Crib Chatter

I posted two articles over the weekend in the comments about the slowdown in the rental markets in Los Angeles and New York City.

In LA, about 6,000 apartments are being built. Here in Chicago, according to Crain’s, it’s about 5300 apartments with the possibility of another 3,000 on deck by 2015.

Some are saying that there will soon be a supply/demand imbalance as the new apartments won’t be absorbed quickly enough.

Many developers and landlords say they’re not nervous, citing an improving job market and downtown Chicago’s growing appeal to well-paid professionals in their 20s and 30s who would rather rent than own. The risk of a glut is small because the market is good at regulating itself, they say, and lenders and investors know when to stop.

“No, there isn’t anything to worry about,” says Curt Bailey, president at Related Midwest, developer of a new 500-unit tower at 500 N. Lake Shore Drive.

The math shows that supply and demand already are getting out of whack. Developers will complete an average of 2,679 apartments downtown this year and next, according to Appraisal Research. The consulting firm’s quarterly survey covers an area bounded roughly by North Avenue, Cermak Road and Ashland Avenue, and focuses on larger buildings.

But in the last four quarters, a key measure of demand, absorption—the change in the number of occupied downtown apartments—has totaled 975 units. Annual absorption downtown has averaged 1,348 units over the last three years, about half the increase in supply forecast in 2013 and 2014.

Mr. Bailey of Related Midwest, meanwhile, has gone all in on the downtown residential market, with the recently completed Lake Shore Drive apartments and a 504-unit rental project under construction at 111 W. Wacker Drive.  The firm, owned by New York-based Related Cos., recently acquired the defaulted loan on the Chicago Spire site and has agreed to buy another development site next door to its Streeterville tower. Mr. Bailey won’t say whether he plans apartments or condos on the properties.

He dismisses talk of an apartment glut, saying the annual increase in demand for downtown housing—apartments and condos—has averaged about 3,000 to 4,000 units since 1990, more than enough to absorb the additional rental supply. And the city, he says, is only becoming a more appealing place to live.

Is the apartment market about to cool?

If so, will this push some developers to make the transition to condos more quickly?

How will rising rates impact the decision to go condo?

Or will developers be left holding the bag with both a weak apartment market AND a weak condo market?

The dark side of downtown’s apartment boom [Crain’s Chicago Business, Alby Gallun, August 26, 2013]

This 4-bedroom single family home at 1414 W. Highland in Edgewater came on the market in May 2013.

In its previous life, it was apparently a butter factory.

Now, it’s a 4200 square foot contemporary home on a 50×112 lot with a 2-car garage.

It has a large master suite and sunroom on the top floor along with a 1500 square foot rooftop deck.

The kitchen has modern white cabinets and stainless steel appliances.

Is the market just as hot in Edgewater as the rest of the city?

Colin Hebson at Dream Town Realty has the listing. See the pictures here.

1414 W. Highland: 4 bedrooms, 3.5 baths, 4200 square feet, 2 car garage

• Sold in February 1994 for $64,000
• Sold in September 2005 for $562,000
• Sold in November 2011 for $915,000
• Originally listed in May 2013 for $1.1 million
• Reduced
• Currently listed at $950,000
• Taxes of $10,840
• Central Air
• Bedroom #1: 26×17 (second floor)
• Bedroom #2: 20×11 (main floor)
• Bedroom #3: 20×20 (main floor)
• Bedroom #4: 18×11 (main floor)
• Sunroom: 20×16 (second floor)

We last chattered about this 2-bedroom vintage rowhouse at 2343 W. Altgeld in Logan Square in April 2010.

See our prior chatter here.

Most of the chatter was on the rowhouse’s location near the Kennedy Expressway.

The rowhouse is on a smaller than normal Chicago lot of 18×100.

If you recall, it has 2-bedrooms on the second floor, an unfinished basement, a backyard and a 1.5 car private garage (although the listing says that it could fit 2 small cars or 1 oversized car.)

There are hardwood floors throughout.

The kitchen still has white cabinets and appliances.

The rowhouse has the other bells and whistles buyers look for like central air. It also has a full bath with each bedroom on the second level.

Back in 2010 it was listed at $299,000 but never sold.

It has come back on the market at $374,500.

Will it sell for the higher price in this hot market?

Mario Greco at Prudential Rubloff now has the listing. See the pictures here.

