Stretching the Price Point in River North: A 2/2 at 700 N. Larrabee
This 2-bedroom plus a den at River Place on the Park at 700 N. Larrabee in River North just came on the market.
Built in 2006, at the peak of the housing boom, the building has 220 units and sits on the Chicago River.
This is a Southeast corner unit with city views east of the John Hancock and southern views of the Chicago River and the Willis Tower/Loop.
It has 10 foot floor to ceiling windows with custom shades and a balcony.
The kitchen has cherry cabinets, black granite counter tops and stainless steel appliances.
There’s a slate fireplace.
It has all the features buyers look for including central air, washer/dryer in the unit and garage parking for $30,000 extra.
This is apparently the first sale since the original sale of this unit in 2006.
It is listed at $605,000, including the parking, or $175,000 more than the 2006 bubble price of $430,000.
Will this seller get the premium?
Michael Rosenblum at Berkshire Hathaway KoenigRubloff has the listing. See the pictures here.
Unit #1809: 2 bedrooms, 2 baths, den, 1245 square feet
- Sold in December 2006 for $430,000 (included the parking)
- Currently listed for $575,000 plus $30,000 for parking
- Assessments of $635 a month (includes heat, air conditioning, cable, doorman)
- Taxes of $6575
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 13×12
- Bedroom #2: 12×11
- Den: 8×8
We get the IAR May housing data today but I am too busy to get to it this morning so we’ll discuss it tomorrow.
We already know from Gary’s data that it is another hot month.
really great view, rest is pretty much standard condo.
would not surprise me one bit to see this place sell as hot as river north has been in my own anecdatal experience
seeing that 2/2’s just down the road in Kinzie Park are selling for 650k-700k and silver tower 2/2’s that have less square footage than this are going for 500k-600k, this will probably go for the high 500k. What a difference a few years make withd regards to River North prices.
The IAR said Chicago median home prices were up 6.8% yoy
And sales up 10%+ yoy.
Check out sales comps at 500 W Superior (old MontG Ward office building conversion). This unit has minimal windows.
https://www.redfin.com/IL/Chicago/500-W-Superior-St-60654/unit-2013/home/18944505
Who in their right mind is paying above 2006 prices for properties? Is this the pent up demand finally coming into the market to buy all at the same time? Is it investors? it’s hard to imagine this level of sales without subprime zero down financing and NINJA loans.
qualified buyers are paying these prices so who the heck knows
This is the smallest looking 1200 sq/ft apartment I’ve seen. Layout is very awkward and narrow, but the views add great value. I think they may be inflating the square footage.
Qualified buyers are taking a huge risk paying such premiums in River North. I’m no permabear but people paying this much for a 2/2 are essentially betting that Chicago real estate is going to escalate to New York type levels. With widening wage gaps and middle/upper middle class decay, perhaps that’s where things are headed, so who knows. Demand is still demand no matter how irrational it may seem to those who can’t afford it (eg. tulip bubble).
Anyone have any predictions on how inevitable interest rate increases will affect property values? At these price levels in River North, every extra point/half a point of interest counts.
“Demand is still demand no matter how irrational it may seem to those who can’t afford it (eg. tulip bubble).”
Affordability in many cases is a relative term.
The living area looks claustrophobic. The developer should not have included an 8×8 den in addition to the two bedrooms.
“Anyone have any predictions on how inevitable interest rate increases will affect property values?”
First thing is figure out the timing when this might occur. People have been saying it’s just around the corner since 2010. There used to be some thought rates were out of the Fed’s control as the “bond vigilantes” would demand a higher interest rate for a worthless UST (because the US is essentially bankrupt, technically) esp. on the long end which the Fed is allegedly not in control of.
There was some debate here about 5 yrs. ago about it. Sabrina always says higher rates will hurt prices, because we are a “monthly payment” society, but there was some proof offered that historically prices do not actually fall in a rising rate environment, primarily because rising rates means the economy is doing well.
I’m of the opinion that interest rates will not rise significantly again in our life time. It’s one of those roads that once you go down you can’t ever go back. How many developed countries can you name that escaped from the low rate environment? The trend seems to go towards negative interest rates these days. To suggest that the US is suddenly going to raise interest rates despite the rest of the developed world in near zirp is unrealistic. I think in my layman’s terms that there’s just too much money out there in the world all chasing too little yield. No amount of economic turmoil or super hot growth in the economy (i.e. great recession or our current technological revolution) is going to change the low interest rate environment. What do I know, I don’t have an MBA from Harvard nor did I ever earn the moniker “the maestro”. I’m just a guy on the street.
“Anyone have any predictions on how inevitable interest rate increases will affect property values?”
Inevitable? Not so sure about that…
“To suggest that the US is suddenly going to raise interest rates despite the rest of the developed world in near zirp is unrealistic.”
