One Luxury 3-Bedroom Duplex Is Under Contract, The Other Is A Short Sale: 1955 W. Cortland in Bucktown
We last chattered about this top floor duplex up 3-bedroom at 1955 W. Cortland in Bucktown in August 2010.
See our prior chatter here.
Then listed at $849,900, many of you thought a buyer would just buy a single family home in the neighborhood for the same price (or cheaper) instead.
The listing was withdrawn from the market in September 2010 and re-listed in May 2011 at the reduced price of $799,000.
It is now under contract.
If you recall, the building was new construction in 2006.
Unit #3E has 20 foot high ceilings in the living room and 3 outdoor spaces, including one deck measuring 20×18.
The kitchen, according to the listing, has custom Italian cabinetry along with Viking appliances and Grohe and Duravit fixtures.
There is also a separate laundry room with a much coveted side-by-side washer/dryer.
In the Redfin listing for the property, the Redfin agent remarked: “Association is doing some preventative work on capstones with special. Sealed in October. ”
Jude Ellis at @Properties still has the listing. You can see the pictures here.
Unit #3E: 3 bedrooms, 2.5 baths, 2800 square feet, duplex up
- Sold in June 2006 for $855,000
- Originally listed in April 2010 for $959,000
- Reduced
- Was listed in August 2010 for $849,900
- Reduced
- Currently listed at $799,000
- Under Contract
- Assessments of $283 a month
- Taxes of $12,172
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 15×15 (second floor)
- Bedroom #2: 12×11 (main floor)
- Bedroom #3: 13×16 (main floor)
- Den: 17×10 (second floor)
But don’t despair if you really wanted this property- because its twin, Unit #3W, is also on the market and now also listed at $799,000 but it’s a short sale.
It also has 20 foot high ceilings and luxury finishes.
The unit has an Arcliena kitchen in teak and stainless steel with a built-in dining room table.
There are 8 foot custom teak doors in the bedroom.
The baths also have extensive tile work and it has 3 outdoor spaces.
Will someone eventually get a deal on Unit #3W because it’s a distressed property?
Maria Casciaro at @Properties has the listing. See the pictures here.
Unit #3W: 3 bedrooms, 2.5 baths, 2800 square feet
- Sold in April 2006 but I can’t find a sales price anywhere
- Lis pendens foreclosure filed in October 2009
- Originally listed in April 2011 for $879,000
- Reduced
- Currently listed as a “short sale” for $799,000
- Assessments of $233 a month
- Taxes of $10,989
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 15×15 (second level)
- Bedroom #2: 12×11 (main level)
- Bedroom #3: 13×16 (main level)
When will we find out what Unit 3E went for? This will be interesting, the servicer on the loan on Unit 3W is unlikely to approve a sale for less than 3E sells for…
These homes in this area are consistently selling for top dollar and will continue to do so. I expect a 5% price reduction before it goes under contract. I think this is priced fairly for a beautiful home but I would not expect it to be much cheaper. and i dont think homes in this area will go much cheaper and soon wiht interest rates rising and home prices rising and taxes rising its best to lock in now and soon.
GroveHD77 to the rescue
Beautiful home…proving that people do not always prefer SFHs. Some would rather have perfect finishings like this than a SFH at this price which would need work to look this good.
Ran a quick search on Redfin of 3br that have sold for over 700k in Bucktown/Wicker Park in the last 6 months. This would be the first.
Also, if you buy now and the QRM portion of Dodd-Frank gets implemented, the spread between 20%-down mortgage rates and less-than-20%-down mortgage rates will blow out. This will whack high dollar price homes in particular. Also, if rates rise significantly, without simultaneous wage inflation, this also puts downward pressure on home prices.
I personally think right now’s a decent time to buy because neither of these things will happen because of (wrt rates) high unemployment and (wrt QRM) effective lobbying efforts. However, I would LOVE if QRM went into effect. 5%, 10%, 15% down buyers would find their mortgage rates so painful that they would move their price point down. The rare buyer who can bring 150k, 300k, 500k to closing would have much less competition.
Don’t worry, the government will keep propping up home prices and I won’t get my way. But Groove, if our government does the responsible thing, your predictions about this price point and neighborhood will get smoked. Not holding my breath.
Gorgeous. Also, home-as-atm alert. >200k cash-out.
This is a nice place for sure.
not far from Lemmings
Nice place, not sure if its 800k nice, but I like it.
Only a few things I would change would be the pedestal sink in the powder room and perhaps the sink layout in the master bath, having two sinks right opposite each other while it looks nice, is rather pointless since you both can’t really use the sink at the same time. But since they are new i’d likely leave it a lone for a long time.
Also I might do some one way glass around that changing room area to block out noise but keep the privacy and light and increase the hvac coolant efficiency (I would assume a 2 floor system)
So Coogan, are you saying rates would be like the following:
5% down – 5% base rate + 2% risk premium = 7% rate
10% down – 5% base rate + 1.25% risk premium – 6.25% rate
20% down – 5% base rate +0.5% risk premium – 5.5% rate
Those spreads are probably not completely unrealistic. This would absolutely destroy the market even further, and would really benefit those who saved some money and are willing to fork it over.
Instant Equity Destruction
That is where the market needs to go. Also, the mortgage interest deduction over the next 5 years so that it no longer exists. It won’t hurt the middle income people as much because of the standard deduction and lack of other significant deductions.
The government should not attempt to engineer outcomes, especially after the horrible housing crash that occurred from 2007-2011.
The next bubble to burst is student loans/college financial aid.
“Real estate recession likely over, experts say!”
http://www.chicagojournal.com/News/07-06-2011/Real_estate_recession_likely_over,_experts_say
Did I miss the buy-low boat!?!
guys, iI need some advice.
There is a certain tier in a certain building that we like.
