“Rate Buy Down”: A 2-Bedroom Penthouse at 920 W. Madison in the West Loop
This 2-bedroom penthouse at 920 W. Madison in the West Loop came on the market in September 2022.
Built in 2002, 920 W. Madison has 99 units and attached heated garage parking.
The listing calls it a “boutique elevator building.”
This unit is a southeast corner penthouse with two walls of windows.
There are hardwood floors in the living room, dining room and kitchen with “plush” carpet in the bedrooms.
It has custom window treatments.
The chef’s kitchen has new white cabinets, under cabinet lighting, designer marble backsplash, granite countertops, an undermount sink, new faucet, brand new stainless steel appliances and a peninsula which seats three.
It has a separate dining room which is open to the living room which has a fireplace.
This is a rare condo which has a second fireplace in the primary suite which also has a walk-in-closet and an en suite bathroom with dual vanity and walk-in-shower.
The second bedroom is fully enclosed and has windows.
This unit has the features buyers look for including central air, washer/dryer in the unit and heated garage parking is available for $30,000 extra.
It also has a massive private terrace which runs the length of the unit with city and skyline views. The terrace is accessible from the living/dining room and the primary suite.
This building is in the middle of the West Loop near all the shops and restaurants on Madison, Randolph and Fulton Market.
Originally listed at $719,900, this unit was under contract in September 2022 but then came back on the market. It has been reduced to $699,900.
The listing says “BUY NOW & TAKE ADVANTAGE OF RATE BUY DOWN SELLER CONCESSION.”
This is the first time I’ve seen a rate buy down offer in a Chicago listing.
Is a rate buy down concession effective to get the sale done? Or will it even matter as the rates have already dropped to 6.29% from 7.25% just a few weeks ago?
Armando Chacon at Century 21 SGR has the listing. See the pictures and floor plan here.
Unit #1002W: 2 bedrooms, 2 baths, 1500 square feet, penthouse
- Sold in May 2003 for $252,000
- Sold in September 2005 for $437,500
- Sold in February 2013 for $395,000
- Originally listed in September 2022 for $719,900
- Under contract
- Re-listed at $719,900
- Reduced
- Currently listed at $699,900
- Assessments of $776 a month (includes exterior maintenance, lawn care, scavenger, snow removal)
- Taxes of $11,826
- Central Air
- Washer/dryer in the unit
- Garage parking for $30,000 extra
- 2 fireplaces
- Bedroom #1: 17×15
- Bedroom #2: 12×11
- Living room: 20×14
- Dining room: 14×10
- Kitchen: 16×10
- Terrace: 54×12
“This unit is a southeast corner penthouse with two walls of windows.”
It appears to be the southWEST corner penthouse unit.
“This is a rare condo which has a second fireplace in the primary suite…”
That is not a fireplace. It is an appliance novelty that you hang on your drywall…
What is with the open shelving in bathrooms? I would have to rip out that cabinet. It doesn’t look like they have a built in medicine cabinet either. I don’t like the shower pan in the other bathroom. It looks rental grade. Otherwise, this place is nicer than I was expecting given the building’s ugly exterior.
“an appliance novelty”
It’s an oversized, inefficient, space heater.
If people find that a high end feature, I’ll put one in every room! How luxe would 16 “fireplaces” be!!
They did do a good job making the actual fireplace look nice–I don’t love it, but it’s so much better than the original, just a firebox in the corner.
I can’t visualize this building in context–is it as dire looking as both Sabrina’s and the main listing pic imply?
“I don’t like the shower pan in the other bathroom.”
One of a handful of things untouched in the reno–I would guess that it was installed really well (set in mortar) and not deemed worth jackhammering out.
It has a separate dining room which is open to the living room which has a fireplace
Does it, though? Painting that area a different color doesn’t make it a separate room.
If people find that a high end feature, I’ll put one in every room! How luxe would 16 “fireplaces” be!!
Look at moneybucks over here in a 16 room mansion.
