Market Conditions: New Downtown Condo Sales Fall 40% Year Over Year in the First Quarter
If the housing market is improving, don’t tell that to downtown new condo developers.
According to Appraisal Research Counselors sales fell 40% in the first quarter of 2012 from a year ago. They were also down 27% from the fourth quarter of 2011.
From Crain’s:
Developers sold just 113 downtown condos in the first three months of 2012, down from 156 in the fourth quarter and 189 in the first quarter a year earlier, according to a report from Appraisal Research Counselors, a Chicago-based consulting firm.
While many homebuyers have started to take advantage of record-low interest rates and falling home prices, the numbers suggest that has yet to happen in any meaningful way at new downtown projects. Many would-be owners remain on the sidelines as renters, waiting for prices to stabilize before making a purchase.
“There hasn’t been a great feeling of urgency to buy,” says Gail Lissner, vice president at Appraisal Research.
The condominium conversion at 1400 N. Lake Shore Drive led all downtown projects in the quarter, selling 20 units to an investor. Otherwise, projects targeting the wealthy or first-time homebuyer fared the best. Sales leaders included CMK Development Corp., which sold 12 condos in the 714-unit building at 235 W. Van Buren St., where prices range from $193,900 to $539,900.
Other top sellers included American Invsco’s 200 N. Dearborn St., with nine sales, and Donald Trump’s Trump International Hotel & Tower, with seven sales.
Buyers who aren’t “price-sensitive” or aren’t burdened by another home to sell continue to drive activity, Ms. Lissner says.
Inventory, however, continues to drop as condo buildings are converted into rental apartments.
But the luxury Ritz-Carlton is about to begin closings and will add another 89 units back on the market – at least in the upper price bracket. (Some are under contract.)
If Trump had 7 sales over 3 months to start the year, how long will it take to sell out the new Ritz on Michigan Avenue?
Downtown sales drop in the first quarter [Crain’s, David Lee Matthews, May 15, 2012]
But whose going to buy all the underwater condos from the early 20-something owners at 235 West Van Buren??
I heard something very interesting at a meeting with brokers/realtors yesterday. The consensus is that people ARE willing to buy (many many more than last year) but they are avoiding buildings that were built around the time of the real estate collapse because they are all afraid of short sales/foreclosures in those buildings. However, like I said, the demand for NEW buildings being built is ASTRONOMICAL. If someone were to start a project now (for completion in 2014) it would likely sell out before ground breaking (that is how much interest there is in new construction) – that makes a lot of sense.
“If someone were to start a project now (for completion in 2014) it would likely sell out before ground breaking (that is how much interest there is in new construction) – that makes a lot of sense.”
Everyone is concerned about short sales/foreclosures in the Ritz and Lincoln Park 2520? Really?
Because those aren’t exactly “selling out”.
The only new construction I’ve seen selling is the 3-flat buildings and the smaller 8 to 10 unit mid-rises on the north side. High rises are dead.
CLIO — then your argument supports a principal reduction for owners. If those underwater owners got a principal reduction, the buildnig would stablize, and these buyers would buy.
I think people are being very cautious about high rises developments in general – shoddy construction, large number of renters/speculators, under capitalized HOAs, foreclosures/short sales, etc. They’ve heard the horror stories. Definitely not saying all that is true in every building, but current buyers are definitely more cautious. People are out there buying, but the caveat is they are looking for quality properties. They still remain quite picky from what I am seeing.
I would focus on the construction. Don’t buy something built as the market was dropping b/c contractors likely cut corners to finsih asap and at lower price points. This isn’t fixable. As for foreclosures/short sales, if your staying a while, this should not deter you b/c these will help you buy at a lower price and if you stay these will eventually end. As for the HOA, most HOAs can get six months back assessment or take position from owners who are not paying and rent the unit out. My HOA has done this in one instance…they took control of a unit and rented it out to recoup unpaid assessments. So the foreclosures/short sales should not be affecting HOAs, at least not in large managed buildings.
“But whose going to buy all the underwater condos from the early 20-something owners at 235 West Van Buren??”
We are in the height of graduation season. A new crop from West Lafayette and East Lansing will be descending on Chicago in a matter of weeks, if not days. Armed with degrees providing a variety of useful skills ranging from political science to communications, these new grads will command lofty salaries and will be looking for high end CMK properties, such as 235 W Van Buren.
“Don’t buy something built as the market was dropping b/c contractors likely cut corners to finsih asap and at lower price points.”
I’d be just as worried about those built when speculators were standing in line to offer borrowed money to developers.
The problem with downtown area condo buildings is that they were built to speculator demand, as opposed to demand from potential residents. There are still many that have not had occupants, as well as plenty more that are empty in the foreclosure pipeline. Extend and pretend has resulted in a temporarily hot rental market. It wouldn’t be hot if all of the current supply of bubble condos were utilized. They will be one day. Instead, the market manipulation results in the “need” for more apartment buildings. Developers, shills, banks and other peoples’ money are at it again. Does this mean that the oversupply still present and vacant from the condo boom will be “fixed” by a large increase in the apartment supply? Of course not. But, it does mean that the housing supply will be increased substantially once again. Who could of known, right?
The virtuous cycle of housing affordability continues. I’ve said it for many years now: the biggest surprise to many will not be the size of the correction, but the duration.
“Lincoln Park 2520”
I know that’s what the developer has been calling it, but they’ve now got the address numbers up on the building, and it’s 2550. If they have any sort of even when it’s finally done and they start showing units, maybe I’ll live-blog it on CC.
“Buy US real estate because it always goes up.”
“Buy MBS because Americans have low mortgage default rates.”
“Borrow for college because grads earn $1M more in their lifetimes.”
