This 4-Bedroom North Center Cottage is Listed at Just $499,900: 1750 W. Grace
We’ve chattered about this 4-bedroom single family home at 1750 W. Grace in North Center numerous times over the years.
You can see our May 2013 chatter here when it came back on the market after several years.
We also chattered about it in 2008 which you can see here.
In between, it was featured on an episode of HGTV.
It’s actually been pending numerous times as well but never sold.
A lis pendens foreclosure was filed in 2011. There was finally a judicial sale in December 2013.
If you recall, it was built in 1878 on a standard 25×125 lot. The house had central air in prior listings, even though the current one doesn’t indicate that, and a 2-car garage.
You can see the interior pictures in the 2008 chatter.
From the current pictures, it appears to have the same kitchen with white cabinets and green counter tops.
The price has been all over the place on this property over the years.
But it looks to be priced at among the lowest prices it has ever been listed at at $499,900.
That’s below what many townhouses or duplex downs are listed for in the neighborhood.
Is this house now a deal?
And will it FINALLY sell in 2014?
Ayoub Rahab at Great Street Properties now has the listing. See the pictures here.
1750 W. Grace: 4 bedrooms, 2 baths, 1619 square feet, 2 car garage
[unordered_list style=”bullet”]
- Sold in May 2006 for $555,000
- Was listed in May 2008 for $669,900
- Reduced several times
- Was listed in November 2008 for $584,900
- Withdrawn
- Re-listed in April 2009 for $575,000
- Reduced
- Was listed in June 2009 for $550,000
- Reduced
- Was listed in December 2009 for $535,000
- Withdrawn in 2009
- Lis pendens foreclosure filed in January 2011
- Was re-listed in May 2013 for $599,000
- Withdrawn
- Bank owned in December 2013
- Currently listed at $499,900 (with HomeSteps financing available)
- Taxes now $9228 (they were $9171 in 2013 and $7162 in 2009)
- Central air
- Basement
- Bedroom #1: 17×15 (second floor)
- Bedroom #2: 11×10 (second floor)
- Bedroom #3: 9×8 (third floor)
- Bedroom #4: 10×9 (main floor)
[/unordered_list]
Many years ago I was in this house at an open house. They had floor plans drawn up on the coffee table in the living room to show you what could be “done” to it. I think they were from the HGTV show which was some kind of renovation show.
But that’s when it was priced much higher.
I hereby vote North Center as having the ugliest housing stock of any trendy neighborhood in Chicago.
It’s in better shape and in a better location than this one:
http://cribchatter.com/?p=16981
which sold for $425, and has been a fenced off plot of dirt for a while now.
It’s in Hamilton–were it in Blaine, Coonley or Bell (close (ie ~ 1 block) to the boundary for each), it would for sure be a teardown candidate.
Not great that it’s across from commercial; not great that it’s next to a rental building that runs the full lot length.
“I hereby vote North Center as having the ugliest housing stock of any trendy neighborhood in Chicago.”
This place is in Lake View, notwithstanding what Sabrina sez.
And anyone who thinks North Center is ‘trendy’, has a seriously demented standards for ‘trendy’.
OK. Change “trendy” to upper class neighborhood.
Did that ugly shack next to the beer garden in North Center ever sell?
Question to all, which neighborhood would you pick as having the ugliest housing stock overall? For me, I can’t decide whether PIlsen or Bridgeport has the ugliest housing stock. I suppose my neighborhood doesn’t have the prettiest housing stock either, but at least there are no sunken houses with roof material covering the exterior.
“Change “trendy” to”
Lagging indicator?
“Did that ugly shack next to the beer garden in North Center ever sell?”
Yes, and it looks completely different now.
” I can’t decide whether PIlsen or Bridgeport has the ugliest housing stock”
See, Pilsen is *far, far* “trendier” than North Center.
Nah dude, northofcenter is trendy. Any place with 20/30 somethings, bars and rich upper middle class not the suburbs is trendy. There are degrees of trendy. Northcenter is not Logan Sq or Pilsen but it’s still a trendy place to live.
I personally like the half underground asphalt roll siding look in Pilsen. Northofcenter’s working class 1000 sq ft housing stock isn’t great but it’s OK. Nothing will ever beat my old dear old irving though, it was like a walk in the victorian era. My goodness I miss that ‘hood.
I appreciate the midcentury ‘modest’ as it’s called in my hood – and there are some pretty nice midcenturies on murphy lake a short walk from my house (and bordering the lakes at maine park) but it just ain’t the same as the victorian loveliness painted laides/gingerbread/eastlake that was Old Irving.
Who is up for the CC meet up?
I’d love to have a CC meet up except that the lag might make it impossible to post the date in time ….