The reno is well done, but the exterior of that building is… oof, just bad.
“The reno is well done, but the exterior of that building is… oof, just bad.”
I wish they would paint the balconies. I don’t understand that green color. Aren’t the window frames all green too? I think they are. This unit has painted theirs on the interior, it looks like.
“a 16 room mansion”
I was including bathrooms, of course. And separate dining rooms. And just making up a number–but living as I do on JU’s block in Muncie, it’s easy to afford 16 rooms, eg:
https://www.zillow.com/homedetails/4404-W-Legacy-Dr-Muncie-IN-47304/99101548_zpid/?
“Does it, though? Painting that area a different color doesn’t make it a separate room.”
Good question Madeline. They list it out separately, and not as a combo, so that’s why I said it was a separate room.
Not really my kind of unit but looks like a bargain considering all the cool outdoor space.
“an appliance novelty”
It’s an oversized, inefficient, space heater.
If people find that a high end feature, I’ll put one in every room! How luxe would 16 “fireplaces” be!!“
Chuds find it to be a high end feature. The electric ones especially look stupid. The epitome of fake it till you make it
The buydown is meaningless with out knowing how much they’re buying down
Needs a $200k drop due to the hideousness of the building
I doubt the rate buydown does much. The typical buyer has already factored the higher rates into their search and adjusted their price point accordingly. Either this listing is within their search parameters or it’s not. The buyer is not going to know about the rate buydown unless this property shows up in their search results AND they read the description.
If a buyer is interested in this property they may or may not put much value on the buydown and would rather have a lower price to use the savings as they see fit. I absolutely did not want to buydown my rate because I got a 7 year ARM and I’m betting I can refinance at a lower rate within the rate buydown payback period. However, when I refinanced my last house I did buydown the rate because I knew I would be selling within a few years, not refinancing, and the buydown had a good payback period.
Not really my kind of unit but looks like a bargain considering all the cool outdoor space.
Yeah, meant to say I really like the terrace (could use some shade, though). Check out the 2013 listing – there used to be a view of the sears tower/loop from the terrace, which has been totally obstructed by new construction.
“I doubt the rate buydown does much. The typical buyer has already factored the higher rates into their search and adjusted their price point accordingly.”
Thanks for explaining what is going on out there Gary.
Sellers don’t have to drop their price to find the 2022 buyer because the 2022 buyer is a totally different person than the 2021 buyer. This is what most don’t understand. Most buyers are tied to the monthly payment. They simply get pre-approved for a certain monthly payment and then buy a property that fits in that parameter. The problem for the more expensive coasts is that buyers are now priced out on a monthly payment basis, so they have moved to the sidelines. Something has to give in those markets.
But in Chicago, the buyer who was looking at a $5,000 payment on a house that was $900,000 now looks at a $5,000 payment on a $750,000 property instead. And we DO have those properties available.
However, some first time buyers will be priced out of their chosen neighborhood in Chicago with the higher rates and will have to move to the sidelines OR change neighborhoods.
“But in Chicago, the buyer who was looking at a $5,000 payment on a house that was $900,000 now looks at a $5,000 payment on a $750,000 property instead. And we DO have those properties available.”
Thats not how this works. Some buyers will accept that they’re buying a lesser home/worse neighborhood that their cohorts that bought 2 years ago, but thats a pretty small pool.
Buyers also have the option of staying put and waiting for pricing to normalize with higher rates
High prices + Low Rates /= High Prices + High rates
“there used to be a view of the sears tower”
Still see the Willis Towers Watson Tower from the terrace on the walk thru.
Replacing Pres Towers with 727 Madison might be considered a plus, tho.
“Some buyers will accept that they’re buying a lesser home/worse neighborhood that their cohorts that bought 2 years ago”
2 years? 9 months!
How many people “have to” (as opposed to ‘would like to’) buy a first home or new home? I get that once you commit to looking, most people are pretty darn committed, so it’s not really rational decision making at that point.
“2 years? 9 months!”