Have any of you naysayers actually been inside 225 VB since the new owners took over the vacant, unsold condos and finished them? I avoided this place till very recently, when a client expressed interest in looking at the handful of units still available. They are beautifully designed and well-priced in the $200’s including garage space. Only possible drawback to quick sales here is that the remaining places have 1 or 1.5 baths, but none have two beds/two baths. Students and Medical Center workers hoping to have “private space” for a roommate may find this a deal-breaker.
Last week I checked, they still have 2beds in 235VB available.
ChiTownGal seems to be referring to Van Buren Lofts, not 235 Van Buren – which hasn’t changed ownership.
Here’s a look inside Van Buren Lofts:
http://www.youtube.com/watch?v=MpFw24qObSE
Permabear: “We are in the height of graduation season. A new crop from West Lafayette and East Lansing will be descending on Chicago in a matter of weeks, if not days. Armed with degrees providing a variety of useful skills ranging from political science to communications, these new grads will command lofty salaries and will be looking for high end CMK properties, such as 235 W Van Buren.”
Really Permabear? Have you read anything lately about the job market for recent college grads?
http://www.nytimes.com/2011/05/19/business/economy/19grads.html
A few choice quotes from the article:
“The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008…”
and
“Of course, these are the lucky ones — the graduates who found a job. Among the members of the class of 2010, just 56 percent had held at least one job by this spring, when the survey was conducted. That compares with 90 percent of graduates from the classes of 2006 and 2007.”
The only thing these grads will be buying is used Ikea furniture for their new crash pad in their parent’s basement.
“high end CMK properties, such as 235 W Van Buren”
Haha. That’s a joke. The only high end part about 235 is that it’s a high rise. The units all have cheap finishes and the HOA is going to suffer if CMK doesn’t offload more of its inventory. And I bet we see some foreclosures hit that building in Q3.
“The consensus is that people ARE willing to buy (many many more than last year) but they are avoiding buildings that were built around the time of the real estate collapse because they are all afraid of short sales/foreclosures in those buildings. However, like I said, the demand for NEW buildings being built is ASTRONOMICAL.”
I think you’re ignoring a couple important pieces here. First, I would argue that buyers aren’t afraid of purchasing in buildings that were built around the collapse; rather, developers are refusing to lower their prices to market conditions. 235 is a great example. CMK thinks that they can still demand 2007/2008 prices. That’s clearly not the case… just look at their sales history.
On the flip side, look at CA23. Originally built around 2007/2008 and priced through the roof. Original developer refused to adjust to the market and went bankrupt. Bulgravia buys the property and flips the remaining 11 units in four months, after adjusting the prices. In October 2011 they announce construction (and start signing contracts) of Phase 2, a 24 unit building similar to Phase 1. May 2012 and they have four units remaining. Why? They’re aggressively priced. In fact, they won’t even negotiate and have actually gradually increased prices on their remaining inventory.
OK, my bad, I’m referring to 1224 VanBuren.
Permabear is being sarcastic, I hope.
This generation of recent grads is one of the most debt-burdened ever. Many analysts believe that we could have a “lost generation” of home buyers who cannot even get married or rent an apartment because of massive college debt loads combined with a dearth of job opportunities even for those with hard skills like engineering (what specialty did you pick), accounting, and nursing. Medical Doctors are highly employable, but the floor is flooded with law grads. Those in “soft” fields are going to have a helluva time finding jobs that justify their college expenditures or make the payments on all those loans.
“with a dearth of job opportunities even for those with hard skills like engineering (what specialty did you pick), accounting, and nursing.”
From what I’ve read this tide is turning for the hard skill types who pound pavement. It appears to still not be the case for “soft skill” types/bachelor in bullshit degrees.
GMT said:
“235 is a great example. CMK thinks that they can still demand 2007/2008 prices. That’s clearly not the case… just look at their sales history.”
Yes – just look at the sales history, rather than GMT’s fantasy version of it.
235 Van Buren, once again, was the top-selling city project, with 21 contracts signed in the first quarter of this year.
http://www.chicagorealestatedaily.com/article/20120426/CRED0701/120429844/local-new-home-sales-could-see-first-annual-rise-since-2005
“235 Van Buren, once again, was the top-selling city project, with 21 contracts signed in the first quarter of this year.”
Joe: Who cares about “contracts signed”???
The article clearly states that they CLOSED on 12 condos in the first quarter in that building. It was NOT the top selling condo project in the first quarter (even though that’s not saying much as the top seller sold only 20 units, all to one investor, in the quarter.)
How many units in that building? Over 700.
At this pace it could take them a decade to sell out the rest of the building.
GMT WAS looking at the sales history (not the contract history, which you were looking at.) Who has a “fantasy version”?
Sabrina,
235 Van Buren was the top-selling project in the first quarter and had the second highest number of closings. The articles clearly state that. Quarter after quarter, according to Crain’s, 235 has been among the top-selling downtown projects.
GMT’s point – as best I can decipher it – was that buyers would not pay CMK’s prices. Buyers have disagreed.
How many unsold units in the building? I don’t have the exact number, but it’s fewer than 300. Project out based on the current worst quarter’s closings, and how do you get to a decade?
You have to have some perspective to understand 235’s pricing structure. The project didn’t begin deliveries until later in 2009, when the downturn had already been in full swing for a while. From the outset 235 was pitched and priced toward the lower end of the new construction market downtown.
The CMK bashers here don’t do a very good job of making their case – largely because they don’t have one.
P.S. For any first-time readers, CMK is a client.
Its easy to bash CMK – their buildings are crap. They cut every corner possible during construction.
