It All Depends on When You Bought: 600 N. Fairbanks in Streeterville
There has been a lot of recent chatter about 600 N. Fairbanks.
The Helmut Jahn designed building in Streeterville continues to see active traffic with some flippers able to sell for a profit since the building first started closings in November 2007.
See our chatter on a prior post and info about recent sales in the comments here.
But making a profit, in some cases, seems to be tied to when you bought in the building.
Take these two 05 tier units which are currently on the market.
One seller, Unit #1505, appears to have bought pre-construction at a much lower price than Unit #1805. The difference in the possible profit margin (if there is a profit upon sale) appears quite large.
Unit #1805, which originally closed at a higher price, was listed last October and has since been reduced $30,100.
Unit #1805: 2 bedrooms, 2 baths, 1253 square feet, (NW view)
- Sold in November 2007 for $672,000
- Originally listed in October 2008 for $675,000 (parking extra)
- Reduced
- Currently listed for $644,900 (parking extra)
- Assessments are $425 a month
- Taxes are “new”
- Schatz Realty has the listing. See the pictures here.
Unit #1505 just came on the market in January.
Unit #1505: 2 bedrooms, 2 baths, 1253 square feet, (NW view)
- Sold in November 2007 for $584,000
- Listed in January 2009 for $629,900 (plus $55,000 for parking)
- Currently still listed for $629,900 (plus $55,000 for parking)
- Assessments of $416 a month
- Taxes are “new”
- David Isquith at Keller Williams Gold Coast has the listing. See more pictures here.
I think this is a great building in a great area but I wonder if it is too conjested.
1,253 SF in the “05” tier? i am HIGHLY skeptical. 900-1,000 seems more realistic. I’m not basing this on anything other than a semi-educated guess. square footage fraud is so rampant.
I am still astonished at these prices, I mean it isnt freaking Manhattan, its Chicago! I mean, these places are almost twice the cost of something comparable in river north/old town/lp/lv etc.
End of 07 real estate analysts were already predicting an ugly crash in property values so why go out and buy a place well above the average $/sq ft in the area?! If this were Manhattan, this unit would have a contract within weeks. But this is Chicago and right now $600k goes pretty far.
Is it me, or does 1505 look like a prison cell? Between the strange metal bed and the what-was-trendy raw concrete ceilings, I fail to see why this building has had so much buzz. You CAN have modern design without a sacrifice of comfort and quality finishes.
(A word of warning, while looking at condos in this city, I was astonished at the number of units where current owners had high power telescopes for peeping into others private lives! I would imagine only the truly brave would sleep with blinds drawn in a bedroom like 1505.)
Lol you’re right that metal bed does look like a prison cot.
Lauren if this place were in Manhattan at this price it would go under contact in seconds. 600 N Fairbanks is $500 per sf, in Manhattan new construction is around $1200 per sf and up. 900k gets you a 750 sf 1-bedroom.
Also this unit is strange- In the foyer there is a closet for the washer/dryer, but no coat closet.
There has been one contract signed in 2009. There has been one closing in 2009. There are currently 23 units available for sale on the MLS. Current absorption indicates there is around 2.5 years of inventory available.
In addition to the 23 units currently listed, there have been 26 other units which have been listed in the past but did not sell. In addition, there were 18 units which were purchased from the developer and rented without being offered for resale.
horrendous apartments.. even more horrendous bldg. Those shades make it look like a tall glass slum
Here are the 41 units which have rented through the MLS, along with their purchase prices for a little perspective:
1301 CLSD — 8/4/2008 — $805,000
1301 RNTD — 9/15/2008 — $3,900
1404 CLSD — 11/28/2007— $385,166
1404 RNTD — 12/17/2007— $2,200
1506 CLSD — 2/25/2008 — $367,116
1506 RNTD — 6/25/2008 — $2,000
1508 CLSD — 12/10/2007— $411,505
1508 RNTD — 6/20/2008 — $2,150
1509 CLSD — 1/18/2008 — $417,000
1509 RNTD — 3/12/2008 — $2,200
1602 CLSD — 11/28/2007— $563,159
1602 RNTD — 2/21/2008 — $3,000
1603 CLSD — 12/4/2007 — $403,751
1603 RNTD — 2/27/2008 — $2,245
1604 CLSD — 11/27/2007— $419,300
1604 RNTD — 2/15/2008 — $2,200
1605 CLSD — 11/14/2007— $541,000
1605 RNTD — 5/27/2008 — $3,030
1701 CLSD — 11/28/2007— $822,000
1701 RNTD — 2/4/2008 — $5,250
1704 CLSD — 11/12/2007— $436,500
1704 RNTD — 9/24/2008 — $2,500
1706 CLSD — 2/15/2008 — $374,715
1706 RNTD — 4/8/2008 — $1,925
1901 CLSD — 11/26/2007— $778,000
1901 RNTD — 8/26/2008 — $4,200
1905 CLSD — 11/20/2007— $563,000
1905 RNTD — 11/10/2008— $3,200
2101 CLSD — 11/28/2007— $828,500
2101 RNTD — 10/15/2008— $3,900
2103 CLSD — 11/26/2007— $451,000
2103 RNTD — 9/2/2008 — $2,850
2201 CLSD — 12/13/2007— $946,705
2201 RNTD — 5/13/2008 — $4,800
2202 CLSD — 12/4/2007 — $621,152
2202 RNTD — 1/27/2009 — $3,100
2305 CLSD — 12/17/2007— $580,500
2305 RNTD — 8/26/2008 — $3,350
2404 CLSD — 1/28/2008 — $430,000
2404 RNTD — 2/4/2008 — $2,300
2502 CLSD — 1/28/2008 — $657,500
2502 RNTD — 3/3/2008 — $3,400
2503 CLSD — 1/18/2008 — $440,500
2503 RNTD — 2/9/2009 — $2,250
2705 CLSD — 2/6/2008 — $585,802
2705 RNTD — 6/9/2008 — $3,400
2801 CLSD — 2/4/2008 — $902,500
2801 RNTD — 1/13/2009 — $4,800
2802 CLSD — 2/7/2008 — $0
2802 RNTD — 12/30/2008— $3,300
2805 CLSD — 1/28/2008 — $0
2805 RNTD — 8/15/2008 — $3,200
2903 CLSD — 2/19/2008 — $439,000
2903 RNTD — 3/18/2008 — $2,100
2904 CLSD — 2/25/2008 — $486,000
2904 RNTD — 4/30/2008 — $2,250
2905 CLSD — 1/31/2008 — $630,403
2905 RNTD — 12/15/2008— $3,250
2907 CLSD — 2/11/2008 — $579,990
2907 RNTD — 6/25/2008 — $3,150
2908 CLSD — 2/11/2008 — $503,223
2908 RNTD — 7/13/2008 — $2,400
3001 CLSD — 2/12/2008 — $950,500
3001 RNTD — 7/25/2008 — $4,900
3002 CLSD — 2/15/2008 — $667,000
3002 RNTD — 5/15/2008 — $3,250
3107 CLSD — 2/19/2008 — $0
3107 RNTD — 5/16/2008 — $3,300
3201 CLSD — 2/25/2008 — $1,037,000
3201 RNTD — 10/22/2008— $4,800
3205 CLSD — 2/22/2008 — $682,000
3205 RNTD — 6/2/2008 — $3,800
3206 CLSD — 4/30/2008 — $416,788
3206 RNTD — 8/1/2008 — $2,100
3306 CLSD — 4/29/2008 — $418,268
3306 RNTD — 7/9/2008 — $2,350
3407 CLSD — 3/25/2008 — $621,465
3407 RNTD — 6/12/2008 — $3,200
3505 CLSD — 3/27/2008 — $669,000
3505 RNTD — 5/15/2008 — $3,800
4001 RNTD — 5/6/2008 — $11,000
4001 CLSD — 6/5/2008 — $2,075,500
As ever, thanks, G! Very illuminating.
And I’m glad I’m not the only one who turned out to be very disappointed by this building, both inside and out. 🙁
Interesting article…. http://www.nytimes.com/2009/02/12/world/middleeast/12dubai.html?_r=1&ref=business
My husband and I actually toured 1805, 1505, 3607, and 1707. The 05 units did feel much bigger than the 07. I think the 05 is around 1255 sq ft and the 07 1170 or so.
We also looked in 550 St. Clair and 240 E Illinois. We are still undecided though on whether to buy now or continue renting.
Hi G,
What has resold in the building?
Millie,
Go to the prior post about the bldg linked by Sabrina in this post and you will find I posted all resales yesterday.
Ah, so units are reselling.