A higher floor (30+) priced at high 600s just closed including parking for 600K. Two lower floor options (12 and 18) are available but are priced in mid 600s without parking. 12th floor one has nice finishes while the 18th floor has ugly bathrooms and an over-mount hideous sink in the kitchen.
We have 200K down payment; should we make an offer now or you think prices will further trickle down? Also what do you think the value for these units should be given that 30+ sold at 600K? Oh I should mention that the view is as good so nothing is blocking it for the lower floors.
QRM only impacts non-Fannie/Freddie loans so it wouldn’t have much of an effect on 90% of buyers. QRM would restrict financing for non-conventional financing, so basically the jumbo and alt-a markets. I am not convinced QRM is really necessary as the banks have already constricted lending to all but the most qualified borrowers in that space.
Even the jumbo financing above 20% down is VERY tight qualification wise.
The market is nothing like it was during the bubble when Alt-A lenders were doing all kinds of crazy high LTV stuff combined with stated/no doc.
if you like it, can afford it, and plan to stay for a long time, why not?
those that say they can predict the bottom are full of crap as hitting the bottom exactly will involve a great amount of luck and life timing.
OMP is a nice building, hope you enjoy it
Dave –
I work for an investment bank trading mortgage backed securities and talk to a few of the biggest mortgage originators.
Total wild card. The spread could be 2%, 5%, 8%… Mortgage originators/banks would need to be compensated for holding a 5% interest in non-QRM indefinitely. This legislation would tie up equity capital they couldn’t use for other investments and lending. I expect the rates to be prohibitive.
But I would point out that it won’t be smooth. The rate for 19%-down could be 9%, while a 20%-down borrower gets a much lower rate 5%. The 20% line of demarcation would be black-and-white.
“5%, 10%, 15% down buyers would find their mortgage rates so painful that they would move their price point down. The rare buyer who can bring 150k, 300k, 500k to closing would have much less competition.”
I’m not yet a person that could bring 150k down to closing and even I want those provisions put in place!
It just makes more sense that someone buying a 700k place should have to put down more than 5 or 10%, and if they can’t, then they shouldn’t be buying a 700k place!
Ultimately what that will do is bring more reasonable prices, and that same place is no longer a 700k place, so maybe they’ll be afford it after all…
Found this article interesting.
http://www.chicagotribune.com/business/breaking/chi-economists-no-rebound-this-year-in-housing-prices-20110707,0,5383577.story
CNNMoney surveyed some economists for housing predictions. Of the 22 who gave specifics, only 3 anticipated prices rising this year. As a group, they predicted a -3.9% Q2 YOY, and -2.9% for the year total.
thanks sonies. how much do you think we should offer given the lower floor thing?
Miumui –
Are the lower floors guaranteed to maintain the views? Just asking b/c a friend bought in a building where the lower floors had the same views but two years later a building partially obstructed views from the lower level units. Sometimes views from lower floors can actually be better…not so high you lose details in the view. For example, we previously lived in penthouse and recently moved down a few floors for more space for the same money. I actually like our current view better b/c its framed in the windows better…not looking down but look at…However, our views are perserved forever so I have no fear of losing it.
If your lower floors will have preserved views you might be able to discount it from a higher unit but certainly not as much if there is a risk that another building might build high enough to block them.
miu, maybe see what kind of discount was originally given , or has been given in the past
Russ – you’re right, FHA mortgages are exempt for QRM and FNMA/Freddie mortgages will be exempt as long as those entities in government conservatorship (aka forever)
Why do you think I put this rant in this posting?
FHA/Fannie/Freddie are irrelevant for a 799k priced condo in Chicago. This price point is in “other 10%” that relies almost entirely on the non-conforming mortgage market.
Today, if you want to get a mortgage with 10% equity on 799k home, yes, they run you through the meat grinder, they check your gardener’s credit, interview your 3rd grade teacher, its a painful process. But in the end, borrowers are still getting these mortgages, with rates in the same ballpark as conforming (maybe 1%-2% higher than conforming).
This would end.
Anyone lacking 180k cash would not get a competitive rate to buy a 799k home. Just take half the potential buyers out of the market and see what happens to prices…
“an over-mount hideous sink in the kitchen”
Hard to believe that was even an option from the developer.
“Also what do you think the value for these units should be given that 30+ sold at 600K? Oh I should mention that the view is as good so nothing is blocking it for the lower floors.”
If you compare the listings for 45th floor v 8th (which I’m assuming are from developer), the delta is $2.74K/floor, ignoring non-linearities. And there’s prob other listings and prior sales to assess differences. Which is separate from question of how you value it of course.
you can get a 15 year jumbo today for like 3.875% and a 30 year jumbo for 5.125%
that isn’t much off from the gov sponsored FHA/VA @ 4.25/4.375
nor is it too far from the conforming rates wich are practically identical to jumbo rates
was reading something interesting today from bob dickey and he shows that rates are still in an extremely strong downtrend, and he expects rates to continue lower for “several more years”
” Also what do you think the value for these units should be given that 30+ sold at 600K? ”
Value is hard to determine as the seller might not have seen the light (likeHD) and could still be in belief that the unit that sold on floor 30+ was an anomaly.
I’d negotiate quickly and painlessly with a very straight forward approach.
First- Determine which unit you want more. A few finishes can be changed over time. If the layouts are exactly the same don’t let a minor detail hold you up and try for the higher floor.
second – Approach that seller with a clearly written letter. Send it via an agent or send it directly to the sellers agent. Document that you are pre-approved, have $200K to put down, and would like to put their unit under contract immediately for XXX price. Detail why you feel the price is fair and then close with the following statement.
“We understand that this price might not be what you expected at this moment in time. If that is the case we understand and will take this exact offer to unit XXX and pruchase their unit instead. We can be flexible on the closing date but must take posession by xxxx date.
