Market Conditions: Downtown Condos Sales Go From Bad to Awful in Q4
If anyone needed any confirmation about just how bad it is out there in the last few months of 2010, the Appraisal Research Counselors is just out with the gruesome fourth quarter downtown new construction sales numbers.
2010 shaped up to be one for the record books- with a record low number of new construction condo sales. The fourth quarter actually saw a loss of 19 sales contracts.
From Crain’s:
Developers of downtown condos and townhomes lost more contracts than they inked in the fourth quarter, posting a -19 net sales figure, down from 111 in the third quarter and 148 sales in the fourth quarter of 2009, according to a report by Chicago-based consulting firm Appraisal Research Counselors.
The majority of the sales were in a select group of buildings like 757 Orleans and The Silver, both of which cut prices to move units.
“Everybody who sold well (last year) repriced their units. People who held firm on pricing saw very little sales absorption,” Ms. Lissner says. “I would think we would start seeing some movement on price for the unsold inventory, which will generate more sales. I mean, how long can you sit holding firm?”
Belgravia’s 565 Quincy, which we have chattered about several times, was also a big winner last year after it cut prices.
“I’m not sure if I should laugh or cry,” Belgravia President and CEO Alan Lev says upon realizing his firm accounted for more than one-third of the total market’s sales last year. “I feel a hell of a lot better in 2011 than I did a year ago.”
Moving forward in 2011, the question is, which building will be the next to aggressively cut prices? Or will they go rental instead?
Some buildings sitting on inventory include:
- The Legacy
- 60 E. Monroe
- Aqua
- One Museum Park
- The Colombian (has already cut prices)
Downtown condo sales hit new low in 2010 [Crain’s Chicago Business, Eddie Baeb, February 14, 2011]
From another Crain’s story yesterday: “Developers sold 678 homes in the Chicago area in the fourth quarter, up 26% from 536 in the year-earlier period, according to a report from Tracy Cross & Associates Inc.”
BTW, IAR will report total January home sales in Chicago down about 17% from last year. However, there are signs that contract activity is picking up. About 50% of those sales are still distressed.
Ms. Lissner says. “I would think we would start seeing some movement on price for the unsold inventory, which will generate more sales. I mean, how long can you sit holding firm?”
YEAAAAAAAAAAAAAAAAA!!! (Peter Griffin voice)
When are these developers going to become realstic with their prices. Some are still so outrageously priced, that you would think they were still stuck in 06′.
Exhibit A. Sales volume increases as prices decrease.
what about 235 van buren building, how’s that selling?
i thought The Colombian was already the cheapest of the mil/grant park condos, can it even go cheaper?
at six north michigan they are still playing the “listing game” where the only put so many unit for sale at given times and take them on and off the mls.
what about the park monroe frankenstien monster? has any unit closed?
the metropolitan did huge price cuts on only select units, it seemed to work only for those units
but it does have a mayor contender as a occupant.
with all the why i bought at 235 van buern videos out there it “looks” like that is a hotcake seller.
how is trump doing? i heard there was a underground market for the preconstruction contracts?
and are there really that many people who need in-towns?
and aqua, did they even get a aldi yet?
“Exhibit A. Sales volume increases as prices decrease.”
And do you know what that means?
“From another Crain’s story yesterday: “Developers sold 678 homes in the Chicago area in the fourth quarter, up 26% from 536 in the year-earlier period, according to a report from Tracy Cross & Associates Inc.””
Gary- I saw this. But they are essentially changing their mix and lowering prices to make the sales. Some of the most successful developers are now doing townhouses instead of SFH.
“what about the park monroe frankenstien monster? has any unit closed?”
That is 60 E. Monroe. There are a couple hundred units in The Legacy- right? That’s the building to watch- in my opinion.
The Colombian has cut prices several times and still it’s not like they’re jumping which means prices simply aren’t low enough yet for that product.
Some developers got extensions on their loans but I can’t believe the banks are going to keep waiting years to get paid.
And don’t forget- anyone who bought at the preconstruction prices or before the price cuts in these buildings will all be Vetroed. So the outlook for downtown condos is not good for many years to come (depending on the building, of course.)
Which was more responsible for the increased sales volume in 2010: the substantial price cuts, or, the catchy marketing phrase?
Again, lower your prices, usually significantly, and your sales volume will increase. One building with substantial price cuts resulted in 1/3rd of all sales last quarter.
FROM ABOVE:
““I’m not sure if I should laugh or cry,” Belgravia President and CEO Alan Lev says upon realizing his firm accounted for more than one-third of the total market’s sales last year. “I feel a hell of a lot better in 2011 than I did a year ago.””
He’s not laughing or crying, he’s too busy running to the bank to cash the checks. He was one of the first developers to run for the exits and good for him.
After reading about 1111 S Wabash’s special assts, I hope people proceed with caution on new construction the West and South Loop.
Even with price cuts, I’ve been looking at condos for a year now and haven’t found anything that screams “buy me now”.
Belgravia’s Lev believes it may be 5 years before another major condo project is built in Chicago. You can see his take on the market in this video interview:
http://www.youtube.com/watch?v=WieodXksAwc
““what about the park monroe frankenstien monster? has any unit closed?”