I’ve been in this place when it was listed by the previous owners. It needs A LOT of work to make is liveable for a family.
Teardown. Then Mcmansion.
I’m glad I don’t have to live in a house like this.
It does look, though, that people won’t pay just ANYTHING to get a SF house in Lakeview. This house just will not sell at this price or anything near it.
It’s a tear-down- should sell for the price of the lot. Is it zoned multi-family.
Not sure why this is a teardown. Sure, it needs work, but with 40k it could be a great modest house that serves a small family for 20 years. Or tear it down and put up some tacky shit construction for 300k.
This is a small, outdated, expensive house on a lot in a crappy location. Take a 2 second look on street view and you’ll understand why. This little stretch of Grace has two – yes two – SFH. Across the street is an industrial building, and the rest of the block is vintage apartment buildings. The metra tracks are right there too. If only this house were a block away on Paulina…it would have sold years ago..
Not to be a jerk, but on what planet does one pay $500,000 plus extensive renovation costs for a “modest house that serves a small family for 20 years”?
On planet earth. Have you ever seen SF prices in DC, LA, SF or NY?
What does a standard Chicago lot go for in this hood? I’d think the ask is close to land value. I’m a little surprised developers haven’t swooped in for the tear down – mcmansion construction.
“On planet earth. Have you ever seen SF prices in DC, LA, SF or NY?”
Yeah, but the last time I checked, 1750 W. Grace was not in any of those places. Google Street shows it on a crappy block in the City of Chicago, in the shithole known as Illinois.
“Who is up for the CC meet up?”
Toss out some dates
“Not to be a jerk, but on what planet does one pay $500,000 plus extensive renovation costs for a “modest house that serves a small family for 20 years”?”
I hadn’t looked at the street view to see quite how wonky the specific location of this home is, so I’ll back off the idea that this home is worth retaining. I was probably wrong on that account. It’s a subpar piece of property that ideally receives 3 or 4 condos. I feel bad for the SFH that gets redone 2nd.
That said, 500k + reno for a sfh home in a good neighborhood in Chicago is hardly crazy.
As a city we culturally reject the idea of a redone 560k small house in a good neighborhood in favor of an enormous and cheapest practices 1.2m home that’s going to have the next decade’s version of split faced block.
I guess I’m rejecting the idea that living in a modest house is only for people of modest means, suggeting that accepting the livability of a modest house in a good neighborhood is a way to punch above your neighborhood weight class, and suggesting that buying a modest house and redoing it with a 15-20 year window is obviously a better financial decision than buying what would replace it.
Approval for a 560k mortgage is about 120k family income. In my world, that’s a relatively modest two-income family.
“Approval for a 560k mortgage is about 120k family income. In my world, that’s a relatively modest two-income family.”
$560k seems on the high end for $120k HH income.
“Approval for a 560k mortgage is about 120k family income. In my world, that’s a relatively modest two-income family.”
Is taking out a $560K mortgage a prudent financial move for a family with $120K HHI? When my income was in that range, I bought a $380K condo. That was for single, childless me; and after paying the mortgage,utilities, other fixed expenses and investing, I didn’t feel as though I had a lot of discretionary cash. With a family? I would have had to live pretty frugally. I can’t imagine trying to swing a $560K mortgage on $120K, but maybe I’m more of a spendthrift than I thought…
“Approval for a 560k mortgage is about 120k family income. In my world, that’s a relatively modest two-income family.”
Yeah, that mortgage is WAAAAAY too high for 120k family income. I will say that mortgage should be no more than 2x gross. So, family making 120k should have 240k mortgage. Assuming 20% down, that is 300k house. Not saying you CAN’T get approved for more, but you shouldn’t buy more than that.
A $560k house on a $120k for DINKS seems doable if the owners lived frugally. All bets are off if there are kids though.
This is assuming the person only has 20% down. A couple with kids and only earning $120k is probably going to get financial help from parents who don’t want their grandchildren raised in a “scary” neighborhood. Although, those same grandparents might not approve of this neighborhood.
““Approval for a 560k mortgage is about 120k family income. In my world, that’s a relatively modest two-income family.”
Yeah, that mortgage is WAAAAAY too high for 120k family income. I will say that mortgage should be no more than 2x gross. So, family making 120k should have 240k mortgage. Assuming 20% down, that is 300k house. Not saying you CAN’T get approved for more, but you shouldn’t buy more than that.”
While I think a $560k mortgage on a $120k HHI is high, using multiple of gross is not really accurate these days. You should be looking at DTI ratios with rates so low. a 2x income mortgage is a lot different when rates are 3 or 4% vs 6 or 7%.
a 560k mortgage with 20% down is a 700k house… you are not buying one of those on a 120k HHI, not in Illinois at least…
120k is definitely the low, low end, but I think 2-2.5* gross is a bit of a holdover from higher rates. Looks like the yearly PITI on 560 is around 36k for a property *like* this one, and that’s 30% of 120, so within the realm of a healthy budget.
