“This Won’t Last Long!” 2-Bedroom Short Sale Loft: 758 N. Larrabee in River North
This 2-bedroom loft in One River Place, at 758 N. Larrabee, in River North has been on the market since October 2010.
In that time period, it has been reduced $80,100.
Now a short sale, and listed $77,600 under the 2006 purchase price, the listing says “this won’t last long!”
It is a concrete loft with tall ceilings.
There are hardwood floors throughout the main living space.
The kitchen has granite counter tops and black appliances.
Is this a deal?
Allison Kellaher at Luxe Marketing & Sales has the listing. See the pictures here.
Unit #414: 2 bedrooms, 2 baths, 1350 square feet
- Sold in June 2002 for $289,000 (included the parking)
- Sold in January 2006 for $367,500 (included the parking)
- Lis pendens foreclosure filed in July 2009
- Originally listed in October 2010 for $345,000
- Reduced twice
- Currently listed as a short sale for $264,900 (parking $25,000 extra)
- Assessments of $377 a month (includes cable, doorman)
- Taxes of $3278
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 14×11
- Bedroom #2: 10×11
I have a question for all you wise people, say the prices keep dropping another 5-10% for nice condos with good views and all, but if the interest rates rise a point or two wouldn’t that pretty much offset the effect? How come no one is concerned with that?!
BTW, the featured unit here is definitely not nice in my book : )
miumiu – several reasons:
1. most people who post here are not serious buyers/sellers – just pretend consumers
2. most people are very ignorant when it comes to math/calculations -you have to spell it out in terms of monthly costs for them to realize the difference (ie most people can only deal with concrete “bottom line” numbers).
miumiu,
You hit the nail right on the head. Tomorrow I’m doing a post that looks at the combined effect of mortgage rates and home prices. The total housing cost recently bounced off a 23 year low.
“1. most people who post here are not serious buyers/sellers – just pretend consumers”
Agreed! it sometime it just get plain annoying, if you are SO certain housing is still going to fall more why don’t you just sell short on some REITs.
I mean if you really do believe housing is going to fall another 25%-50% as many here allude do, sell short you will make a killing if you are correct!
I think this one likely will sell fairly close to asking, maybe $280,000 or so. So, not really a deal, but not too far off the market price.
LOL
If IRs went up 2% in this environment we would have Armageddon.
Interest rates don’t just affect mortgages lol, it would destroy the ability to borrow everything in an already weak credit market.
A 2% rise in IRs would correspond to a MUCH larger drop in home prices than 5 – 10%.
Keep dreaming realtards.
There is nothing special about this condo to have a buyer say “wow”, I really want this place. As a result, a buyer for this particular condo will be making a financial decision rather than an emotional decision. Financial buyers are looking for bargains right now and the correct buyer for the property will determine what the property is worth to him or her. Time will tell if its on the market long or not. Not sure if the bank has already agreed to a short-sale price. If not, this could be on the market for months and months longer
“There is nothing special about this condo to have a buyer say “wow””
uhh – yes there is – the price!!! So, yes, it still can be an emotional decision if someone really wanted to live in this area and were previously priced out.
chicagobull(shitter), I am not a savvy investor by any stretch of imagination, but we gave an offer for a place in Nov. which was sold to another. At the time the rate we were getting was better than what we are getting today. Now we qualify for 4.8 or so. Now why am I interested in this? I did some back of the envelope calculations and saw that my dream place needs to come down some before I can afford it. This of course can happen alternatively if I can save some more cash or a combination of both. What worries me is that between me saving more and the seller reducing the price, the interest rates get to 5.5 (I don’t think is will be impossible) that will pretty much ruin my efforts. I am starting to see that Clio is on to something, seems most people here just talk and are not really looking into buying seriously.
That is when you realize nice places are not down as much as you think and interest rates do matter.
