One Year Later and This 2/2 is Still Available: 867 N. Hermitage in West Town
This 2-bedroom unit at 867 N. Hermitage in the East Village neighborhood of West Town has been on the market for a year.
In that time it has been reduced $30,000.
The building was built in 2003 so it has the finishes and layout of buildings of that era.
It has hardwood floors, central air and washer/dryer in the unit.
The kitchen has 42 inch cabinets, granite counter tops, stainless steel appliances and an added bonus of a wine fridge.
With many similar properties in this neighborhood also listed, what will it take to sell this unit?
Romeo De La Cruz at Jameson Sotheby’s has the listing. See the pictures here.
Or you can see it at the Open House on February 20 from 12-2 pm.
Unit #2: 2 bedrooms, 2 baths, no square footage listed
- Sold in November 2003 for $321,000
- Sold in July 2005 for $346,000
- Originally listed in February 2010 for $389,900
- Reduced
- Currently listed at $359,000 (parking included)
- Assessments of $70 a month
- Taxes of $3630
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 15×12
- Bedroom #2: 12×10
Is it just me or does it look the the units above and below this one are squishing it? The picture of the exterior makes it look like it’s about five feet tall…
“STEPS TO NIGHTLIFE & BLUE LINE”
Since when did 3/4 of a mile become “steps” other than “you will have to walk many steps”
LOL at the 2003 buyer trying to come out ahead on this one.
Bad buy above $299k
I meant 2005 buyer
Executed Recorded Document Type Amount
07/29/2005 08/24/2005 WARRANTY DEED $346,000.00
Executed Recorded Document Type Amount
11/25/2008 MORTGAGE $69,500.00
Executed Recorded Document Type Amount
07/29/2005 08/24/2005 MORTGAGE $276,800.00
$346,300.00 total mortgages
Only way this is going to sell is as a foreclosure or a short sale…
“Only way this is going to sell is as a foreclosure or a short sale…”
uhhh- or bring money to the closing. Remember – millions/billions were made today alone in the stock market!!!
“$346,300.00 total mortgages
Only way this is going to sell is as a foreclosure or a short sale…”
HD – question for you. When you post this mortgage stuff, you don’t know how much (if any) has been paid down, right? That $346 is what they borrowed at the time not the loan balance, no?
$359k is crazy, I know of a penthouse 2/2 a few blocks away for $375k. I think this could carry over $299 though…..since it’s in 3% down FHA territory I think it could go for $320k
I love that the realtor calls it “Amazing” Only 2,000 others like it! This guy must think it’s his birthday when he gets 13 donuts in a dozen box!
I really want to agree that this is overpriced and will not sell for more than $299k, especially since there are so many of the same style units in the same type of building in this area. There is nothing unique about this condo for this area, and the sold properties in the area do support a $350k price.
Judging from the other sold listings in this area… $335k gets it done.
“When you post this mortgage stuff, you don’t know how much (if any) has been paid down, right? That $346 is what they borrowed at the time not the loan balance, no?”
That’s correct.
It’s certainly possible that they drew the whole HELOC and used it to pay down the first. It’s somewhat more likely that they got the HELOC and never drew a dime. It’s more likely than that that they have a balance on the HELOC that is more than $0, but less than the full amount. And it’s certainly possible that the first mortgage is an I/O, the HELOC is fully drawn and they are 90 days behind on both of them, racking up penalty interest and late fees, so that the aggregate amount due is approaching or over $400,000.
“Since when did 3/4 of a mile become “steps” other than “you will have to walk many steps””
Google Maps makes it .6 miles but I totally agree with you.
No way this sells for close to ask, and less than 8% in price reductions after a year on the market should tell you a lot about the seller’s ability to accept much of a lower price. I’m not a fan of the size (is that the structure of the stairs intruding in one of those pictures?), the finishes, the location, the fact that you have units about you and most of all the security-risk walk-up back deck. Hard to see this one selling any time soon. I think that around $300 gets it done.
Also, regarding “The building was built in 2003 so it has the finishes and layout of buildings of that era.”, I think that’s a little unfair to 2003. That was only 8 years ago and layouts and finishes haven’t changed too much – this plus just has crappy ones.
If they had priced it at today’s ask a year ago, does anyone think the home buyer credit could have woed a knifecatcher?