2343 W. Altgeld: 2 bedrooms, 2.5 baths, 1.5 car garage, 1600 square feet

• Sold in October 1988 for $56,000
• Sold in March 1990 for $230,000 (?)
• Bank owned in June 1995
• Sold in September 1995 for $81,000
• Sold in December 1995 for $95,000
• Sold in August 1999 for $172,000
• Sold in October 2003 for $305,000
• Originally listed in May 2009
• Currently listed at $299,000
• Taxes of $4500
• Central Air
• Unfinished basement
• Bedroom #1: 17×15
• Bedroom #2: 12×10

This 1-bedroom loft in 420 W. Grand in River North just came on the market.

With all the high rise development, many people forget that much of River North was just a bunch of run-down warehouses until about 20 years ago.

This 1200 square foot south facing loft has the features that loft lovers look for including large industrial windows, tall timber ceilings and walls of exposed brick.

The kitchen has white cabinets, granite counter tops and stainless steel appliances.

The bedroom is fully enclosed.

There are two bathrooms in this unit and both are marble.  On a side note, an agent once told me that in many of these larger 1 bedroom/2 baths in the building that they used to be 2-bedroom units but the wall was removed to allow for the large living/dining area. I don’t know if that is true of this unit as well. But that’s how some of the 1-bedrooms ended up with 2 full baths.

It has central air, washer/dryer in the unit and garage parking is included.

This loft has come on the market $1500 above its 2007 price.

Are we already back to peak prices in River North?

Kelly Lynch at Koenig & Strey Real Living has the listing. See the pictures here.

Unit #4G: 1 bedroom, 2 baths, 1200 square feet

• Sold in December 1993 for $181,000
• Sold in July 1996 for $205,000
• Sold in November 1998 for $225,500
• Sold in April 2003 for $310,000
• Sold in October 2007 for $387,500
• Currently listed for $389,000
• Assessments of $358 a month (includes water)
• Taxes of $4372
• Central Air
• Washer/Dryer in the unit
• Garage parking included
• Bedroom : 17×14

Housing is big news this week. Chicago’s real estate experts and some agents have been chiming in about July’s hot sales. The Sun-Times even put rising real estate prices on the front page.

From the Tribune:

Despite the positive report, the local housing market’s recovery continues to be uneven. Unlike eight to 10 years ago and except for investors, people who are priced out of choice neighborhoods are not looking at fringe neighborhoods in search of a good deal and future appreciation, said Zeke Morris, president of the Chicago Association of Realtors.

“We still need pioneers, people who are willing to take that chance in neighborhoods,” Morris said. “I’m happier that our median price is moving up. The only thing I caution people about is, the top half of the median is not the problem. The bottom half is the problem. How do we get prices at the lower half of the median moving up?”

In July, the median sales price of a home sold in the nine-county Chicago area rose 18.3 percent from a year ago, to $201,075, the Illinois Association of Realtors reported Wednesday. The median price of a home sold within the city increased 25 percent year over year, to $250,000.

While those kind of numbers seem reminiscent of the bubble years of runaway home prices, that’s not the case this time, real estate agents say. They add that homeowners who expect their properties to fetch unrealistically high prices are being urged to ratchet down their expectations.

“We’re not seeing prices skyrocketing,” said Michael Golden, a co-founder of @properties. “Pricing is still very moderate. The market today is much more thoughtful, much more careful, even though it is hotter than it was two years ago.”

The slower pace of activity that Prudential Rubloff agent Francesca Rose has seen in August is welcome because it means a more balanced market and a less-panicked buyer.

“The nervousness and the panic, people feel like they’re going to make the wrong decision,” Rose said, adding: “When we say it’s slow, it’s relative. It’s slow relative to April.”

The Sun-Times covers the bidding wars but also talks about slowing in August.

“The inventories are so low that there’s really no place for prices to go but up,” said broker Leigh Marcus of @properties. Marcus works Chicago neighborhoods from the South Loop to Rogers Park, and he reports brisk sales and bidding wars for homes with attractive features.

He handled such a sale in July for Joe Chasen, an options trader at the Chicago Board of Trade. Chasen said the Bucktown rowhome sold in three days and drew a strong response because of features such as a yard and rooftop party space.

Marcus said it sold for $861,500 and that six offers were made, all above the asking price.

Chasen said he bought a house in Glenview before selling in Bucktown and had to beat out other bidders. “I think I hit the market at a good time, just before interest rates began to tick up,” he said.

Marcus said the higher rates are just now having an effect. He said he detected a slowdown in sales starting in August beyond the typical impact of vacations and back-to-school preparations.

