Is the Market Cooling? A 2-Bedroom at 340 W. Superior in River North
This 2-bedroom at 340 W. Superior in River North came on the market in June 2018.
Built in 2001, this mid-rise building has 120 units and a parking garage. It has a doorman and an exercise room.
This unit has extensive custom wainscoting, molding and millwork you normally don’t find in a 2000-era building.
There is a custom built-in dark wood entertainment center in the living room.
The kitchen is “completely upgraded” and has the same dark wood cabinets as the entertainment center. It has granite counter tops, stainless steel appliances and a large breakfast bar.
The master suite has a bathroom with a renovated shower and double vanity.
The second bedroom is the style commonly found in loft units, as it doesn’t have a window.
The listing says this unit has a den, but I had to study the floor plan for a while before I spotted it listed as the foyer, measuring 10×7.
It also has a big balcony with city views.
The unit has the other features buyers look for including central air, washer/dryer in the unit and garage parking is available for $35,000.
Originally listed at $600,000 in June, it has been reduced $60,000 and is now listed at $540,000 plus $35,000 for the parking.
What will it take to sell this property?
Melissa Siegal at @Properties has the listing. See the pictures and floor plan here.
Unit #1105: 2 bedrooms, 2 baths, 1310 square feet
- Sold in June 2002 for $419,500 (no parking)
- Sold in June 2004 for $447,000 (included the parking)
- Sold in October 2008 for $505,000 (included the parking)
- Originally listed in June 2018 for $600,000
- Reduced several times
- Currently listed at $540,000 (parking is $35,000 extra)
- Assessments of $878 a month (includes heat, a/c, gas, doorman, cable, Internet, exercise room, exterior maintenance, lawn care, scavenger, snow removal)
- Taxes of $8331
- Central Air
- Washer/dryer in the unit
- Bedroom #1: 17×11
- Bedroom #2: 13×10
- Den: 10×7
- Balcony: 27×6
’02 price + CPI = $588k
’08 price + CPI = $588k (yes, really)
So, yeah, market is cooling.
yeah but I was told people don’t buy property with real dollars anon 🙂
I wonder if the odd layout is holding this place back? Seems like a nice enough place, just not a typical layout
2 bed plus den, not really (like Sabrina, I also was staring at the floorplan trying to figure that out), and one bedroom without a complete wall and window is perhaps a negative (having the baby’s room right by the door like that could be an issue too).
But that aside, I don’t know — I actually like the place pretty well.
For comparison, 340 W Superior, #1008 sold in March for $655K (above asking).
Looks like its sales history is:
$435,500 in 6/02
$537,500 in 9/03
$635,000 in 10/14
And then the one this year.
Is it unit-specific or that much of a cooling since March?
“Rare two bedroom + den”
where’s the den?
can you paint the interior window mullions? always hated the color they used for them in this building.
I appreciate the showing off of the wall safe.
“people don’t buy property with real dollars”
So, I suppose one should believe that median and average incomes have gone up by 40% since ’02, rather than being basically flat?
Is CPI + 0 bps a good return on investment?
“Is CPI + 0 bps a good return on investment?”
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What’s your alternative purchase’s return, and its risk premium? And how much do you want to spend on rent during the time period?
Here’s an alternative investment:
https://www.yahoo.com/finance/news/holy-grail-whisky-sold-record-1-1-million-140637752.html
“So, I suppose one should believe that median and average incomes have gone up by 40% since ’02, rather than being basically flat?”
median/average income earners aren’t buying 500k+ 2/2’s in River North though, in fact I’d say they are at the rock bottom of people who should be purchasing properties. I don’t think the top 10% of earners income has remained flat since 02 but I’m too lazy to look up stats like that anyway
“Can you paint the interior window mullions? always hated the color they used for them in this building.
I wondered the same thing and it looks like you can.
https://www.redfin.com/IL/Chicago/340-W-Superior-St-60654/unit-903/home/12666192
And the den is the foyer
IMO, it’s generally good for housing prices to increase around the rate of inflation (but many places they are obviously going up much faster). If that’s what it’s doing, it also means housing isn’t a great investment, if that’s what you are looking for (good place to live, nice to have a paid off house when you retire, tax deductions when paying mortgage interest, sure).
