl who are experienced in buying/selling have an amount that is the absolute lowest price and they (I) advise my agent to not even bother me if their price is not at that level. I don’t get offended…why would I, I still hold the keys!!
So, wait, let me get this straight: 90% of list is a lowball offer?
G:
Isn’t Southport’s zip code 60613? (not 60657?)
What are the sales stats for condos during that time period as compared to the other years for the actual Southport neighborhood?
Because I’m not seeing a lot of the prices come down dramatically.
People may be lowballing (as some of you are doing) but sellers aren’t budging because they can’t (unless they come to the table with money.)
And most sellers of condos in that neighborhood aren’t going to come to the table with cash.
Most condos listed for sale in this neighborhood are overpriced, but this one is absolutely stupidly overpriced. The seller must think the real estate bust only affected other places but his/her great neighborhood is “different”.
Yea I have trouble even saying that 90% is a lowball offer but I’m not sure it’s even worth my time to look at places that I don’t think I’ll be willing to pay 90% for. Sometimes I’ll go look just in case they drop their price down the road so I can get into 90% range.
Even people who bought in very early for little money (like people who bought a 2-bed in the south loop for 80K in 1998) are holding on like crazy as well. Everyone is holding on. I am hoping these unemployment numbers will help turn the tables.
nomadic,
90% of offer is not a lowball offer in my opinion. i think part of it is context. i made about a 50% offer. But this is a property that has been marketed for over a year. MLS has it for less but i know it has been on and off the market. the latest listing was 10% but clearly no action. i also know it is being marketed above its 2005 or 2006 sales price. it is also in the jumbo mortgage category even assuming 20% down.
did i expect my bid to be accepted? no. but this is the only way to re-frame the debate and reset expectations into what the market really is going to be. a sales price doesn’t make the market. a buyer and a seller in agreement makes a market. right now, i see a property market that is mostly offers. but with owner’s recent price change and my latest bid i am at 70% of offer. it’s coming my way.
so no deal? so what? i’m still renting and actually saving money. buying a property is only going to increase my cash burn rate. it’s a luxury item/investment. i’ve rented 10 years and i can keep on renting. it’s a buyer’s market if you have the cash and patience. i’m now considering bids on properties of a divorced couple and someone “transferred to NYC”. i’m smacking my lips. one of these days someone is going to bite. and my low ball bid won’t be within 25% of their current list price.
nomadic,
excuse me if I might have overlooked this in your past posts, but what are your reasons for trying to buy now? Are you, as GLS suggests…looking to make a luxury purchase (try as I may I just do not understand this way of viewing home ownership) or do you plan on buying, perhaps making some upgrades to ‘personalize’ your space, then enjoying your home for 10+ years before upgrading to a more expensive property utilizing your equity to level off the amount you spend to do so.
The benefits of renting vs owning are ones that will change and will change very quickly favoring owning. The bottom cannot be predicted until we are well past it at which point you would have lost the chance to then view your purchase as a viable investment.
One thing that does concern me greatly is this whole idea of housing as an investment only just makes no sense to me. Over the years, the chance you take now will certainly pay off and you will yield returns….of course it will take time but in the end you will come out on top.
“If they’ve been at all sensible and lowered their ask, then you can point out that your offer is for 92% of list instead of 88% of list (or whatever), so in one sense you’re actually offering more.”
You know I do agree with and respect your views here anon(tfo), but this idea just does not hold water when you are the seller of ANY property. It may work on a desperate first time seller who is so underwater that their panic makes them want to think they are coming out on top. But for an experienced seller (and their agent who should agree with them) to do so is even more insulting than lowballing at an outrageous level and expecting that their offer will be accepted.
Just saying… while in the past sometimes psychological games may have worked in RE, at this point in time we have all moved past that way of thinking.
“If you are seriously interested in getting a deal you might want to broaden your chosen neighborhoods AND look at foreclosures as well.”
Well, hell just got a thin coat of ice on the surface as, while a common sense and minor point, I finally agree with your RE wisdom Bob!
In the past I would focus on only one or two neighborhoods while disregarding some great deals elsewhere. At that point is when I started to expand my dealings to include becoming more involved in regentrification efforts in areas that were less than desirable at the time.
The only thing I would advise in considering foreclosures and even short sales is to track down the toughest and most aggressive housing inspector in Chicago. There have been many times when I was ready to offer when I or one of my crew discovered cleverly hidden ‘no maintenance performed’ issues on a home. Or as is the case in so many foreclosures, damage was inflicted by those who became emotional when walking away from their dream home. Looking at every inch of the property with a magnifying glass is essential here.
“One thing that does concern me greatly is this whole idea of housing as an investment only just makes no sense to me. Over the years, the chance you take now will certainly pay off and you will yield returns….of course it will take time but in the end you will come out on top.”