That is 60 E. Monroe”
i thought the address is 55 east monroe and the commercial below it is 65 East?
Ironically Sabrina, most of the owners in Vetro’s association meetings, who are quick to point out that they bought at the higher prices, still seem to love where they live.
Is 235 doing well?
The owners who purchased at higher prices better love where the lived because they’re stuck there for a while!
“Ironically Sabrina, most of the owners in Vetro’s association meetings, who are quick to point out that they bought at the higher prices, still seem to love where they live.”
Why is this ironic? These are probably very smart people in tune with what is important and what isn’t. I am so sick of everyone treating real estate like a pure financial investment. What about the emotional/psychological benefit/return you get for living in a place you actually like? Also, remember that rents are going up:
http://www.chicagotribune.com/classified/realestate/apartments/ct-biz-0211-rent-chicago-20110211,0,6212936.story?obref=obinsite
“Also, remember that rents are going up:”
all your CC renter here please explain to clio what you will do if your landlord tries to raise your rent!
My landlord isn’t planning on raising my rent..i’m actually trying to negotiate 100 bucks off for next year right now. I do know for a fact that the downtown inventory for 1 beds is incredibly harsh right now…I have friends looking for places and a ‘nicer’ 1 bed with parking is almost impossible to find for less than 1700/month, in a rental building or by owner.
If you look at the NYT rental ratio charts the updated data says that the Chicago metro is about 17. According to them, if you are between 15 and 20 you should lean toward renting but if you find a place you really like and want to stay in for a long time then to go ahead and buy.
I rent in the near west loop (very very near west) @ $2500 for a 2BR – not including parking. The closest equivalent condo is about 2 blocks away (a new development) and is asking ~$350,000 – not including parking. If you ignore the assessments and taxes, the ratio is just barely under 20. I guess that a debate could ensue when deciding how to calculate assessments and taxes when calculating the ratio.
Anyway, this goes to show that the price in my neighborhood doesn’t need to drop all that much to make sense – rental buildings here are in the upper 90% occupied rate so rents are clearly at market rates.
If developers would just drop prices by $25,000 – $50,000, they’d sell out. In my neighborhood.
Tipster, if what you say is true, then why not place offers that reflect what you want to pay? $25,000 is less than 10%.
negotiate harder or move.
“all your CC renter here please explain to clio what you will do if your landlord tries to raise your rent!”
Of course with the moving some (Clio) feel that it is a traumatic experience that will scar and stunt you for life. I love it. Love new places, love changing the place up, love meeting new neighbors. Dislike the actual process though but that is 48hrs of misery then on to exploring a cool new nabe.
“Tipster, if what you say is true, then why not place offers that reflect what you want to pay? $25,000 is less than 10%.”
Because I am perfectly willing to rent a 1200 sq ft 2BR but I have no interest in buying one.
I want a 2BR + den or a 3BR.
“The majority of the sales were in a select group of buildings like 757 Orleans and The Silver, both of which cut prices to move units.”
I can believe that, the Silver tower is really filling up, I would say only 1 or two floors (out of 22?) are empty now
757 orleans I have no idea as I just go to the walgreens there and dont bother to look up, but it seems empty still
So if one bedrooms are 1700 a month why not buy the 2 shown on cc in the last month for 70 or 80k? I think one was in south loop other on clark across from wienercircle. Both could look pretty sharp w a little work and a few bucks.
MP West is almost all empty. If they don’t cut prices or go rental, then I am not sure how they can deal with their loan. I have heard MP East’s loan has been paid off. The developer still has quite a few unsold units there too.
So what is the deal with Aqua? I haven’t been in it, but looks great and I thought it was already mostly sold.
I don’t think people wanting to purchase at Aqua can get financing due to the hotel and rental percentages
“So if one bedrooms are 1700 a month why not buy the 2 shown on cc in the last month for 70 or 80k?”
Because they aren’t selling for 70 or 80k. I offered 130k cash on one of the 1BR’s that was listed on CC for 109k and didn’t get it. I offered 150k cash on another that was listed at 100k and didn’t get it either. And you still had people here claiming they wouldn’t sell for 100k.
thanks for the video JoeZ. Fast forward it to 10:19 it’s interesting when he starts talking about all the developers, what they are doing now, and how they will deal with the future. he basically says the mature ones will be jaded and leave future development to a new generation of “risk takers” that don’t truly understand what a personal guarantee really means to them.
Anyone have any thoughts on the streeterville area, seems like a lot of listings are still asking for 2006-2007 prices?
Can someone remind me what ARC defines as the “downtown area”? Is it North to Roosevelt, Lake to Halsted? Bigger? Smaller? TIA!
Bw, 401 Ontario is a cheaper condo building for rentals in streeterville… U can probably pull off a 1 bed with parking at 1400-1500…there are a few other condo buildings like that in streeterville. McClurg and lakeshore plaza apartments are dumps. If you have a bigger budget both streeter place and the streeter are nice rental properties with good amenities , they still feel very apartment like though ( popcorn ceilings, cheap appliances) . Also check out 5-2 mcclurg…some decent units there. The neighborhood as a whole I’m not a fan of/ good lake access but very very touristy. Lots of older folks and people who have weekend places..