To be specific, the article states:
“The top-selling suburban single-family development in the quarter was the Meadows of Winchester Glen in northwest suburban Carpentersville, developed by Bloomfield Hills, Mich.-based PulteGroup Inc., with 16 sales, according to Tracy Cross. The Chicago leader was the condominium tower at 235 W. Van Buren St. developed by Chicago-based CMK Development Corp., with 21 contracts signed in the first quarter.”
At issue is the quality of the metrics…since signed contracts DOES NOT equal closings.
Personally, I prefer looking at the number of closing. I am not enough in the know or have enough data to know how many contracts fall apart and as a result the property gets re-listed.
—
Joe Zekas (May 16, 2012, 11:28 pm)
Sabrina,
235 Van Buren was the top-selling project in the first quarter and had the second highest number of closings. The articles clearly state that.
G & Gary & Others
Any rule of thumb on how many signed contracts fall out? Is it best to look at it quarter or quarter? Any need for seasonal adjustments? I’m just curious, but I could be over thinking it.
“You have to have some perspective to understand 235?s pricing structure. The project didn’t begin deliveries until later in 2009, when the downturn had already been in full swing for a while. From the outset 235 was pitched and priced toward the lower end of the new construction market downtown.”
Delivery dates don’t mean anything. It’s all about the date they signed the contract. When was that, Joe? It was in early/mid 2007, prior to the market collapsing. And how many lawsuits has CMK filed against owners who are trying to back out because their new condo is now worth 30% less?
And stop obscuring the facts. Yes, they signed the most contracts last quarter. But let’s compare that against their inventory. Any high rise building should outsell some midrise project, on a pure count basis. But what about as a percentage against inventory? How did they perform. For someone who is paid by CMK, I would expect you to be able to provide some figures here. But perhaps you don’t want to because the figures point to a building in trouble.
There’s also the issue of foreclosures. 235 has several foreclosures and the building is only three years old. Banks don’t like that and it hurts prices. The building is far from out of the woods… and there cheap finishes don’t help, either.
GMT,
You’re the one trying to obscure the fact that you claimed buyers wouldn’t pay CMK’s prices but quarter after quarter they have been paying those prices.
Perspective. Back in May of 2007 Crain’s reported that CMK was about to begin marketing 235 Van Buren. In the same article Crain’s reported that year-over-year Q1 sales had fallen 46% and other developers were backing away from unstarted projects.
A year ago Crain’s reported that CMK had sued 27 buyers who had failed to close. In the same article it noted that Museum Park had sued 100 buyers.
Delivery dates are meaningful – 100s of buyers opted to close at 235 at a time when buyers were walking away in larger numbers from other projects.
What do you contend anyone should conclude from your “several” foreclosures out of 100s of closed units other than that in any large group of people some are going to experience financial difficulty?
CMK has been outselling other high-rise buildings in the market without engaging in the price-cutting that some have. Units are appraising and closing, and banks like that.
Do you have access to the building’s financial statements to allege it’s “far from out of the woods?” I don’t, and I doubt that you do either. You’re just making stuff up.
Cheap finishes? You’re sounding desperate. They’re finishes that have proven acceptable to 100s of buyers at 235’s price levels.
Joey Z,
dont forget about me
http://cribchatter.com/?p=14453
Groove77,
Your troll-like behavior in that thread is completely forgettable.
“Groove77,
Your troll-like behavior in that thread is completely forgettable.”
I must agree. Whatever happened to the fun loving Groove that would pull up into the gas station in his top down Jeep, with his 3 gay friends, turn on Wham, and use the gas pump hoses to have water gun fights??
Let’s look at some case examples:
1510: Purchased in June 2009 for $252,500; Resold in March 2012 for $180,500
1513: Purchased in June 2009 for $271,000; Resold in July 2011 $for 222,000
1617: Purchased in April 2010 for $234,000; Resold in June 2011 for $210,000
2318: Purchased in July 2009 for $206,500; Resold in March 2012 for $150,500
Still think CMK can demand their 2007 prices? Those early purchasers got screwed, losing nearly 30% of the value of their home. I highly doubt this building sells out before their loans mature. And I would hate to be an owner there with increased HOAs likely on the horizon.
And lastly… Joe, the reason so many commenters are highly annoyed by you is not because 235 is your client, it’s because you’re a paid shill. You don’t care about the real estate market; you care about your clients. You’re an advertiser, plain and simple. Your site dedicates itself to your “sponsors.” You provide a “fresh take,” but only for your clients. Your like the doctors who spoke on behalf of Big Tobacco in the 50s and 90s. “There’s no proof that tobacco kills or nicotine is addictive.” Of course there isn’t, or at least not so long as they’re paying your bills.
We, the commenters (minus you), have no agenda or relationship to the homes we discuss on this blog. The only time you show up is when one of your clients is mentioned. Then you put on your cheerleader uniform and ra ra ra all day long about your client while ignoring reality.
GMT,
My agenda here was to point out the realities that you ignored.
It’s clear who I am and what my agenda is. No one knows what an anonymous commenter’s agenda is, and there’s absolutely no reason to accept your claim of neutrality at face value. You sound very much like you’re in the employ of a CMK competitor.
“No one knows what an anonymous commenter’s agenda is”
Mine is global conquest, between bong hits.
Ze’s like an open book, you just have to ask.
I’m employed by a financial institution… not a competitor of CMK.
And you’re not pointing out realities, you’re ignoring facts. Like the resale value of 235 units. Or that it’s impossible for them to empty their inventory before loan maturity. And that their units have cheap finishes. And original buyers have upside down mortgages. And that their rent to own program is a desperate move to shore up capital.