How long will they be waiting to “come out on top”? Just curious. The LA Times is reporting that some homeowners who bought in the Inland Empire outside of LA/SD in 1989 are now underwater.
One guy bought his home for $120,000 and a house a few doors down from him just sold for $65,000. I think they said 14 zip codes are now selling for under 1989 prices.
Of course, that homeowner is enjoying his house and raised his family in the house for 20 years.
But I wouldn’t call that any kind of “investment.”
Its not an investment, its called ‘forced savings’.
“at this point in time we have all moved past that way of thinking”
Dude, you’ve firmly established that you inhabit a strata of society that cannot be reasonably called average or typical. Maybe all of your friends and business associates are beyond “that way of thinking” (altho I doubt it), but they aren’t the people Nomadic is likely to buy from.
Nomadic is looking for a 2BR condo for less than $350k–in the areas under consideration, the sellers of these units are going to be “typical” and more often than not first time sellers. They’re not–in general–sophisitcated participants in the RE market and, as we’ve seen time and again, many of them use knucklehead realtors (whose fealty is to the closing and their commission, anyway). So I have lower expectations for Nomadic’s likely sellers than you do.
Plus, many of these sellers *will* be approaching desparate times, and when people get squeezed, they’re more likely to take any escape route. But it will still be limited by what they owe on their mortgage(s)–which is why, if you want to find a possibly acceptable below-ask price for someone who’s “stuck”, you should sketch out a closing statement for the Seller to know what number makes it so they don’t have to bring any money to closing.
“How long will they be waiting to “come out on top”? Just curious. The LA Times is reporting that some homeowners who bought in the Inland Empire outside of LA/SD in 1989 are now underwater. ”
Weren’t they also underwater from 1991 thru 1999, or so? Didn’t read the article, but that’s about the history of SoCal housing; 1989 was near a peak.
“Isn’t Southport’s zip code 60613? (not 60657?)”
It’s ’57 up to Addison (and West to Damen). The property in this post is in ’57.
Either SoPo is in both ’57 and ’13, or this property isn’t in SoPo.
That of course is the question of the century Sabrina! No one knows the exact answer, but it is not all doom and gloom as many here predict. I do know that in the past I have been reprimanded gently for comparing the Chicago market with other areas of the country so while I appreciate your LA/SD story I don’t think it is relevent to the situation here. I have an agent friend in Buffalo, NY. She has been relating stories of how the market there has not experienced much, if any backlash from the economic problems that the rest of the country faces. She just closed on a sale where the house went for $50k above asking price due to a long bidding war. So much for comparing areas aroung the country Sabrina.
This morning a woman I have followed for years, Barb Corcoran in NYC, was on the Today show giving her take on the Rent vs Own debate. While acknowledging the problems we all face now, her responses did indicate some hope and it does still make sense to buy now.
Her points were: 1) if you like control in your housing situation (doing as you please with your home, go for it) 2) after paying off your mortgage, regardless of the market there is still equity in your home. Has it gone down in recent years? Of course that is more than evident. But to buy now, 30 years down the road who is to say your home would not be worth more? 3) if a buyer is going in now for the short term, even the closing costs dash thaat hope of making $$$ and yielding a return…it just will not happen. BUT, in the long run there will be appreciation 4) due to govt intervention, there is program after program being rolled out to encourage a return to buying and there are RE deals out there in good numbers 4) while unrolling the market is slow, once it does start to rebound, it does so rather quickly. Remember that over cliched comment, “buy now or be priced out”? Will that return and this time be true?
She cited the depression years as the only time in American history where there was not appreciation…but as analysts have agreed we are not facing those same circumstances now.
Seriously though, I think the point I was trying to get across for some time now is that for some new buyers it is not all about the financial aspect. Not everyone is buying to make money in a few short years.
As she said today and in several other articles I have read, no one knows the bottom until we are well past it and there is no way of predicting where or when it will improve.
What was once a sure bet is now a take a chance, gamble your money and but, in the meantime enjoy your own home without an owner dictating your every move.
There were 84 condo sales in 60613 for 5/1/09 – 6/15/09, a decline of 40% from the 139 in the same period in 2008, which was a decline of 33% from the 208 in the same period in 2007. The two year decline was 60%.
There were 140 condo contracts in 60613 for 5/1/09 – 6/15/09, a decline of 10% from the 156 in the same period in 2008, which was a decline of 17% from the 187 in the same period in 2007. The two year decline was 25%.
Good numbers G, however a 40% decline in contracts doesn’t equal a 40% decline in prices, especially since all this excess inventory is being bought up and nothing new is being built.
