Update: $15K Reduction on One Bedroom at 2545 N. Clark
We chattered about this one bedroom at 2545 N. Clark in Lincoln Park in May 2008. It last sold in December 2006. It has recently been reduced.
How long do you have to live in a unit to break even these days?
Lots of people are about to find out.
I don’t have the square footage on this unit. But here are the room sizes:
- Bedroom: 12 x 12
- Livingroom: 12 x 13
- Kitchen: 12 x 9
Unit #1: 1 bedroom, 1 bath, no square footage given
- Sold in December 2006 for $285,000
- Was listed in May 2008 for $314,900
- Reduced
- Currently listed for $299,900
- Rental parking available nearby
- Assessments of $138 a month
- Century 21 Sussex and Reilly has the listing
assessments are very cheap, but this place seems a bit too small for 300k
Big deal; it’s still at least $15k overpriced. What was this flipper thinking listing it at $315,000 in May? 2006 was peak bubble pricing; you’re certainly not going to get more than that now.
If you buy conversions for the new appliances you will lose money. People were suckered into new construction and paid up for the shine. The shine is gone when it comes time to sell and you are simply stuck with a not so nice condo that really should be a rental property.
Stevo–
So you have at least one category of LP/LV condos (not on major streets–we all knew that those were bad buys, so they never counted) that might be expected to decline? All I can say is “WOW”.
ps–I also totally agree with that. Condo conversions (in the absence of real uniqueness) have been way, way overpriced for a number of years. They should all be priced (basically) as rent-savers, as they are the purest replacements for rental apartments.
Sorry for multiple posts. So a similar apartment around the corner would rent for about $1200-1300, meaning that it should be priced somewhere b/t $180k to maybe $225k. That $60k was a lot to pay for new appliances, granite and slate.
$260k mortgage means he put down $25k which is less than 10% of the $285k selling price. at $300k the 5% realtor fee and closing costs to seller of $3,000 and mortgage payoff of $258k means he’s walking away with a few thousand dollar loss. I wonder if he’s trying to sell after a year and a half because he hates the building or if his arm is going to reset and won’t be able to afford the payments. Who knows. He should at least hold on to it for a couple of years and enjoy the city.
We have no way of knowing why someone is selling.
But as I’ve said before- the length of time people stay in their condos is amazingly short. Especially lofts. For one bedroom condo owners- who usually are younger- a lot can change in even a year: job change, marriage, divorce etc.
Lots of 20-30 somethings buy the one bedroom condo and then get married and, well, what do you do with it?
A $260k mortgage at a generous 5.5% fixed is $1,476. No 20% so PMI of $169 estimated from goodmortgage.c0m. Taxes haven’t been assessed yet but what do you estimate, $150k a month? Plus assessments of $138. Grand total monthly payment = $1,933.00 per month. $1,300 rent vs. $1,933 buy. I’m just putting it out there.
Even with the tax deductions ($1,400 Interest + 150 RE taxes x 12 months – $5,000 SD the renter takes x.25% tax bracket) = $3,400
($1933-$1300)= $633*12=$7,596-$3,400 = $4,196 premium to own with a $260,000 mortgage.
Homedelete: I don’t dispute your calculations. In the near future, more people will wake up to the fact that unless they’re going to stay in the $300k one bedroom for a long, long time- it makes no financial sense to buy it.
But we aren’t there yet (as they’re still selling.)
People still believe in real estate and that in, say, a year, prices will be heading up again. They can’t even conceive of a market that continues to remain even stagnant (let alone still declining.)
I can’t tell you how many people I’ve met in the past three months who are trying to sell their properties without success who have told me they will simply, “rent it out until next year when the market improves.”
I have no crystal ball, but it seems that quite a few properties are going to be re-appearing on the market next spring and the market will be???? Who knows…
people think that being a landlord is easy…another misconception that is going to be relieved very soon.
“it seems that quite a few properties are going to be re-appearing on the market next spring and the market will be????”
If (1) gas remains expensive and (2) some businesses realize that they can attract employees by being at a transit hub (that is, relocate, at least in part, to central Chicago), then there is a good likelihood that there will be more people moving “downtown”. Without that tho, the correct answer is ” Who knows…”
The exurbs will be affected the most from higher gas prices. Good bye Pingree Grove and Manhattan!! The more typical suburbs and the city will stay pretty much the same. An extra $20 or $30 a week for gas won’t destroy most household’s budget. No one I know will move from the suburbs to the city because gas is $5.00 a gallon. If gas were $20.00 a gallon and it was rationed then all bets are off. Otherwise things will remain pretty much the same. Gas was really expensive during the late 70’s and it was rationed and even then people didn’t flock from the ‘burbs into the city. They just woke up early to get in line for gas.
“the late 70’s”
Can’t compare Chicago (or NYC or Boston or DC or most big cities other than Detroit) today to Chicago in the late 70s. Totally different environment. And yes, very few will move b/c of gas prices, but when they are already going to move, there will be another “positive” for the city for many people.
Gas prices aren’t likely to relocate many people to the city, but at Clark/Fullerton, buyers have the opportunity to ditch the car altogether. That represents savings far beyond decreased fuel consumption.