Wesbury, however, said the market will take the rates in stride. He said that with more confidence in place, “buyers are more willing to buy than back when rates were lower but buyers thought home prices might fall further.”

Will the experts be right about August cooling?

July’s heady housing gains in, around Chicago not expected to be replicated [Chicago Tribune, Mary Ellen Podmolik, August 22, 2013]

Housing market heats up in Chicago area with July sales up 36.1% [Sun-Times, David Roeder, August 22, 2013]

We’ve chattered about this brick and timber authentic loft in The Village Lofts at 612 N. Oakley in West Town several times over the last year.

Our first chatter, in May 2012, consisted of debating whether or not this property was in the Ukrainian Village or the Patch.

No one could decide.

See that chatter here.

Back in May, most of you thought it was overpriced for the neighborhood.

But that was then and this is now.

If you recall, it has exposed brick and timber ceilings in 2000 square feet.

There are two bedrooms and two baths on the main floor along with the main living area.

A steel staircase takes you to the second floor where a master suite and a 25 foot landscaped west facing terrace awaits.

The kitchen has maple cabinets and stainless steel appliances.

The loft has the other features buyers look for including central air, in-unit washer/dryer and parking.

Last July, this loft was reduced to $448,000.

It has come back on the market at $524,900.

Is the market $76,900 hotter just 13 months later?

Didn’t it also appear on a recent episode of House Hunters? (it was the one where the couple was looking for a 3-bedroom with vintage character in Lakeview, so of course, they went to look at this loft in West Town.)

Gregory Quadrini at Prudential Rubloff has the listing. See the pictures here.

Unit #207: 3 bedrooms, 3 baths, duplex up, 2000 square feet

• Sold in June 1999 for $260,000
• Sold in December 2001 for $350,000
• Was listed in May 2012 for $475,000 (parking included)
• Reduced
• Was listed in July 2012 for $448,000 (parking included)
• Withdrawn
• Currently listed for $524,900 (parking included)
• Assessments of $362 a month
• Taxes of $5784
• Central Air
• Washer/Dryer in the unit
• Bedroom #1: 21×13 (second floor)
• Bedroom #2: 25×10 (main floor)
• Bedroom #3: 12×11 (main floor)

It’s that time again. As expected, July sales soared year over year. Median prices also jumped by double digits.

From the Illinois Association of Realtors:

The city of Chicago saw a 31.1 percent year-over-year home sales increase in July 2013 with 2,838 sales, up from 2,164 in July 2012. 

The median price of a home in the city of Chicago in July 2013 was $250,000 up 25 percent compared to July 2012 when it was $200,000. Chicago condo prices also saw double-digit gains for the month, posting a 13.8 percent jump to $280,000. Average time on market in the city was 48 days, down 30.4 percent compared to 69 days last July.

Here’s the July data since 1997 (thanks, once again, to G for the info):

• 1997: 1,694
• 1998: 2,139
• 1999: 2,186
• 2000: 2,013
• 2001: 2,410
• 2002: 2,661
• 2003: 3,105
• 2004: 3,429
• 2005: 3,487
• 2006: 3,088
• 2007: 2,819
• 2008: 2,200
• 2009: 2,040
• 2010: 1,631
• 2011: 1,666
• 2012: 2,088
• 2013: 2,838

Inventories continue to be the problem.

“The market is starting to come together, especially in the condo arena that was hard-hit across most areas of the city. That condos are moving at a strong pace now and prices are also increasing means that both buyers and sellers are feeling confident,” said REALTOR® Zeke Morris, president of the Chicago Association of REALTORS® and Operating Principal and Managing Broker, Keller Williams Realty, CCG. “As the availability of inventory continues to decrease, we hope to see buyers look into some of the areas that aren’t performing as well, as an alternative.”

Additionally, foreclosures have all but dried up and those that do come on the market are bought by investors.

“While both prices and sales continue to point to a sustained housing market recovery,” noted Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory of the University of Illinois, “the inventory of homes for sale remains at low levels.  The number of foreclosed properties may have deterred many potential sellers from listing their homes.  Recent analysis suggests that the level of foreclosed properties may return to pre-recession levels by the end of the year and thus providing some incentive for additional listings.”

What does the CAR mean when it says they “hope to see buyers look in some of the areas that aren’t performing as well”?

That buyers who are looking in Lakeview will now start looking in Uptown or Rogers Park or Albany Park?

New mortgage applications have been falling this summer. That data would indicate that sales, nationally, will also fall in the coming months.

Will July be the best it will get for 2013 or will Chicago be immune to a slowdown?