But, my whole point was that we as a city should culturally encourage smaller homes and actively retain more modest housing so that a family with income of 120-150k aren’t pushed to the suburbs, or constrained to less desirable city neighborhoods.
“a 560k mortgage with 20% down is a 700k house… you are not buying one of those on a 120k HHI, not in Illinois at least.”
Sorry for the lack of clarity, I meant a hypothetical 560 purchase+reno with 20% down, so a 448 mortgage.
How long does it take $120k HHI DINC’s to save $112k (20% down). To me, that is the killer. Even at $2k/mo in the bank that’s 5 years.
much more manageable for that income level!
There are lots of gorgeous homes in this city on the south and west sides. The city should do more to curb crime so more middle class people would be willing to live there.
Why can’t the city bust the gang members on tax evasion and clear out more poor neighborhood? Perhaps the city could offer a financial incentive to poor people to move out of the city. Basically, they could offer $10k to anyone who costs the city more money than they pay in taxes to get them out of the city and make the city more livable for the rest of us.
“Sorry for the lack of clarity, I meant a hypothetical 560 purchase+reno with 20% down, so a 448 mortgage.”
Thanks doc. That definitely makes more sense.
I guess my point was more, 1) $500,000 is a lot of money to the vast majority of people living in this country as well as in our fair city; and 2) $500,000 for the shitheap in question is kind of absurd (I mean, if you can afford that mortgage, why on earth would you ever, given the alternatives at your disposal, pick that falling down little postage stamp on a crap street?)
That said, I agree with The Dr.’s sentiment that “500k + reno for a sfh home in a good neighborhood in Chicago is hardly crazy” but the idea that $500,000 is somehow “modest” is an oxymoron. The house in question was probably truly built for someone of modest means; now it’s attainable only by someone with an income level of the top 10%. I guess that’s the price of breathing Chicago’s rarefied air?
“How long does it take $120k HHI DINC’s to save $112k (20% down). To me, that is the killer. Even at $2k/mo in the bank that’s 5 years.”
Bank Of Mom and Dad. Essentially a 100% loan, with 20% maybe not ever having to be paid back….
“How long does it take $120k HHI DINC’s to save $112k (20% down). To me, that is the killer. Even at $2k/mo in the bank that’s 5 years.”
I dated someone who saved $150k in 4 years. He never did anything and refused to spend money on anything but life’s absolute necessities. We once got into a fight over toilet paper brands and it was about that time I decided I had enough.
So yes, there are people who can save lots of money in a short amount of time. You might not necessarily want to spend time with those people, but they exist. They also can make good neighbors because they tend to be quiet and not have parties.
“That said, I agree with The Dr.’s sentiment that “500k + reno for a sfh home in a good neighborhood in Chicago is hardly crazy” but the idea that $500,000 is somehow “modest” is an oxymoron. The house in question was probably truly built for someone of modest means; now it’s attainable only by someone with an income level of the top 10%. I guess that’s the price of breathing Chicago’s rarefied air?”
Not to be nit-picky, becasue for the most part I agree with what you’re saying, but what I said was that the house would be modest, not that the amount paid for it would be modest. What would be modest would be the amount paid for the house in relation to the average cost of a SFH in the neighborhood.
In fact, what I’m advocating is that we as a city retain small houses that need updates like this one (althought not necessarily this one) in neighborhoods like this, precisely so the “rarified air” is enjoyable by many, and so that development dollars are spread more far afield so that a broader diversity of neighborhoods are livable for people like Jenny (don’t even want to get into her proposal…….). Of course, this fantasy relies on an incredibly unlikely broad cultural change where people don’t immediately call for teardowns in nicer neighborhoods, and instead regard reno of modest homes as an acceptable lifestyle.
I guess I dream about a world in which young families with 120-150k incomes don’t move to La Grange (or wherever the fuck it is they move to) for 6 car garages, and instead keep population, upper income diversity and tax base in Chicago.
” I will say that mortgage should be no more than 2x gross. So, family making 120k should have 240k mortgage. Assuming 20% down, that is 300k house.”
The problem is now that the $300k home in 2012 in park ridge is now $380,000 (i.e. my house) and $300,000 buys a nice house in schaumburg….