How come all the cheap condos are all 1400 sqft or less? Where are the deals on the 2500+ sqft units?
miumiu, you’re right a 5-10% dip in home cost is negated by a 1 or 2 % increase in interest, although it’s not as immediately apparent because with a 30 fixed loan the monthly payment isn’t that different — something like $100 per $100K per interest point
(play with a loan calculator to see for yourself).
But given that people aren’t able to unload homes as easily as in the past without risking taking a bath, I think people will be more careful with what they buy. Instead of starter homes, they will be their Forever and Almost-Forever homes.
awesome! i can eat at japonais and stroll through the projects afterwards.
Steven i think we chatted before about a raw space in RN which was 2000sqft+
“Now we qualify for 4.8 or so. Now why am I interested in this? I did some back of the envelope calculations and saw that my dream place needs to come down some before I can afford it.”
So it was what, an extra 0.5% that made your dream place “unaffordable”? Yes, rising rates do suck for broke people trying to afford too much, that is true.
The reason people still look at selling price over monthly cost is that they’re not buying a place they’re going to stay in forever. Resale value is a really big factor for most people, especially in this type of property where the vast majority aren’t going to want to stay for 10-20 years. Sure you could use the amount you’re saving in interest by buying now to pay down more principal but most people don’t think that way. And at the end of the day you still have to get the property appraised for the price you’re paying.
“What worries me is that between me saving more and the seller reducing the price, the interest rates get to 5.5”
miumiu:
The counterpoint is that you can always re-fi in the future, to reduce your rate, but you can never lower your purchase price.
And the counter-counter is the hypothesis that rates don’t actually effect prices, even in real terms (which I *really* don’t want to start arguing again, but throw out there for balance).
affect. not effect.
Mium,
Interest rates do mater. YOU said “2 points”, now you’re lowering the bar to .7% which is still massively substantial. Any rise in interest rates will correspond with additional housing price drops on top of the downward price pressure created by the foreclosure/short sale market.
An unfathomable rise in IRs (2% or higher) would detonate the bond bubble that is WAYYYYYYYYY bigger than the RE bubble was. Imagine the RE bubble but here the players are governments, hedge funds, institutional investors, and the fortune 500 companies.
It would destroy society. That’s how bad it would be.
Clio–I disagree. In this market, its much harder to “wow” any buyer with price rather than trying to “wow” them with a condo that looks fantastic and has great finishes, etc. In this market, there is always something cheaper (just read Cribchatter everyday). The run of the mill condo, with a bad floorplan, builder base cheap finishes, bad views, bad natural lighting, bad location will sell only if a buyer thinks they are getting a “bargain”. Again, bargain buyers are making a financial decision, i.e. “I don’t love it, but I will settle for less since it is a good deal”.
Also:
On this place, subtract the fireplace (and the likely hidden column) and it becomes *much* more attractive with a bigger open living space. That looming fp/column kills the space.
This is a good deal. Will probably go for ask to slightly above.
This is a good deal. Will probably go for ask to slightly above.
Bob 2, read the post carefully before you comment. It is not just the rate, I need to save more cash and seller needs to come down too. BTW, I am talking about north facing units in MPE that are now over 700K. But you are definitely right that it is out of my range. What I am trying to decide is wait 6-9 month and potentially get it or buy something I can afford now. One big factor in the decision making is obviously interest rates. All I was trying to figure out is that why in our CC debates often time a crucial variable, i.e., rates are ignored.
Thanks for the explanation Chicagobull, admittedly I am not very financially savvy so was curious to see if you guys think it possible for the rates to jump up to 6 or 7.
“awesome! i can eat at japonais and stroll through the projects afterwards.”
Actually, but for a the rowhomes, all the projects are gone. Groupon is expanding and the neighborhood is getting better each day. The row homes are very empty as the cost to renovate is exceeding the cost to demolish. My bet is that CHA seeks leave of court to demolish them irrespective of their “historical” protection.
Steven -“How come all the cheap condos are all 1400 sqft or less? Where are the deals on the 2500+ sqft units?”