512 mcclurg*
“Of course with the moving some (Clio) feel that it is a traumatic experience that will scar and stunt you for life. I love it.”
Roscoevillager, I bet you are single with only a few belongings. Try moving a family or house full of furniture and you won’t love it so much.
chukdotcom you were outbid or they wouldnt sell at that price?
“chukdotcom you were outbid or they wouldnt sell at that price?”
Outbid on the 130k (don’t know what it sold for yet, under contract now), wouldn’t sell on the 150k (bank countered with 205k).
“Roscoevillager, I bet you are single with only a few belongings. Try moving a family or house full of furniture and you won’t love it so much.”
dooode its not bad as you paint it (i should call you the HomeDelete of moving).
it helps you reduce clutter and real value what you need, as the non essential stuff ends up staying in boxes reducing clutter.
a good mover is a blessing as then you just use friends to unpack/pack stuff. no heavy lifting involved.
Hey Chuckdotcom, which CC listings were you outbid on?
Clio, I am married with one on the way and have tons of newly purchased china crystal and all the trappings that come from wealthy wedding guests. I have a large apartment and a high tolerance for change. I am also in the process of moving for the first time in 3 years and have invested the GDP of a small country in bubble wrap. I fully believe in movers.
In previous threads I have attested to being a military kid growing up and have experienced the full household cross country moves. Moving is one of the greatest ways to understand yourself and priorities, constantly pushing your personal boundaries is great for the soul and forces you to understand how to make friends.
Thanks chukdotcom. Seems banks toss lowball offer to get interest then snatch it away.
I honestly don’t know why anyone would buy a condo anymore. Your fate is tied to too many others’. The time horizon for breaking even with a rental is long. Too much potential for assessment surprises. To me it seems like it’s best to either buy fee simple or rent. Any strong pros for the condo that I’m missing??
roscoevillager, wait for 3-4 years – you will see that you will NOT enjoy moving so much. Also, just try and get your SO to feel the same. I would bet any amount of money that your attitude will be totally different in 5 years (with or without more kids).
Note to Sabrina – you have often raised the issue regarding all of the couples buying 2/2 and ask why they don’t realize that they will need to move in a few years when they have kids. If you look at the attitudes of many of the posters here, you will see that they truly believe that they really do NOT think anything is going to change. They are very naiive and think that their attitude towards city living/moving will be the same in 5 years after a couple of kids. How I wish they would realize that they are wrong and should be more careful in making these decisions.
moving sucks. period!
” Any strong pros for the condo that I’m missing??”
Absolutely – you don’t have to waste time dealing with landscapers, repairmen, etc. etc. – seriously, time is so frickin important. The biggest difference I see in people who have a lot of stuff and those that don’t is that the ones without all of the stuff (ie houses, cars, etc.) have much more freedom and tend to be much happier than those of us who spend 90% of our free time calling H20 departments, com ed, landscapers, roofers, etc.
I would gladly pay a premium not to deal with this shit!!!
“I honestly don’t know why anyone would buy a condo anymore. Your fate is tied to too many others’. The time horizon for breaking even with a rental is long. Too much potential for assessment surprises.”
Neighborhoods can go to shit too, and you get your assessment surprises with your SFH too in the form of all the maintenance and repairs that are required (although you can DIY to save a good chunk). Both have their pros and cons, but in both cases if you’re in it for the long term it’s better than renting.
Good luck with all of that stuff, I hope you use it sometime. Leave it packed. Engaged people really should cool it when they register for all this stuff they’ll hardly ever use esp. when young kids are on the horizon. Crystal vases are perhaps the best thing to register for that actually get used regularly, not much else is worth it besides a gravy boat! Crystal wine goblets are a buzzkill to drink fun from, people are too paranoid with them.
“….and have tons of newly purchased china crystal and all the trappings that come from wealthy wedding guests.”
“Hey Chuckdotcom, which CC listings were you outbid on?”
630 N Franklin 1br bank owned. Was listed $108,900
“To me it seems like it’s best to either buy fee simple or rent. Any strong pros for the condo that I’m missing??”
For me, I look at it this way. Take the 630 N Franklin property I was interested in. Buy it for 130k cash. Would cost me $190 per month in assessments, and $200 per month in taxes. Roughly $400-500 per month. I couldn’t touch a rental anywhere near that. I don’t really see it as an opportunity cost on my money, because I believe that housing is a better investment than the stock market right over the next 5 years (where my money is now). I think that property was worth 150kish today anyway.
“630 N Franklin 1br bank owned. Was listed $108,900”
Was it bank owned or Fannie/Freddie owned? Those units have owner/occupied priority over investors for a while after listing. Wouldn’t be surprised if some banks agreed to this for some units in exchange for bailouts or some other crap.
It was FNM owned. However, it was past the “first look” or whatever they call it time period.
All you need to enjoy moving is one set of bad neighbors.
Another great amenity of living downtown is if you don’t have an extra vacant parking spot your guests will either have to take public transportation or have the luxury of paying $5/hour for parking in the near future. Mayor Daley made it such a more desirable place to live I tell ya.