I think that this strategy works best if you have given the offer to the higher floor first. There is often a perceived value drop to the lower floor.
I suspect that those sellers may negotiate a bit but will gladly accept your offer! If not repeat the process on the lower floor and purchase that unit instead. Chances are strong that they do not know each other and will not compare notes or act as an oligopoly to drive up your bid so use the same leverage on that seller as well.
Worst case scenario they both turn you down. If that is the case then send an unsolicited letter to “unit owner” at each floor that you would consider purchasing explaining your situation and how much you love that layout. There is a strong chance that one or two are owners considering selling their units but are not currently not on the market.
Good luck and congrats!
So basically anything in the market priced at over $600K is going to be in trouble because the universe of buyers will shrink considerably. I do think that there are people who have the 20%, but would have to go “all in” and have little to no safety net, or would need to move some money around to be able to do it. This is how the entire market should be structured in the long-term with these risk premiums varying depending on the down payment amount. It just makes the most sense in the long-run.
Coogan, yup we are on the same page. I just hear a lot folks mention QRM thinking that it applies to all mortgages.
I agree, it would hurt the non-conforming market unnecessarily. That market has largely corrected itself and competition has kept the rates reasonable. In fact, some jumbos are cheaper than conforming if the buyer has the right profile.
The nonconforming market significantly over corrected, but we are seeing some loosening of the guidelines as the banks/investors figure out the sky isn’t necessarily falling in terms of credit risk of borrowers. Sound underwriting is much more involved than simply saying someone needs 20% down.
QRM is the government again being a day late and dollar short. Regulating mortgages that for the most part don’t really exist anymore and making it harder for banks to make rational decisions about individual borrowers. Under some of the guidelines proposed, Congressman wouldn’t even qualify to get a mortgage under their own legislation.
Miumiu – BTW my strategy is for an existing building with multiple owners and not for dealing with a developer or a building that is not sold out.
as for the higher floor thing miumiu
as long as you don’t have a preference for living on the absolute top floor, and as long as your view is going to be permanently unobstructed, i would go with the lowest floor with “forever views” as I hate the additional time wasted riding in elevators and additional ear popping when living on a high floor, not to mention you can probably get a lower floor discount
but thats just me
“Congressman wouldn’t even qualify to get a mortgage under their own legislation.”
I would love to put them all through a mortgage application!!! Anthony Weiner just the tip of the iceberg.
btw… The scalable rates for different down payments is *exactly* how the market should work if it were efficient.
Jp3.. Unless u have lots of time i suggest BA with a ferry trip to colonia de sacramento and then rio… Still too cool for punta del este or i’d say go too. BA anywhere in ricoleta-soho-palermo you are fine. Cool city. Rio i know much better and can be of more help when u need.
Gringo, the rates are scalable for different rates. The rates just don’t go up as much as most people think. Putting more down doesn’t buy that large of a rate discount. Rates also change based on FICO score. Whether you are buying a condo or a single family or multi-unit.
thank you for the advice guys especially jp3chicago. yes the views are guaranteed.
DZ I was thinking something along your “delta is $2.74K/floor” as well. Thanks!
JP3, brillant!
Good luck with the offer muimui…you’ll have to let us all know how it goes.
“I was thinking something along your “delta is $2.74K/floor” as well.”
It’s certainly one estimate of the value (maybe a touch high as the lists are prob high). Note also that these sellers were well aware of the delta as set by the developer when they were choosing units. They may have a different personal value (as may you) but they’re fully aware of the “market” premium.
Good luck!
The problem with increases in interest rates in the short-term is that there is a lot of pressure on wage inflation. Increases in profits are not going to employees, with the exception of the top executives. Companies are fighting to not have to pay people more than they did last year. The lack of people retiring in management at many companies is causing a glut of people who are qualified to move up, but their bosses are hanging on for an extra 3-5 years because they really love making all the money. Even when they do retire, the next generation of leaders will be paid less in order to be competitive with companies abroad, but also due to increased taxes and regulation.
This property if it sold for asking price would need to be purchased by an established household with a $250K combined annual income. I just don’t see that much potential for the value of that place to go up that much over the next 5 years. Would it seriously go to $900K in 5 years?
funny russ.. I wouldnt think the spread would be that big if you went longer on the term. I would expect a big diff on something like a 5yr. Do you have the numbers? Been w/o much signal the past week so hard for me to do my own homework.
“Companies are fighting to not have to pay people more than they did last year. ”
HR departments know they can underpay people. In many instances corporations are downsizing those with 5-15 years experience and replacing them either with new college grads or those with similar experience but have been on the bench awhile and are willing to settle for far less.
This is in addition to the common and still occurring practice of beefing up staffing abroad or in low cost, low tax regime states and cutting staffing in high cost, high tax states like Illinois.
I don’t see a lot of hope for Chicago overall. Anonny’s “top performers” theory will not hold up because the previous RE equilibrium was attained via this middle management segment. And it increasingly doesn’t exist anymore.
“yes the views are guaranteed.”
most likely the will be but never count on it. law change and are bent to fulfill what ever need (or really clout) is desired at that time.
also trees grow pretty high nowadays with the chemical rain water 😉
@ groove…with my luck they will grow out of bound : )
I thought the parks are guaranteed views. I forgot why though. So you think it can easily change?
BTW, talked to my agent. She said the 600K sale was a special case as a relocation company was involved so I should not hold my breath but she’ll look and see if the other owners are negotiable. Well prices are not going up so I can just wait and keep saving. For all I know the prices might be even coming down more : )
“low cost, low tax regime states and cutting staffing in high cost, high tax states like Illinois”
Compared to the other centers of power, business, commerce and culture in this country, IL is low cost, low tax. If I moved to NY, LA, DC or SF, my income could be the same, but my cost of living would go up (taxes for sure in NY; in NY and SF my housing cost would sky rocket, and in DC and LA it would be higher). Heck, even if I moved to Boston or Seattle, my income would likely go down a bit, but my costs would go up a bit.