Illinois home sales and prices see double-digit gains in July; Statewide sales up 28.5 percent, median price jumps 14.2 percent [Illinois Association of Realtors, Press Release, August 21, 2013]

We last chattered about this 2-bedroom triplex corner loft in the Postcard Lofts at 1733 W. Irving Park Road in Lakeview in May 2013.

You can check out that chatter here.

Priced at $499,900 some of you thought it was too expensive but $475,000 might get it done.

We actually chattered about this unit nearly 6 years ago- in October 2007.

The interior of the loft now looks remarkably similar to what it looked like back then. Check it out here.

Loft lovers will delight that many of the original features remain including the original safe which is now a bathroom, complete with the safe door serving as the bathroom door.

It has 14-foot timber ceilings and a spiral staircase.

The listing says there is an unfinished 4th floor with 600 square feet.

The kitchen is the same as six years ago. It still has what look to be maple cabinets, white appliances and does not have granite counter tops.

The listing also says there is an “assessment credit available.” From the public listing it doesn’t appear that the assessment includes heat or cable.

The loft has central air, washer/dryer in the unit and garage parking.

This loft has reduced to $475,000.

Will that be enough to make the sale?

Jennifer Vogel at Conlon still has the listing. See the pictures here.

Unit #222: 2 bedrooms, 2 baths, 2379 square feet, triplex

• Sold in 1998?
• Sold in February 2005 for $528,000
• Was listed in 2006-2007 for $599,000
• Reduced
• Was listed in October 2007 for $549,000
• Withdrawn in 2008
• Was listed in May 2013 for $499,900
• Reduced
• Currently listed for $475,000
• Assessments now $618 a month (includes snow removal and water) (They were $554 a month in October 2007) 
• Assessment credit available
• Taxes are $6033
• Central Air
• Washer/Dryer in the unit
• Garage parking
• Bedroom #1: 20×16 (third floor)
• Bedroom #2: 22×13 (third floor)

We’ve chattered about the first floor unit in this 3-unit greystone at 1130 W. Armitage before but now a second floor unit has come on the market.

It has high ceilings, crown molding and access to both the front and back porches.

The kitchen has cherry cabinets, granite counter tops and stainless steel appliances.

The master bedroom has a white marble bath.

Because it’s a vintage 3-flat, the bedroom sizes are smaller. The listing says to “note” the second and third bedroom sizes which are 10×9.

It has all the other features buyers look for including central air, washer/dryer in the unit and garage parking.

The unit is also just a few blocks from the Armitage El stop and surrounded by all the shops and restaurants on Armitage.

It came on the market in July and has reduced $4,000 to $495,000.

This is $10,000 under the 2005 purchase price.

Is this a deal?

Randy McGee at Koenig & Strey Real Living has the listing. See the pictures here.

Unit #2: 3 bedrooms, 2 baths, no square footage listed

• Sold in July 1995 for $274,000
• Sold in December 1999 for $370,000
• Sold in June 2001 for $410,000
• Sold in June 2005 for $505,000
• Originally listed in July 2013 for $499,000
• Reduced
• Currently listed at $495,000
• Assessments of $162 a month
• Taxes of $8565
• Central Air
• Washer/Dryer in the unit
• Garage parking included
• Bedroom #1: 16×11
• Bedroom #2: 10×9
• Bedroom #3: 10×9

This 1200-square foot 1-bedroom brick and timber loft in the Donohue Building at 711 S. Dearborn just came on the market.

The kitchen and bath have been upgraded since the original conversion in the 1990s.

It has espresso cabinets, stainless steel appliances and a white tile backsplash.

There are also white tiles in the bathroom.

It’s a top floor unit with timber ceilings and walls of exposed brick.

This building has some great windows and this unit is no exception with its large arched windows in the living room.

It’s one of the rare Donohue units that has central air (most have window units.)

It also has in-unit washer/dryer.

Parking is available just up the street for $35,000 in 801 S. Plymouth or you can rent around the corner.

The assessment  includes the heat.

With almost nothing available on the market, will this unit go under contract this week?

Judy Howard at Prudential Rubloff has the listing. See the pictures here.

Unit #802: 1 bedroom, 1 bath, 1200 square feet

• I couldn’t find a prior sales price
• Currently listed for $300,000
• Assessments of $704 a month (includes heat and cable)
• Taxes of $4600
• Central Air
• Washer/Dryer in the unit
• Parking available to buy down the street for $35,000
• Bedroom: 12×12