I use my wedding china every day… then again i’m pretty practical
I bought a condo. My friends have bought condos. As much as we would like a sfh, too much $ to live in a desirable hood (IMO). Rented prior for 7 years, couldn’t be happier nowg
SFH not risk free either. My friend bought an Environs house, SFH, on a new street. The street was not built to code and now the city refuses to maintain it. He now has to create mini association for his street to get neighbors to kick in for trash pick up, repairs and snow removal….basically there is an association without management…talk about work….he now has to pay an association fee and deal with the work…They are suing the street developer — Belgravia — but the outcome of that will take years. At best, they get $$$ to take care of their own street. Can’t exactly rebuild the street w/out moving some houses, yards, etc…
“Can’t exactly rebuild the street w/out moving some houses, yards, etc…”
It’s too narrow? Otherwise, why not?
a local,
is it the development behind the cta’s elston bus depot?
“is it the development behind the cta’s elston bus depot?”
My first thought was Hartland Court.
Use the china/crystal at least weekly (really just depends how often we are home for a meal together). All the other stuff comes in really handy entertaining clients, colleagues, friends.
Clio, like I said, I have spent my entire life moving every few years, sure the process is no picinic but I don’t let that stand in my way. Kids do fine with moves (I did, my siblings did and so do millions others) and take their cues from their parents (kinda).
The greatest part of moving? The housewarming party you get to throw a few months later. Of course, I get that maybe I’m a bit masochistic in that I enjoy things that others might not.
Also Clio, I am totally hoping the SO is against a move in 5 years – because that would mean burbs ::shudder::
“My first thought was Hartland Court.”
looks like you’re right
http://www.yourwindycityguide.com/?p=1512
Groove – “a local, is it the development behind the cta’s elston bus depot?” Yes it is.
RV- you may be surprised how fast your interests change over the years. Early on (in my twenties) there was no way I would ever imagine wanting to live in the SUBURBS. After 2 kids, there was no way I would ever imagine living in the CITY. After my ex and kids moved to LA and I was alone again, I am back to wanting to live in the CITY again. The bottom line is that even if YOU don’t change, your situation often will dictate where you need to live….
The problem is not just that the City won’t maintain the park and streets, and the SHFs have to maintain it, its that now the units have to carry insurance (slip and fall…) for the roads and park…this adds to the cost tremendously. They have more potential liability than a big condo building and fewer units to cover the cost.
“The problem is not just that the City won’t maintain the park and streets, and the SHFs have to maintain it, its that now the units have to carry insurance (slip and fall…) for the roads and park…this adds to the cost tremendously. They have more potential liability than a big condo building and fewer units to cover the cost.”
Why is this not the developers problem. Are the houses fee simple, is there a plot survery for each parcel….. I would check with an attorney who has ownership of the park and streets.
“To me it seems like it’s best to either buy fee simple or rent. Any strong pros for the condo that I’m missing??”
EJ, as a-fed notes, for most people, SFHs in nice areas are too expensive. For instance, for me to buy a four bed SFH within a two block radius of my two bed condo, it would cost about four times as much, not merely double.
“Groove – “a local, is it the development behind the cta’s elston bus depot?” Yes it is.”
wow took a stab at it as the homes there have HUGE price drops.
the crazy thing about that small little area is there is a street name sign and no street that goes through the middle of the development.
and the only way in is through the elston bus yards as there is a railroad/security fence thing blocking the other entrance from a alley off of the indian woods neighborhood.
““is it the development behind the cta’s elston bus depot?”
My first thought was Hartland Court.”
i didnt even know about that until you said it, i actually google’d it (i know groove did research its shocking)
groove77 that development is a joke. They were asking a million dollars for each of those homes during the bubble. I rode my bike through there after the bubble burst and it was a ghost town. piles of rubble everywhere, weeds growing 7 feet high like a god damn prairie on the vacant lots, and there was like all over 5 homes built total of the 30 or so planned. It’s the same developer CA who built the development we talked about a few weeks ago in old irving. that was a total bubble development. I remember thinking “a million dollars for one of these?” HA!
http://cribchatter.com/?p=9943
http://www.edgebrookglen.com/
SUCKS TO BE THIS GUY:
http://www.redfin.com/IL/Chicago/5710-N-Latrobe-Ave-60646/home/21751035
Sold on 09/20/2007
$991,843
“I rode my bike through there after the bubble burst and it was a ghost town”
that must have been the most depressing bike ride ever. elston is all industial then you need to turn down the “bus depot lane” which is all employee parking and busses down a two-three block strip before you even see a tree. and then the trees are new so small and sad.
and then the whole devlopment is blocked by metra tracks and the bus depot sonly 20% borders indian woods nabe which you need to walk through to get to the forest preserve.
homedelete —Actually, Hartland Park is complete…you must be thinking of nearby developments (just north in Lakeview) around a simliar park. Hartland is just the few streets south of this park. Its built out completely with Balgravia townhomes and Environs Development SFHS. The SFH went for 1.5 to 2 million. The townhouses close to a million. I’ve been in several homes in the development. The SFH are finished nicely…as Environs are pretty high end. I thought the Belgravia were much more cookie cutter. In any event, Belgravia is responsble for developing the streets and park..not Environs. The developer does not claim to own the park and streets and the city won’t take it over. Lots of litigation and fees….
to state the obvious, no bottom without:
a) increase in jobs/pop. growth in Chicago. Surpised by the census # that Chicago pop. decreased by 200,000 from 2000 to 2010, expected zero change, not a decline. Contrast Chicago with the actual growth within the city limits of NY/LA/Houston. NYC-proper had a nearly +400,000 person growth between 2000 and 2010.
b) Chicago has incredibly permissive zoning and buildable lots/old housing stock which encourages a continues supply of new units even with the current glut.