“I don’t see a lot of hope for Chicago overall. Anonny’s “top performers” theory will not hold up because the previous RE equilibrium was attained via this middle management segment. And it increasingly doesn’t exist anymore.”
Something else to consider, with regard to Chicago in particular:
More and more people will have the option to ‘work from home’, or where it doesn’t matter where they are based in order to have a certain job.
So… How many people have lived in Chicago in the past because they had to for a certain job?
Or asked another way, as more people have the option of living wherever they want and it not affect their job, will they choose Chicago, or will they choose a city with better weather, more reasonable cost of living, and less of the ‘big city’ logistics and b.s.
And be careful to not overvalue the ‘big city’ amenities (like Museums, Navy Pier) that we have here. Even the restaurant scene here in Chicago I believe are overvalued somewhat.
“So you think it can easily change?”
easily? heck no. will it? most likely never. but its not “guaranteed” thats all.
wards put a good fight and we are better city for it. but he is long gone plus now greed and corruption is more prevalent if not a crisis which the CDC needs to find a cure or contain. so “guaranteed” is not the word that should be used.
hey this reminds me of products that have a “lifetime guarantee”, if the company dissolves and is not bought out then your “lifetime guarantee” is just a word with no mass attached to it.
“easily? heck no. will it? most likely never. but its not “guaranteed” thats all.”
Yes, and who exactly is offering the guarantee and what *is* the guarantee?
“Yes, and who exactly is offering the guarantee and what *is* the guarantee?”
i think it was Paul Vallas?
“if the company dissolves and is not bought out then your “lifetime guarantee” is just a word with no mass attached to it.”
Might not even need to go away–all they need is a bankruptcy. A company can go in and out of Chapter 11 quite easily. In fact so easily some companies do it multiple times in a row.
The building is looking over the park and I had heard that Grant and Millennium are protected views. Something to do with a court ruling or such. Don’t remember what it was though that I had exactly heard.
I think Chicago really competes with other mid-western cities.
“Compared to the other centers of power, business, commerce and culture in this country, IL is low cost, low tax”
I noticed DFW & Houston were missing from your list of cities that are “other centers of power”–why is that? Yours is an argument you made up, with your own cherry picked comps to fit your narrative.
“If I moved to NY, LA, DC or SF, my income could be the same, but my cost of living would go up”
Methinks your argument is centered around “progressive”/deep blue cities. Unfortunately for you businesses aren’t choosing these locations to hire middle-income professionals as much as they were in the past. Look at Sears as an example: one the tax freebies end they’re out of here faster than a NY minute.
You see, anonny, Chicago people aren’t truly fundamentally different than other mid-west people. Yeah Chicago has walkability and a great singles scene and lots of “cultural” amenities that mostly only tourists go to, but when it’s family formation time Chicagoans preferences and needs are the same as St. Louis(ans?), Cincinnatians, Indianapolis(ans?), etc.
The difference is in these other cities you have raise a middle class family on median wages in a house comparable to income. In Chicago it’s drastically out of sync. We’re going below 100 on Case Shiller anonny, because valuations in 2000 were frothy to begin with.
Bob, I think it depends on what you do for a living. If you are in the FIRE industries (banking, consulting, law, etc), the only real options are other major cities. Second tier cities aren’t as much of an option.
Chicago does in fact compete for middle management jobs with other smaller cities. Brand managers/general management types are typically choosing between Chicago, Milwaukee, Cincinnati, Atlanta, Dallas, etc.
Chicago is by far the least value in terms of how far the dollar goes if staying out of the major 1st tier cities. However, for the professional services industries the choice is Chicago, NYC, Boston, DC, SF, LA, etc and in those cases Chicago is by far the best value. Even when I see companies paying cost of living premiums, it in no way makes up for the difference.
If you don’t care about being in a big city with big city amenities and can find a consulting or banking gig in a small city, you can do very well. Most professional services firms pay the same pay scale in off the beaten path cities. The $150k consulting package goes a lot further in the Cleveland office versus NYC.
“The building is looking over the park and I had heard that Grant and Millennium are protected views. Something to do with a court ruling or such. Don’t remember what it was though that I had exactly heard.”
you are correct the battle for the citys front yard has gone on a long time and is a “court ordered/ruling” yet somehow they found a way to vote the children museum to be built at bicentennial park. the loophole trick is that its “under” but yet it still got approved despite the “law/ruling/court order”. luckily Childrens will stay at navy pier.
but yet again it shows its not guaranteed and enough money and clout throw a certain way can change things.
The executives in Chicago often make more than the smaller cities, and so do many of the new hires, but in the middle is where it’s all screwed up. Those with 5-10 years of experience will make the similar in smaller cities for some wierd reason.
If I could work from home, I would be out of Chicago in a heartbeat.
I think working at home is overrated. My job is one that allows for telecommuting, yet no one does it because they think it eventually impact promotion.
“She said the 600K sale was a special case as a relocation company was involved so I should not hold my breath but she’ll look and see if the other owners are negotiable”
Miumiu – Fire her immediately! A real estate agent that you have chosen to represent you as a buyers agent works for YOU and YOU alone. She clearly has missed that point and is already making up an argument and excuses as to why she will not be able to get the deal done on your terms, for a great price, and with your best interests in mind.
Most RE agents are poor at negotiating. They feel that the more negotiations needed in a deal the less likely it will be that they actually sit at a closing table and earn a commission.
Thank her politely and take your offers directly to the sellers as suggested in my example. If those sellers are sharp they can or have already prepared for an offer like this and will get a reduced commission from their agent. If you have not toured those units with her then you are under no obligation to use her services. It is clear that with her attitude she will only cost you money!