#
G on February 11th, 2009 at 11:09 am
Here is some correct info on #1402 & #3601:
#1402 sold 11/12/2007 for $545,500 w/pkg (deed 731733134)
#1402 sold 12/3/2008 for $560,000 w/pkg
Obviously no profit on this after transaction and carrying costs.
#3601 sold 4/17/2008 for $1,139,000 w/pkg
#3601 sold 11/6/2008 for $915,000 w/pkg
I’ll leave the math on this one to the DB, aka The Turd.
Here are the rest of the resales in the building (all include parking unless noted):
1301 sold 11/13/2007 for $805,000 w/pkg
1301 sold 8/4/2008 for $805,000 w/pkg
1703 sold 11/27/2007 for $398,500 w/pkg
1703 sold 11/12/2008 for $425,000 w/pkg
1802 sold 11/20/2007 for $576,394 w/pkg
1802 sold 12/4/2007 for $698,000 w/pkg
(sold unit for $640K and pkg to seperate party for $58K)
2002 sold 11/20/2007 for $619,500 w/pkg
2002 sold 9/22/2008 for $683,200 w/pkg
2107 sold 12/10/2007 for $533,000 w/pkg
2107 sold 2/5/2009 for $500,000 ?/pkg (deed not yet avail.)
2211 sold 1/3/2008 for $858,500 w/pkg
2211 sold 4/29/2008 for $920,000 w/pkg
2307 sold 12/28/2007 for $586,000 w/pkg
2307 sold 3/20/2008 for $612,500 w/pkg
2505 sold 1/30/2008 for $586,500 w/pkg
2505 sold 10/14/2008 for $682,500 w/pkg
2603 sold 1/15/2008 for $426,000 w/pkg
2603 sold 4/14/2008 for $455,000 w/pkg
2606 sold 4/15/2008 for $353,000 no pkg
2606 sold 7/28/2008 for $386,000 no pkg
2704 sold 1/22/2008 for $445,500 w/pkg
2704 sold 5/27/2008 for $471,500 w/pkg
2809 sold 2/12/2008 for $483,000 w/pkg
2809 sold 10/7/2008 for $445,000 w/pkg
3004 sold 2/12/2008 for $447,500 w/pkg
3004 sold 6/2/2008 for $486,500 w/pkg
3303 sold 2/28/2008 for $412,500 no pkg
3303 sold 8/15/2008 for $415,000 no pkg
It is still early in the correction and we already have a lot of losses in this “prime” building. Don’t forget the transaction and carrying costs. Of course, the carrying costs will vary from the high costs of the flippers with vacant units to the lower costs of owner-occupants due to loss to equivalent rents.
Here are all of the sales in the bldg since September 2008:
#2107 sold 2/5/2009 for $500,000 ?/pkg (deed not yet avail.)
#1402 sold 12/3/2008 for $560,000 w/pkg
#1703 sold 11/12/2008 for $425,000 w/pkg
#3601 sold 11/6/2008 for $915,000 w/pkg
#2505 sold 10/14/2008 for $682,500 w/pkg
#2809 sold 10/7/2008 for $440,000 w/pkg
#2002 sold 9/22/2008 for $683,200 w/pkg
#3603 sold 9/2/2008 for $542,500 w/pkg
I personally love the look of this building. It is different than most, which I like. There is a 2bed/2bth on the market for 563K. (in which the seller will pay closing costs) I am not sure the difference between this one and the other two, since I have never been in any of the three.
Ze: gotta disagree about the look of the building. I really like the exterior’s aesthetic. Would I ever LIVE in this building…no way. Especially given these prices.
“I was astonished at the number of units where current owners had high power telescopes for peeping into others private lives!”
I’ve noticed women actually…like…the blinds open. Just sayin’
Hi Steele,
I’ve been in both! The 07 is smaller and has the corner in the living room, which is lovely; however, there are 2 structural columns in that living room, making the space a bit awkward and small feeling.
My husband has a large dining room table (from his Mother actually) that we can’t get rid of.
That unit is the 07 tier which is smaller and has a weird layout for furniture in the living area. the 05 tier is more spacious and larger. As far as sq footage goes this building is TRUE sq footage…I have been in a lot of new construction where it was not the case but everything is accounted for in this unit!
A little clarification of the numbers in my 12:25p post above:
There are currently 23 units for sale in the MLS, 7 of which are offered by the developer and 16 of which are attempted resales.
There have been 26 additional units which attempted a resale in the past but are no longer on the market for sale.
There have been 16 units resold to date.
To date, 58 of the units have been put back on the market. The last unit count I found for the bldg was 212, so 27% have already attempted to resell. Add in the 18 “investors” who rented without offering their unit for sale (MLS only, definitely undercounting those who rented other ways,) and it appears that at least 76 units, or 36% of the total, were purchased by those not planning to live here at all, or at least not for very long.
In light of these numbers, and the lack of recent sales, it is safe to say that this building is a long way from reaching price stabilization.
Millie said, “Ah, so units are reselling.”
“Were reselling” would be more correct. In addition, it appears that the last four resales were net losses for the sellers.
OK, I’ll confess to everyone.
My husband and I made an offer on a 2/2 in this building and are negotiating on it. I won’t tell you all which unit until it closes.
We want to live in Streeterville in a new building. We looked at 160 Illinois, 240 Illinois, 550 St. Clair, 600 N Lake Shore Drive, and a couple older buildings, 250 E Pearson and a conversion, 222 Pearson.
To us, 600 N Fairbanks is a gorgeous building with finishes that far surpass the other new construction in the area.
The units come standard with wood floors throughout (including bedrooms), Snaidero cabinets, Wolf Stove, Subzero, and Miele.
The units feel big and airy and have high ceilings and great windows.
So, that’s my story.
I’m girding myself for your criticisms
“1,253 SF in the “05? tier? i am HIGHLY skeptical. 900-1,000 seems more realistic.”
Do you really think they are misrepresenting square footage in this building. The building is designed by Helmut Jahn, a world famous architect. I seriously doubt he would want his product misrepresented in anyway. Architects provide this information based on the BOMA standard (Building Owners and Managers Association). I’m quite certain measurement fraud happens in older products but not many new construction projects with established architects.
Millie, good luck. You’ll get no criticism from me unless you claim it will be a good investment. Buy it and enjoy it if you can afford to lose some money and don’t want to wait for the real deals to come.
Millie –
Don’t sweat it. This forum is notorious for being chock full of whiny haters. Take this particular thread for example – even bitching about the *BED*?!
Maybe the posters are compensating for something. Perhaps that’s why they’re afraid of people with telescopes…
Thanks Bradford.
We want to be right downtown, walking distance to the lake, shopping, restaurants, etc… This building offered all of that plus a huge sundeck, pool, and workout room.
Honestly, I would have preferred a townhouse but I can’t handle the stairs anymore.
We have no plans to sell or move anytime in the future. I am retired and my husband still works for the next couple of years. We sold our home in the suburbs in 2007 and have been renting downtown since then.
How do we know the SF comes from Mr. Jahn? And i don’t care who he is, personally. People thought the world of madoff.
i’ve seen many examples of fraudulent square footage – it’s ALL OVER THE PLACE in buildings, new and old.
I don’t KNOW that’s the case in the building. One of the commenters above said that she wouldn’t be able to fit her dining room table. you can get alot of furniture in a 1,253 SF apartment.
Maybe i’m the only one who feels this way. any appraisers here ever deal with this building? Fairbanks, do you own in the building?
Bradford,
The telescope crowd is another one of the reasons I have a general distaste for high-rise neighborhoods like Streeterville and River North. Maybe they spend too much of their disposable income on housing so they can’t afford to go out and TV gets old so they play spy on the neighbors?
Seriously, anyone who has a telescope for people watching sounds like they desperately need a more exciting hobby to me. Its rather sad.
G – sounds like a mild criticism…
It’s encouraging to see retirees embracing this sort of style and urban lifestyle.
I tried to convince my parents to get a place in the city but instead they divide their time between Orland Park and Florida. Yuck.
Bubble,
I’m not commenting on which unit it is until it closes but it definitely fits a dining room table.
Millie –
Congrats – looks like a sweet building. I’m all for buying or renting based on lifestyle preferences, not trying to time the market. I recently was looking fairly casually (actually, it was over the course of more than a year), and found a place that was exactly what I was looking for and customized a couple things (which would have been impossible in a rental), and I haven’t regretted it and I’m quite sure I never will.
Millie, my wife and I love the building and are seriously considering one of the units you listed as well. We were holding out for the $15K homebuyer credit, but we think we’ll move forward even though it’s not as attractive. We were leaning towards one of the 07s even though the living room was slightly smaller. Having the views in the living room as opposed to the master bedroom seems more appealing to us. However, we realize there are pros and cons to both.