It takes a long, long time to save $100,000, without fortuitous investments or luck. I lived in a crapshack of a rental for 8 years with two professional incomes and a modestly frugal lifestyle; and by the time life happens (marriage, wedding, kids) the ability to save dwindles precipitously unless your income increases significantly. Heck, I’m making roughly $40k more now than I did in 2012 and I still find that (increased taxes, phaseouts, new roof, replacement car, daycare, etc) even with the significant extra income it’s difficult to save. Every time I feel like I get ahead I feel like i take two steps back. And I’m one of the lucky ones. and I grew up lower middle class and I still can’t figure out how truly ‘poor’ people do it.
The people I know who save the best have very generous bonuses. Bonus time in Feb at law firms is great; or large commission/bonus checks help too. without those large frequent infusions of cash it’s difficult to set aside any signficant amount of money. That’s my opnion at least, others may think differently, and the most frugal people I konw still use flip phones, have CRT tvs and have dial up speed internet to save a buck. And it gets even more frugal from there. I know a family that just replaced their CRT a few months ago – and they bought a 22″ flat screen no name brand for around $100….I watch too much TV to spend like that….
“The problem is now that the $300k home in 2012 in park ridge is now $380,000 (i.e. my house) and $300,000 buys a nice house in schaumburg…”
Oh well. Tough turkeys.
“I dated someone who saved $150k in 4 years. He never did anything and refused to spend money on anything but life’s absolute necessities. We once got into a fight over toilet paper brands and it was about that time I decided I had enough.”
Never knew that Jenny dated HD.
“Never knew that Jenny dated HD.”
They don’t like to talk about it. It wasn’t so much the crapshacks HD lived in but rather the things he would ask Jenny to do that was the deal-breaker.
“Never knew that Jenny dated HD.”
Ha! I went off the market far too early, never had a chance to meet a girl like Jenster!
“It’s a tear-down- should sell for the price of the lot.”
Um, $500k is pretty much the price of a lot around there. Certainly over $400k.
Which feeds into The Dr.’s point–it really is too bad that places like this get torn down instead of updated into ~$550k houses. but that really requires them to sell for ~$350k, and that is *definitely* a teardown price.
Speaking of, that place on Addison (2014) is digging for a foundation now. Sold for $485k in Oct-05, $200k in Apr-12 (as a f/c) and $425k in Feb-14.
20 percent down? Loan no more than 2x gross income?
In 2010, putting 10 percent down on a conforming loan entailed taking a rate that was a half percent higher (which amount was, of course, tax deductible). Something in the range of 4.25. Two months ago, putting 10 percent down on a non-conforming loan again meant taking a half percent higher rate. 4.125. Sure, I’d have loved to put down 20 percent on both purchases, but I couldn’t. I’ll try not to beat myself up over it.
And speaking of lending parameters out of the mortgage-burning-era, who’s expecting their income to remain the same for the life of their home loan? Mine went up all three years that we owned a condo in ELP. It’s now less than it was when we rented for two years before that purchase, so I’m fully aware that incomes don’t always go up. I guess I just subscribe to the Casey Kasim school of thought when it comes to home buying decisions. Keep reaching for the stars.
“Which feeds into The Dr.’s point–it really is too bad that places like this get torn down instead of updated into ~$550k houses. but that really requires them to sell for ~$350k, and that is *definitely* a teardown price.”
This house is a bit of an anomaly. The block is pretty crappy – it’s nowhere near as nice as Paulina a few blocks over. The house was built in 1876 and it looks like it too. It probably needs new EVERYTHING. It has no insulation, god only knows what the wiring looks like (knob and tube anybody?). there’s probably awful water pressure, and who knows what else is going on behind those walls. It’s a money pit that needs to be torn down, it’s well past it’s useful life. Obsolescence they call it. It’s a decent location for a three flat condo, but bad for a SFH, this is not a $500k lot. with all the other options out there for half a million dollars this money pit is a pass – and most other people looking in the $500k range seem to think so too.
Agree that this price for an old, needs-to-be-renovated SFH on a doody block is a no-go.
However, my husband and I have a modestly higher income than that stated above (I stay home) and I really love that we were able to buy a small, modest, old home for less than $500K in North Center. If it were priced $50K or $100K less, it would have been a tear-down and turned into one of the $900K-$1.5MM new construction houses on the block. When we have the money, we can build up (attic is unfinished). Houses like ours get snapped up quickly because there are a lot more people that can pay $500K than $900K for a home. Chicago blows other major cities out of the water in this respect – there’s no way we’d be able to live in the city with our two kids in NY, LA, or SF.
“I went off the market far too early, never had a chance to meet a girl like Jenster!”
Is the missus still checking up on you here, HD?
“Is the missus still checking up on you here”
It is awfully close to the 4th…
“Is the missus still checking up on you here, HD?”
he has plenty of time to escape town with the LAG here
Pending: http://www.redfin.com/IL/Chicago/1750-W-Grace-St-60613/home/13387982?
zoned RS-3, so they’d need a zoning change, or a variance, to build something other than a SFH on the lot, if it’s a developer buying.