Icarus, it looks like it would have taken low $340’s to get a middle floor w/garage pkg closed with a contract dated 1/1/10 – 4/30/10.
Haha another losing living in an alternate reality. Sorry bud but you bought the place I hope you like to live there…for a loooong time.
The only reason McCrapBoxes were built was because there was an ample supply of lemmings with access to extremely easy financing to allow them to overpay by hundreds of thousands of dollars for places like this.
265k by 2014.
Yet another example of how anon (tfo) presents a rock solid argument and suffers no fools gladly. Well met.
It looks ok. Actually the finishes are better than many other condos we have seen, but there is nothing special about this one. I cannot see this fetching close to 05 prices. This seller either is in no rush to sell or is greedy.
“Haha another losing living in an alternate reality. Sorry bud but you bought the place I hope you like to live there…for a loooong time.
The only reason McCrapBoxes were built was because there was an ample supply of lemmings with access to extremely easy financing to allow them to overpay by hundreds of thousands of dollars for places like this.”
Bob – why is that that you so love to revel in other people’s perceived, perhaps not even real, misfortune? Did someone decrease the size of your cubicle or steal your stapler today? And, yes, surely these buyers overpaid by “hundreds of thousands of dollars” (and should have paid $146,000 in 2005 for a 2/2) — you really have your finger on the pulse of the real estate market!!!
The second mortgage is a refi, wwith a larger balance, of the second mortgage taken at the time of the original closing. I didn’t want to post the entire loan history, just what I believed is outstanding.
Bob is hoping it hits $265k by 2014 so he can finally afford it and gets a few years to save up a down payment.
“I didn’t want to post the entire loan history, just what I believed is outstanding.”
The recorded mortgages or HELOCs don’t tell you very much at all about what is outstanding (just that it’s a minimum of $1 and a maximum of the original amount plus unpaid late fees and additional interest). You are making significant guesses about what the owner has or has not paid off. The information about recorded liens is useful, but not nearly as useful or definitive as you are making it out to be.
Now, I agree with you that, if these people had the means, they would have paid down their mortgage to a reasonable amount, moved to a new place and rented this one out if it couldn’t sell at their expected price, but you’re acting like the public records are a definitive record of their current status, and you know that’s not true at all.
2/2’s are a dime a dozen in west town, a hood that I actually like. But you can get much better for cheaper and because of that this place is nowhere near selling.
“you really have your finger on the pulse of the real estate market!!!”
Obviously I do much moreso than this buyer because I am not experiencing the financial pain they are (or rather their banks). Also the mortgages prove this owner could’ve never have realistically afforded this place at 359k.
I obviously have a much better finger than you for determining the pulse of the market, Jon, as I am intelligent enough to recognize that this place was never worth 346k and the only reason it sold for that is that some bozo got a zero downpayment loan on the place stretched out over two mortgages. People like you obviously cannot discern the difference nor see the agency problem of an idiot willing to overpay using EZ financing with other people’s money.
“Bob is hoping it hits $265k by 2014 so he can finally afford it and gets a few years to save up a down payment.”
I don’t like West Town. It would have to go a lot lower than 265k for me to want to live there.
Glad I sold my place almost exactly like this and 2 streets over in August 2008 for $380k. Unlike most people on this site I really like West Town. This is walking distance to the L, division street restaurants/bars, etc.
jjj – more often then not, the recorded amounts are the owed amounts, minus a little bit for repayment of principal. At least in my experience, and I’ve been involved in one way or another in the real estate since the November in which I was licensed to practice law. Yes there are nuances you pick up over the years, but I feel pretty confident about those figures. At the bare minimum, it explains the listing price, which should be completely obvious by now.
“The recorded mortgages or HELOCs don’t tell you very much at all about what is outstanding (just that it’s a minimum of $1 and a maximum of the original amount plus unpaid late fees and additional interest). You are making significant guesses about what the owner has or has not paid off.”
In cases where the homeowner had no downpayment, I think its a pretty safe assumption that they aren’t so good at budgeting or managing their finances and have made minimal headway on paying down their mortgage.
“Unlike most people on this site I really like West Town.”
I like West Town, mostly because people (like) on this site don’t!
If you look at the comps and make some reasonable assumptions about the direction of prices over the next year, I can tell you two things:
1) This property will not sell this year.