“homedelete —Actually, Hartland Park is complete…you must be thinking of nearby developments”
He’s talking about the development behind the Elston bus terminal that you (accidentally?) responded to Groove was the one you were talking about.
“He’s talking about the development behind the Elston bus terminal that you (accidentally?) responded to Groove was the one you were talking about.”
crap, so wait i didnt win the cookie/star/pat-on-the-head?
Actually there is county forest preserve running along the north branch of the chicago river, and there is a semi-developed mountain bike trail (more of a foot path in places) so I sometimes back there when I’m not in the mood to drive out to willow springs, and one day I took a detour through indian woods and ended up noticing the homes going “OMG this is a RE bubble” I swear to god I thought that to myself. The entire area was industrial for a reason. If it were actually built out and you could suspend disbelief it might be a cool place to live, until you heard the bum of the bus wash cleaning a CTA bus at 3 am
“Contrast Chicago with the actual growth within the city limits of NY/LA/Houston. NYC-proper had a nearly +400,000 person growth between 2000 and 2010.”
Chicago isn’t NYC. NYC has a sizable community of all ethnics. Chicago only certain ethnics. If you’re an Eritrean immigrant you’re likely not going to find a sizable Chicago population, but likely will in NYC.
“NYC-proper had a nearly +400,000 person growth between 2000 and 2010.”
Where did you find 2010 census date for NYC? Can’t see that it’s been released.
Chicago Population Sinks to 1920 Level
http://online.wsj.com/article/SB10001424052748703312904576146741729857936.html?mod=googlenews_wsj
CHICAGO—A larger-than-expected exodus over the past 10 years reduced the population of Chicago to a level not seen in nearly a century.
The U.S. Census Bureau reported Tuesday that during the decade ended in 2010, Chicago’s population fell 6.9% to 2,695,598 people, fewer than the 2.7 million reported back in 1920.
After peaking at 3.62 million people in 1950, Chicago underwent a half century of decline that ended only when the 1990s boom years produced a small gain in the 2000 count. At that time, the city loudly celebrated its comeback….
A mass exodus from Chicago, tumbling prices in a free fall, higher unemployment, unsustainable housing stock – WOW – HD if you are so smart, why don’t you just move out of Chicago? Seriously, if things are that bad, do us all a favor and just move.
“tumbling prices in a free fall.”
At least someone is getting something right.
My question is- when will prices stop declining? At what point?
How much will rising interest rates play into it? I feel like rising rates are the real wildcard and that everyone is underestimating the impact of 6% or 7% (or higher) mortgage rates because there is a generation of buyers who have never seen 7% (which it was exactly 10 years ago.)
Like I said- I am now seeing 2008 purchases going to short sale. That is well AFTER the bust began. Should have had tighter lending as well. So why are these loans now going bad?
“Should have had tighter lending as well. So why are these loans now going bad?”
Three letters: FHA.
“FHA-backed mortgages, which require 3.5% up front, made up about half of loans for home purchases last year”
http://online.wsj.com/article/SB10001424052748703312904576146532935600542.html?mod=WSJ_hp_LEFTTopStories
Our government continues to be the lender of last resort for the sausage mortgage loans private institutions are unwilling to underwrite. Private lenders, unlike our government, care about things such as repayment and risk-adjusted rates, unlike our government.
“630 N Franklin 1br bank owned. Was listed $108,900”
Don’t worry chukdotcom. There will be plenty more bank owned 1-bedrooms at that price if that’s what you really want to buy.
It’s interesting though because you can really see how this bust is working. 2 years ago, the foreclosures used to sell pretty quickly in the further out neighborhoods (outside of the GZ)- sometimes within hours. Now? Not so much.
And as the foreclosures head closer to downtown- sales are also slowing on them. People are realizing the “deals” aren’t really deals 6 months or a year later.
So now I’m seeing bank owned units simply sitting in parts of Lakeview, for instance, when a year or two ago they would have been snatched up. No one wants to be a landlord in Lakeview anymore?
that edgedbrook glen is the most laughable development of all.as you can see from the overhead shot there are only about 20 of the proposed 60 homes built.the rest of the lots looks like a bomb went off.chunks of concrete and asphalt all over,a broken down dump truck sat in there for well over a year.i’m suprised you never saw this before groove.last time i drove thru there about 20 percent of the homes are for sale.not including the model homes.the worst part is that not only is the huge northside CTA barn *right* in your backyard…..it sits pretty quiet during the day…but once the busses are off the street at 10 PM…they start rockin and rollin cleaning and servicing those busses aaaaalll night long.dozens and dozens of them,heavy equipment too.nothing like the sound of air tools in the middle of the night.not to mention diesel fumes.and when the workers take their break they have a basketball hoop set up,i have seriously driven past there at 3AM and seen these guys shooting hoops and grilling on their BBQ.it might be quieter living next to the airport.
on top of that,they had a lot of pick-up truck contractors building them.i’m pretty the original developer went bust years ago.a totally stupid place to build high end homes.