JZ is crafty bc some of his posts are informative and have nothing to do with his clients. he builds up some credibility that way. then he puts on his ad man suit and starts cheering for cmk,etc. kind of reminds me of those newspaper ads that look like real articles. I always get ticked off when I’m reading one and then realize it is a commercial that should be skipped.
“Ze’s like an open book,”
to easy of a set up i will pass 🙁
“Joe Zekas (May 17, 2012, 9:56 am)
Groove77,
Your troll-like behavior in that thread is completely forgettable.”
your flattery may drop my undies but wont steal my love
235 W. Van Buren is a dump. It’s basically a giant dorm. My sister owns a condo there, and, like most of the under-water owners, rents it out to college kids attending schools in the Loop.
When she lived there, she had the pleasure of 2 AM ska band practice, permanent hallway pot smells, and random screams and fights.
GMT,
So you’re “employed by a financial institution …” I’m sure everyone is buying that, and that you hold a position of great responsibility that requires uncommon financial acumen.
I’m not ignoring the resale value of 235 units – or your cherry-picking of 4 examples, or your bad math on “nearly 30%.” If recent buyers, who are not blind to what’s been going on in the market, aren’t concerned about it, why should I be? And why should you be? What, exactly, is your agenda? Spare us the neutral observer shtick. Why aren’t you applauding CMK for its efforts to maintain resale prices for its buyers by not engaging in the price-cutting that’s been occurring almost without exception in the market? Does your “financial institution” have investments in / loans to CMK competitors?
Without knowing the internal financials, you have no way of attaching any meaning to the maturity date of the loan. Loan extensions are common. Not as common, however, as meaningless pretensions to non-existent knowledge at CribChatter.
I was at 235 Van Buren earlier today, and have been there numerous times. I’ve been in almost all of the projects it competes with. The finishes compare favorably to many of them. But then, this is CribChatter where anyone can babble on about homes without ever seeing them, and can expect top-of-the-line finishes in a budget-priced product.
If you knew anything at all about “cheap finishes” you’d back up your glib gab with specific examples of comparably-priced projects that are offering better finishes. You have visited 235 and the comps, haven’t you?
I haven’t checked, but don’t doubt that some buyers are underwater on their mortgages. So what? That’s just the reality of the past few years, and tells us nothing about CMK.
The rent-to-own program is a recognition of a variety of marketplace realities, not a “desperate move” as you contend.
You call me a cheerleader when all I do is question your highly questionable assertions and flesh out the factual record. You’re cheerleading for a scenario that you can’t substantiate.
“GMT,
So you’re “employed by a financial institution …” I’m sure everyone is buying that, and that you hold a position of great responsibility that requires uncommon financial acumen.”
My guess is that is at least 83.4% accurate.
“You’re like the doctors who spoke on behalf of Big Tobacco in the 50s and 90s”
LOL!!
“So you’re “employed by a financial institution …” I’m sure everyone is buying that, and that you hold a position of great responsibility that requires uncommon financial acumen.”
The position of great responsibility part is a bit off, but the SIFI part is dead on.
Sorry for rounding 28% up to “nearly 30%. I’ll be precise next time. And did I cherry pick those units? Why don’t you check for yourself since you know so much about 235. You’ll find that those are the most recent resales in 235. I didn’t leave any out. If you were so lazy and busy shilling for them, you’d check your facts.
And again, I have no financial interest in 235. And most likely neither does my employer given that we’re not big players in the real estate market (hence we didn’t need any TARP money).
And yes, I have visited 235, several times in fact. And the biggest turn off was the shoddy work. If I’m going to pay 400M (when it’s really worth closer to 300M) for a 1300 sq ft 2/2, then I expect top of the line finishes. I want real hardwood floors and real wood cabinetry, not that fake wood they’re using. And then the developer’s arrogant attitude was ridiculous.
“The rent-to-own program is a recognition of a variety of marketplace realities”
Reality is that they’re overpriced and need the capital before maturity. When I visited it the first time, I specifically asked about them offering units for rent. Not only did the developer blatantly lie, but they also talked about it as if it wouldn’t happen. They were performing exceptionally well and had no need to rent out their units, or so they said.
I’m curious about something else, too. Is 235 a budget building or a high-end condo? It appears that you’re describing it as budget here but on your site it’s often referenced as high end. So which is it? If it’s budget, I’ll forgive the cheap work. But if it’s high end, there’s no excuse.
GMT,
The gross resale numbers you listed total 20.85% below the gross purchase numbers. To get to your 28% number you’d have to assume sales transaction costs of 9%. Yeah, you should be more precise next time.
“… the most recent resales …” If that’s not cherry-picking the universe of resales, I don’t know what the word means.
You and your employer are “not big players in the real estate market” but you can pompously pronounce on the financial prospects of a big deal?
You say you’ve visited 235, but don’t indicate that you’ve visited any of the comps. The fact that you expect “top of the line finishes” at a $400K price point for a 2/2 tells me that you don’t have even a faint grasp of the realities of the marketplace.
I meet and hear feedback on very many developer sales reps, and many are inattentive and arrogant. I’ve never heard anyone but you describe CMK’s as anything remotely resembling arrogant, and never heard anything but high praise for them.
You can buy 2/2s at 235 from CMK (although not 1,300 square feet) in the $260s.
You give no indication of when you first visited and were told by a developer’s representative – I’m assuming you did not talk to Colin Kihnke – that units were not being offered for rent. When they’re offered for rent at a later date you characterize the earlier statement as a lie rather than questioning whether it was accurate at the time. That’s not how adults interpret reality.
“Reality is they’re overpriced.” Reality is people are paying the price, i.e. Mr Market says they’re not overpriced except in your parallel universe.
You’re curious about whether a building with 2/2s selling in the $260s is a budget building? You’re kidding, right?