2) When it finally does sell, the market for a standard 2/2 with a flat roof built half-ass on a not so great block to far from Division, will put the price inside of 300k.
Kel, it doesn’t matter if you sold your place in August of 2008 for $380K if you stayed in the same neighborhood and bought a bigger condo for more money. You’re actually worse off.
“The second mortgage is a refi, wwith a larger balance, of the second mortgage taken at the time of the original closing.”
That changes things. I would be *shocked* if their balance is under $300k, and surprised if it’s much under $310k.
I would be shocked if the balance was under $330 or $335k, leaving just enough money to pay closing costs and the realtor.
I same some chart the other day saying that the average downpayment during much of the boom was like 5% and a majority of loans had little or no money down so it’s no shocker when you see a 2005 purchase with the piggyback mortgages and no money down..
off topic,
what is up with the sun times website? i cant access the school report card thing for like a month. wanted to check some rankings to win a argument with a co worker
“I would be shocked if the balance was under $330 or $335k, leaving just enough money to pay closing costs and the realtor. ”
Assuming a 5.5% mortgage rate (probably high as it’s probably an ARM) and an 30-year am, and no payment default or late payments on the 1st, the 65 payments made would have reduced the balance of the 1st to $253,919.48. Plus $69,500 (almost certainly at the min and I/O), equals $323,419.48. Drop the rate to 4.25, another $5k would have been paid and at 3.5% another $3.3k ($245,6 balance, for a $315,5 total).
So, slight revision: double shocked at under $300k. Really surprised below $310. But equally surprised by over $325k.
Groove:
linky: http://labs.suntimes.com/reportcards/
Then, some of the ranking lists don’t work, but some do, and, if you are comparing just a few schools, pull up the individual school report and for some of the schools (seems to be top 100) it states their rank out of X [elem/jr/hi] schools ranked.
was looking for the list to print for proof, but its seems like the lists are SOL,
its only about ten schools i guess i can take the time out of my day to look up each of the 10 school 🙂
btw WTF sun times website all around is azz now
I dunno, maybe I am too optimistic about the financial positions and acumen of people, and I’m certainly generalizing for the portions of the market I follow (mostly SFH and larger condos/THs on the N and NW Sides). (I’m not saying that I think that all portions of the market are like the ones I follow, I’m just saying that the markets I follow provide a lot of counterexamples to your assumptions). The people I know who buy, sell and own these properties for living in or rentals are primarily middle to high income professionals with plenty of money to pay more than their minimum mortgage payments. There’s no question that a lot of folks don’t do that (or at least have money set aside that they could apply to a mortgage), but I think that a lot of folks do.
For example, if you looked at the 80ioARM/15HELOC/5dp structure I entered into on the place that I live in now, under the assumptions here you would think that I have negative equity due to some expected value depreciation. The reality is that the HELOC has almost nothing outstanding (it’s worth a small annual fee to have a big line still open at a good rate – I’ve even though about putting more on it to avoid the line getting lowered) and there’s another 200k or so I might have (or, if I did, it wouldn’t be obvious from the recordation) paid on the (now amortizing) first loan, but I’ve just put it into the bank as cash because who wants to pay off a 3.125% mortgage that’s tax-deductible? Probably $50k or so of that extra “equity” I have is due to interest savings from the loan structure, and, while money is fungible so it’s hard to say what $ is what, another $100k or so is from appreciation on the 15% of the purchase price that I could have put down but I chose to hold on to and invest on my own. It’s tough to know what people really do here but I think that you’re suffering from confirmation bias if you think that the short sales and negative equity situations you see are necessarily indicative of broader trends. Since Illinois is a fully recourse state, owners are liable for their loans. One person’s “I needed to get a wacky loan structure to afford the place” is another person’s “hell yeah, I will borrow that much money at those interest rates and deduct my interest if I can.”
What do you guys think about SunTimes school ratings vs. Chicago magazine school ratings? I haven’t looked to closely at their methodology or the difference, and have mostly just used them both as a general guide.
“I haven’t looked to closely at their methodology or the difference, and have mostly just used them both as a general guide.”
Correct.
“What do you guys think about SunTimes school ratings vs. Chicago magazine school ratings?”
to me its just some extra data i take with a grain of salt. When wifey was prego i went all crazy school dad and researched my azz off. now just use that info to make fun of GreenZone folk.