Hi. I currently live in this building in a 2/2 as a renter. I believe the building is top notch and a comfortable and stylish place to live. Feel free to disagree as we all have different tastes.
One thing I really appreciate is the attentiveness of the staff and personnel. Each time I need assistance they have went out of their way to make sure that I was not inconvenienced. In particular, I have had the cable/internet installed while I was at work and the staff simply accompanied the cable man upstairs and waited for him to finish the installation. Other times, I had them directly place packages into my unit when I wasn’t at home. And just in general, their demeanor seems set on making your life easier.
Also of note to Millie or others… I have been getting destroyed on my heating bill. It takes a lot of work to keep the unit warm with all those windows fyi.
I’d be worried about the siren noise of all the emergency vehicles, given the proximity to the hospitals. Can anyone comment on how noise-insulated a building like that would be?
G said, “Millie, good luck. You’ll get no criticism from me unless you claim it will be a good investment. Buy it and enjoy it if you can afford to lose some money and don’t want to wait for the real deals to come.”
fullhouse said, “G – sounds like a mild criticism…”
fullhouse – Where’s the criticism?
Millie,
The buildings you mentioned are the same ones on our short list for the same reasons you stated. We haven’t pulled the trigger yet, but we are chomping at the bit (mixing metaphors). I hope you get a great deal, and I am sure you will love living in your new home.
G – I was being facetious.
Bubbleboi-
I just refinanced my 2br and the bank sent an appraiser to measure everything. To my surprise, the 05 and 02 tiers came in at 1400 square feet! I don’t know why the appraiser would come up with a bigger number than the original developer, but unless someone can explain to me wy he was lying, I’ll take his word for it.
” Take this particular thread for example – even bitching about the *BED*?!
Maybe the posters are compensating for something. Perhaps that’s why they’re afraid of people with telescopes…”
Since this was directed at me, “maybe the posters are compensating for something” , you may have a point since I am currently at the Four Seasons Koele in Lanai, Hawaii. (Cribchatter is addictive!)
(Sabrina can verify)
My comment was that I found the interior of 1505 cold, and have never understood the raves for this building compared to some other “luxury” towers. Although I am currently renting in Chicago, I have noticed that some of the resales in “older” towers such as 161 E. Chicago (Olympia Center) are almost a bargain for the sq. footage and finishes of the some of the units. I am just not into concrete ceilings, metal bondage beds, and rooms that would feel VERY small if the blinds were drawn.
I do think if 600 N. Fairbanks is your style it would be fun, and it is a rather unique product. Now back to golf and the beach.
bubbleboi…I do own in the building and am in the 05 tier….it seems very large for 1250sq feet…most developers would have fraudulently called it 1300+ for sure….I can by the perimeter using the windows and every inch is accounted for! I checked before closing 🙂
G, you are one of the most pathetic, intellectually dishonest losers I’ve ever come across. You simply cannot accept the fact that almost ALL these units have gone up. You change your argument to discussing only “flippers” whenever it’s clear that everyone else made money. All I know is that I have a 100% return on my down payment over the past 3 years, how have your investments done?
“There has been one contract signed in 2009. There has been one closing in 2009. There are currently 23 units available for sale on the MLS. Current absorption indicates there is around 2.5 years of inventory available.”
So now you are calculating absorption rates based on 5 weeks of data? How stupid do you think we are? How about this- YOU just posted 8 closings since 9/08 when the crises started. By my account, that means the 23 currently listings will be gone in by the end of the year. Do YOU even take your yourself seriously?
Thanks everyone for the Support.
In towner,
This is just my opinion but 550 St. Clair and and the two new buildings on Illinois felt cheap to me. I have nothing to substantiate that claim except for the feel. The lobby, hallways, etc, felt cheap.
Also, we didn’t want retail in the building, especially food retail, so that helped us narrow down the options.
Congrats Millie, I love living here and the good news is that 4-5 years from now you’ll still be living in the newest, best building downtown. The fact that it appreciated since the peak of the bubble and has remained stable (with several closings) through the credit crises suggests that this building will do very well for you over the coming years.
Hey Turd if you’ve had a 100% rate of return on your investment over the last 3 years, you might consider selling to capture that. But oh wait, i forgot! Real estate in streeterville always goes up!
“if you’ve had a 100% rate of return on your investment over the last 3 years, you might consider selling to capture that”
He doesn’t need to sell; he’s already made money on his purchase. But not if he had to sell right now, per his own admission.
Thank you anon! I never bought it as a flip. My point is that G can’t seem to admit that not every building is hurting and it’s kinda sad to watch him try to skew the numbers in a negative way.
Millie, if you are truly buying the unit for your own enjoyment then don’t worry about what a handful of online users say. However, if the information G posted is correct you should keep it mind during negotiations: “There are currently 23 units for sale in the MLS, 7 of which are offered by the developer and 16 of which are attempted resales.”
Don’t feel pressured to pay more than you want to pay, for fear you will miss out…it sounds like you will have plenty of opportunity to find a different unit in this building.
L,
Its does depend on what unit she wants, however. I’d be willing to bet that a lot of the units on the market are one-bedrooms or penthouses. I’d be curious to see how many of the for-sales units are 2bds.
I like this building. If I didn’t hate the neighborhood I might keep an eye out for some of the 1/1’s in the future, especially if they enter distress.
I think the lowest priced units that sold here were some 1/1s in the lower 300s. For this location and the finishes I don’t think thats that unreasonable (assuming they came with the parking spot).
“Turd Ferguson on February 12th, 2009 at 3:27 pm
G, you are one of the most pathetic, intellectually dishonest losers I’ve ever come across. You simply cannot accept the fact that almost ALL these units have gone up. You change your argument to discussing only “flippers” whenever it’s clear that everyone else made money. All I know is that I have a 100% return on my down payment over the past 3 years, how have your investments done?”
Where have I changed my argument “to discussing only flippers?” Perhaps the DB/Turd has a comprehension problem? Each of the last 4 sellers lost money with transaction costs alone, let alone what vacancies or loss to rental equivalent (for owner-occupants) cost them. The DB wants to ignore that trend, but I will remind him with each and every closing (however rare they may be.)
The DB who had to hide behind a Turd is accusing me of being “one of the most pathetic, intellectually dishonest losers?” I see the DB’s cognitive dissonance extends beyond real estate and financials.
Real estate, like stocks are worth nothing until you actually SELL them. So he didn’t “make money on his investment”… yet.
“Real estate, like stocks are worth nothing until you actually SELL them. So he didn’t “make money on his investment”… yet.”
Oops. I forgot the sarcasm tags.
And, of course, Turd re-affirmed that he has “made money”, but wouldn’t be able to sell at a profit now.
Which sounds like a loss to me, if you MtM. I guess it’s a pro forma profit, based on his projections of what it *would* sell for, if the market didn’t suk.
Who cares if he made money or lost if he doesn’t need to sell and can afford the monthly nut he has nothing to worry about.
Heck even if he’s underwater Uncle Sam is going to make it possible for him to save a few bucks on a low 3.5-4% refi within the next year or two, so..
The DB/Turd said, “I’d be willing to bet that a lot of the units on the market are one-bedrooms or penthouses.”
Always fade the DB.
Of the 23 units currently on the market, there are 6-1BRs, 13-2BRs and 4-3BRs. The 2BRs for sale consist of 3 on the 02-tier, 5 on the 05-tier, 2 on the 07-tier, and 3 on the 10-tier.
Of the 26 that failed to resell and are no longer on the market, there were 13-1BRs, 7-2BRs and 6-3BRs.
Of the 18 that were purchased and rented without being offered for resale, there were 4-1BRs, 12-2BRs and 2-3BRs.
“Who cares if he made money or lost if he doesn’t need to sell and can afford the monthly nut he has nothing to worry about.”
I can’t beleive that you’re friendly with DB/Turd, Bob. He’s clearly a yuppie. Other people pay $500/ft for a shoebox in the sky, you disparage them. Especially if they claim that it has gone up in value since their purchase. I don’t get it.
anon(tfo),
I don’t disparage people in highrises as much as you might think. For those wanting a high-rise there are very few neighborhoods in the midwest that are comprised of high-rises so it stands to reason these might command some sort of premium.
Roscoe village/w lakeview–there is nothing inherently special about these neighborhoods to command that sort of premium. You live in a residential neighborhood like many others and grossly overpaid compared to many others.
At least DB’s a yuppie who knows his place (Streeterville/RN). He’s not mucking up my neighborhood like the stroller pushing housemommies in RV. I don’t goto SV much and he probably doesn’t come up to LV much and I’m happy with that.