Actual housing costs are going up more than inflation, though, because of taxes, as noted on the other thread.
2002-2018 being around inflation, with a huge dip in the middle of the period, is a lot better than some were predicting in 2009 on this site.
Correction: Second paragraph should have said “Actual housing costs even in this place…”
“median/average income earners aren’t buying 500k+ 2/2’s in River North though, in fact I’d say they are at the rock bottom of people who should be purchasing properties.”
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Since when did purchasing property become the preserve of elite incomes?
well considering only 15% of the entire US population has over 10k in savings… I’m going to stick with that “theory”
The realtor really put a lot of effort into this listing
I think this feels a lot smaller in person
Are the floors in the LR that beat up or were they going for a distressed look?
The white Wainscoting is a nice clash with what could be nice wood (bubinga?) in the den/kitchen
Kitchen is tiny
Mirrored hallway is horrible
With that large of a WIC, I’d give up 2′ of MBR length to expand the LR
“Since when did purchasing property become the preserve of elite incomes?”
As I read it, he was referring specifically to River North, which is an expensive area, not to “purchasing property.”
JohnnyU — good point about the floor, I thought it looked bad too, but it’s hard to tell for sure from photos.
“well considering only 15% of the entire US population has over 10k in savings… I’m going to stick with that “theory””
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I got dollars to doughnuts that most of the buyers of “500k+ 2/2’s in River North” could only buy due to an account at the Bank of Mom and Dad — if that’s your idea of “savings.”
If you’re going to have that theory, I suggest you ratchet up your income cut off. Please consider:
At 2.5X gross income (rule of thumb for affordability), the buyer of a $500k crap shack (condo or otherwise), needs $100,000 in down payment and $200,000 in annual household income to qualify. $200k household income is well above the top 10%-of-American-income-distribution cut off, and the $100k savings kicker narrows the pool of buyers even further.
FHA loans take as little as 3% down. is placing those your forte, sonies?
🙂
“As I read it, he was referring specifically to River North, which is an expensive area, not to “purchasing property.””
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Nope, read the original comment — said rock bottom of those who should be “purchasing property.”
Okay, fair enough. I missed that part.
Hmm. Median household income in 2016:
US $57,617, with a one-year change of +2.01%, 5-year change of +7.02%
Illinois $60,960, +1.03%, +5.25%
Chicago Metro (CNJ) $66,020, +3.24%, +5.79%
I’d argue that making more than $66K as a 2-income household in Chicago doesn’t exactly make you someone with an “elite” income. However, I would also agree that a household at the median income level should be able to buy real property (although also that they should save up a reasonable downpayment before doing so). This is why it’s not a bad thing for property to increase closer to inflation than to go up fast.
Case-Shiller Index for Chicago:
Jul-2018 3.02% (3-yr); 2.91% (5-yr); -0.30% (10-yr)
yeah… I don’t think people with below median household incomes should be buying homes… what a hot take
Good eye JohnnyU, the condition of the floors along with the distaste that every potential buyer must feel when they realize they are trying to sale a slightly larger than average foyer as a den could be the sole reasons that this hasn’t sold yet… (no one wants to move in to a new unit and immediately have to refinish/replace the floors)…
“yeah… I don’t think people with below median household incomes should be buying homes… what a hot take”
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If they can find someone to finance them — as long as no fraud is involved — God bless.
My point was that even the upper ten percent can’t afford the half million house — wherever it is — without help, being it in the form of concealing a loan from Mom and Dad, or FHA, or whatever. Maybe the top one percent, but not the top ten.
What would happen to the market if we didn’t have such shortcuts and un-disclosed assistance (not to mention advances on inheritance)? Well, probably ninety percent of real estate agents today would be pan handlers tomorrow.
A bunch of numbers:
Median US Household Income in 2000: $41,990; in 2016: $59,039
Increase=about 40%
Top 10% starts at about $162K, as of 2014 (so 2014 dollars).
For the census tract this property is in, median household income is $101K (in 2013 dollars, so more now), and 33% make over $150K (also 2013 dollars). So close to a third would be in the US top tenth percentile.