There was a 2800 sq foot unit in this building. Custom buildout (no terrace/deck but building approved one) in this building and it sold last year for $1.2 million I belive. Maybe Sabrina can find this listing and what it went for. That was a deal as the owner had $1.8 into it.
groupon to the rescue! maybe they should do some sort of deal on all the excess housing inventory. better hurry before google starts taking market share.
“It is not just the rate, I need to save more cash and seller needs to come down too.”
Yes, as I said, rising rates suck for that reason. They are only to your advantage if you can potentially buy the place outright. If you need to finance you’ll most likely be paying more, unless you have other investments that can offset the cost. If you got the money you got options, if not you’re screwed.
“All I was trying to figure out is that why in our CC debates often time a crucial variable, i.e., rates are ignored.”
Probably because they been fantastically low for a while and the little day to day fluctuations don’t make much of a difference for people looking to buy now. 2 years from now, who knows what it’ll be…
So if interest rates go up 2% that will knock off 20% of a persons buying power.. So if we expect interest rates to go up what do you think that means for future housing appreciation? Better buy a home that you plan on living in for a long time and make sure you buy it at the write price!
Anyone have thought on real-estate prices in Streeterville, looks like a lot of people are asking for their 2006/2007 purchase price or am I wrong on this?
So basically Bob2 you are claiming RE deals are for cash-only buyers?! I am going to pay 30% down payment. It is not exactly a small portion. All I was saying is that interest rates matter in the decision making process and they are another degree of uncertainty in the equation. Seems you are agreeing but also disagreeing with it.
miumiu,
to be honest with you, you’re right, and it’s really sad that you’re right. the notion that the only way to buy a house is to utilize massive leverage is so ingrained into the American psyche that it completely skews any reasonable economic analysis of the housing market.
i think truly responsible buyers should acknowledge how precarious a market is when it rests on this kind of collective, debt-seeking push for home ‘ownership’ (i use quotes, because in reality, until you free yourself from debt, your debtors own it). beyond how unreliable this structure is, buyers today are not only faced with the task of buying a home that is in the context of history massively inflated, but we are also made to believe that putting half our net worth into a 20% down payment is the ‘responsible’ approach to home ownership, and that we need to structure our actions around the mortgage rate.
i like to look at prices from the perspective of it being like any asset, and i’m sure others on this site share this belief. my access to leverage has no effect on its true value. as buffett said, “price is what you pay, value is what you get.” and since i’m someone who (foolishly?) at least has a little faith in capitalism, i think prices should one day converge to their true value in the housing market.
This is a good deal: price, square footage, taxes and assessments.
Whether this is a great place (finishes, layout, etc) are clearly debatable.
“So basically Bob2 you are claiming RE deals are for cash-only buyers?!”
No, but if you need a loan you can expect to pay more for the same deal.
I do agree with you, I just found your comment about 4.8% putting your dream home out of reach a little strange. At best you must have been quoted 4.3 before then, so a 0.5% increase at 400k loan is $121 a month extra. I don’t see that as a big deal, especially in a high end building with its high assessments and taxes.
Personally I think interest rates rising will not depress prices enough to even out by itself, but there’s more factors at work that will make some real estate more of a bargain in another year or two despite rising rates. That’s just my opinion though and I may be completely wrong. It’s a bit of a gamble, but in the South Loop there’s just too much inventory and it’s way too overpriced IMO.
1) I helped a friend move into a unit in this building *exactly* like this unit here in 2002. I mean, it looked exactly like this, with the pole in the kitchen, the 2nd bedroom with no window, it was a different floor though. I remember the unit being uninspiring and long, narrow, dark. Not impressed at all, and IIRC, the significant other and I saw this property and became concerned that if pricing kept rising, we’d eventually be priced out. It was a few years later I realized it was all just a bubble.