Know what I saw to some RV stroller pushing housemommy expecting another? Its straight out of Michael from the office–“OMG you’re HUGE!” Lol. I’ll even help them load up the U-haul out to Orland park once they finally figure it out. Livin’ the dream on home equity is over for this demographic.
“Each of the last 4 sellers lost money with transaction costs alone”
They lost money BECAUSE THEY WERE FLIPPERS! Are you kidding?
Thanks for the data G. FYI, the 10 tier units are considered two bedrooms, but they are really just two crappy south-facing one bedrooms that were combined and are kind of a strange layout. So, 10 of the 23 units on the market are the traditional 2 b/r, which seems about right.
“I guess it’s a pro forma profit, based on his projections of what it *would* sell for”
Yes anon, illiquid assets are valued based on recent sales of comparable assets. I can’t get over how pathetic you guys are, it just KILLS you that my unit has increased in value!
Millie,
Congrats on the purchase I think that building is great. We went with a unit in 550 St. Clair, we loved 600 NFB but the deal was to great to pass up at St. Clair based on our needs and purpose (In Town). While 600 N. Fairbanks definetly feels more rich, i would not necesarrily classify 550 as cheap, they are both nice buildings if that it is the style you are looking for. Also I do prefer St. Clairs intersection to Fairbanks. But overall I think they are both great buildings (again if it is what you are looking for).
“I can’t get over how pathetic you guys are, it just KILLS you that my unit has increased in value!”
No, it kills me what an insecure douchebag you are. I mean really.
I’m simply happy that evidence has been provided that my condo has gone up in value. You are trying to find every angle possible to prove that I haven’t made money, even though I clearly have. So, you are trying to tear down someone who has been more successful than you. Are you sure I’m the insecure one?
“So, you are trying to tear down someone who has been more successful than you.”
You know absolutely nothing about me. I think you should think through what are signs of insecurity before posting anymore.
HTML possible here?
ICIS: http://www.arrse.co.uk/cpgn2/uploads/forums/cripple-fight___.jpg
Bradford, LMAO…….. I think the kids need a time-out.
Thanks anon, I’m going to go on a spiritual journey in the desert to “think through what are signs of insecurity.” I’ll get back to you when the peyote wears off.
The DB/Turd: “They lost money BECAUSE THEY WERE FLIPPERS! Are you kidding?”
No, but I actually agree with this as to their fate. There appear to be 75 more units that have tried to sell or went straight to rental in this bldg of 212 units.
This show ain’t near over, folks.
Thanks everyone for their comments. Sabrina, this is a terrific site! I learned a lot about the building.
I’ll update you all on our progress!
“Also of note to Millie or others… I have been getting destroyed on my heating bill. It takes a lot of work to keep the unit warm with all those windows fyi.”
CClurker: Thanks for the update about the windows. I’ve been wondering all January how the heating in these units would hold up. Yes- they put in “solid” windows but they’re still windows and it was still negative 15 degrees every night for a week and among the coldest Januarys.
What do you mean by “destroyed”? Could you give us a monthly number?
Thanks.
Yes Clucker,
I would really appreciate that info!
Thanks!
Millie
PS we are still far off in price
You know I can’t resist a RE troll but anon(tfo) you summed up my thoughts perfectly. The DB/Turd character with his 600 NF “only goes up” is even stranger than the shill’s “lp only goes up” mantra. Their beliefs border more on religion and mythology than rational thought. The other day I read a quote where someone said, “Never argue with a fool. To a bystander you look like two fools arguing” and there’s some truth to that little idiom.
“#anon (tfo) on February 12th, 2009 at 4:53 pm
“I can’t get over how pathetic you guys are, it just KILLS you that my unit has increased in value!”
No, it kills me what an insecure douchebag you are. I mean really.
“
Millie,
Yes, please keep us updated. I love this building as well. Compared to the ones you mentioned earlier, it has better fit and finishes…..I know someone may bash that, but I’ve been in them.
Keep us posted….Dominick’s is nice too.
“with his 600 NF “only goes up””
Please name one time when I ever said that this building “only goes up.” Nice strawman, but I’ve never said anything remotely to that effect.
T2/Turd/DB……multiple user names, eh?
“T2 on February 12th, 2009 at 10:09 pm
“with his 600 NF “only goes up””
Please name one time when I ever said that this building “only goes up.” Nice strawman, but I’ve never said anything remotely to that effect.”
We’ve already been over that! Nice work, it only took you 6 months.
Sonnies… tsk… tsk…
“Real estate, like stocks are worth nothing until you actually SELL them.”
You Are you stating that if I buy 10,000 shares of a $28 stock right now and use cash to buy it there is no offsetting asset ledger entry and my balance sheet now should look 280k worse???????
?????
Heating for December – January was $300ish and January to February was $400ish for one of the 1253 sq units.
There are two thermostats. One in the second bedroom and that one controls heat in the second bedroom and master bedroom (attached to the master bed). The other one is in the living room and controls heat in the master bedroom and living room / kitchen.
While on the subject, another minor problem is that the master bedroom has only one heat duct and it is as far from the actual bed as possible. And since the bedroom is on the corner it really does make it difficult to keep the master bedroom at a consistently warm temperature.
Though it may appear that this buildings (600 NF) has appreciated, the units are only worth as much as people are willing to pay. If you can sucussfully flip a unit for profit that’s great, congrats. On the other hand, 600 NF is built very poorly with many setbacks during construction, typical being a Bovis job and all.
Sidenote: Right now you can get a 1/1 at 550 STC for +/- 380k w/parking and a 2/2 for under 500k, both are still overpriced IMHO.
CCLURKER – What do you have your thermostat set to? I live in 550 St. Clair and mine barely ever runs.
“Sonnies… tsk… tsk…
“Real estate, like stocks are worth nothing until you actually SELL them.”
You Are you stating that if I buy 10,000 shares of a $28 stock right now and use cash to buy it there is no offsetting asset ledger entry and my balance sheet now should look 280k worse???????
?????”
I’m not an accountant, but it won’t look 280k worst because it uses “mark to market” accounting or value setting. It is seriously worth nothing until you sell it (at a profit or loss).
I forget what the term is called in finance, since I’m an econ guy but essentially, yes 🙂
Bring back the 1,000 sqft 2 bedroom unit developers. People need to buy smaller furniture, use less utilities and build more vertical storage along the walls. FYI, 100 unused sqft is worth $300-400 per sqft ($30,000 – $40,000 in the purchase price) and you pay taxes as well as assessments on it. Treat your personal life like a business and drive down operating costs. Then you will actually be able to retire someday.
I keep it about 60 when I am out and 75 when I am home.
Sonnies – That is completely wrong. If I own 30 shares of xyz stock and it is currently trading in an active market at $1, the mark to market value of my stock is $30, if the a active market is bidding $.50 for that stock than the value of my stock is $15 and so on and so forth. You can’t compare stocks to real estate, the liquidity profiles are completely different.
Its still not worth anything (read: actual usable money) until you sell it! Its not like you can go buy a food with a stock certificate or brokerage account statement, therefore its not worth anything.
Sonies – If that is the case then every bank and institution would have to write down their tier 1 assets to 0 which would trigger massive capital calls and end the world. No you can’t buy anything with your stock certificate or brokerage account statement, but I can liquidate three of my WalMart Shares instantly to go to WalMart and buy food, household goods, etc. Therefore, a liquid stock is not worth $0. Your statement is 100% wrong.
Sonies,
Yet if you owe money in a civil lawsuit or child support or back taxes they can and will seize the assets in your brokerage account. Imagine that.
Also the common definition of millionaire is your net assets excluding real estate. So I guess a lot of those millionaires are really broke because they own millions in stocks but won’t sell them to convert them to money market funds. LOL.
Mille,
Good luck! I hope you get it at the price you wanted!
“Heating for December – January was $300ish and January to February was $400ish for one of the 1253 sq units.”
Yeowch. I’ve got 4000 square feet of 12 foot ceilings, concrete floors, big windows, and exposed brick and my Jan-Feb bill was only about $500. Programmed to 62 during the day and 72 when we’re home.
I noticed a large drop in heat loss after adding double cell shades, FWIW. Though the last thing you want to do in a building like yours is start covering all your windows. :-/
“Heating for December – January was $300ish and January to February was $400ish for one of the 1253 sq units.”
Have you checked your windows lately? I used to pay close to that for the 1100 sq ft apartment, but that was because of the horrendously leaky floor-to-ceiling windows. Even the weatherstripping tape was not much help in that situation.
Sonies… “Its not like you can go buy a(sic)food with a stock certificate or brokerage account statement, therefore its not worth anything.”