One rule of thumb for housing is no more than 28% of gross monthly income. Gross monthly income on $165K is $13,750, so that number would be $3850. The mortgage calculator on redfin tells me the monthly payment at $540K with this property’s taxes and assessments is $4020 with 20% down (but you’d need to have $108K, which is more likely if you’ve been saving for a while or sold a place you were in for a while or were lucky in your timing — which is actually quite possible right now if you bought in 2011 or 2012, for example). Of course, what one can actually afford to pay depends on other expenses.
Changes over time for this census tract:
1990 (in 2013 dollars): $67K
2000 (same): $113K (this reflects a change in the neighborhood, presumably, actual number was $82K)
2013: $101K — so actually down, but could just mean more single income households
Looking at median income in different tracts, you really see how some neighborhoods have changed. My old one in Southport:
1990: $58K
2000: $99K
2013: $115K (here I think one difference is somewhat more families, somewhat older than 2000)
Looking at a couple of other tracts for fun (2013 median income only):
2216 (between Western, Leavitt, Armitage, and Fullerton): $70,500
8322 (Leavitt, Fullerton, Damen, Armitage, plus Armitage to Church between Hoyne and Damen): $82K
2222 (Western, Armitage, Bloomingdale, Hoyne): $120K
2405 (between Bloomingdale, North, Western, and Milwaukee): $109K
(but you’d need to have $108K, which is more likely if you’ve been saving for a while or sold a place you were in for a while or were lucky in your timing — which is actually quite possible right now if you bought in 2011 or 2012, for example)”
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Not necessarily, unless you bought st the 2010-12 bottom. Be honest; How many had savings at the Bank of Mom and Dad? The hypotheticals are nice, but the fact that you are resorting to hypotheticals tells us you know you’re grabbing at straws.
Johnc, I’d say about 50% of the borrowers I’ve dealt with have some type of parental help. Some are an outright gift of down payment (anywhere from 5% to full 20%), while others may have trusts / inheritances that have boosted savings.
I didn’t realize how prevalent this was until I got into the mortgage business.
I don’t see to many greenzone type buyers truly scrimping and saving every penny. That is more common at the lower end of the market imho.
“I’d say about 50% of the borrowers I’ve dealt with have some type of parental help”
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That’s what I figured. Which means that the “top ten percent of income” is insufficient — can’t make the nut yet on down payment.
I guess sonies is going to have to branch out into FHA-loan-qualified clientele ere too long. Slumming!
” I don’t think the top 10% of earners income has remained flat since 02″
top decile is a little harder to find, but top quintile and top 5% is easy:
top 20% 2002 = 84,016 + cpi = 114,191
top 20% 2017 = 126,855
top 5% 2002 = 150,002 + cpi = 203,883
top 5% 2017 = 237,034
So, yeah, plus 10 to 15%, which is basically enough for the increases in taxes and insurance costs to be flat as a percentage of income.
“it’s generally good for housing prices to increase around the rate of inflation ”
Over 100+ years in Chicago, the increase is around inflation a couple dozen basis points, if you pick about the same point in the real estate cycle.
Their ask is below inflation, and they are signposting (by splitting out the parking) that they would consider an offer that is almost -10%.
Johnc, the top 10% is sufficient income wise, but the target market (young professionals) for most of these greenzone condos really haven’t been working long enough to save $100k plus cash in most cases for a 20% down payment hence the prevalence of gifts.
Most of the buyers are in their late 20s or early 30s at most and only recently are making say $100k/yr. They can easily support the PITI payment, but not necessarily the cash down stroke of 20%.
I even see a lot of $1 million plus purchases with family gifts / inheritances.
Seems like a good deal at first glance, but I hate rooms without windows and this one is guilty of that crime. Love the balcony and views. Location is too far west for me.
Re: “Be honest; How many had savings at the Bank of Mom and Dad?” and “I’d say about 50% of the borrowers I’ve dealt with have some type of parental help” — I’m actually shocked at that number, as that was never an option for me.
Again, if this is NOT your first place or you waited to buy until after you had been working a while, and you are a DINK couple, I don’t think having a substantial downpayment is hard to imagine (although I realize many people don’t, I put down only 5% on my first place, although it also cost less than 2x my income, since I tend to be conservative with money).
If it’s not a starter place (and a place for $500+ isn’t a starter place in my mind), selling a prior place (if you bought it when prices were lower, as in many cases), makes a huge difference as to the availability of a downpayment. Obviously, if you bought in 2007, yeah, that very well could be a problem, except then you have been paying the mortgage on the place for 11 years.