“How long does it take $120k HHI DINC’s to save $112k (20% down). To me, that is the killer. Even at $2k/mo in the bank that’s 5 years.”
Um…forever. That’s why Yellen was saying that mortgage credit is still “too tight” and that it’s holding back the housing recovery.
No, Madame Chairman, it’s not the credit. It’s that people don’t have down payments AND they have gotten minimal salary increases in the last 6 years.
By the way, a young couple buying this could qualify with just 10% down.
The NY Times Magazine is covering the story of millenials moving back home with Mom and Dad after college because of student loans and poor job opportunities.
I would argue this is nothing new. 20-somethings have been moving back in with mom and dad forever. But in years past, they only stayed 6-months to a year. Now they are staying for 4 or 5 years! Now, they are turning 30 and STILL living at home.
There are some Chicago-area examples in the article, including one woman living with her mother in Downers Grove.
http://www.nytimes.com/2014/06/22/magazine/its-official-the-boomerang-kids-wont-leave.html?hpw&rref=magazine&_r=0
I guess people better not go to college unless they have a plan and that plan includes a job that will allow them to pay off the student loans.
In the meantime the housing market seems to be doing just fine in Chicago despite what the Illinois Association of Realtors is or has released today.
“I guess people better not go to college unless they have a plan and that plan includes a job that will allow them to pay off the student loans.”
You bring up a good point. For the most part it costs as much to get a BS in Computer Science as it does a BA in English but the earning potential for those majors is vastly different. I doubt there will be an overhaul of higher education any time soon though.
“In the meantime the housing market seems to be doing just fine in Chicago despite what the Illinois Association of Realtors is or has released today.”
ha! ha!
Oh wait- are you saying to “ignore the data?”
The IAR didn’t put out the release this morning. Maybe it will be out later today or tomorrow. It doesn’t want to talk about how sales are down big. BUT last May was the best May in Chicago in 6 years so the headline isn’t as bad as it seems.
The problem is, sales will decline for the rest of the year. How is the housing market “just fine” when sales are again sliding? They were ALREADY near multi-decade lows.
As I’ve been saying for awhile- this housing market is FAR from normal. The Fed really messed things up. It brought rates down so low there was a frenzy and now prices are too high. Incomes aren’t rising. You can’t have housing prices rising 10% or more a year and not incomes and have it be sustained. It won’t be.
We are in a flat housing market right now. That’s not enough to get people who are underwater still to sell.
Another reason however for kids staying at home longer is that they have champagne taste on a barefoot budget, because kids today were never told no, they are coddled and told how awesome they are their whole life. They all want to keep their i-phones with data plans, nice car leases, high fashion clothes, expensive restaurant bills, bar tabs, etc. and you can’t do that if you’re paying to live on your own with rent, bills every month and paying down student loans (which given all that money to do whatever in college basically enables the live beyond your means on debt sort of lifestyle)
“Oh wait- are you saying to “ignore the data?”
Nope. Would never say that. As I pointed out in my May recap 55% of the drop in sales is a drop in distressed sales. Inventory remains low and market times are low: http://www.chicagonow.com/getting-real/2014/06/may-chicago-real-estate-market-update-home-sales-plunge/ Great time for the full commission brokers who sellers are allowing to earn hundreds and thousands of dollars per hour.
“The IAR didn’t put out the release this morning. Maybe it will be out later today or tomorrow. It doesn’t want to talk about how sales are down big. BUT last May was the best May in Chicago in 6 years so the headline isn’t as bad as it seems.”
They gave the release to the media but haven’t posted on their site for some reason. Their numbers came out exactly where I said they would.
“How is the housing market “just fine” when sales are again sliding? They were ALREADY near multi-decade lows. ”
There is upward price pressure.
BTW, I was in Dallas over the weekend and talking to people and realtors it looks like the market is so hot there that the appraisals can’t keep up with the price trend. Consequently, properties sell in 1 day with multiple offers for prices that won’t appraise. Amazing what free market capitalism will do for a city/ state.
” How is the housing market “just fine” when sales are again sliding? They were ALREADY near multi-decade lows. ”
Put it in perspective. For Chicago sales were higher than 5 of the last 6 years. For the PMSA sales were higher than 6 of the last 7 years.
”How is the housing market “just fine” when sales are again sliding? They were ALREADY near multi-decade lows. ”
Because they weren’t.
You bring up a good point. For the most part it costs as much to get a BS in Computer Science as it does a BA in English but the earning potential for those majors is vastly different.