Clio,
One bit of good news for you is that the demographic that is leaving Chicago also tends to be the lowest income one.
However, there’s quite a bit of bad news:
http://globaleconomicanalysis.blogspot.com/2011/02/population-adjusted-retail-sales-and.html
The financial crisis of 2008 was a sea change, actually a tsunami like event in economic terms. You seem to be perplexed by the receding sea and have wandered out to investigate.
Your entire generation has been the recipient of incredible luck. The boomers created consumption bubble after bubble, culminating in the real estate bubble that dwarfed all others and benefited half or more of the economy. Think not only RE owners trading up & HELOCing but also government workers whose departmental budgets got bloated by ever increasing property taxes.
The gig is up–despite spending and wasting trillions our government cannot re-inflate the bubble.
Nothing but pain ahead, especially in anti-business high tax deepest of the blue states like Illinois (and California, and NY).
I can only hope that Democrats fleeing Illinois for greener pastures and more conservative areas (which is also a proxy for better economies these days) aren’t met with open arms by the locals if they attempt to bring their failed paradigms and ideologies with them but instead are met with derision.
that’s a good one bob.and very true.
It sucks everytime I turn around tthere is another nail in the coffin for city living. Yesterday’s headline in some paper was how 3000 pre-k cram for tests to make the slots for the 500 selective spots. I could send my kid to school in park ridge or a private school and get a sufficient elementary education. Last night I read chicagos population shrank. Less people to pay streets and sans truck drivers 90k plus full benes pper year. That’s more money in property taxes and sales tax to pay for the bloated dying system. Everyone talks about rail lines and public trans yet naperville grew 10% last decade and the colllar counties continue to blow up.
“i’m suprised you never saw this before groove.”
JW,
Oh i saw that development for a long time, really didnt know about it until the houses stated getting framed and a buddy said go look.
now the dump truck thing i didnt see, i have only been back there 3 times. its not a destination or a stop thru, you really need to set aside time to go there.
I also saw the development “saug woods” when it started wedged between a cemetery/river/trains tracks and the only way to get to it is a long drive down bryn mawr or through the peterson/pulaski industrial area off victoria ave.
“everytime I turn around tthere is another nail in the coffin for city living. Yesterday’s headline in some paper was how 3000 pre-k cram for tests to make the slots for the 500 selective spots.”
not only do they cram for tests at age 4 they some have tutors to cram even more into a 4 year old!
i understand the reasoning behind it, but i think its blown out of proportion by over-insane parents. as i know two families that went all gung-ho on magnet/gifted/charter when the local schools was a good one.
i truly felt bad for the kids and the stress and competitiveness and possible hard disappointment *at that age.
now if a family in a ACTUAL crap school district is doing the same thing i understand that.
but HD by the time you have kids most burb schools will be years into a budget shortfall, underfunding, and overcrowding. its already happening outside the city borders.
“Last night I read chicagos population shrank. Less people to pay streets and sans truck drivers 90k plus full benes pper year. That’s more money in property taxes and sales tax to pay for the bloated dying system.”
Yup it’s a death spiral. In the one-party machine run state their answer will always be raising taxes on the remaining citizens vs. cutting back on spending.
Remember machine beneficiaries (unions & poor) disproportionately benefit from this strategy.
There’s not a lot of hope for the middle class of Chicago. Unless they want to make sacrifices like…I dunno…not reproducing. I’m sure some will value walking to Starbucks over procreating but probably not most.
I love how some people on here are like “we value an urban lifestyle” but they are clearly, clearly the minority. The collar counties are about the least urban lifestyle one can live short of ‘rural’ and they’re flaming hot hot hot; Naperville is STILL growing and the City of Chicago and it’s ELP and ELV and south loop lifestyles appeal to substantially less and less people. for every east lp’er there are many others who prefer lake in the hills or god forsaken aurora which is flaming hot.
“Yup it’s a death spiral. In the one-party machine run state their answer will always be raising taxes on the remaining citizens vs. cutting back on spending.
Remember machine beneficiaries (unions & poor) disproportionately benefit from this strategy.”
Bob–look into the breakdown of the population. 90% of the decrease came from one race leaving town–about 16% of the 2000 total.
“Bob–look into the breakdown of the population. 90% of the decrease came from one race leaving town–about 16% of the 2000 total.”
And they left neighborhoods that are never mentioned here on CC where houses sell for under 50k where no CCer would ever consider living in.
Doesn’t mean middle class aspiring GZers or other northsiders don’t have a huge financial crosshair on their backs going forward to feed the machine.