2) There are few large condos because so many greedy developers built these units with the maxim to squeeze as many homes as possible onto the subject building. Over time people will buy contiguous units and knock out walls to create larger units. I had a boss who used to live in teh playboy building and he combined two 2beds (or maybe a two, a one and a studio) damn it’s been a while, but regardless, he combined them and created a huge cavernous condo that was more like a home, rather than a tinyish sq ft condo like this.
A higher interest rate results in a larger mortgage interest deduction come tax time.
I would much rather have a high interest rate and a low purchase price than a low interest rate and a high purchase price.
Bob 2 my bad for confusing you. I could not afford my dream home at Nov either.
There was another ok place that we could get buy my heart was not in it as I am in love with the North facing aforementioned units. All I was saying is that I wonder if I should buy something I can afford now or wait a year when combination of more savings (50-80K) for me and price drop will make a difference. My husband thinks being too greedy will work against me if interest rates rise in the mean time.
Not Bob: “Personally I think interest rates rising will not depress prices enough to even out by itself, but there’s more factors at work that will make some real estate more of a bargain in another year or two despite rising rates. That’s just my opinion though and I may be completely wrong. It’s a bit of a gamble, but in the South Loop there’s just too much inventory and it’s way too overpriced IMO.”
My gawd!! A reasoned, albeit not fully disclosed, explanation for waiting.
HD: “Over time people will buy contiguous units and knock out walls to create larger units.”
Funny, I was thinking that would be the best use of this space. Not that that is very likely on the 4th floor, even if this is next to a corner unit (is it?)
“Tomorrow I’m doing a post that looks at the combined effect of mortgage rates and home prices. The total housing cost recently bounced off a 23 year low.”
I have Nov 2010 as a new 23 year low (from April 1987.)
“All I was saying is that I wonder if I should buy something I can afford now or wait a year when combination of more savings (50-80K) for me and price drop will make a difference. My husband thinks being too greedy will work against me if interest rates rise in the mean time.”
IF you are buying a SFH and parking you butt for a haul 7-10 years and your almost “perfect” dream home hits the market just pull the trigger (and the mortgage is only 30% of your income you will be fine.)
if you are looking to by a nondescript 2/2 in a cheesy area, just fricken rent rates will be rates it will affect more than just your friendly local mortgage payment.
PS the buyer of this unit used an 80/20 loan Long Beach Mortgage (aka WaMu) loan to finance this baby 100%.
Even the 2002 purchaser put down 10%. Just imagine what the price will be if the 2011 buyer has to put down 20%
“I have Nov 2010 as a new 23 year low (from April 1987.)”
real dollars, accounting for taxes, assessments (as applicable) and wages? Or are you going to disappoint me?
Groove I am going for a 2/2 in SL that some think is a cheesy area…lol…but works great for us as it is in town and we commute from south so it works well in terms of traffic and all. Also I love the area, proximity to museums, lake and all.
The fact that most attractions are walking distance or a short cab ride is great for us. I also think unobstructed views of sky line and the lake over grant park is a something that has intrinsic value.
@ anon(tfo)
anon (tfo) on January 25th, 2011 at 1:18 pm
“I have Nov 2010 as a new 23 year low (from April 1987.)”
real dollars, accounting for taxes, assessments (as applicable) and wages? Or are you going to disappoint me?
Real dollars – CPI or some index
Taxes – can also put in a range
wages – more govt stats
How do I do assessments given the huge variance?
“How do I do assessments given the huge variance?”
I assume that G–master of the data–has some tracking method to see if growth in assessments is divergent from inflation. I would guess it is, but have no source. If it’s not, then it’s basically inapplicable.
I used to budget ~ 2% / year for assessment increases while living in large stabilized condo buildings.
If we are going back to ’87, I wonder if assessment figures would tend to run high given the amount of new condo stock for this period of time along with the higher than normal variance of assessment increases for new condo stock.
I look forward to the data from Oracle “G”
Wasn’t there a thread about a year ago, where Joe Zekas and some other guy were making a case for RE prices being independent of interest rates? I recall the other guy putting up some legit links to support his position.