“Dude, you’ve firmly established that you inhabit a strata of society that cannot be reasonably called average or typical. Maybe all of your friends and business associates are beyond “that way of thinking” (altho I doubt it), but they aren’t the people Nomadic is likely to buy from.”
Dude, although you did take that quote out of context (I was referring that we do not engage in psychological mind games that would make us believe we are the rulers of the world, LOL) to make another unrelated point, I will play along.
While I would like to believe that the circles I travel in are nothing but the Bill Gates Jrs of the world, such is not the case. I have associates at every level of RE and related businesses. Even those at the highest end of the game and are the most financially solid ones I know do dabble in the most basic and practical end of the housing market. They do consider every property as valuable as their own private residences and have an outlook that since they know how much their property is worth based on purchase price and upgrades, (I know a properties value is not a valid number until it sells) they know what the bottom offer will be.
So pulling it back to the lowballing debate, the strategy you suggest does not work…even on the most ‘practical and unexperienced’ level. It is clear that if one thing was learned so far from the crash is that everyone going into this situation is so much more well educated and prepared than they were in the near past. Sad that it has taken such a disaster for education to be sought out…
“Good numbers G, however a 40% decline in contracts doesn’t equal a 40% decline in prices, especially since all this excess inventory is being bought up and nothing new is being built.”
Exactly…G loves to point out sales numbers from last year…two years ago with the hope of doing so will make the sales prices go down to below 1990 prices! Don’t think that strategy is going to work G.
” you did take that quote out of context (I was referring that we do not engage in psychological mind games that would make us believe we are the rulers of the world, LOL)”
You may have been thinking something like that, but the words didn’t appear in pixels. Re-read you post from 7:02. Your points were:
1. Re-bidding at a lower price, but higher percentage of reduced asking price “just does not hold water when you are the seller of ANY property”.
2. “a desperate first time seller who is so underwater” might fall for it.
3. “an experienced seller” would be more insulted by that gambit than a crazy initial lowball offer.
4. “Just saying… while in the past sometimes psychological games may have worked in RE, at this point in time we have all moved past that way of thinking.”
Seems that–as typed–it wasn’t out of context **at all**.
Anyway, I was being flippant about pointing out the higher percentage of asking price; that’s the comeback when the Seller gets snotty about your re-offer, and assumes they’re saying “no, I won’t take your offer of $5k less than your previous offer”.
Also, it may not work in residential real estate, but it certainly is not a recipe for certain failure in all negotiations. But I would avoid pointing out you’re offering a higher percentage before your ready to walk away.
Good luck GLS. One my low offers was on someone who got transferred to NYC as well.
Westloopeo – I’m certainly not buying a luxury. I’m buying a space I can live in for a few years with an extra bedroom that I will rent out. I won’t buy unless I think I can rent the whole thing out for near the monthly cost. My monthly costs will be lower than a 1BR’s rent after renting out a room. After a few years I’ll upgrade it and stay for a while, sell, or rent the whole thing. This means I am trying to buy a place where price is close to rent parity and that’s pretty tough in these Lakeview neighborhoods.
Anon – You’re right, the sellers of these
Wrong again, westlessthan0.
I have never claimed that a % decline in sales or contracts equals a % decline in prices. What I have said repeatedly is the following:
Sales volume has collapsed to the lowest levels in 20+ years.
The number of conversions and new construction units have increased supply significantly in that time, thus making volume as a % of supply far lower than at any time in 20+ years.
The return of “sustainable” mortgage lending requirements, rising unemployment, and future demand borrowed during the bubble years have severely shrunk the pool of qualified buyers.
These facts lead me to the following conclusions, which I have repeated again and again:
The big price drops will not occur until sales volume increases significantly. Until significant volume increases occur, prices will continue to decline slowly and steadily.
The current “standoff” in areas with low sales volume will not end through buyer capitulation.
G said: “The big price drops will not occur until sales volume increases significantly. Until significant volume increases occur, prices will continue to decline slowly and steadily.”
I agree 100% which is why I continue believing in the lowball, disciplined strategy. Slightly off-topic, but don’t you hate it on HGTV’s First-time Buyers, you constantly see the realtor be-rate the buyers for bidding too low and not getting what they want. First off, the commish is higher with a higher bid. Of course realtors love you to get into a bidding war. Second, most of these buyers, are COMMITTED to buying. Oh, we have to buy a place before we get married or have the baby, etc. Serious mistake.
Sellers are going to have to meet my demands if they want to see cash. If they don’t, I’m a big boy and I will move on.
Finally, for bidders, wait a few months. There is academic/statistical evidence of pricing falling in the winter/shoulder season when sales slow. In this market, that’s several more months of mortgage payments, assessments/maintenance, property taxes, etc.