“Don’t worry chukdotcom. There will be plenty more bank owned 1-bedrooms at that price if that’s what you really want to buy.”
There will be more bank owned’s, but what people assume is that they will always be lower than the previous one. I don’t believe that to be the case.
Anecdotally, many of the things I have been looking at went under contract recently. For example these 1 br’s all just went under contract:
630 N Franklin REO at 108,900
630 N Franklin Corp Owned at 175,000
630 N Franklin Short sale at 189k
The short sale had been on the market for a while.
In addition, 1620 S Michigan just had a bunch of 1/1 and 2/1’s go under contract in the last week or two.
chukdotcom,
I agree with you – I have also seen a huge number of properties I have been following go under contract. Secretly, it is very disappointing because, deep down, I really wanted prices to really decrease so I could buy more property. However, I am beginning to become very depressed because I am seeing all of my “star properties” go under contract.
“In addition, 1620 S Michigan just had a bunch of 1/1 and 2/1’s go under contract in the last week or two.”
Really? I have the following in the past two weeks:
#718 1/1 REO LP$94,900 contract 2/3/11
#1016 1/1 REO LP$99,900 contract 2/8/11
#501 2/2 Short Sale LP$220,000 contract 2/4/11
“#501 2/2 Short Sale LP$220,000 contract 2/4/11”
Any guess on how far short of that ask it will close at?
People who live out there have a good time in life, that’s what I observe when I visit them. Their kids all have plenty of friends & places to play, everyone has a kick-butt basement area, the parents have many things in common with their neighbors, everyone speaks English well. It gets tiresome sometimes living in the city, where you can’t transact basic business or converse quickly because the clerk or person you are dealing with has either limited English skill, or speaks a different dialect or vernacular of English. Who else gets sick of having to repeat oneself??
“Naperville is STILL growing and the City of Chicago and it’s ELP and ELV and south loop lifestyles appeal to substantially less and less people. for every east lp’er there are many others who prefer lake in the hills or god forsaken aurora which is flaming hot.”
The losers who support liberalism and its failures, then flee, do not change their ways. Look at the exodus of people from CA to OR, WA, they’ve now turned those states blue!! Portland and Seattle are home to all kinds of bizarre liberals trying to ruin more areas that were once healthy.
Lack of reproduction is exactly what will happen. More shelter dogs will be rescued perhaps. People like cheap immigrant labor but they fail to understand the larger issues, like having the immigrants massively reproduce and then send their kids to public schools, then the people complain that they don’t want to send their kids to those schools!! “The Economist’s dictionary describes an externality as a cost which can arise when people engaged in economic activity do not have to take into account the full costs of what they are doing. ”
“There’s not a lot of hope for the middle class of Chicago. Unless they want to make sacrifices like…I dunno…not reproducing. I’m sure some will value walking to Starbucks over procreating but probably not most.”
I can only hope that Democrats fleeing Illinois for greener pastures and more conservative areas (which is also a proxy for better economies these days) aren’t met with open arms by the locals if they attempt to bring their failed paradigms and ideologies with them but instead are met with derision.
oops, that last paragraph is Mish’s quote and s/b paragraph 4
#501 2/2 Short Sale LP$220,000 contract 2/4/11
“Any guess on how far short of that ask it will close at?”
It’s a short sale, so who knows if it will close at all? It isn’t pre-approved by the bank. I have no idea why anyone would bother with short sales in the bldgs that have already been cmk’d and vetroed hard.
The 2/1 closings w/pkg dropped under $180K in 2010. 2/2 units fell from $280K to $240K in 1st half of 2010, no sales since. #403 2/2 REO is pending on a 1/24/11 contract at LP$202,500 (pkg not clear) after 88 days of market time with orig LP$227,250.
My prediction from 07/08 stands: 2/2 w/pkg will eventually be had here for under $200K.
“Really? I have the following in the past two weeks:
#718 1/1 REO LP$94,900 contract 2/3/11
#1016 1/1 REO LP$99,900 contract 2/8/11
#501 2/2 Short Sale LP$220,000 contract 2/4/11”
Yeah, that’s 3 contracts in 4 days. What is your point? And there were 3 more shortly before that.
chukdotcom – you have to learn to ignore G – he is just a persistently negative nellie who feels he has to prove everyone wrong and assert his data-gathering power over everyone. Even if everything in real estate was great, G would find some obscure point to make a negative comment.
My prediction has been that smalls 2/2’s or 2/2’s outside the GZ will be in the 100’s; average 2/2’s in better areas will be in the 200’s and larger 2/2’s in decent buildings and areas will be in the higher 200’s or 300’s.
THe pictures of #403 referenced above make it look like a shoebox, and it’s pretty far south for the south loop. They’ll all be under $200 eventually
http://www.redfin.com/IL/Chicago/1620-S-Michigan-Ave-60616/unit-403/home/18941619
“he is just a persistently negative nellie who feels he has to prove everyone wrong and assert his data-gathering power over everyone.”
The funny thing is his data gathering proved my point. Of the 7 1/1 or 2/1 listings recently on MLS for 1620, 6 are either closed or under contract. And in just one week, I saw 7 of the 8 properties that I was looking at go under contract. The only one that didn’t is a short sale. Some of these had been on the market for many months and they all went under contract within days of each other.