A basic argument against the inverse correlation of rates to prices goes something like: when the economy is doing poorly, people are poor, prices fall and so do interest rates. When interest rates rise, it’s generally assumed it’s because of a strengthening economy (not default risk), and people have more cash flow, confidence, etc. and prices will rise even though interest rates are rising.
“Groove I am going for a 2/2 in SL that some think is a cheesy area”
Miumiu,
I love the SL, tried for a year to get a rental in OMP. the location when compared to the no congestion is PRIME. the museums for wife and the kid would have been so sweet.
for me if i was looking to buy would be scared of the SL, just way to many shifting variables and i just wouldnt feel secure owning there.
But thats me, i am no expert or even a novice, but just seeing price drops, special assesments, lawsuits, and all the inventory there has me continually skeptical of the SL.
just do mad research before you jump in there, thats all.
BTW check out the shrine or reggies for good house music.
here’s the old thread, the other guy was named Sparky, you have to scroll down to the second-half of the thread: http://cribchatter.com/?p=8206
My response was to Gary’s comment about the “combined effect of mortgage rates and home prices” and how I didn’t see that bounce off the recent low based on his parameters.
“real dollars, accounting for taxes, assessments (as applicable) and wages? Or are you going to disappoint me?”
I am, only because I ain’t giving away the farm.
“I am, only because I ain’t giving away the farm.”
Well, I wasn’t asking for the details, just if you were using all those inputs to your total cost formula.
Also, do you break it out price-tier wise?
Boy, you guys must be really fun at parties!!!
Patience Sabah
our thirst will be slackened in due time
chichow – you are speaking in tongues, now… what does that even mean?
http://www.facebook.com/people/Patience-Sabah/100000282566152
anon(tfo): “…subtract the fireplace (and the likely hidden column) and it becomes *much* more attractive with a bigger open living space.”
I find fireplaces to be useless features for any urban setting. It’s also too much of a fire and carbon monoxide hazard. Unless you live within chopping distance of your wood, it does not make sense to make the fireplace a central architectural feature of your home.
To those of you who have fireplaces, how often do you actually use them? Give me an approximate number of days per year that it ever gets used.
+danny
It was hard to find a place without a fireplace… total waste of space IMO, I had a few rentals that had them and I never used them once in many years
“I find fireplaces to be useless features for any urban setting. It’s also too much of a fire and carbon monoxide hazard. Unless you live within chopping distance of your wood, it does not make sense to make the fireplace a central architectural feature of your home.”
Agreed. Also one less place I can put a TV (I’m not putting it above the fireplace). People tell me I should care about it for resale…
“Agreed. Also one less place I can put a TV (I’m not putting it above the fireplace). People tell me I should care about it for resale…”
NYTimes (basically) declared them over just last week. Some jewelry heir buffoon really doesn’t like his anymore.
“NYTimes (basically) declared them over just last week. Some jewelry heir buffoon really doesn’t like his anymore.”
I know you are not vouching for the article, but there is some just crazy screwing around with statistics in there.
“I know you are not vouching for the article, but there is some just crazy screwing around with statistics in there.”
There were stats? I just saw that the in-crowd apparently doesn’t think fireplaces are a benefit in Manhattan anymore and immediately began dumping my investment in Manhattan wood-delivery service companies.
ps:
None of the people in that article were real, were they? I mean those are all made up names, right?
My thoughts on a variety of the interesting issues raised in this good discussion:
Some people like fireplaces, some don’t. I’ll best most GBWFs in the City rarely get wood in them, but mine probably does 40 days a year. We go through a lot of wood. I expect that a decent number of people also run gas logs a decent amount. I do think that fireplaces in weird places (I’ve seen them open to both sides in an en suite master, in the center of a room, weird corners, etc.) tend to suck and reduce resale value, but I’m not sure that a fireplace in a useful spot along a wall is going to be a detriment for most.