Sending the unsolicited letter to other current unit owners and documenting that comp will also be under no obligation from the current agent. Whatever you do make sure not to take her pricing advice too seriously as she is just negotiating to get you up to a price that will allow her a clear shot to the closing table.
“I think working at home is overrated. My job is one that allows for telecommuting, yet no one does it because they think it eventually impact promotion.”
I guess it depends on the organization; mine is one where, even though there is an office, no one has permanent offices/cubes, it’s only ‘hotel cubes’.
As more organizations realize the value and savings from this, especially as remote connectivity and collaboration tools keep getting better, this will become more accepted.
“If I could work from home, I would be out of Chicago in a heartbeat.”
Yeah but all the other places I’d seriously consider would be just as or more expensive. In an home on the hillside with a water view overlooking the ocean in Maui, ski in-out on the slopes of Vail, in an old white frame home along the shores of Lake Geneva, watching the people passing by along the strand in Hermosa Beach……
A man can dream!
@ jp3chicago, i have toured the 12th floor property with her. She is nice just not aggressive. I think I will write the letter and push her to send it. She has shown us a lot of places for a year now so I feel bad firing her. I honestly think some agents are just not very aggressive; after all if she makes a sale, she’ll get paid so it is in her interest to try.
“If you don’t care about being in a big city with big city amenities and can find a consulting or banking gig in a small city, you can do very well.”
Of all of my b-school peers, the one I suspect will be rich (first) is the guy doing PE/IB in Cleveland. 350k in NYC is one thing, in Cleveland that’s (almost) FU money.
“Brand managers/general management types are typically choosing between Chicago, Milwaukee, Cincinnati, Atlanta, Dallas, etc. ”
Brand managers don’t really get much of a choice, especially at first–maybe between two locations if they’re lucky. The single ones I knew going to P&G in Cincy weren’t too thrilled about the locale, but it’s not like they had a competing offer from Pepsi or Sara Lee here. They don’t hand out brand mgt offers–it is very competitive albeit a different requisite personality than other MBA industries.
General managers (those on the CEO trek) can and will go anywhere, location typically isn’t a primary (or even likely secondary) consideration for them, their spouse maybe.
Also there are far more middle management (80-125k) roles than there are FIRE roles. FIRE occupations might save LP valuations somewhat, but they aren’t saving the entire green zone. And as for foreigners coming to the rescue–compared to NYC, SF & LA Chicago is far less foreigner friendly, at least that’s what I’ve read.
“As more organizations realize the value and savings from this, especially as remote connectivity and collaboration tools keep getting better, this will become more accepted.”
Telecommuting during downturns will be utilized via one of three ways:
1) It can be taken away during downturns as companies don’t need to compete as aggressively on perks to keep employees happy.
2) It can be used during downturns, like casual dress to work, as a side perk so they don’t have to pay their employees as much as competitor X.
3) Telecommuting offers a perfect test environment to see which positions can be effectively outsourced.
There is a lot of talk and hype about telecommuting. But if you can do your job effectively at home most of the time I can assure you a PhD in Bangalore can at a fraction of what you’re being paid and this fact won’t be lost on your organization indefinitely.
“There is a lot of talk and hype about telecommuting. But if you can do your job effectively at home most of the time I can assure you a PhD in Bangalore can at a fraction of what you’re being paid and this fact won’t be lost on your organization indefinitely.”
Not when the entire organization follows the same work-from-home model, and has been for quite a few years (well before and after the ’08 downturn). I think you’re referring to low-skilled, commoditized, low-value-added work.
As crazy as it may sound to some, the same competencies that helped build America into a leader years ago still exist in a percentage of the population.
There are also some companies that are abandoning their outsourced model, and bringing operations back to the U.S.
” She has shown us a lot of places for a year now so I feel bad firing her”
I get that thought as I am an emotional person as well however I would rather send her a $1000 gift card for her troubles and save $15K on the purchase of the property.
“She is nice just not aggressive.”
I like that she is nice as she does not have to be mean to be successful. However she does need to be savvy, strategic, and ultimately a bit aggressive to get the point across to those sellers and their agents that YOU and your hard earned and saved $200K are the answers to their prayers and in turn their best shot for the rest of 2011 and 2012.
Groove – the Children’s Museum in Grant Park was never a done deal. Alderman Reilly was not amused with the presumptions of the museum and their supporters (think a Pritzker was involved) that they were going to be able to waltz into Grant Park and do as they pleased. He was actually gearing up to fight any major changes they proposed.
Miumiu – google Montgomery Ward Chicago lakefront. You’ll get plenty of hits about the lawsuit that Ward took on to keep the lakefront accessible to the poor.
There’s also something about the bridle paths in Lincoln Park staying unpaved per Marshall Field the first.
“There are also some companies that are abandoning their outsourced model, and bringing operations back to the U.S.”
Name one from the Fortune 500.
“I think you’re referring to low-skilled, commoditized, low-value-added work. ”
I assure you that PhDs in Bangalore are perfectly capable of replicating tasks that are above low-skilled. Or is Motorola’s Global Software Group low skilled? You live in 2003 if you think only menial office drones are outsourcable. Howabout many of the IBanks research functions? Analyzing stocks, running models and such..must be very low skilled.
I’ve heard of US airlines moving their customer service departments out of India due to the complaints of poor service and accents. When labor costs are rising 10% annually in China and India and the turnover of workers is 10X that of the US, companies will think twice about outsourcing. In the long-run, the cost savings could end up causing a loss of customers which is bad.
Bob, why don’t you ask Deloitte how outsourcing is going for them. They try to send as much tax work and audit work over to India, but the people in the states end up doing a ton more work reviewing it, and the quality is not necessarily as good. Also, no fortune 500 company wants to have to call their tax guy over in India with a question. Specific clients even have their engagement letters include qualifiers that say that no work will be outsourced to India.