So what do you think the Fed is doing? That they are bluffing about September? That they’ll raise once and then not raise again for another year? (which would go against anything they have EVER done- although what they have done the last 7 years is different than anything they have ever done.)
I’m asking honestly.
We are fast approaching a 5% unemployment rate. Multiple asset classes are at all time highs. When do they cool down the bubbles? Or are you saying they do not?
“Sabrina always says higher rates will hurt prices, because we are a “monthly payment” society, but there was some proof offered that historically prices do not actually fall in a rising rate environment, primarily because rising rates means the economy is doing well.”
All the data that “proves” that rising mortgage rates won’t hurt housing prices is from the 1970s. That’s when we had 1 income families and people actually spending only 25% of their income on housing. Not people spending 30%, 40% or 50% of their income on housing in addition to school loans, auto loans and $150 a month cell phone bills.
Additionally, housing prices weren’t at record highs. And you DID have to have 20% down. It took my parents 2 years to sell their house in 1979-1980. Good times.
If you think a $200 mortgage increase won’t impact housing (let alone a $500 a month increase) then you weren’t watching housing in 2013 when rates rose to 4.75% and housing went flat. And that’s not even 6%.
We ARE a monthly payment nation. Where’s the extra money going to come from? If you could afford a $400,000 place in 2015, maybe you’re buying a $325,000 place for the same monthly payment in 2016. BIG DIFFERENCE.
“Who in their right mind is paying above 2006 prices for properties? Is this the pent up demand finally coming into the market to buy all at the same time?”
Most of River North, Streeterville, and large parts of Bucktown, Ukrainian Village, Lincoln Park and Lakeview are ALL above 2006 prices. So plenty of people are paying it. And WELL above it.
Sabrina, who, not where, are paying higher than 2006 prices.
More importantly, what will higher rates do to the weave market?
http://detroit.cbslocal.com/2015/06/04/weave-loan-store-to-offer-loans-to-buy-hair-extensions-in-detroit/
“All the data that “proves” that rising mortgage rates won’t hurt housing prices is from the 1970s.”
And house values were rising 1% in a 10% inflation environment. Seems to me that housing prices were being hurt.
LOL chuk, That is both hilarious and sad at the same time
Redfin sez there have been 23 sales in this building over the last 3 years, so deriving a “fair value” shouldn’t be impossible.
#809, same plat, 10 floors below, traded at $490k in Nov 2013 — part of a “multi-property sale”, so it appears units were trading in bulk not too long ago.
https://www.redfin.com/IL/Chicago/700-N-Larrabee-St-60654/unit-809/home/18921396
Unit #1815, different plat, same floor, supposedly traded at $446 in July 2014.
https://www.redfin.com/IL/Chicago/700-N-Larrabee-St-60654/unit-1815/home/18933772
I’m sure there’s a story for why this 1200 sq ft, 2 bed 2 bath unit traded a year ago for $128k less than its neighbor, #1809, is currently asking for a 1245 sq ft, 2 bed 2 bath. But the issue is whether or not that story (and the extra 45 square feet) is worth an extra 128k.
“I’m sure there’s a story for why this 1200 sq ft, 2 bed 2 bath unit traded a year ago for $128k less than its neighbor,”
The market is completely different. It’s like night and day compared to 2014. 2014 was a dead market. No multiple bids. Higher mortgage rates. After the taper tantrum in May 2013, the housing market went dead for about 16 months.
Now- is it worth $128k more in a really hot market? I guess we’re going to find out.
River north is crazy, even units in my building are flying off the shelves in half the market time of last year
“After the taper tantrum in May 2013, the housing market went dead for about 16 months.”
What kind of nonsense is this!?!?!?
“After the taper tantrum in May 2013, the housing market went dead for about 16 months.”
Sigh.
I have to educate you AGAIN about the housing market Chuk? It’s SOOOOO tiring.
Chicago home sales were down year over year every month in 2014 except for one. Wow. Imagine that?
2014 sucked. It was dead, dead, dead. No bidding wars in 2014. It wasn’t until the end of the year that things started to pick up as mortgage rates fell some more. Rates were over 4% for most of the year.
Yes- rates over FOUR PERCENT caused a housing slowdown.
Lol.
What will happen when they’re over 5%?
We’re all screwed.
“River north is crazy, even units in my building are flying off the shelves in half the market time of last year”
Last year was a dead market. That’s all changed.
But I am still surprised that May sales were below 2013. It seems worse than 2013 but that could just be because we’re now at new record high prices so it just feels even hotter. I don’t know.
“I have to educate you AGAIN about the housing market Chuk? It’s SOOOOO tiring.”
http://cribchatter.com/?p=10074#comment-133900
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