Some interesting info here: http://www.payscale.com/college-salary-report-2014/majors-that-pay-you-back (English Literature is low, but it ranks just above Business Administration…)
We are in a flat housing market right now. That’s not enough to get people who are underwater still to sell.
How are we using the term “underwater” here? The true definition (remaining balance on the mortgage is higher than the selling price), or the CribChatter definition (selling price is below previous purchase price)?
Another reason however for kids staying at home longer is that they have champagne taste on a barefoot budget
But that’s not new, either. I worked with several people in the late 80s/early 90s who were living at home and driving BMWs. I didn’t understand those people then, and I don’t understand them now!
Whatever one might want to say about the market, can we at least agree there seems to be a lot of LAG?
“English Literature is low, but it ranks just above Business Administration…”
Well, I’m not sure all the english lit baristas are included in this. Then again, I’m a little mystified how one earns a bachelor’s in bus admin.
” I’m a little mystified how one earns a bachelor’s in bus admin”
I think you just need to look at the schools that grant BBA/BSBA degrees, and you will have largely answered the question about low starting/early-career salaries.
This should be required study material for anyone planning on going to college: http://www.slate.com/blogs/moneybox/2014/06/23/the_top_paid_jobs_in_america_in_one_gigantic_chart.html
“Whatever one might want to say about the market, can we at least agree there seems to be a lot of LAG?”
There shouldn’t be. I upgraded the server over the weekend. Super powerful now. If there is still a lag then something else is going on.
”How is the housing market “just fine” when sales are again sliding? They were ALREADY near multi-decade lows. ”
Um…sorry. But they are. Both new and existing home sales are still near all-time lows.
And here we go again. Falling sales are NOT an indication of a “healthy” market. Nor a “normal” one. At least not when sales fall 15.7% year over year. They will fall this month (June) and next month (July). It’s hard to say what August will bring. We could see a flat month in sales because they were falling by then last year.
This housing market has been “weak” for about a year now and rates aren’t even at 5%. Just imagine when they are. Affordability will be even worse. OMG. We could see sales again approach 2009 levels.
What a conundrum. People won’t sell because they will either lose money or they are still underwater (owe more than their loan.) Buyers can’t buy because prices are too high. So you get this stalled market.
I saw some interesting regional existing home data from NAR today. The only category that saw an increase in sales in the Midwest in May was in the price range of $500,000 to $750,000. Even the $1 million+ category in the Midwest saw a sales decline. In all other regions the $1 million+ saw sales increases.
“Both new and existing home sales are still near all-time lows.”
If you are talking about Chicago that’s just not true. If you are not talking about Chicago I’m not interested.
“As I pointed out in my May recap 55% of the drop in sales is a drop in distressed sales.”
Yes. The foreclosure deals have worked their way through the system (at least the vast majority of them.) The private equity firms that were distorting the market and the investor buyers are going away because they can no longer make the same money as the home prices are too high now. That ship has sailed. Blackstone has said they are buying in only like 4 cities now including Atlanta and a few others in the south.
Once you take the all cash buyer out of the equation (which nationwide is like 40% of ALL sales)- what are you left with???
Buyers who have no down payment. Buyers who haven’t had a pay raise in 5 years. Buyers paying more for food, energy, health care and education costs. And now they have to pay 10% to 45% more to buy a house?
The numbers don’t add up. Housing prices are too high- even with near record low mortgage rates. The Fed screwed itself. Because now only two scenarios can happen:
1. Either incomes start rising- and quick. If that happens, the Fed is sure to start raising interest rates, rather aggressively because that means the job market is heating up quickly. So mortgage rates will rise- BUT incomes will also rise. If stocks stay elevated- buyers may still feel like they can stretch into the property. Maybe this is a decent scenario for housing, I don’t know. But higher mortgage rates are really going to bite. People think 4% rates are “normal” now.
2. Housing prices will go down. This will happen as long as incomes remain stagnant.
You can’t get blood from a stone. Now that the investors are mostly out of the game- who is left to buy?
First time buyers are at their lowest level in the last 50 years. You can’t have a healthy housing market without entry level buyers.
“BTW, I was in Dallas over the weekend and talking to people and realtors it looks like the market is so hot there that the appraisals can’t keep up with the price trend. Consequently, properties sell in 1 day with multiple offers for prices that won’t appraise. Amazing what free market capitalism will do for a city/ state.”
Are you actually rooting FOR the housing bubble Gary? This is what this sounds like.
You know we’re back in one right? You know it’s all distorted, right?
“Put it in perspective. For Chicago sales were higher than 5 of the last 6 years. For the PMSA sales were higher than 6 of the last 7 years.”
I said this. I said last year was one of the hottest Mays we’ve seen in years.