Even worse
“How many people “have to” (as opposed to ‘would like to’) buy a first home or new home? I get that once you commit to looking, most people are pretty darn committed, so it’s not really rational decision making at that point.”
No one really (a relo maybe).
There’s an big emotional component for sure, however one would hope that buyers are weighing the financial burden of a home purchase in their calculus.
“Thats not how this works. Some buyers will accept that they’re buying a lesser home/worse neighborhood that their cohorts that bought 2 years ago, but thats a pretty small pool.”
Yes. This is EXACTLY how it works JohnnyU, as Gary said. You are the one who doesn’t get it.
We are a monthly payment nation. Home buyers simply get preapproved, are told what kind of monthly payment they can afford, and buy accordingly.
When rates spiked, buyers were caught unawares and were shocked because they WERE priced out. But come this spring, these higher rates are new norm. There will be a new group of buyers. Again, in Chicago, you just trade down until you can afford it. Maybe you buy 2 bedrooms instead of 3 because that’s all that’s in your price range. Buyers may have to make compromises for a certain neighborhood. This has happened throughout all of time with buyers.
The rates will likely stay elevated for a year or more, if the 1970s and 80s are any indication. The housing market will adjust.
I do, however, feel badly for those in the bubble markets where fundamentals just don’t support the prices at these rates. Could be a wild ride. But Chicago won’t be as bad because we have plenty of product at various price points.
“Yes. This is EXACTLY how it works JohnnyU, as Gary said. You are the one who doesn’t get it.”
I dont know what your issue is with the concept of people putting buying on hold. Its not a novel and if it wasnt the case there should be bidding wars as “Inventory is low”
“We are a monthly payment nation. Home buyers simply get preapproved, are told what kind of monthly payment they can afford, and buy accordingly.”
Or stay with me here, they dont buy and continue to rent
“Again, in Chicago, you just trade down until you can afford it. Maybe you buy 2 bedrooms instead of 3 because that’s all that’s in your price range. Buyers may have to make compromises for a certain neighborhood. This has happened throughout all of time with buyers.”
How many times have rates spiked 5 points in 6 months in the last 25 years?
Or again they can continue with their current living situation
“Or again they can continue with their current living situation”
This is the slow time of the year. Always. Most buyers, and sellers, are waiting for spring buying season.
People have jobs (for now). Home sales will continue to be decent because of the job market. The late 1970s housing market looked a lot like our current one. Everything was frozen as rates rose quickly. Eventually, buyers adjust. They trade down and get a house/property with the payment they can afford. In cities where affordability is an issue, something will have to give. Prices will likely fall there.
“This is the slow time of the year. Always. Most buyers, and sellers, are waiting for spring buying season.”
You never run out of excuses as to why Chicago underperforms.
Or you could go with the simple answer that buyers are spooked and willing to waiting for rates/prices to drop
“People have jobs (for now). Home sales will continue to be decent because of the job market. The late 1970s housing market looked a lot like our current one. Everything was frozen as rates rose quickly. Eventually, buyers adjust. They trade down and get a house/property with the payment they can afford. In cities where affordability is an issue, something will have to give. Prices will likely fall there.”
Define decent
So all the buyers who would have bought $750k properties are now buying $500k properties. Who’s going to fill the void at $1MM-$750k? The pool gets smaller each time you jump in price
Real housing prices fell in the late 70s/early 80s:
http://www.econ.yale.edu/~shiller/data/Fig3-1.xls
And we’re seeing that again. Not with this one (yet), but a lot of others.
“You never run out of excuses as to why Chicago underperforms.”
It’s not underperforming. It’s outperforming. And it will for this entire cycle.
As I’ve said a dozen times already, we didn’t have the boom, we’re not going to have a bust.
“So all the buyers who would have bought $750k properties are now buying $500k properties. Who’s going to fill the void at $1MM-$750k? The pool gets smaller each time you jump in price”
Fewer people. That’s why luxury will struggle. There just won’t be enough buyers for the $1.3 million Southport condo.