The reason that most people don’t understand the benefit of low interest rates is that same reason that there was a housing bubble – people subscribe to truisms (“we’ll always be able to refinance,” or, “it’s fine to get a HELOC to take $ out of my house, that’s what it’s there for”) or can’t get past the simple numbers like a purchase price. Same with all the ARM loans – you’re nuts to do something like a neg am loan, but the vast majority of normal ARMs from the boom continue to reset at ridiculously low rates. ARMs were evil when sold to people who needed the low payments to barely meet DTI requirements and who couldn’t afford the interest on a 30 year loan at a normal rate, but they’re the consumer’s best friend to someone with plenty of savings and DTI in the single digits.
2% growth in assessment might hold true over a 30 year period, but I think that assessment growth will be MUCH higher over the next ten years, because of inflation in services and all the foreclosures, REO, etc. not paying assessment, etc.
I think that interest rates are going to stay relatively low. I think that the Fed is far more concerned about unemployment and lack of economic activity than they are about inflation. Money is pretty much free for large, successful, liquid corporations at this point. There is also a ton of private money sitting on the sidelines, and lending regulations have been severely altered. I would expect that owning mortgages entered into in 2011 is a far, far safer investment than a 2007 tranche. My view is rates are going to stay in the low to mid 5s or below for a while. Compared to where things have been in the past, if a rate up to 6% or so is a problem for you, you probably should not be buying real estate, you’re too close from a DTI (actual, not arbitrary) standpoint.
come on you can’t talk about an awesomely pretentious article from the grey lady and not link it
Sorry, sonies. It’s here:
http://www.nytimes.com/2011/01/20/garden/20fire.html
My favorite part:
““A wood-burning fire in the city is a ridiculous luxury — we would never have put it in ourselves,” said Mr. Arpels, grandson of one of the founders of Van Cleef & Arpels and the former managing partner of Netto Collection, a baby furniture company bought by Maclaren. “In the city, it doesn’t make sense to burn fires, because it’s inefficient and it’s polluting.” “
LOL my favorite tidbit
“Karen Soucy, an associate publisher at a nonprofit environmental magazine, isn’t swayed by that argument. She refuses to enter a home where wood has been burned, even infrequently. “
I would have considered this place when I last purchased in 07. I recall looking at small 1 beds (only on the 8th floor so at least you get direct sun) for 258-299 + parking
Groupon is going to save the neighborhood just like March First saved the west loop….they ever finish that monster parking deck on Fulton & Elizabeth they started back in 2001?
But fireplaces are SEXY! Especially in winter! Don’t tell me CC’ers are just a bunch of real estate wonks with no sense of romance!
And then a few years later, of course, they play a major role in the Christmas run-up – you know, hanging stockings, explaining to the kids about Santa’s grand entrance, etc.
“But fireplaces are SEXY! Especially in winter! Don’t tell me CC’ers are just a bunch of real estate wonks with no sense of romance!”
so my “fire place” DVD wont work on the Laaadies?
“Santa’s grand entrance, etc.”
Santa is just a vehicle of American consumerism that teaches kids to be greedy, why would i want my kid to be a part of the reason the banks caused the Housing bubble and market crash?
I (in cheap-ass mode) rented a $1 dollar movie last night: The American staring George Clooney.
The opening scene* has Mr. Clooney siting in front a nicely glowing fireplace at the foot of a bed. On the bed is a lady in her birthday suit showing a lovely backside.
Romantic – Check
Uplifting – Check
Practical – Not.
* Later you see they are in a cabin in the woods where it makes sense to have a fireplace vs the always over the top Trump (I think I recall something about how every room in your condo has a fireplace)
Where is G’s info?
“Where is G’s info?”
Behind the pay wall, Jason. He said as much. Guess the general categories of the inputs is too proprietary as well.
(Or he’s just ignoring/missing the question)
“so my “fire place” DVD wont work on the Laaadies?”
LMFAO and almost fell out of the chair. Awesome Groove, just plain awesome.
BTW, this place is ok for the price. I’d try 275k w/parking depending on the views outside them windows.