But sales have been down year over year for 5 months now. It’s no longer a trend. It’s the reality. And they will be down for this entire year. So where does this leave us?
A very distorted housing market. The rich are buying their $1.5 million new construction homes in Lakeview. But hardly anything is selling in middle class land (which is why the median keeps rising.)
It’s not healthy or normal. I don’t know how it will end- but probably badly.
“BTW, I was in Dallas over the weekend and talking to people and realtors it looks like the market is so hot there that the appraisals can’t keep up with the price trend. Consequently, properties sell in 1 day with multiple offers for prices that won’t appraise. Amazing what free market capitalism will do for a city/ state.”
Free capitalism, or does it have more to do with $114 oil?
I’m not rooting for a housing bubble but it’s exciting to see prices rising again. Dallas has the dynamics to support rising housing prices. And in Chicago….all I can say is that I love listing homes right now because they haven’t been this easy to sell in years. Right now I’d still rather have a listing than a buyer. That’s just the opposite of a couple of years ago.
“Once you take the all cash buyer out of the equation (which nationwide is like 40% of ALL sales)- what are you left with???”
All the people who are buying homes.
“Free capitalism, or does it have more to do with $114 oil?”
Oil is a small part of the Dallas economy. It’s finance and real estate and technology and healthcare and transportation. Businesses want to be there because they have a business friendly environment – just the opposite of Illinois. And no state income tax. And they have the most ambitious highway construction program going on that I’ve ever seen.
LAG everpresent. (Can see Gary’s comment on the ticker but not when I click on it.)
“If you are talking about Chicago that’s just not true. If you are not talking about Chicago I’m not interested.”
Is that why you’re bringing up Dallas Gary?
I don’t have May existing homes sales for Chicago for the last 20 to 30 years. I would need G to pull me the data. All I have is what’s in the post but those are the abnormal years.
“Dallas has the dynamics to support rising housing prices.”
Wow. Delusional!
You can build for hundreds and hundreds of miles all around it! Just like Chicago. Oh- and before everyone says “but everyone wants to live near the city now and there’s no supply” just look at places like Berwyn and Flossmoor. Plenty to buy. Houses just sitting there- on the market for months. If people were desperate in Chicago they’d buy in the ghetto neighborhoods like they do in Oakland (where my friends have been robbed walking to their front door at gunpoint. Yippee Bay Area!)
But they don’t. Plenty of places to build. Plenty of properties to buy.
“Is that why you’re bringing up Dallas Gary?”
I brought it up because I suspected that you were talking about the nation and I had interesting information on a another city.
“I don’t have May existing homes sales for Chicago for the last 20 to 30 years. I would need G to pull me the data. All I have is what’s in the post but those are the abnormal years.”
My May recap has the data back to 1997.
“LAG everpresent.”
How long does it take for the comment to show up in the thread then? This doesn’t happen on my computer- probably because I’m the administrator.
I thought the new server would fix it- but evidently it’s not working. The new server at least should make everything else faster on the site.
“just look at places like Berwyn and Flossmoor. Plenty to buy. Houses just sitting there- on the market for months.”
Berwyn average market times are at an all time low – 49 days. But Flossmoor is a different story. Some areas are just depressed. That doesn’t mean the market is doomed. I’m still loving East Village.
“How long does it take for the comment to show up in the thread then? This doesn’t happen on my computer- probably because I’m the administrator.”
I just got this in my email notification but it’s not showing up in the thread or the ticker. However, as soon as I post this comment your post will show up for me at least.
I lied, Sabrina. Your post is not showing up right now.
“Berwyn average market times are at an all time low – 49 days. But Flossmoor is a different story. Some areas are just depressed. That doesn’t mean the market is doomed. I’m still loving East Village.”
Maybe it’s just the ones I’m looking at. As I said- it’s not the same market everywhere. Not even within the city of Chicago.
I went to a couple of open houses this weekend on the north side when I was just walking around. There was nothing to get excited about at any of them. There was one couple in each of them when I strolled in- so there WERE some others looking. They looked like they could be real buyers too- not just looky loos. But there was nothing “hot” about the open houses. I’ve been to truly hot open houses in San Francisco over the years where you walk in and there are 20 people already in the property. Heck, a few years ago I went to an Open House in Logan Square for a SFH listed at like $500k with a remodeled kitchen and a garage. There were 20 people in that house that day. It went under contract in just 2 days.
But that’s just the properties I went to while strolling around. Maybe they just weren’t the “hot” ones this weekend.
I still continue to see almost as many price reductions in my screeners as new properties coming on the market. The north side seems to have more inventory than other parts of the city (it’s more dense) and sellers who are listing too high are paying the price.
“My May recap has the data back to 1997.”
