No Housing Bubble in Chicago? 4350 N. Broadway
For the last several years many “experts” have said Chicago wasn’t in a housing bubble (as they were apparently having on both coasts where prices were running up 20% a year or more.) In Chicago, prices went up “slowly” and there was no mania.
Really?
Maybe the experts should ask the owners of condos at 4350 N. Broadway, a 10 story mid-rise building built in 2004 in the Buena Park neighborhood at Broadway and Montrose.
One penthouse unit is going to foreclosure auction this week.
Unit #1010: not sure of the size but at least a 2 bedroom, 2 bath
- Sold in January 2006 for $557,500
- Sold in August 2006 for $650,000
- Foreclosure auction price of $482,081
Better yet- skip the foreclosure auction and buy a penthouse unit just down the hall that’s owned already by the bank.
Unit #1012: 3 bedrooms, 2.5 baths, 1950 square feet
- Sold in December 2005 for $711,000
- Currently listed for $399,000
- Listing states it is “sold in as-is condition. Great opportunity!”
- Assessments of $675 a month
- Great Street Properties has the listing
That’s a 44% price reduction.
There is one owner trying to sell the old fashioned way.
Unit #802: 2 bedrooms, 2 baths, 1275 square feet
- Sold in July 2004 for $326,500
- Listed for $300,000 (plus $25,000 for the parking)
- Assessments of $338 a month
- Listing says “Motivated Seller”
- Dream Town Realty has the listing
$711,000 for a 3 bedroom penthouse in that location?
No. There was absolutely no housing bubble in Chicago.
Aw, c’mon. You’ve got Jake’s Broasted Chicken basically across the street and all the fun and frolic of Graceland Cemetary just to your west. How can that be beat? And don’t forget the traffic that the Target will bring right outside your front door.
Seriously, what is shocking to me is that people obviously thought that they would be able to sell them for more than they had paid for them–$711k is ridiculous for that, but can you imagine someone paying $830k or more for that–$830 is based on the 1/06 to 8/06 sales of #1010 (which, btw was 100% financed–$455 1st and $195 2d–and not the only one bought in the former owner’s name in the building–along with another house for over $1.3mm in not quite 4 months–$2.7MM borrowed, total).
It’s the same surprise I have about anyone buying in Trump or the Spire–it may be somewhat reasonable if you are (a) rich and (b) employing it as a currency hedge, but otherwise, do you really think that you’ll get someone to pay even 20% more than your $(1/2/5/10) million purchase price in inflation-adjusted dollars 10 years from now?
That’s a 44% price reduction.
———–
and it is *still* too expensive!
What overpriced little dumps. This building is just one more pile of high-rise ticky-tacky, replete with malevolently “open” kitchens (saves building walls)bottom-of-line kitchen appliances, and developer -grade cabinetry and fixtures, all in a small, cramped space devoid of detail or interest.
Guess I’ll remain in my beautiful $815/month (heat included)vintage rental for a while. Given a choice of my place or this one, for the same rental, I’d take the one I’m in, no contest.
Places like these will be crowding the rental market soon. Guess what, most of the new cookie-cutter condos will lose value rapidly relative to comparable older condos or SF houses, and will end up being permanent rentals.
An update on a property above—#1012 at 4350 N Broadway—closed in Feb this year for $405K which included 2 heated garage spots. I represented the buyer. Yup, this was a foreclosure — not in bad condition when my guy bought it — and had sold a few years ago for $700K+. Of the 12 penthouses in this building—several sold back in ’05 for about the same amount. Many of us active in the area were shocked by these sales as we just weren’t selling condo’s for any amount near these sales back in ’05.
Interesting, of the 7 or so that sold for above $700K—all ended up being rentals. Odd, eh? Why would someone pay $700K for a brand new condo and rent it out is a mystery. Over time it became evident that the renters weren’t taking care of the units and weren’t paying rent. At the same time, the owners of these units stopped paying their mortgages, condo fees and taxes. Surprise–1 foreclosure recently sold (#1012), 2 more are pending (#1001 and #1004, both under contract in less than 20 days). #1002 is on the market (beat inside) and I suspect that #1003, #1005 and #1007 will be on the market soon as all are vacant. That will take care of the foreclosure issue in this building–to the best of my knowledge there aren’t any other foreclosures elsewhere in the building and very few in the area.
SO what happen to the PH level at Buena Pointe? GOOD question. I would give anything to review the original lending files of the units that sold at $700+ in ’05. I cannot imagine what is in those appraisals as comparable sales—they just didn’t exist. So whatever lenders and owners got nailed on this–they deserved it. Unfortunately the condo assn and other owners in the building have been forced to deal with the PH’s (due to lack of payment of monthly fees), but by the end of this year as all the foreclosed units have been sold and new owners make payments–they’ll be in good shape.
This is a good building with surpising decent lake and some city views. The lobby is very nice, it is well-managed, the board is active, the roof top party room/outside decks is phenominal AND ++ for the garage—you can still get a second spot (for about $20k).
SO, I wouldn’t use this building as evidence of bubble or not. Something odd went on here, but I haven’t seen this type of a % price decrease elsewhere on the northside (to the best of my knowledge).
Thanks for the update on this building Mark. Unfortunately, situations like this are far more common, even on the north side, than you might believe. I uncover house sales (and prices) that seem highly irregular on the north side at least once a week.
The mortgage fraud was everywhere.
I’m sure–these lenders took a risk and now they’re paying for it–lending standards have been far too loose the last 5 years or so, so its good to see some regulation to this.
FYI- Three pent house units that each come with 2 indoor parking spaces are for sale at $270K, $290K, and $300K. They are all foreclosed and in great condition. Unfortunately, taxes for these units are $7K-$9K per year without the exemption.
If you’d like to view any of these units http://www.jeffnobleza.com
Definitely mortgage fraud. Foreclosures are being driven by outright mortgage fraud and speculation. I guarantee the loans were done as “primary residences” with the borrower never moving in the property. I also bet they were “stated” income on top of it. Probably had a fake appraisal or the lender’s call center underwriters were so overwhelmed and so far removed from the Chicago market, the appraiser probably could have used comps down in Lakeview/Lincoln Park and the underwriter wouldn’t have known the difference since the comps were within a 1 mile.