ChiMag’s isnt it calculated by a few editors one bein the “deal estate guy”?
i think the suntimes is test score heavy and chicago mag is trying t build a crazy matrix (which is over their head) to add in class size, diversity, school spend per pupil.
both are just a guide to a schools performance, many more factors than testing and school spending.
I for one value the arts and sports for my kid(s) than a math test.
I would choose a school that is 80th on the list if it offered better arts and sports than the #1 school on the list.
JJJ I’m sure your a smart guy and I’m sure your financially astute but you do not have a pulse on the trends of the broader market. I watched it blow up and now I’m watching it implode. I could spend a half an hour on your post but I’ll just address a few of your comments:
“but I’ve just put it into the bank as cash because who wants to pay off a 3.125% mortgage that’s tax-deductible? ”
Uh, only the interest is deductible, and only at the tax bracket you’re in. So if you pay $1.00 in interest you can deduct 28 cents of it for every dollar you are above the standard deduction. There’s no way that arbitrage works unless you can park the money in a high paying short term interest rate (which doesn’t really exist) so what you’re really saying is that you just want to have the cash around. Which is OK but don’t think it is financially savvy to carry around debt because as we all know ‘debt does not equal wealth’.
“It’s tough to know what people really do here but I think that you’re suffering from confirmation bias if you think that the short sales and negative equity situations you see are necessarily indicative of broader trends. ”
I don’t have the numbers off hand but something like 1/3rd or 1/2 of all sales in Chicagoland are distressed sales? Compared to just a few years ago when the number was practically zero? Yeah, I’d say unequivocally that distressed sales are a large part of broader trends.
“Since Illinois is a fully recourse state, owners are liable for their loans. ”
Yes that’s true but for all practical purposes first mortgages are never collected upon in IL and only second mortgages are ever filed as lawsuits, and the collect rate on those are less than 1cent on the dollar. HSBC and Citibank are the only two I’ve ever seen actually file a lawsuit to collect on a second mortgage and believe me when you get a lawsuit for a second mortgage the first thing you do is see a BK lawyer.
“One person’s “I needed to get a wacky loan structure to afford the place” is another person’s “hell yeah, I will borrow that much money at those interest rates and deduct my interest if I can.””
You think those two thought processes are diametrically opposed but often then are one in the same.
“There’s no way that arbitrage works unless you can park the money in a high paying short term interest rate”
*NO* way? HD, if anyone reads this, you’re going to get *killed* on that point. No *foolproof* way, but lots of other ways.
If he had taken the borrowed principal and bought a 30-year T, he’d be ahead. Not guaranteed zero risk, but pretty damn close.
Do you know anyone who has successfully arbitraged their cash that they would otherwise use to pay down mortgage principal? Other than speculating in the stock market which entails substantial risk?
But in all honesty, I wouldn’t put the money into my mortgage either. It’s like flushing money down the toilet. THE value of many homes is dropping faster than the owner can pay off principal nowadays anyways.
“This is walking distance to the L”
Yeah walking through the most disgusting L stop intersection in the GZ: Division/Ashland/Milwaukee Is this what living has come to?
I’m quite sure Ivan Albright (at the Art Institute) got his inspiration from the crowd around there!!
I decided to put money in GLD instead of paying down my 4.3% mortgage, this was when Gold price was around $930. Actually I was so sure of the secular gold bull market that I thought of doing a HELOC and buying more, but I wimped out.
“Do you know anyone who has successfully arbitraged their cash that they would otherwise use to pay down mortgage principal? Other than speculating in the stock market which entails substantial risk?”
I shook my head when Bob made the comment earlier and will shake it again. Mathematically there is little to no benefit to paying down principal. You can get real close to a clean arbitrage and synthetically create the principal component of a loan in a private account… Even if you dont get it to the decimal that way you are leaving out liquidity value as in liquid cash is always premium over an illiquid asset.
Of course liquid cash is a premium but call it that. Don’t delude yourself into believing that carrying debt and deducting a portion of the interest is financially savvy. I don’t know about you, but you’re not supposed to invest money you cannot afford to lose. Debt does not equal wealth. Keeping money liquid is an entirely different, and perfectly legitimate reason, but the tax deduction is not.
And apparently a lot of people agree with me.