Actually you can. My credit card allows me to purchase against my account and then every month that many shares are sold to cover it. Someone with Assets can buy whatever they want knowing the liability can be covered even if it is illiquid since they can borrow against and readily convert it to liquid. Hey I was the one wake and baking instead of going to Accounting class, this is not that hard.
You ARE LITERALLY saying that someone with a $100 mil in equities and someone with 0 are of the same wealth.
Yeah congrats you are a proud owner of a margin account most of my clients and myself have that amazing priveledge. But what you said is that you still need to sell the securities within your account to buy things. That’s my point. Saying you made money on your house and haven’t sold it yet is not true (like what Turdburgler said)
“Saying you made money on your house and haven’t sold it yet is not true”
Don’t forget that he acknowledged that, if he had to sell right now, he wouldn’t make any money. He’s using pro forma valuation, not MtM.
Ze,
If you really wanted to bake your brain you would’ve attended that accounting class.
I never understood that there is a whole discipline around arriving at a book value of a corporation. Not only that, so much is subject to managerial discretion so as to make public accounting almost worthless.
Just look how Citi, ML and Wachovia were hiding their losses until they got to a safer place. Well not Citi they’re still hidin’!
“Don’t forget that he acknowledged that, if he had to sell right now, he wouldn’t make any money. He’s using pro forma valuation, not MtM.”
what?!! he tripled his money but if he had to sell he would not profit. Turd, please explain this “logic”?
The issue with the high heating bills is that it is north facing. 10 ft celings also don’t help. The south facing unit I have I rarely need heat. My bill for a 930 sq. ft place is $60. I get all the sun exposure.
My prediction is that CC Dq’s are gonna the next major shoe to drop, big time. Prime debtors pay all their bills on time – until they literally one day stop paying. Especially those debtors with homes that are underwater; they literally have nothing to lose. Sometimes I think these banks lend on credit cards knowing that the debtor will eventually go 120+ days DQ. The algorithm must compute that if they can collect the minimum payment for long enough it will offset the amount they lose at charge-off…For sure Capital ONe works like that Why else would you give someone a $1,000 credti card? THey collect $50 bucks a month until the debtor stops paying.
The heating costs for my 2/2 (1253 sq feet) has been only 115 or so for my electric bill….keep the blowers on LOW at all times per managements instructions (or coils cannot warm air quickly enough) and buy a programmable thermostat! IT helps immensely.
HD,
I agree. Not so good news today. CBS Marketwatch has multiple stories about deflation and also is reporting that S&P500 profits are going negative for the first time ever. Even if you exclude financials.
The economy right now is like an ice cube in a microwave. I really hope it doesn’t continue contracting at the rate it did in 4Q 08.
“My prediction is that CC Dq’s are gonna the next major shoe to drop, big time.”
You don’t think that 6% default rates evidence a major problem? There’s no shoe to drop–you just missed the sound amongst all the other noise.
Sonies.. I don’t have a margin account. Securities are an asset. Securities are convertible to cash.. Securities=Cash. End of story…
So if you have cash and think it’s so great.. go to the bank today and try and withdraw 100k and wait to see the expression on their face. Liquid??? ROFLMAO!!!
You have not explained the 1 question I am asking. 280k in cash leaves the asset side of the balance sheet. What offsets it or is it a loss of wealth??
Sonies.. btw.. they let you touch peoples money??? I’m cringing!
It is definitely OK to mark to market for assets and profit/loss. Most stocks do not fall under this category and are quite easy to mark to market (unless you hold over 10% of the outstanding shares) – they won’t qualify as cash/cash equivilants, however, they are still part of your (or a business’s) assets.
The issue is when you have illiquid securities that are difficult to price accurately, which real estate qualifies as. (e.g. Banks writing down several billion in a day on MBS, CDS, and converts – it’s not like the portfolios actually dropped that much in one day – they figured out they were marking too optimistically).
I think one of Turd’s points is that maybe he wouldn’t make a profit if he sold right now, because he couldn’t cover fees, but condos seem to have generally gone up in price. Honestly, with a relatively illiquid market like real estate, if your expected profit is so small it doesn’t cover fees, probably best to call it a wash – after all, aggressive accounting tends to get ppl in more trouble than conservative.
First paragraph should read (I moved some sentences around):
It is definitely OK to mark to market for assets and profit/loss – although illquid securities can be tougher to mark. Most stocks do not fall under this category and are quite easy to mark to market (unless you hold over 10% of the outstanding shares) – they won’t qualify as cash/cash equivilants, however, they are still part of your (or a business’s) assets.
Fullhouse.. I agree completely. Her argument was securities are worthless. Period.
So if I have 95% of my wealth in securities I am practically broke but if I sell it all tomorrow I am suddenly rich. It’s kinda a binary argument on value/no value. As for illiquid assets best to value as close to fair market value and reserve around the risk.
Bob.. not to be rude and not respond. I learned from my brief and one and only corporate experience not to ever trust a balance sheet. They would ask me how earnings would look.. I would always smugly respond. “What do you want me to make them be”.. Ah structured finance…
You have not explained the 1 question I am asking. 280k in cash leaves the asset side of the balance sheet. What offsets it or is it a loss of wealth??
280k of liability?
Assets = Liabilities or something like that? I really don’t know and I really don’t care. Like I said I sucked at accounting in college as I was busy waking and baking like you.
I never said securities are worthless, I said essentially they are worthless until you SELL them. Because Turdface said he made all this money on his place, but he hasn’t sold it yet so he didn’t make SHIT.
And I don’t know what kind of banks you have in Brazil, but if I went to a bank and demanded to get 100k in cash from my account, they would look at me crazy, but they would have it!
And as for
“Sonies.. btw.. they let you touch peoples money??? I’m cringing!”
I don’t actually touch anyone’s money, they write checks to or from their own accounts and I manage the market value of their portfolios. Very well in fact 🙂
Wow we are still discussing Turds profits. On my balance sheet I have allways marked to market. For stocks and cash day of close balance valuation. For realestate holding I would always discount the current valuation by 15% to account for closing costs, holding period, etc. But thats just me, very conservative on my accounting practices.
Sonies –
It’s just moving assets to other assets (cash to stocks). The equation is assets = liabilities + equity, but, nothing is getting moved to the other side, so it doesn’t apply in this case.
Do you consider “touching peoples money” to literally be holding a pile of their cash in your hands?
Wealth management, eh? I’m going to resist saying anything b/c I don’t want to start a flame war, but it’s difficult…
BTW, and example of A = L + E in play would be selling shares would increase assets, but reduce equity, or selling bonds would increase assets and increase (negatively) liabilities.
Sonies, the problem is not so much that you are completely, utterly and unquestionably wrong. The problem is that you are too stupid to know that you shouldn’t be arguing about a topic that you clearly have zero experience in. That’s what most of this message board is- ignorant people discussing topics that they know nothing about. Anyone who takes advice from someone who doesn’t know what they are talking about deserves what they get.
Fullhouse.. you accidentally typo’d is my guess selling shares does not change equity it moves cash to securities.. asset for asset.
Sonies.. you are completely retarded. And I use BofA, Citi, HSBC… go tomorrow and ask for 100k and I promise you that you do not leave with it on the same day.
Thanks for the advice Fairbanks.
Ze –
I meant selling shares of your own company (i.e. IPO), but, yes, I was unclear.
Turd,
Actually, I find the overall quality and knowledge of this message board to be pretty good, and that’s in spite of you, so that’s saying something.
Sonies – There is absolutely no way you manage peoples money, no way. You don’t have to be a CPA to manage people’s money but you do have to have a basic understanding of accounting concepts, which you obviously don’t. Let me take one guess, you are a financial advisor, newsflash to everyone out there, financial advisors are not money manager’s, they are marketers. I wouldn’t give my money to a financial advisor even if they paid me to do so.
Yeah ok whatever you say! You guys are completely missing the point I was trying to make, so whatever I’ll drop it. How many of you guys were up 20% last year? Yeah, I thought so. I’m not a financial advisor, those tools sell mutual funds and crappy Variable life insurance policies.
I manage portfolios, you don’t believe me, fine, but I’m damn good at my job without being some accounting poindexter, which in my field is totally pointless because 99% of the accounting out there is complete and total bullshit.
I am speechless, you obvioulsy manage money for very retarded individuals and grandma’s. If you ever repeated those words to a institutional investor you would not be managing a dime.
Humor me though, what did you invest in last year?
Excuse me? What exactly did I say that was so retarded without explanation? As for what I invested in, its called GFY (go **** yourself)
I was up 21% last year, so there! Isn’t it fun to make stupid claims on anonymous message boards?