Where on my site has 235 ever been referred to as a “high end” building, much less “often referenced as high end?” Once again, you’re just making stuff up. You might not know what a high-end product is, but I certainly do.
“Where on my site has 235 ever been referred to as a “high end” building, much less “often referenced as high end?” Once again, you’re just making stuff up. You might not know what a high-end product is, but I certainly do.”
Wasn’t there a couple that was featured in a video on your site Joe that bought a high floor big 2-bedroom (or maybe it was a 3-bedroom, I can’t remember)- that paid over $400,000 for it? I seem to recall a discussion of that here on CribChatter from a few years ago now…
Maybe some of the other longtime readers can refresh my memory if they remember that video.
“The fact that you expect “top of the line finishes” at a $400K price point for a 2/2 tells me that you don’t have even a faint grasp of the realities of the marketplace.”
Don’t worry GMT. You’re now a part of the “you know nothing” club. It’s a pretty big club, actually (as most of the regulars here on CribChatter are probably in it by now)- but it’s kind of fun to be in it.
Remember, Joe Zekas knows all. Always has. Always will.
“Maybe some of the other longtime readers can refresh my memory if they remember that video.”
I remember the two 22-yr old girls at a subway who bought a condo as a dorm room and I thought that was pretty hilarious. Then again if they’re from a family with $$$ to burn why not spend it on little princess lmao.
Sabrina,
Lauren and Matt bought a 3/3 penthouse, so they paid well over $400. Matt had previously bought from CMK at 630 Franklin. You can see their video and video with other 235 buyers here:
http://www.235vanburen.com/video/
Your sarcasm, Sabrina, doesn’t change the fact that i know an awful lot about real estate and your regulars know next to nothing.
No- this was a husband and wife.
Here it is. Matt and Lauren. The video is from 2010. It was the penthouse.
http://www.youtube.com/watch?v=R0_7dIs2yg0
“Sabrina, doesn’t change the fact that i know an awful lot about real estate and your regulars know next to nothing.”
Yet, ex-post, their advice was far, far better than yours, JZ. Who at best could claim to be silent on the deteriorating RE market between 2007 & today, in reality was hyping it, but claims to have been brutally honest about the state of it.
Ex-ante most of the regulars here were pushing caution. Not good ol’ Joey–a true shill to the end. By the way you make judgements JZ I’ll take “ignorance” any day. Because I’m not stuck in an underwater Chicago condo.
“Your sarcasm, Sabrina, doesn’t change the fact that i know an awful lot about real estate and your regulars know next to nothing.”
Yes- they know NOTHING. They are all clueless idiots.
But you Joe- all knowing real estate expert- you called the bust. You SAID it was going to happen. You WARNED everyone reading your site. You told them NOT to buy. You tried to talk Matt and Lauren against buying this condo at 235 W. Van Buren pre-construction when they already OWNED a condo in another building.
But they just didn’t listen.
All that real estate experience- gone to waste on clueless people.
By the way- what are Matt and Lauren going to do when they go to sell their “over $400,000” unit? The other 2/2s in the building are selling, if at all, for $260k. They’ll have the most expensive unit in the entire building.
Yikes!
Bob,
Your lies can’t change the fact that we reported extensively and honestly on the downturn from its inception, and also linked to many 100s of articles about it. We gave our readers a far more comprehensive view of the state of the market and the differing views about it than they found here.
There’s a lengthy record at YoChicago that anyone can match against your fictions, but that’s never stopped you from lying about it.
Sabrina,
I don’t call markets, and I don’t tell people what to do. You’ll find that to be the case with most people who know a lot about real estate.
I leave calling markets and telling people to buy or not buy to uber-wise people like you.
P.S. Matt and Lauren bought a 3/3 penthouse. What relevance do the smaller low-floor 2/2s in the building have to that?
“I don’t call markets, and I don’t tell people what to do. You’ll find that to be the case with most people who know a lot about real estate.”
That’s a lie. In 2007 on Yochicago you called anyone who was a housing bear stupid. You said there were hundreds of newly minted big firm lawyers to snap up all those expensive downtown condos and that the real estate market would be just fine. You banned people from Yochicago who were making bearish or negative comments (I understand why- as all your sponsors didn’t really appreciate being told that the sky was falling.)
Whatever Joe.
“What relevance do the smaller low-floor 2/2s in the building have to that?”
I only remembered this penthouse video in reference to your mocking of GMT’s comment wondering if 235 was a budget building of some kind. I remembered this unit being way more expensive (but, of course, they bought pre-construction. Who knows what it would sell for now.) You were rude to GMT- but his question wasn’t a dumb one considering there are units like this penthouse in the building. But maybe you really insulted Matt and Lauren who apparently bought the only luxury unit in that entire building.
There’s an extensive record at YoChicago, Sabrina, that anyone can match against your grotesque distortions of what I said and didn’t say. Calling me a liar might make you a heroine to your regulars. It makes you something far less appealing to people who examine the record objectively.
Not that it matters. Neither you nor most of your regulars have any regard for facts.
“There’s an extensive record at YoChicago, Sabrina, that anyone can match against your grotesque distortions of what I said and didn’t say.”
Yes- I’ve seen the record.
If anyone else wants a good laugh- go look around in the archives in the summer of 2007. There’s some GREAT threads on YoChicago with Joe verbally attacking all the bears and banning people. Good stuff!
Ah- those were the days…
Sabrina,
In the world beyond CribChatter, fact-based disagreement isn’t an attack, and banning shrill name-calling anti-semitic racist know-nothings is the only way to preserve civil discourse.
That’s the great thing- this world IS Crib Chatter. Yay! We get to have conversations (and yes, disagreements) here.