That’s better than what I have but it’s not 20 to 30 years worth of data. G used to get me data going back to 1988. I have it for some of the months- but just not for May (unfortunately.)
“How long does it take for the comment to show up in the thread then?”
Around 30 minutes, ime. Anyone test it more precisely?
“This doesn’t happen on my computer- probably because I’m the administrator.”
Yes, bc you can remain ‘logged in’–when we post, that eliminates the lag until the page ‘logs us out’ (ie, so long as we don’t need to re-fill out name and email to post).
Maybe my imagination, but the site does seem faster. However, that makes the LAG all the more annoying.
“Around 30 minutes, ime. Anyone test it more precisely?”
I think I might have posted a time in an earlier thread, but yeah around 30-45 minutes. And the site logs you out before then. So, not to belabor the obvious, but this makes it v difficult to have a discussion unless you are posting nonstop so that you don’t get logged out.
“So, not to belabor the obvious, but this makes it v difficult to have a discussion unless you are posting nonstop so that you don’t get logged out.”
Also, when you are “logged out”, the recent comments list excludes the lag effected comments when you are not on the front page.
““Who is up for the CC meet up?” / Toss out some dates”
I propose any night from July 5th – July 11th.
Someone name a place.
Let’s try to get a sponsor. LAGunitas or LAGavulin would be appropriate. Maybe Old Style LAGer.
“truly hot open houses ”
I don’t care if there is one person or 20 people there, it’s an open house. With rare exception (e.g., restrictive sellers who only want people in their home for a limited window, etc.), an open house is for a property that didn’t garner enough interest to go under contract through normal, private showings. Open houses and sale signs are for over-priced listings, or properties that are challenged in some other way. And, of course, they’re for broker advertising.
Call it a bubble, call it distorted, unhealthy, whatever you want. But this market (at least in the nice areas of thriving parts of the country, be it Chicago, Dallas, etc.) is not flat, and drops in sale activity are not necessarily representative of the market. There’s just not enough coming on the market (mainly because there’s nothing for sellers to buy). As Gary said, he needs listings, not buyers. In our neck of the woods, any listing that is realistically priced goes under contract in a day, typically for over list. If the list price is somewhat inflated, it closes just under list. Only properties that are either way over priced or have some major challenges sit for very long, but even those eventually sell, and not at what I consider bargain prices.
If you bought a place in 09/10, great. If you didn’t, don’t be mad that buying real estate is tight/expensive/frustrating again. I loved buying in 2010. I loved selling in 2013. I didn’t much like buying a couple months ago. As long as I don’t hate selling the next time around (be it in a couple years or a couple decades), I can live with it.
“I propose any night from July 5th – July 11th.
Someone name a place.”
Groove’s side yard.
“I don’t care if there is one person or 20 people there, it’s an open house. With rare exception (e.g., restrictive sellers who only want people in their home for a limited window, etc.), an open house is for a property that didn’t garner enough interest to go under contract through normal, private showings.”
Wow. WRONG!
In a truly “hot” market- the open house is the ONLY time you can see the property. The agent will tell everyone in the notes that it is open that weekend for showings and then offers are expected by Monday morning.
Chicago isn’t as hot as SF and NY where they use the open houses much more effectively but I was at a 2-day open house in February for an apartment in Lakeview that had like 50 people tromp through (according to the agent). It was the ONLY time you could see the property (was said that way in the notes). Multiple offers as of Sunday night. Sold for $15,000 over list.
Yeah, we listed one in May and held an open house the first weekend. 50 people showed up. It ended up being really convenient because most of the interested parties came through the open house with or without their realtors. By Monday we had 3 offers and it sold for $10K over list, which was 825K.
[Now it seems I can see one thread but i have to LAG in separately to see the other.]
“Now it seems I can see one thread but i have to LAG in separately to see the other”
Working “normally” for me…
“Working “normally” for me…”
Checked a couple of times. Could see most recent posts on the thread I posted on, but not others.
“Could see most recent posts on the thread I posted on, but not others.”
I had this problem now, too.
noted as pending.
Sold for $490k on July 28.
Deed not showing in CCRD, but appears to have sold to a developer/landlord, rather than an individual.
Was a freddie mac take back in Dec-13, from the original ’06 mortgage. There was a $100k 2d behind that one, from a Nov-07 refi (?? maybe a third? Bought with an $82,5 2d, and no release, but that was *common*).
Sold for $490k on July 28, 2014.
Which is over 10% below the *2006* price. Like for like.
To my utter shock, this one was reneovated, and it still owned by the ’14 buyers.
They refi’d a couple of times and currently have a $640k mortgage from 2022 (for some reason a 10/1 arm), which implies a value over $800k.