Look here Sonies a lot of these people here have MBAs or at a bare minimum degrees in finance or accounting….I was once literally trounced for computing real estate appreciation with simple interest instead of compound interest. I took a beating for no real reason. I also computed appreciation over multiple transactions instead of one at a time and again, was reprimanded. Or how about the time I argued with Steve whether you should count principal payments as an expense or as a transfer into a different asset class (i.e. equity).. it’s pointless. Fortunately no one here tries to argue law with me b/c I could actually pull up cases and cites instead of fighting over basic accounting principals from freshman year of college.
Sonies – Please allow myself to clarify. I did not actually call you retarded, what I meant to say is that your clients are retarded for having somebody so dumb manage their money.
“Isn’t it fun to make stupid claims on anonymous message boards?”
Yeah like that claim that you made money on your investment in this here building, unless if you actually needed to sell it, then you wouldn’t have made money.
Pot meet kettle.
Sonies… They were only up 20% if you liquidated their portfolios completely on Dec 31st, otherwise it doesn’t count.. Right??
And HD I will argue law with you (clearly at an enormous disadvantage) if it makes you happy. 🙂 Remember why you lawyers make everything so damn obtuse with all those damn commas. Mo money.. Mo money! 2 sides to arguments.
Millie,
I recently bought a 2/2 in the building and absolutely love it! The staff is friendly and helpful, but not at all intrusive. And, if you’re attracted the the style of the building, I think you’ll be disappointed if you settle for something more vanilla.
In regard to heating costs… There was a discussion re: that issue at the last board meeting. Two small steps to solving that problem: (1) adjust the vents to direct the heat to move in the right directions — this is a 10 minute task that can be done by hand. (2) Replace the original thermostat/fan control with an electric one (cost is hundred buck or so) — the original controls required the fan to run continously which accounted for much of the expense.
Hope to welcome you as a neighbor in the near future!
Sonies –
A strategy as stupid as long vol would have returned 400% – I actually know some ppl who did this as a large part of their portfolio… they didn’t claim they were terribly skilled, though. More likely, if you actually hedged your portfolio with options, which many actively managed funds do, you would be almost assured a 20% return – as the deltas of the stocks vs hedged options would have cancelled, but you would have made a killing on vega. Again, a strategy that would have returned 20% with zero skill…
You should read Fooled by Randomness (“Nassim Nicholas Taleb, a professional trader and mathematics professor, examines what randomness means in business and in life and why human beings are so prone to mistake dumb luck for consummate skill” – amazon.com).
Also, A Random Walk Down Wall Street is good (“Not only will a broad range of index funds outperform a professionally managed portfolio in the long run, but investors can avoid expense charges and trading costs, which decrease returns.” – amazon.com)… there are counter-examples to this, such as A Mean-Reverting Walk Down Wall Street, but I would guess this is not what you do (almost impossible to do this as an individual manager).
“Again, a strategy that would have returned 20% with zero skill…”
The last guy I knew who promised similar returns is currently sitting in the MCC (Hi Lee!).
Or even Bernie Madoff with his option/hedging strategy claimed consistent returns. I mean $hit, I get .2 in my checking account or whatever and you’re promising 20% returns with zero skill? No offense, but you’re the guy who doesn’t know what he’s talking about. Wait, you should go work for Citidel, because you would be a star trader there. You’d outperform everybody, you’d work your way up the ladder and before you know it you’d be in charge of the HOuse of Morgan. Good luck fullhouse, good luck.
“I get .2 in my checking account ”
HarHarHar. More like .02, right now. I’m at one (1) bip in checking at the moment, with a platinum (or whatever) account.
full…
“A strategy as stupid as long vol”
Never been a better strategy created in the world!!!!!!!!!!
p.s. the deltas do not cancel out. you make a fucking killing on the fact the option one changes.
otherwise a great post.
I stand correct anon, I’m getting .1% interest in my checking account. It’s guys that run around claiming 20% and/or consistent returns that are fraudsters, that type of stuff really strikes a nerve with me. Those scammers deserve to be executed for stealing money; I’m old school like that.
Put down the bong, Ze.
“#Ze Carioca on February 13th, 2009 at 5:26 pm
full…
“A strategy as stupid as long vol”
Never been a better strategy created in the world!!!!!!!!!!
p.s. the deltas do not cancel out. you make a fucking killing on the fact the option one changes.
otherwise a great post.”
Well to the market timer’s defense, rarely is it as apparent as it was in 4Q08 that there is going to be significant volatility ahead.
I mean when the idiot president comes out and threatens people’s 401k accounts, you know there is going to be significant volatility ahead.
HD… Nope just made it out of a ketchup bottle.
What did you not like. Most true statement I can make.
HD –
Are you really a lawyer?!? … b/c you can’t read worth a $hit. I said conditional past tense “would have returned” – it was ex post saying someone has skill, when, in fact, it was actually random… I absolutely never promised high future returns – my whole point was the opposite – a lot of simple random strategies can generate high returns, but would not perform well in general, therefore should not be quoted as proof of “skill”.
BTW, moron, I happen to know some ppl at Citadel – a huge fund there returned over 50% last year after fees, without a single losing month. Also, there were other desks that performed extremely well, and haven’t had a losing year in the past 10 years – just the credit desk was blown out of the water b/c the TED spread market exploded by a factor of 10x the historical max – a MUCH MUCH bigger outlier than anything that happened to the stock markets. Also, over Citadel’s 18 year history, even including last year, their annual returns are 20%, and they haven’t needed government intervention so far. And no, I am not saying they will generate 20% returns in the future, idiot. You want to talk about other financial firms, b/c I’m sure I know a ton more about just about all of them than you?
Ze –
Why can’t the deltas cancel out, if the portfolio is properly delta hedged? Are you saying b/c gamma will get you off-delta? … true, but minor compared to vega.
Full..
1- be nice to HD.
2-Yes, And that all depends on how small the delta is when you start and how fast you move before you get in your own way. Not going to argue this one when you win both ways.. All warm and fuzzy good.
“I’m getting .1% interest in my checking account”
Which bank? I’m always shopping.
HD –
Actually, maybe my previous posts had too many words for you to understand, so I’ll simplify it so a 5 year old can understand it. My post at 4:43pm basically said that “just b/c someone generated 20% returns last year, it doesn’t mean it wasn’t pure luck”. My post at 5:49pm basically says “you are a moron”.
Ze –
Good catch on the deltas – didn’t think anyone would notice – still minor, though… Why be nice to HD? For lack of a better phrase “he started it!”
fullhouse, no you said “would be almost assured a 20%”, I guess I missed the point of your post, if there was one.
Sonies, this guy fullhouse has got a phd in something or other, you most assuredly do not want to argue finance with this guy.
From what I’ve read in the WSJ on Citadel it isn’t as rosy as you paint it out to be, fullhouse.
In fact, fresh off the press:
http://www.reuters.com/article/companyNews/idUSN1353224820090213
Now I understand that a hedge fund isn’t a mutual fund, but any suspension of redemptions is a bad omen, especially a lengthly suspension.
Bob,
Citadel is most definitely in trouble in their Kensington and Wellington funds b/c of their credit book, but they have a large CTT fund which returned over 50% to investors(http://www.bloomberg.com/apps/news?pid=20601103&sid=aJh97l.VMJlo&refer=us). Also, there were desks internal to Kens and Well that had excellent years, but they were overshadowed by the craziest credit market ever (just like most of the Banks and other funds, which is why some of them paid high bonuses despite a terrible overall year). I’m just saying, unlike HD indicated, not everything at Citadel went terribly last year.
HD –
Again please learn to read:
“More likely, if you actually hedged your portfolio with options, which many actively managed funds do, you would be almost assured a 20% return”… I said “IF you actually HEDGED” – it was a hypothetical strategy that many people employ that would have, b/c of luck, had high returns LAST YEAR – nothing regarding FUTURE performance.
“fullhouse, no you said “would be almost assured a 20%”, I guess I missed the point of your post, if there was one. “
“Actually, maybe my previous posts had too many words for you to understand, so I’ll simplify it so a 5 year old can understand it. My post at 4:43pm basically said that “just b/c someone generated 20% returns last year, it doesn’t mean it wasn’t pure luck”. My post at 5:49pm basically says “you are a moron”.”
Thank you, and nowhere did I say it was mad skillz or anything like that. I just said that because someone appears they had a bad experience with a financial advisor (which I am not). Probably put some discretionary income into some VUL life policy that’s about to lapse, or bought some prop A shares at 5.75% up front that lost 50% over the last year, per reccomendation of his “planner” lol.
The signals once this credit crisis came to be well known were as clear as day and any idiot could have made a killing buying puts on oil or financials or real estate related securities. Watching helicopter Ben throw everything at this crisis (while he was a huge anti-inflation guy) was another pretty obvious sign that bad times were ahead, and its not easy to short or buy puts on stuff. I do much different strategies but option hedging is one portion of the things I do.