“and banning shrill name-calling anti-semitic racist know-nothings”
No Joe. You banned everyone who ever mentioned buying real estate might be a foolish financial move on your site over the past several years. You make up things such as racist and anti-semitic to try to lend credibility to your censorship but in reality you were very quick to ban all of those with a dissenting viewpoint regarding the state of the real estate market to be either rosy or at best not destined to fall in quick succession.
You are a liar Joe Zekas and most on here know it, and you site is now a desert tumbleweed town in comparison.
You also hate sabrina for running a forum that allows open discourse and is light on moderation. Because you’re old Joe: you’re a shill from a bygone era who never quite got that in this information age the channels can’t be controlled to a T anymore. You don’t have 100% control over the marketing medium here and elsewhere on the internet aside from your site and we all see how it drives you nuts.
You’re just an old bitter liar who failed at basically every occupation he ever tried. Which in your case is a couple dozen, apparently.
What were we talking about?
Oh yeah. 235 W. Van Buren.
I haven’t written a post about that building in a long time. It’s funny how it just kind of appears in these articles about new construction because it has SO many units.
Outside of the downtown, new construction is selling pretty briskly. Developers are wading into the 10-12 unit buildings now. The expensive $600,000 3-flat units are also selling quickly in places like Lakeview and LP (even though similar units but built in the 2000-2006 era, sit on the market unsold for months.)
Buyers want “new” and, apparently, in smaller buildings, single family homes, or townhouses. If they want high rise living, they’ll just rent it.
But, Bob, there’s this nagging little thing called a factual record that doesn’t square with what you’re saying.
I don’t hate Sabrina. I find it rather humorous that someone who positions him / herself as my nemesis on Twitter has less than 8% of the Twitter followers that YoChicago has.
P.S. Bob – YoChicago had just over 50,000 unique visitors last month. Our first 50K month.
“I find it rather humorous that someone who positions him / herself as my nemesis on Twitter has less than 8% of the Twitter followers that YoChicago has.”
I don’t care about Twitter Joe. But I DO feel like the twitterati might want to get updates on the posts that way (or on their phones etc.) So that’s why I finally set it up. Same with Facebook. I hate it! (sorry.) So if anyone sends me a message there- I’m not apt to reply (although I will reply on Twitter or e-mail.)
But yes, Bob is right about one thing. It drives you NUTS that you can’t ban him and Pete and everyone else on this site you consider idiots (basically everyone). Because you have no control here.
Joe- you’ve said yourself that we are insignificant little peons. You’ve said Crib Chatter doesn’t matter. Why are you here??? Go away. Leave us to have fun. You’re such a debbie downer all the time.
I’d really rather not be here, Sabrina. But, when people’s idea of “fun” is spreading misinformation about my clients …
“But, when people’s idea of “fun” is spreading misinformation about my clients …”
Misinformation? Joe, does 235 have real hardwood floors? Does it have real wood cabinetry? Is it selling signicantly slower than planned? You claim that we’re all spreading misinformation yet you fail to provide a single shred of evidence to support any of your claims. You simply say, “GMT, Sabrina… you’re stupid and wrong.” That’s the gist of your rebuttle. They’re paying the bills so they can do no wrong. You won’t even acknowledge that the building has experienced sub-par sales.
You’re no real estate expert… you don’t even care about real estate. You simply take a check and then spew whatever garbage your clients tell you.
So what is your job, Joe? What services do you render? Do they pay you to actively seek out negative comments about 235 and then post commentary supporting 235? Is that in your job description?
And for all my friends out there, have a great night. Maybe I’ll pick this up again tomorrow if there’s anything new 🙂 But for now, I need some sleep as I have a conference call in 5 hours.
FWIW – Various internet postings on CMK 235 W. Van Buren
I’m breaking it up the postings due to the limit on multiple URL links in one post…
I won’t speculate on this specific developer’s motivations behind their actions at that point in time.
I can though comment on other past events that have taken place here in our little Chicago RE corner.
Per Joe Zekas from back in July 2009
Quoting from an e-mail from Scott Hoskins, CMK’s marketing director: “the developer is absolutely not renting unsold units. For sale only.”
http://www.skyscrapercity.com/showthread.php?t=430425&page=17
Per Joe Zekas from back in Feb 2012 in a sponsored post
“235 Van Buren, a striking new Ralph Johnson-designed 46-story condominium in the Loop, is launching a rent-to-own program on selected units.
One-bedrooms will start at just over $1,500 per month and 2-bedroom, 2-bath units at around $2,000 a month. Heat, air-conditioning and gas are included in the rent.”
rest of post here:
http://yochicago.com/235-van-buren-launches-rent-to-own-in-the-loop-program/25583/
===
and now for my commenting
There’s a difference in 2009 and 2012 market conditions (e.g. supply mix, pricing, financing rates).
For various reasons (loans due, cash flow, investor pressure, etc.) , there is pressure to monetize unsold units by converting them to rentals e.g. Walton on the Park
again I’m breaking it up the postings due to the limit on multiple URL links in one post…
Turnover ( or unrest ) at 235 W Van Buren
Numerous time, we’ve seen it before and we’ll see it again REGARDLESS of which building and which developer: The lovely time for residents and developers when the HOA is turned over to the residents…
Here is/was the official? facebook page for 235 W. Van Buren (I’m not sure if it is still active)
http://www.facebook.com/groups/89719257307/?ref=ts
And here another 235 W. Van Buren facebook page ( maybe unofficial? ) where some residents are commenting
http://www.facebook.com/235WestVanBuren
Blog found on the internet
http://blog.235vanburen.info/2012/05/owners-discussion-board-has-been-censored/#more-203
@GMT
Regarding your comment on 235 W. Van Buren:
“Misinformation? Joe, does 235 have real hardwood floors? Does it have real wood cabinetry?”