“I put down only 5% on my first place”
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I put nothing down on my first house. I went VA. Going from a Maggot at Parris Island to sergeant in the infantry had its bennies.
And speaking of VA loans — If you ever have a customer who wants to go VA, find out if they’re members of Navy Federal Credit Union. NFCU can work a VA loan faster than most of you can work a regular loan, and that includes the VA inspection.
“Again, if this is NOT your first place or you waited to buy until after you had been working a while, and you are a DINK couple, I don’t think having a substantial downpayment is hard to imagine”
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Well, Russ said that “Most of the buyers are in their late 20s or early 30s at most,” which strikes me as first time buyers. They certainly are not people who were buying in 2007, or even 2010 (too young). So, it appears that without the Bank of Mom and Dad, or crispies from wrinklies (advances on inheritance), a substantial down payment is hard to imagine.
I’m with you that a $500k place isn’t a starter home, it looks like there’s a lot of Bifs and Tiffanys who think otherwise, though.
“put down only 5% on my first place, although it also cost less than 2x my income”
same.
Why is it that hard to imagine there’s 20 / 30 something’s en masse making enough money for 500k+ places as “starter” homes? I’m in this age range and know plenty of people who either own places like this or will buy them when they are finished renting the equivalent.
It’s true to say that it requires these people be in the top 10%+ income wise, but what I think is under appreciated is just how many of those that are in that bracket want to purchase in the same handful of neighborhoods. Not to mention that many of these are dual income couples. I don’t think it’s uncommon at all for two people in this age bracket to be collectively at 175k+, putting these types of properties in their range.
” don’t think it’s uncommon at all for two people in this age bracket to be collectively at 175k+, putting these types of properties in their range.”
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The income part isn’t the problem. It’s the down payment. You need three things:
a. down payment;
b. income to afford the monthly note call, and;
c. no/few other debts (e.g., student loans).
At that age range (let’s call it 27 – 35), we’re not talking about someone who bought a house earlier and benefited from appreciation. Unless lucky to get a full scholarship or a whacking trust fund, student loans figure prominently in the balance sheet. And the person/couple simply hasn’t been earning enough long enough to build up $125k ($100k down payment and $25k moving expenses) in the bank to make a down payment on his/their own.
Hence the Bank of Mom and Dad. I was not a bit surprised at Russ’s 50 percent figure for family assistance, and I think it is low for that price point for people of that age. Income is not the problem. Wealth accumulation is. The tykes just don’t have that kind of trump in a real bank.
“$25k moving expenses”
You’re hypothesizing that these first time buyers have a house full of furniture in their one-bed rental? Or has moving really gotten that expensive (if so, I’m starting a moving company).
Looks like the subject property is now contingent.
And the person/couple simply hasn’t been earning enough long enough to build up $125k ($100k down payment and $25k moving expenses) in the bank to make a down payment on his/their own.
“The downpayment isn’t really an issue anymore. After the financial crisis, the banks cracked down and were basically asking for 10% or more for the downpayment. But that has gone away now.”
The 20-somethings can buy with 3% or 5% down. If they’re making $175k as a joint couple or a well paid singleton, they could save the $25,000 pretty easily in a year or two on a $500,000 property. They’ll have to pay PMI, but at least they’re in the property.
“You’re hypothesizing that these first time buyers have a house full of furniture in their one-bed rental? Or has moving really gotten that expensive (if so, I’m starting a moving company).”
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My bad. Moving and buying furniture, etc. for the new place.
Seems like people here complain more about the place/s and enjoy doing it. Good for you. While you were discussing irrelevant things, a buyer ignored all of those “issues” and put an offer down already.
Those who can, do…..
Appropo of the market cooling, people (not) having equity in their homes sufficient to move up the ladder, the Bank of Mom and Dad, etc.; here’s what the Saint Louis Fed has to say on the subject — bottom line, I am right, per usual (and Bucktown stops at Armitage):
https://www.stlouisfed.org/on-the-economy/2018/october/who-equity-their-homes-who-doesnt
$25,000 moving in expenses? That makes no sense. Its like $3k to have someone pack and move for you locally.
Finally closed for 560K on 4/2/19