Hence the surge in cash-in refinanings.
http://www.bankrate.com/finance/mortgages/cash-in-refinance-activity-skyrockets.aspx
and gringo, your little blurb earlier about Rio real estate being more expensive than NY is surely the sign of something foreboding…in the area, the hot money, the speculation….be careful
“#gringozecarioca on February 18th, 2011 at 12:05 pm
I shook my head when Bob made the comment earlier and will shake it again. Mathematically there is little to no benefit to paying down principal. You can get real close to a clean arbitrage and synthetically create the principal component of a loan in a private account… Even if you dont get it to the decimal that way you are leaving out liquidity value as in liquid cash is always premium over an illiquid asset.”
I agree with you (homedelete) in that I define arbitrage under the classical definition – that it has to be riskless. Riskless is not for me – there is no question that I am risk-loving in my securities investments. I got pretty hurt in equities in 2007 – 2009 and didn’t do anything worthwhile with options, but having all that cash on hand instead of tied up in real estate allowed me to have pretty mindblowing (at least for me, in both percentage and dollars gains) returns over the last 18 months. There’s a lot of value to having cash on hand. I hear you that a lot of folks can’t be like that, or aren’t like that, I just think that you’re making a mistake to use what are essentially your guesses about where a homeowner stands to inform your views on individual properties. And I think that the confirmation bias is strong here – a lot of the people who don’t _have_ to sell aren’t – they can ride out these prices and live there or even rent while buying another property. What kind of turnover in SFH housing stock is there in Chicago proper? Can’t even be 10% a year, right? You’re assuming that those owners who were unwise and have to enter into a distressed sale are representative of all owners.
I’m not a big drum-beater when it comes to my inflation expectations, but a long term tax-deductible obligation in the 3s is likely to be close to zero nominally for any reasonable expectations about the next 5 – 10 years.
“…deduct 28 cents…”
Obviously it’s not a bad problem to have, but, all other things being equal, I wish that was all I could deduct on owner-inhabited mortgage interest. Also don’t forget state income tax.
“Yes that’s true but for all practical purposes first mortgages are never collected upon in IL and only second mortgages are ever filed as lawsuits”
I know of at least one case where a first mortgage is being pursued, but I agree it is rare. That written-off debt always gets 1099’d though, right? That tax liability can’t be discharged, right? (Not sure here, mostly asking.) Also, surely your credit is totally hosed as well, and that is going to make things much more expensive and difficult for 7-10 years, right? If people have the means and the income they do care about this stuff.
Nope I know better than to be a friend of debt, just back to my very old argument about i/o loans and no need to pay down principal.
As for my blurb, agreed again.. doesn’t make much sense to me either but think it continues another 7 years regardless. I think residential here becomes highest $ per sq meter in world shortly.
JJJ – bush passed that law (i can’t remember the name) and it forgives the tax liability of foreclosed homes. There are some nuances but for most owner occupied foreclosures there is no recourse. Walking away is quite simply the most logical and cost-effective thing to do.
The other assumption that you make is that homeowners will just be able to “ride out these prices and live there or even rent while buying another property.” I’m sure many can to their financial detriment. My shelf is full of cases where owners tried to do that, and failed miserably. Some estimate that 39% of Chicago homes (with mortgages) have negative equity. That’s an awful awful lot of homes. That is the pulse of the market. It sucks and ensures that foreclosures and short sales will dominate the market for years to come.
But why sell *now* unless you have to? Why not just ride it out like everyone else? That’s what makes me suspect of many homes that are on the market today.
The assumptions I make are fairly safe. Most car accident lawyers will tell you that 90% of the population has little or no assets, and have little net worth other than than their next paycheck and the value of their car insurance policy.
Everything in life becomes clearer when you see the world through this lens.
“Keeping money liquid is an entirely different, and perfectly legitimate reason, but the tax deduction is not. ”
But if one is doing it to maintain liquidity, the tax deduction is not the point *as a tax deduction*, but as a way to reduce the cost of funds.
And, yes, I do know real people (as opposed to fake internet people) who have extracted $$ from their homes for non-real estate investment purposes. Several, in fact. And yes, to the best of my knowledge, they came out ahead. It, of course, helps a great deal that investment tax rates are lower than OI tax rates, allowing one to make money (assuming LT-treatment) if your return merely equals your mortgage interest rate.