Miumiu to me the fact that she’s shown you tons of properties in a year, none of which you wanted/were able to buy should be reason enough to let her go. Why didn’t she get you in on that higher floor place that went for $600k?
Having said that, I think you’d still be wise to wait until you’re more settled into parent life before spending so much on what will still be a weekend home for you.
“I assure you that PhDs in Bangalore are perfectly capable of replicating tasks that are above low-skilled”
Are there some over there that are decent? Sure. But many others… you’d be surprised how bad they can be. One of my clients uses outsourced resources from Infosys and Cognizant so I’ve had to deal with them first-hand, and it’s almost entirely not good, sometimes to the point of being a complete joke.
One of my buddies was dealing with DuPont trying to outsource some it’s accounting offshore, and it was s complete disaster. They had to abandon most of all of it almost immediately.
Not only that, but it’s not even as cheap over there as it used to be, so a lot of the price advantage is going away as well.
“She said the 600K sale was a special case as a relocation company was involved so I should not hold my breath but she’ll look and see if the other owners are negotiable”
JP3 and Miumiu, I read this as she was trying to set the expectation that this was a one off from the norm.
I would still try JP3 suggestion. Gently remind her that she doesn’t make a single dollar until you purchase a home and you’ve already set your mind that the home you want is valued at a certain price.
at my company Work From Home means you can work as much as you want at home — after putting in your hours at the office. 😀
Icarus you are right. That is what I am planning to do.
Jennifer, to be honest one of the reasons I am hesitant is exactly what you point out. I am so tired these days not sure I really will be up to coming to Chicago in the Fall and Winter most weekends. If the market is not recovering why should we rush. Then again we are not exactly very flexible as once Bob said it if one is not flexible there are not than many if any deals out there. We can expect to get a better price as the whole market has negative gradient but I really like very few units. Especially that i want the city and my husband the lake view and we want low assessments as this is only an in town for us so we don’t feel like paying a ton for heating and cooling when we are only there on weekends. So it is complicated and there is the fear of catching a knife as G put it.
“at my company Work From Home means you can work as much as you want at home — after putting in your hours at the office”
Find a new job where they properly recognize the value you deliver instead just of how many hours you warm a seat! 😉
“But many others… you’d be surprised how bad they can be. ”
You’re right. Never said they were great and companies have ruined entire business units with that decision. Noone really considers Motorola a leader in cell phones anymore..do they?
“Bob, why don’t you ask Deloitte how outsourcing is going for them. They try to send as much tax work and audit work over to India, but the people in the states end up doing a ton more work reviewing it, and the quality is not necessarily as good.”
Don’t get me started on the Big4 and international taxes. A _european_ so badly mangled my international taxes awhile ago that I’m not even sure I can set food in the UK without getting arrested or at least speaking to a rep from the dept of inland revenue.
With outsourcing I know the quality of workers is lacking vs. US counterparts, but that never seemed to be a deterring factor to most big MNCs I’ve worked at pursuing the strategy.
Most of the execs making the outsourcing decision either are remunerated based on savings goals solely or have no idea or care what impact it will have on the long-term health of their organization.
“I think working at home is overrated.”
Try doing a bong hit in your cubicle.
“Of all of my b-school peers, the one I suspect will be rich (first) is the guy doing PE/IB in Cleveland. 350k in NYC is one thing, in Cleveland that’s (almost) FU money.”
wow, yeah I’m sure making 350k in Cleveland, you could be happy. I’m bet even in Cleveland there’s a really nice and decently hip area to live, you could afford to fly somewhere else on the weekend any time you want. 350k in Cleveland is probably like 1M per year in NYC!
“350k in Cleveland is probably like 1M per year in NYC!”
Much more.. you can easily spend a million on an insane shopping spree in Manhattan. About $1,000 if you go wild in Cleveland.
Miumiu-
Developers usually charge about $5k per floor (for the same floorplan) in a luxury type building. So if a unit sold on the 12th for $500,000- you should expect it to sell on the 22nd for $550,000 (if a developer was selling it- with similar finishes.)
The higher the unit- the more expensive it is (even if “view” doesn’t matter you individually.) The 30th would be more prestigious than either the 18th or the 12th.
Personally- in a newer building- I would never pay MORE to live on a lower floor (than what a unit sold for on a higher floor.)
“There are also some companies that are abandoning their outsourced model, and bringing operations back to the U.S.”
Bob- Master Lock in Milwaukee has been adding workers to its Milwaukee plant because they can make the locks for less than in China now. They aren’t abandoning China however. But for some manufacturers- it’s making more sense to increase production here. (Master Lock is owned by Fortune 500 company Fortune Brands.)
The article also mentions GE and Boeing doing the same thing.
http://www.msnbc.msn.com/id/43569240/ns/business-us_business/
I also recently read an article about a prominent patent law firm that has been outsourcing to India since 1999 (basically an industry leader in outsourcing) now moving its Indian operations to North Dakota because of cultural differences and, yes, it actually will cost them less due to rising Indian wages.
“because they can make the locks for less than in China now”
Kinda what I say I see here, prices and wages soaring while the dollar gets cut in pieces. Not much longer til the wage arb closes.. then off to the races again… the world’s GROWING!
I would argue that most India-based BPO has matured pretty well, but the labor arbitrage has definitely deteriorated. The latter might be more of a reason for work coming back.
My husband’s firm spent a fortune letting IT staff go so they could outsource it to India, then spent another fortune breaking the outsourcing contract because it was such a disaster and another fortune hiring and training new local staff. But every time they announced each move the market treated it like good news so TPTB still did just fine out of it.
This whole outsourcing thing is just silly. You should never fully put all your eggs in one basket, especially when you are moving critical operations overseas where there are much bigger risks. Instead, it’s best to do some outsourcing and evaluate it after a couple of years before diving in and then having to retrench and come back and start over. The biggest risks are the increasing wages abroad, potential loss of important IP, and the costs involved in managing and overseeing those operations.