*And it *is* easy to short or buy puts i mean. Dammit!
And obviously I hope to do as well this year as I did last year. Hopefully even better!
“nowhere did I say it was mad skillz or anything like that”…
“How many of you guys were up 20% last year? Yeah, I thought so.”
“I manage portfolios, you don’t believe me, fine, but I’m damn good at my job”
And I hope for cool buds and tasty waves… but I will accept tasty buds and cool waves also 🙂
By the way… back to real estate.. Have to be a freaking idiot to buy shit now. Sellers are starting to crack.. they HAVE to sell. Oh this is gunna be a funny summer…
Sonies,
I want to get leveraged 35-to-1 and just start writing OTM naked calls. Hey if I win I win big! If I lose the poeople I borrwed money from lose big haha too bad for them! I want to do the i-bank strategy.
Senate just passed the stimulus package, here comes hyper-inflation.
ship… go ask for a raise Monday and let’s revisit this inflation idea afterward.
Ze, why put a theory to a real world test?
G, will you be my Valentine?
I am amazed by the exchanges in this blog. People should heed the advice of a great economist. In the long run we’re all dead. If you like this building and it adds value to your “personal balance sheet”, buy it. As a side note, If you have strong finance and real estate skills, you’ll understand the following: The fed is going to print money hand over fist and we’ll see the m1 supply explode exponentially to essentially make up for a collapse in the m3 supply. Buy gold, commodities, and real estate. If you don’t believe me, check out what happened to real estate values in the late 70s… Capping off a decade overidden by hyperinflation.
In the 70’s price increases were pushed through to wage increases, that is not going to happen this time. Inflation becomes real tough without that.
I still keep asking what is going up in price? I only see down. Picked up a steam generator for my shower yesterday. Was 1800+ a few months ago. Now being given away for under 1k.
Now please all go to the bank tomorrow and ask for 100k cash and see how liquid your CASH money is. They will look at you like you just asked them to have sex with their 4 year old daughter. Put it under the mattress and think about how easy it is for a country to pull back all hidden money by reprinting it in a different color and forcing you to tender. Fun fun fun!!!
Ze – I agree with you 100% that in the short term there will be no wage increases and I would not expect a raise tommorow. However, you cannot dismiss the fact that the goverment is going to print money until things get better. Policy’s enacted today are going to have effects 4-6 years from now. Do you think in the late 90’s when the Clinton administration was enacting lending policies that would allow a homeless mother with 5 kids to “live the American Dream” that people could have envisioned the bubble that would have been created? NO (granted there were skeptics out there,but the majority of the people on this board were drinking the housing Kool-Aid).
“However, you cannot dismiss the fact that the goverment is going to print money until things get better.”
The result will not be better. It will turn the current times of RE demand destruction into the ‘good old days.’
Those policies could result in something similar to Japan’s lost decade(s?). I see no reason to jump into real estate. IMO, you will have plenty of time when things finally bottom out. Years and years of flat prices. Buy some gold if you are worried about inflation.
shiphouse:” Policy’s enacted today are going to have effects 4-6 years from now.”
The government cannot print enough money to offset the amount of money being destroyed. All they can do is offset severe deflation.
As soon as monetary velocity picks back up, inflation is going to become a real issue. I doubt that the fed will be able to drain liquidity out of the system quick enough to stop inflation from increasing. Frankly, that’s probably what they want. Inflation is good for debtors (ie, voters) and bad for lenders (ie, banks). The banks are basically screwed anyways, so some good old fashion inflation for 3-5 years would be the “least bad” outcome from all this.
sorry to post something that seems to have dropped of a long time ago, but concerning telescopes, most poeple have them for the same reason Frasier does; they look good on a set. When i first moved to streeterville (north streeterville, the quiet, swanky part, not the gauche new money south streeterville) i got one. Turns out there was very little to see… most people close their blinds before screwing, but leave them open when picking their noses.
Also, if you are into cougers, i highly highly recommend north streeterville. 🙂 grrrrow!
I agree with Turd (I feel weird saying this for mutliple reasons). In the shorter term, any monetary and fiscal policy will be an attempt to offset the natural deflation with this systematic deleveraging, and there will not be high inflation. Longer term, credit and spending will return (albeit at somewhat lower levels than previous), at which time double digit inflation could be a reality… This is probably what the government wants, as it trasfers wealth from those with savings to those with debt (rich -> poor, asia government -> US). Obama can knock out 3 birds with one stone – stimulate the economy in the short term (although it will still be bad), close the wealth gap in this country, help finance/mitigate enormous debt levels.
Ship. I have watched several countries try and print their way out of it (currently living in one that tried that once). Never works. I agree first effort was to monetize debt but at some point you do that and your creditors flip their shit and walk or demand higher interest to offset the printing which just nets it all out.
When this is all over the one result will be a diversification away from the U.S…. Game over! Think China lent the hairdresser 500k for the house and had the same chance of getting it back if they lent it to an untouchable in India so why not diversify your credit risk. Next time $500 each to 1,000 Indians instead. Watch! They will learn. I assure you of that.
Full.. “close the wealth gap in this country”
Doesn’t work that way… exact opposite. The poor can’t get raises fast enough to offset inflation and get chewed to bits. Those with capital demand returns slightly in premium to inflation (and get it) or capital moves away to more friendly environs. I promise you if inflation was 10% the 10yr bond rate will compensate for that. So I just roll paper and protect my ass while the poor schlep working at Best Buy gets it in the rear.
The creditors in this case (China and Japan) can’t just flip – they’re more screwed than we are if the dollar collapses.
And to beat a dead horse. “and bad for lenders (ie, banks)” I assure you Turd the banks wish there was inflation. Think of the assets they are holding. Or even worse how many free puts they wrote on assets that they do not want to see get exercised on them. They want inflation and higher home prices more than anyone.
Full.. they can flip and eventually will. They will throw money at it hoping it solves things (and protect their biggest position of long dollars)then eventually they will realize they are just throwing good after bad.. eat it (very painfully).. move forward spreading it as much as possible going forward.
When you go looking for white knight financing remember when he comes on the horse it is usually with a list of terms HE is dictating.
The other side of the coin which no one has eluded to is supply constraints. Developers will not be able to get financing for a long, long time. America is still adding to the population. Demand will begin to outstrip supply sooner that you think. You can’t compare us to japan because for one, the run up in real estate values was a lot more severe in japan than the u.s., and two, their population growth ( or should I say the lack there of) could never support the existing supply. This is not japan and if you think it is, you will get severely burned in the market.
Ze –
You are probably right about the poor still being screwed when it comes to income levels, but reducing their crushing debt burden will help, although maybe temporarily. Also, the wealthy may be able to partially insulate themselves, but they will still take a pretty severe hit.
Also, you are right that China will reduce it’s long dollar exposure going forward – it has already started. But, this will take a LONG time, b/c it’s primary concern will be trying to keep the country from mass riots and a coup.
No amount of government spending is going to reinflate a split level home in the inland empire to $500,000. Helicopter ben would seriously have to drop money from the sky for that to happen. Tightened lending standards going forward is going to put an end to the $700k home for the $14k a year strawberry picker. things were so out of whack for so long that its going to be difficult to pull out of a deflationary spiral. imho it would take trillions and trillions of dollars dropped from the skies to reinflate our economy – not just new roads and expanded welfare benefits. Japan has had significant deflation for years despite several massive spending projects. Unfortunately they didn’t they the helicopter drop, maybe that would have worked. Inflation will again rear its ugly head but that’s more of a long term concern. In my opinion we’re already had inflation: my education cost $14k a year when I started and $30k a year when it ended 7 years later! Gas was 99c a gallon when I started undergrad and it was $3.50 or higher when I graduated law school. My parent’s home in the burbs went up in value 2.5x times between 1995 and 2006. The credit fueling the inflation is gone gone gone. Now it’s time to deflate. I can’t see how so money, outside of credit, will work it’s way into my pocket that the cost of everything. Short of the government giving me money (the $400 a year stimulus tax break hardly offsets my parking tickets in Chicago) or if everyone suddenly finds $50,000 in their bank account tomorrow morning…the gov can’t print money fast enough to offset the deleveraging occuring right now. I would love inflation, i would love to inflate away my student loans but I’ve taken the position that ain’t going to happen anytime soon so it’s better to just pay them off.
In regards to China, there is an old saying- If I owe you a thousand dollars, I have a problem. If I owe you a million dollars, YOU have a problem!
