Sales Update: A One Bedroom On the Mag Mile: 535 N. Michigan
535 N. Michigan in Streeterville is an older highrise that has suddenly become “hot” because it’s:
- On the Mag Mile
- Affordable
Unit #706 had been on the market for several months. I last chattered about it in March 2008. It has now sold after several price reductions.
The listing said it had $60,000 worth of renovations. There are no w/d in the one bedroom units.
Unit #706: 1 bedroom, 1 bath, 755 square feet
- Sold in August 1996 for $83,000
- Sold in September 2002 for $168,000
- Was originally listed for $289,000 in December 2007
- Reduced to $274,000
- Reduced again to $249,000 in March 2008
- Sold in April 2008 for $245,000
- Assessments of $428 a month
- Parking is available in the building for $245 a month
Great building! Beautiful indoor pool, work out room, and spa on roof level and wrap around decks. No units have in unit laundry, not allowed in the building. There is parking (rental), 24 hr doorman, receiving room, huge remodeled lobby, large storage lockers, and access to the restaurant, Bandera, without going outside.
I think affordable is a relative term. Good rehab but with those assessments and parking 245k seems high. Then again I’m not infatuated with the Mag Mile so..
Another thing we don’t frequently talk about are taxes, which are probably high for this location. Before taxes with parking you’re looking at $673/month. Throw in $250 for estimated taxes and $50 for homeowners insurance and you’re looking at 1k just to enjoy the “pride of ownership”.
Assuming 195% financing at 6% they’re expensing $2,150 per month to own. How much would it cost to rent a place like this with parking on the mag mile? $1800?
Err assuming 95% financing..not too many 195% LTV loans being originated these days.
The true calculations are pretty close to even on rent/buy. Homeowners insurance on a 1 bedroom condo is much less, more like $225/year because your association/building has insurance as well. Bob, believe it or not taxes are not that high in some of the older buildings in Streeterville/Michigan Ave. I have a few properties in Streeterville that the taxes are less than 1% of the property value. Also the taxes and interest portion of your payment is tax deductible.
But Bob, if you find one, make sure to let Stuck in the City know. 😉
Bob,
“Pride of ownership” also includes tax free capital gains when you sell (that is if you’re willing to wait the market out), and as Investor points out, several of those monthly expenses are deductible from federal taxable income so you get a chunk back. There is an ownership “premium” but it’s not much. $250-ish is a fair price for this one, I think.
The MLS lists taxes at $2,534 for this unit for 2006. That’s without the homeowner’s exemption.
Unit #706 does appear to have had $60K in renovations since the 9/02 purchase for $168K. The recent sale for $245K ($325/sf) means they ended up just about even. However, the sale of this renovated unit will be a comp killer for the following listings in the building:
UNIT Orig LP LP Now SF $/SF Mkt time
1608 $259,000 $245,000 840 $292 112
1809 $259,000 $259,000 725 $357 42
508 $249,000 $249,000 840 $296 179
2508 $289,000 $289,000 840 $344 212
3111 $279,000 $259,900 755 $344 19
Most of these appear to require a lot of renovation to equal #706. How far will they fall?
Here are the most recently rented 1BR units from MLS:
UN Rented SF Rented $
3212 2/4/2008 755 $1,450
904 1/30/2008 840 $1,250
2805 12/12/2007 755 $1,300
2508 12/12/2007 840 $1,400
1303 10/17/2007 755 $1,400
2611 10/6/2007 755 $1,300
I’ve heard realtors equate this building with the other new construction in the area and call it a “deal” because you’re not paying $400,000 for the same square footage.
But these same units weren’t selling even three years ago (during the boom) for much more than $210,000 (if that.)
It will be interesting to see what happens to the prices in this market.
I must disclose that I own a 1 bedroom, 06 tier, in this building. Now that I really thin about it, I probably paid too much. 190K in 2005 and I had the unit painted, new carpet in the bedroom, and I remodeled the bedroom. I’m probably in for 215K…. I have it rented for $1440/month which covers Mortgage, Assessments, and Property Taxes (around 2500/year). This is a great building for the location. Built around 1962, new windows installs and NEVER a special assessment.
kitchen, remodeled kitchen, with cherry cabinets, SS appliances, and blue vulga granite…not my taste now but still looks great. My new kitchen is all White and Marble
FYI, don’t compare this building to new construction…It competes with the following:
211 Ohio
233 Erie
230 Ontario
777 N Michigan (nemesis building)
Better start saving Ken!