“Groove – the Children’s Museum in Grant Park was never a done deal. Alderman Reilly was not amused with the presumptions of the museum and their supporters (think a Pritzker was involved) that they were going to be able to waltz into Grant Park and do as they pleased. He was actually gearing up to fight any major changes they proposed.”
the P’s were involved and from my understanding were silently backing until there was a push back then came forward and used clout but because Chidrens wasnt 100% yet the P’s didnt pull out the big guns.
yes more fight would have happened but in the end if “they” wanted it there it would have happened.
the same with Pritzker Pavilion, the smoke and mirrors were “its art, not a structure” and “free for the public blah blah” easy to work a angle. its a matter of the angle being feasible, clout, favors returned, and large amount of cash being tossed about.
not saying i agree or disagree with any of my random statements, just pointing out anything can happen, only death and taxes are “guaranteed”
“Developers usually charge about $5k per floor (for the same floorplan) in a luxury type building. So if a unit sold on the 12th for $500,000- you should expect it to sell on the 22nd for $550,000 (if a developer was selling it- with similar finishes.)”
It’s about half that for miu’s building (which I think is fairly a luxury type building) and tier. I do wonder whether the premium may be less b/c the benefit from being higher up may be less when there are no buildings in the way. Also, I’d imagine the premium will vary somewhat with price of the unit, so not pure per floor premium.
“I am so tired these days not sure I really will be up to coming to Chicago in the Fall and Winter most weekends.”
Have to say, the thought of regularly going out of my hometown on weekends with an infant/toddler is a little exhausting. You could spend 2-3 nights a month at whichever top hotel strikes your fancy and be ahead of ass/tax.
re: outsourcing – India is facing a ridiculous boom time right now in ALL respects (especially real estate). The contracts they made with foreign countries ten years ago for outsourcing are all falling apart because the Indians are getting very very greedy, increasingly lazy and more selfish. They are demanding more money, more incentives, more benefits while providing increasingly inferior services. It is the story of the world – it is funny how success changes people in the same way no matter what the culture or country!
“I do wonder whether the premium may be less b/c the benefit from being higher up may be less when there are no buildings in the way.”
I’ve never, ever seen that in new construction in Chicago. You ALWAYS pay a premium to go up in the floors- whether or not you’re in a building in river north where the first 20 floors have NO real views (but the top 10 do) or whatever. You pay more to live higher in a building. Period.
If a unit on the 30th floor sold for $600k- and it’s the same floorplan- then there is no way I would pay anything close to $600k for the unit on the 18th or the 12th floor (in newer construction buildings.) It makes no sense.
My rule of thumb is a 1% premium per floor (not compounded) and that is about what developers charge and seem to get.
I also think you’d have a hard time getting a lender to go higher now either, the appraisal probably won’t overlook that sale.
Groove – I agree with what you’re saying. It’s impressive that the Ward case has stood as long as it has without any major challenges.
“The article also mentions GE and Boeing doing the same thing.”
I don’t know about one of them but the other I can attest will do whatever it can to garner influence spending trivial money (to them) to curry favor with the current administration and be awarded no-bid contracts from the federal government.
This one has cut tens of thousands of US jobs but yet whose CEO is on the current administration’s labor board. Their entire “green” initiative will survive in actuality so long as the government teet is there, but they will surely milk it for positive PR for years on.
Boeing is different: their only real competitor is about to have it’s suckling from european government teets cut off. Inter-nationality affairs are set to get real catty within the EU in the future: Boeing need just look at EADS and laugh knowing their future is secure. If I were CEO of Boeing I’d be looking into expansion soon, too.
Greece is going to default. Portugal is next. The big bad wolf is blowing down some of the PIIGys houses. EADS is Aeroflot circa 1997.
thanks for the advice everyone. CC rocks : )
“I do wonder whether the premium may be less b/c the benefit from being higher up may be less when there are no buildings in the way.”
“I’ve never, ever seen that in new construction in Chicago. You ALWAYS pay a premium to go up in the floors- whether or not you’re in a building in river north where the first 20 floors have NO real views (but the top 10 do) or whatever. You pay more to live higher in a building. Period.”
My question was whether the premium for higher floors in miu’s building, which is demonstrably about half your $5K/floor or Gary’s 1% rules of thumb, might be less than those rules of thumb for other buildings b/c the lower floors had less of a penalty in her building than other buildings where the lower floors have really crap views. I did not suggest there wouldn’t be a premium for higher floors, just wondering why there might be *less* of a premium in her building.
“just wondering why there might be *less* of a premium in her building.”
Maybe GC types are just dickier and more willing to pay-up to ‘face’ their neighbors every time they get to push a higher number button?
“Groove – I agree with what you’re saying. It’s impressive that the Ward case has stood as long as it has without any major challenges.”
I dont have the facts/stories on the top of my head, but i feel that the basic premise of wards case has been violated repeatedly.
the major offenders IMO are the McCormick place, the offensive soldiers field reno, lake point tower dropped on navy pier, and what was the angle for Lakehore East again?
and in the grand view the time period isnt that long, but it did survive the biggest building boom since the 40’s
McCormick and Lake Point, IIRC, are built on Pier Authority land, which are exempt from the Ward ruling. Soldier Field was obviously a patronage/political corruption/McCaskey ram-job. Don’t know anything about the history of the land for Lakeshore East.
“McCormick and Lake Point, IIRC, are built on Pier Authority land, which are exempt from the Ward ruling”
did not know that? thanks.
would that be the same case for miegs field airport? (thank you daley for getting rid of it)
Does this unit (Cortland) have an elevator? Does anyone know?