“They’ll all be under $200 eventually”
Predicting a 5% drop is not exactly going out on a limb.
“In addition, 1620 S Michigan just had a bunch of 1/1 and 2/1’s go under contract in the last week or two.”
No, it didn’t.
“Yeah, that’s 3 contracts in 4 days. What is your point? And there were 3 more shortly before that.”
There were 3 in the past 2 weeks, not a bunch. My point is that you, like clio, are either very bad at counting or feel the need to exaggerate.
“Predicting a 5% drop is not exactly going out on a limb.”
Really? Because predicting those low prices was sure met with a lot of abuse here 3+ years ago.
G – 3 years ago and today are 2 separate times. Anyone could have predicted the bubble we were in and that prices were going down. That doesn’t mean it is going to continue. Take your eyes off of CC and look at the stock market. Another day another billion dollars made. The economy is improving very steadily, people want to move – the only thing holding anyone back is the difficulty getting a mortgage – but even that isn’t holding people back. For God’s sake, in the past 2 days, I received 2 offers on my farm – after a few months of absolutely no interest. It is crazy – but people ARE making their move. Again, ask the real estate agents/brokers on this site (although they are probably too busy right now to post).
Clio – the first offer is the best offer. Take it and run
“Some of these had been on the market for many months and they all went under contract within days of each other.”
Is it really a mystery what got these contracts signed? It’s the same thing that will get the entire market moving again: lower prices. Those on the market in 1620 for awhile that went under contract saw recent price reductions. The new listings were at record low prices for the building.
That’s all it takes to get properties under contract today: new record low prices, just as it has been for the ongoing correction.
“I received 2 offers on my farm.”
Prior experience tells me that they both were under your purchase price or you would be calling it sold.
“G – 3 years ago and today are 2 separate times. Anyone could have predicted the bubble we were in and that prices were going down.”
LOL. I was making the call that units like #403 were going under $200K when they were closing at considerably more. Let’s see, #403 closed 8/11/06 for $353,500. Was just “anyone” stating that a 40+% decline was a certainty? Something tells me, you missed it completely, clio.
BTW, it does appear that the LP$202,500 for #403 REO includes parking.
Clio…You know the stock market doubling while real estate sucks can be taken in a different way. As in just how shitty an asset class real estate has been and continues to look right now.
And the economy even looking a bit better is called trillions in debt thrown at it, it should actually look better than it does. Much better.
yeah clio its a shame the stock market isn’t timed exactly to real estate purchases, otherwise i’d be up 100% on my real estate purchase instead of down 10%
True… true… (with regard to the stock market) – but my point is that the stock market is an important psychological and financial tool (psychologically, when your portfolios keep increasing, you are more apt to take risks in other areas – financially, you can cash some of those stocks and use it as payment towards real estate).
G– both offers are within 3-5% of asking and are 50k above my purchase price. Yes, I will still lose about 50k (because of holding costs/commissions) but I consider that simply the price of doing business (I have made many times that in other projects – you win some and lost some).
“And the economy even looking a bit better is called trillions in debt thrown at it, it should actually look better than it does. Much better.”
Why don’t you go play some volleyball or stare at some girls in bikinis or get into a gunfight with the cops, gangs or both, or all three at once, instead of coming around here to depress us?
“Is it really a mystery what got these contracts signed? It’s the same thing that will get the entire market moving again: lower prices.”
So, all future sales will be at lower prices? You just said it’s what “gets the market moving again”. What do you mean by moving? Moving up in price? Or just increased sales? How do you know this isn’t it “moving” right now?
Like I said, anecdotally, it seems like there is an increase in units going under contract. And you had an REO listed for 109k and a “regular” listing at 175k that both went under contract for comparable units (I saw them both). The REO I could see selling, but I was surprised to see the 175k one go under contract. And then the 189k went under contract within a couple of days. These were at 630 N Franklin.
“So, all future sales will be at lower prices?”
No, never said that.
“You just said it’s what “gets the market moving again”. What do you mean by moving? Moving up in price? Or just increased sales?”
I meant the current state of the RE market, so volume.
“How do you know this isn’t it “moving” right now?”
Because sales volume is still low and the number of underwater units remaining in bldgs like 1620 and 630 are growing with each round of price reductions setting new low comps. There is simply too much distressed inventory yet to come to believe that these new record low prices will be the bottom.
“Because sales volume is still low and the number of underwater units remaining in bldgs like 1620 and 630 are growing with each round of price reductions setting new low comps”
How can you say it IS low? It hasn’t happened yet. It is happening right now. Today, tomorrow, etc. That is the “volume”. It could be way down, or it could be through the roof. But by the time you have the answer, it is all hindsight. You can say PREVIOUS sales volume was low.
“There is simply too much distressed inventory yet to come to believe that these new record low prices will be the bottom.”
Well, right at the moment, there is very little distressed inventory for what I am looking for. There are no 1br for sale in either 630 or 1620 right now. There were quite a few for a long time.
Again, how will you know the bottom BEFORE it happens. What signs are you looking for?