From the facebook link above, one poster mentioned kitchen laminates. So at least for one unit, its not real wood cabinetry.
Warranty Issues Unattended- Quality issues: Kitchen laminates peeling off . On September 2011, six months after closing on my condo, I noticed that some of the cabinet doors of my kitchen started to peel off just because. I Issued a warranty request using Forth Group’s website protocol. Weeks later they sent some technician from Bovis the contractor who manufactured our kitchens. After they assess the damages, they said they will send replacement doors within 30 to 60 days. That was by early Fall 2011. Well, as of today , May 6th 2012 there is no trace of those replacement doors after I literally beg management, CMK and everyone in their office to help me out to resolve the problem in a timely manner.
==
On another note, I’m personally ok with engineered hardwood floors in high-rise buildings. For me, the trade off for real hardwood floors vs. engineered hardwood floors really depends on the building (ceiling height, noise transmission) and my budget.
Please let’s not make JZ the new Clio. Clio was at least entertaining. JZ is simply monotonous.
oh snaps did joey z just get OWNED by chichow and GMT?
now the question becomes does joey z still get paid for failing to cover up for his client? i wonder if he will even get a check this month? shoot joey z got owned so bad that he may not even get his social security check this month either and his AARP card my get revoked.
Engineered wood. Pergot is garbage.
Laminate cabinets? They can’t even bother to get a veneered mdf? Laminate cabinets lie Pergot cabinets. thats pretty damn cheap.
Sigh. Fair-minded people will read through all the hysterical dreck and see just how thoroughly GMT has shifted ground and how little chichow’s links amount to.
P.S. A rent-to-own program is not the same as converting to rentals. Different goals; different impact.
“how little chichow’s links amount to”
so your saying that dont trust what is said on the internet. is that what your trying to convey?
dont trust it unless it comes from paid spokesperson.
I’m saying what I said, Groove. It was addressed to fair-minded people, not to you.
“Yes – just look at the sales history, rather than GMT’s fantasy version of it.”
Where is it? You asked us to look at it then only mentioned 21 contracts in 1Q12. Fair minded people will see that you haven’t provided the sales history. The rest of your comments have not been very informative, unless one is an insecure buyer who needs to learn a lesson from an expert. So, where’s the sales history you asked us to look at?
@Joe Zekas
I regret that you feel that those links don’t amount to much.
With respect to your point on the differences between rent and rent to own, there is an article here from the New York Times discussing the usage of rent to own:
http://www.nytimes.com/2008/12/07/realestate/07COV.html?_r=1&ref=realestate&pagewanted=all
Some key points in the article are
a. “In most cases, the accumulated rent is used to lower the purchase price…”
b. “Renting to own can be attractive for both sides of a real estate transaction. It brings cash flow to properties that otherwise might be stagnant. And buyers lacking adequate down payments (perhaps because of stock losses), struggling with poor credit, or even recovering from a recent foreclosure, can build up savings and rebuild creditworthiness in order to get a mortgage.”
I hope you find that this link supports the point that whether a developer rents unsold units or puts together a rent to own program, the result for the developer is a monetization of that asset.
Joe Z:
“and how little chichow’s links amount to”
“A rent-to-own program is not the same as converting to rentals. Different goals; different impact.”
“I’m saying what I said, Groove. It was addressed to fair-minded people, not to you.”
again your flattery will get you in my pants but you need to work harder to win my heart
“Yes – just look at the sales history, rather than GMT’s fantasy version of it.””quarter after quarter they have been paying those prices”
“You call me a cheerleader when all I do is question your highly questionable assertions and flesh out the factual record.”
“Neither you nor most of your regulars have any regard for facts.”
“In the world beyond CribChatter, fact-based disagreement isn’t an attack”
Again, where’s the sales history you asked us to look at? All this bloviating about facts yet you haven’t provided us the sales history. A fair minded person would conclude that you are avoiding something.
Regarding Sabrina’s comment on “At this pace it could take them a decade to sell out the rest of the building.”
I dunno about a decade to go, but if I use the following as data points:
Initial sales in 2007.
Now 300 units left (Joe – I realize you say less than 300 and perhaps you can’t provide me an exact number, but I am willing to work with a lower upper bound)
12 closing in 1Q12
Projecting straight line 300/12 = 25 more quarters = 6+ more years from 2012 so 2018 for final original sales.
so a decade to sell out the building from start to finish
When the book is closed and the final chapter written, I think we can all agree that these were volatile economic times.
G:
Where is it? You asked us to look at it then only mentioned 21 contracts in 1Q12. Fair minded people will see that you haven’t provided the sales history.
JZ:
How many unsold units in the building? I don’t have the exact number, but it’s fewer than 300. Project out based on the current worst quarter’s closings, and how do you get to a decade?
G,
A literate person will read the reported sales in the linked Crain’s articles, and will undertand that not all the listings are in the MLS. You understand the MLS angle, so you’re simply being churlish.
chichow,
Q1 closings reflect (mostly) Q4 (typically the slowest Q) sales.
Have these been times that lend themselves to straight line projections from a single data point?
@ Joe Zekas
“chichow,
Q1 closings reflect (mostly) Q4 (typically the slowest Q) sales.
Have these been times that lend themselves to straight line projections from a single data point?”
Point noted – it is from the information that you provided:
“http://www.chicagorealestatedaily.com/article/20120426/CRED0701/120429844/local-new-home-sales-could-see-first-annual-rise-since-2005”
Given your existing relationship with the developer and G’s repeated requests, a better projection is possible if you provided the sales history.