Ze – BTW thanks for the advice on our trip to SA. I’ll be checking in as the plans get more defined. You mentioned too cold is that the case in November. When is the really warm season Jan and Feb?
miumiu
I did not realize that this would be a second home but I still am in favor. We have an almost 2 year old and take her everywhere. She is a great traveller. One piece of advice I was given that we hold true is that kids are creatures of habit so whatever habits you create early on they tend to adapt to and adhere to….
We chose to keep her in motion. There are limits however. She will not be taking a 12 hour flight to SA with us this fall however she has been on over 25 flights including Costa Rica and Hawaii with little trouble.
Once you regain your strength this is an AWESOME time for the two of you to travel. It is not as easy as pre-kid but it is far easier than when he/she is mobile like our daughter. She just does not understand the seat belt sign yet. She thinks that she is always “free to mover about the country”
@ jp3chicago
“we hold true is that kids are creatures of habit ”
Kind of like man ; )…kidding of course…haha
Our little one will be going to DC this Fall with me and in Christmas is going overseas so it better be a good traveler. A russian lady I know told me just put a drop of vodka in his mouth and it will knock him out…lol…You gotta love those Russians.
BTW, I hope you’ll have a wonderful time in SA. I love the place and its people.
I would hope this building has an elevator, if not… no thanks!
Semi related;
How much premium would you guys place on a unit with say a great view, vs a not so great view vs no view? in the same building (obviously)
I agree with jp3chicago, under 2 is a great time to get in any last big traveling, as it’s much easier when they are still ‘portable’. We still travel a lot with our two, but nowhere near as much as we used to. It is better to get them started young though, same goes for eating out.
Sonies, i assume we are talking high rises in which case to me a unit with no views is not worth much. But i think it depends on original price of a unit. say if the unit with no views at all (blocked by other buildings) is priced at x, similar unit with open views but nothing fab should be 1.1x, with lake views alone 1.2x, with city alone 1.15x, both city and lake 1.25x, if x is less than 300K.
As x gets larger the growth factor gets discounted in my opinion.
‘It is better to get them started young though, same goes for eating out.”
I recall a night out when she was around 6 or 7 weeks old. We were at a great steak place in the West Loop and had a nice dinner. After dinner there was a game on the TV and we sat in the bar for a drink or two. It was maybe 8pm at the latest. The little one was fast asleep in here car seat contraption and was tucked into a dark corner right next to our table. No one even noticed until she let out a momentary cry.
That turned it into a serious Q&A and meet and greet moment. Everyone was curious to see the baby.
Wow….did we get some interesting looks and comments from the crowd when they learned how young she was. Apparently some people believe that a kid should not leave the house for the first six months. I remember one older women looking at us with a sense of disgust wondering “whaaaaaat are they thinking” bringing this baby out tonight.
Thats the moment that I stopped caring what other strangers thought about my skills as a parent. So far we are doing just fine. She might not be the Harvard Valedictorian but she is going to be a happy, social, and well cared for world traveller.
Jennifer – how old are your kids?
well Deux Deux has been to Saks, TJMaxx, Cartier, grocery stores, pizzeria, and couple of restaurants and as long as we keep rocking him, or moving his stroller he generally sleeps. Oh and he was out to see the fireworks on 4th of July. I think his favorite place was TJ. i think he is a natural born bargain shopper.
“It is better to get them started young though, same goes for eating out.”
Easy to eat out with kid in baby/infant stage, can be much harder when they hit toddlerhood (depending on the kid) even if you have been doing it all along.
“Easy to eat out with kid in baby/infant stage, can be much harder when they hit toddlerhood (depending on the kid) even if you have been doing it all along.”
very true. it’s hit and miss with my 2 toddlers. sometimes they are chill and sometimes they are hooligans. someone needs to open a bar/restaurant with a big fenced off play area you can toss them into within sight of the tables.
for longer flight travel with 2 year old constant moving monsters-
first only fly during nap time pref, if reg nap time is 11pm then try to schedule the flight to land at 2pm. Get a dang Ipod touch or iPad load two movies. PUZZLES and STICKERS are the great savior!
you do the stickers first, then two books, then the puzzles then when it gets close to nap time pull out the milk a paci and the movie.
we are lucky that our kid naps 3 hours at a time.
now this does not apply if you fly over oceans or your flight is delayed. your on your own there.
but if your good at living with guilt my son had a reaction to something some ranch dressing we think and gave him benedryl he napped 4 hours that day 🙂
““Easy to eat out with kid in baby/infant stage, can be much harder when they hit toddlerhood (depending on the kid) even if you have been doing it all along.”
very true. it’s hit and miss with my 2 toddlers. sometimes they are chill and sometimes they are hooligans. someone needs to open a bar/restaurant with a big fenced off play area you can toss them into within sight of the tables.”
i have the opposite experience, lil groove is easier to handle now when we are out to eat than when he was little. now he cant sit and eat on his own, and reasoning with the squirt actually works now (somewhat).
we have mini puzzles we take with us to the restaurant and we do them together and it keeps him entertained till the food hits the table.
its the last 15 minutes after we ate and are onto coffee that the ants in the pants kick in.
Mine are 7 and 1. The little guy came to lunch with us the day after we got out of the hospital (he was 5 days old and I had a c-section) as it was our anniversary! But he was already 10lbs so he didn’t look like a newborn.
Groove – I’ve never looked into the history of Miegs Field. But it wouldn’t be too difficult to find out who/why/how it got built on the lakefront.
“Groove – I’ve never looked into the history of Miegs Field. But it wouldn’t be too difficult to find out who/why/how it got built on the lakefront.”
agreed it not being difficult but adding to the new theme of this thread, its not the difficult part its the time part. with kids and having a normal social life time is not on my side.
but if i am drunk and bored enough and the wife and kid is sleeping and the laptop is within arms reach then i shall google that up. but given that scenario i dont think i will be google’ing Miegs field 😉
Does anyone know whats going on with this property?