Or owe a Trillion and both have a problem…
As Polonius said in Hamlet…. “Neither a borrower nor a lender be,
For loan oft loses both itself and friend”
That’s right Turd. The more debt you have, the better off you’ll be. Currency debasement has been a theme since time began and I don’t see that trend changing anytime soon. Especially when the head of the U.S. Federal Reserve (who has mastered the causes and outcomes of the depression) has unequivocally stated that ushering currency into the system is the only way we’ll avoid a long, protracted recession or depression. And HD, the fed can actually cause inflation if they truly wanted to, so yes, there is some level of spending/federal balance sheet expansion that will ultimately cause inflation. Milton Friedman accurately stated that inflation is EVERYWHERE and ALWAYS a monetary phenomenon. Period.
I’m 70% in the deflation camp and 30% in the inflation camp. Yes, we will eventually return to inflation, maybe even hyperinflation. I don’t know when, but its probably not right around the corner, I don’t see it in the foreseeable future. How long do you think it will take before nominal prices in the inland empire return to 2005/6 prices? I guess the underwater homedebtors in cali/fl/nv have it all wrong. Instead of walking away from their homes worth 50% of the peak they should just hold on long enough b/c inflation will save them…eventually.
http://www.chicagotribune.com/business/yourmoney/chi-ym-deflation-0215-cpfeb15,0,3899047.story
“The risks of deflation
With the economy facing a backward spiral, Americans feel the high cost of falling prices
Wedding photographer Pogos Kuregyan has lowered his prices.
FedEx aircraft inspector Dan Wallace is dealing with a salary cut and a retirement fund that’s lost half its value.
Though prices are down for food, housing, energy and clothing, Wallace and Kuregyan can’t buy much, because they’re living on less.
After years of worrying about inflation, some economists fear the opposite could soon happen: deflation, an extended period of falling prices that indicates the economy is in a backward spiral.
Millions of Americans have less money coming in than before the recession, and their net worth also has shrunk. That means less to spend on food, clothes, gasoline, cars and shelter. And despite discounts at the store and the car dealership, a lowering of rents and a near-historic drop in the price of houses, people just aren’t buying much.
For Kuregyan, owner of Unique Digital Media, a photography studio in Glendale, Calif., the trouble started when he noticed rivals advertising online packages hundreds of dollars cheaper than his.
His business began to slow. At first, Kuregyan did what many business owners have done in this economy: He offered discounts and extra services instead of formally lowering his prices.
But that didn’t work.
Then he realized that he would need to borrow money from friends to make his December rent payment. Desperate for customers, Kuregyan caved and reduced the cost of his packages by $200 to bring him more in line with his competitors.
“It’s extremely dangerous,” Kuregyan said. “If I start dropping prices and they do it too, then I do it again, then it all becomes fruitless.”
Trying to get credit flowing more freely, the Federal Reserve has dropped interest rates to historic lows. President Barack Obama has been emphasizing the urgency of a massive stimulus package to get consumers and businesses spending again.
But economists and politicians alike are divided about what to do. Taken as a whole, prices in the U.S. economy increased last year, but only a bit. Inflation registered only 0.1 percent in 2008, the smallest increase in prices since 1954. The next reading on the consumer price index, for January, comes Friday.
Consumer spending declined in December for a record sixth consecutive month and rose 3.6 percent for the year, its lowest annual gain since 1961. The economy lost 3.6 million jobs since the recession started in December 2007…..”
He will not be allowed to print the currency to offset the credit collapse. The market will never absorb it. In an Ivory tower maybe, but real world, ROFLMAO NO! Try it and bonds go 1% per day til he has to stop. Continue from there and you have Brasil 1991 but now in the worlds biggest economy. This is not a deflation based on currency, this is a deflation based on an amplitude contraction of credit. The ratio of credit to actual capital globally became EXTREME. We will just have to sit back and watch and see now won’t we.
Truth is nothing would surprise me from here. All the inmates now running the asylum.
What if Bernanke pegs the 10 yr note at say, 3%, like he’s discussed before? You can control your interest rates or your currency, but you can’t control both. They may prefer to let the dollar drop (vs what? the Euro is toast too!) then to let rates increase. It seems to me that this is a good entry point for commodities for the next few years…
What’s the deal, story, at 160 E. Illinois? Just 2 sales, penthouse and other, in last 9-12 months. Solely, developers units listed for sale?? Fairly priced?
Turd.. Misconceptions once again… Like the searing steak thing, people just believe it… The Fed follows the market, they don’t set it. He caps rates and he better be willing to have the world tender their paper all to him on a big giant global arb. The markets are so incredibly much bigger and deeper than even the Fed. Honestly I have never seen a country effectively defend their currency either.
As for 160 E.. always found it depressingly squeezed in there between the Tribune and Intercontinental. Never been inside. Nothing traded because of offers being above comparables, not because of lack of people wanting to sell.
I know they don’t set long rates now, but the Bernanke specifically outlined such a policy several years back. I agree, though, that the treasury markets are so huge that it would be difficult for the Fed to actually do this. Let’s hope they don’t have to try.
Lar: As I said- the flippers tried to flip and couldn’t.
A lot of the units were rented out. The developer hasn’t been cutting prices like some of the other buildings.
And the Streeterville market hasn’t been great.
Read the past chatter:
April 2008 Chatter
In January 2008, about 40% of the building was trying to flip.
Flippers Trying to Flip
Ze, HD –
I don’t think anyone is disagreeing (at least I’m not), that deflation is quite likely over the next year or 2, and the system will continue to delever… I just think the deflation that we may see over the next couple of years will be nothing compared to the inflation that we will probably see 5-10 years out (not saying it’ll be true hyperinflation, maybe just low double digits).
Ze & other amateur economists:
I don’t speak geekspeak. I don’t watch much sci-fi and I guess I’m incapable of understanding “what it all means”? So lets all step out of sci-fi hypothetical mode for a minute (and you should/will agree that Keynesian and monetarist macroeconomics is nothing but hypothetical armchair philsophizing) and give me your opinion on this:
Will Bob be able to acquire a nice SFH near the bubbly creek within 3 years time for around 400k? If so awesome if not where do you think they’re headed pricewise?
Bob, now is a great time to buy!
Bob, you’re the reason this country is in rough shape. Just looking to make a quick buck without doing any research. Why don’t you read up and figure out for yourself where prices are going.
160 E. was willing to look at offers up to 25% off listing price in January. I really like the location of the building and the units are nice. They are still overpriced though being that they can’t seem to unload the last 20 units they have. Not sure if there are new deals now.
Howard I’m pretty sure policy makers had something to do with the shape of this country as well and lets not forget over consumption and rampant debt-fueled consumerism. But hey I suppose I play my bit part 😀
My god the posters on this site! Howard’s humor is completely dead pan and saracastic, or, he’s totally serious and that’s funny as hell too.
“Howard roark on February 15th, 2009 at 3:56 pm
That’s right Turd. The more debt you have, the better off you’ll be. ”
“Howard roark on February 16th, 2009 at 8:40 am
Bob, you’re the reason this country is in rough shape.”
Bob’s guess is as good as yours or Greenspan’s or any Nobel laureate economist’s. The most honest of them will admit that the old models may not hold because we’re in uncharted waters and there is a lot of uncertainty in any predictions. Most of those that project certainty have political biases.
”Howard roark:”Bob, you’re the reason this country is in rough shape. Just looking to make a quick buck without doing any research. Why don’t you read up and figure out for yourself where prices are going.”
Bob, where exactly is “near the bubbly creek?” Is that in the “green zone”?
Sonies,
No. Its definitely outside the “green zone”. Its the south fork of the south branch of the Chicago river. Still the crick is getting better. I’ve talked to residents of the area and although it still smells some summer days, it is much improved vs. even 15 years ago. Some people have even caught fish there. You’d have to be crazy to eat them, though.
And I’m thinking with the stimulus bill there is potential that Chicago could upgrade its sewer systems reducing wastewater release into the river and lake even further. My theory is that long-term property appreciation has potential if they can get that stretch of the river cleaned up. And environmentalism isn’t going away and this will surely be one of Chicago’s green projects in the future.
Is this board about 600 N Fairbanks condo?
Too much over analysis. The economy boils down to CONFIDENCE. All things feed into it. From a big picture standpoint, I cannot figure out how all this access to data that the masses never had before will impact the economy and it ability to recover. People now look at a home and decide what a fair return for the current owner would be and over 80% of buyers do their research online before contacting a broker. Many posters on this board are too focused on the minutia without an understanding / attempt to understand the big picture.
While I mention data, I am referring to access on the internet. Heck whenever I have a question, I pull out my PDA and Google it. Hence, I now rarely ask a objective question anymore.
Think Small – that’s deep.