Not to mention his request that we look at the sales history, yet he provides none. What was the point of the mls comment, other than to avoid giving us the sales history he asked us to look at? A fair minded person sees right through the shill’s BS.
G,
You’re just playing troll. If you want the history so badly, you know how to look it up at CCRD.
“G,
You’re just playing troll. If you want the history so badly, you know how to look it up at CCRD.”
so wait you wont give factsor link if someone else is making the claim (i.e. Groovesterrockone)
and no you wont provide the facts or link when YOU make a claim?
did it just get a little shilly in here?
“You’re just playing troll. If you want the history so badly, you know how to look it up at CCRD.”
You’re certainly not playing a shill. You said to look at the sales history of your client at 235 “rather than GMT’s fantasy version of it.” Where is it? I, too, would like to “flesh out the factual record.” You see, I also have a “regard for facts.” Try to keep in mind that “a fact-based disagreement isn’t an attack.” Is there a problem with the sales history that your client would not like highlighted? Otherwise, where is it?
Groove77
GMT claimed buyers wouldn’t buy at 235’s prices. I linked to articles demonstrating they had. You want to claim I didn’t provide the link? And you get 2 thumbs up for not reading?! Welcome to CribChatter.
Face it joe, you suck!
hd,
Still can’t outgrow the fact that you weren’t anywhere near good enough for Biglaw and I was?
Every attorney I know in your circumstances hates his life, and you don’t come across as any different.
We’re still going strong!
Joe, I haven’t seen the response where you support your client’s shoddy work on the interior of the units. Good thing 235 got that award for the exterior because there’s no way they’d receive any good recognition for that crap on the inside.
And just because a dozen people buy units doesn’t proove my assertion wrong. By my count, they’ve sold about 400 units, leaving them with approximately 300 remaining. Buyers aren’t going to purchase at current prices. Sure, maybe a few, but not enough to ease the minds of the developer or residents.
I love this quote from CMK: “235 Van Buren… redefines what can be expected from Chicago condos.” Anyone care to guess how they’ve redefined expectations?
“[Joe Z ripping on HD]”
Petty much, Joe?
“Still can’t outgrow the fact that you weren’t anywhere near good enough for Biglaw and I was?”
Yeah Joe, that’s it. Once again, showing the world your intelligence. Keep up the good work, Joey!!
You know, GMT, some people think that 100s of buyers plunking down their money when they have lots of choices out there is “good recognition” for the interiors.
And some people think that 21 buyers signing contracts last quarter is a more accurate take on whether buyers will pay 235’s current prices than yours.
“100s of buyers plunking down their money”
In fha-rmville? That would be the taxpayers’ money, in effect. Alot of it already gone. Not from the developers and their shills, of course. They keep their cuts.
“Still can’t outgrow the fact that you weren’t anywhere near good enough for Biglaw and I was?”
How does 5 years as a monkey-work associate over 30 years ago at a firm you didn’t make partner at something to brag about?
Taught me some good mental habits, JMM – like not making unwarranted assumptions about what kind of work people did or why they quit practicing law.
You’re usual a few cuts above the rest of the crowd here, but it’s Friday and everyone else is piling on, so …
“Taught me some good mental habits, JMM – like not making unwarranted assumptions about what kind of work people did or why they quit practicing law.”
So then why did you assume that I work for one of CMK’s competitors? Just because I’m calling a building out for shoddy development?
And I checked out the blog and Facebook page someone previously mentioned. WOW! I am glad I didn’t purchase one of those POS.
LOL!
Sabrina v. Joe Zekas is my favorite local internet feud ever. It warms my heart to the point of palpitations.
I bet if Zekas landed a client that billed pergo floors as “hardwood floors!” he’d defend them as well, even if challenged, and never run an expose in the vein he does. Joe has some decent insight, but his biases are obvious.
“You understand the MLS angle, so you’re simply being churlish.”
I will give JZ credit for using the word ‘churlish’. As you all know, I love all things medieval, and churl, which is a modern english variant of the anglo-saxon ‘ceorl’, was the lowest level of a freeman in the anglo-saxon society. Churlish has evolved to mean low-class behavior, which of course, arose as an insult, meaning one acted in a manner like the lowest class of freeman in 6-11th century Britain.
“arose as an insult, meaning one acted in a manner like the lowest class of freeman in 6-11th century Britain.”
Aren’t the real churls those who are heavily indebted to real estate (ie: those who followed Joe’s advice the past five years)? They sound like the real modern day serfs to me.
That depends bob, I got an amazing deal. I may have timed da bottom purrrrfectly. Or maybe not. Time will tell. In the meantime I have 2200 sq ft of finished space to live, a backyard and a reasonably comparable commute.
I do wonder, how many residents at 235 west van buren, are dog owners and allow their dog(s) to shit on the balcony in the colder months. At 700+ units, I’d imagine it would have to be more than a few. I’d hate to be that looper office worker walking below on a windy winter day!
“I may have timed da bottom purrrrfectly.”
You didn’t with regard to interest rates. Why should I think with prices?
But he gets to re-fi, so no harm – no foul.
“But he gets to re-fi, so no harm – no foul.”
Because that’s totally free and there are no transaction costs in that?
Sorry bob. I meant to type small but typing no was easier when i was on my phone focusing my energy on droppin my morning deuce. Just roll the costs into the new i/o loan anyway. It’s all so simple.
At the end of the day it don’t matter so long as he loves the place.
Yesterday I was walking around that area on the south side I’m find of. I could definitely see myself living there (ie in that 500k house featured on here). Just hope there’s no spike in house prices between now & then.
At some point who cares if prices decline as rates are so low. I’d rather overpay by 10% then have 150bps higher on the mortgage note.