What You Can Buy for $400K in McKinley Park: 3311 S. Western Blvd.
This 5-bedroom house at 3311 S. Western Boulevard in McKinley Park is the most expensive single family home for sale in the neighborhood.
Built in 1953, it is on a double lot measuring 54×130.
Located just a couple of blocks from the orange line El stop, 3 of the 5 bedrooms are on the second level.
There is no central air but the house does have a wood burning fireplace.
There is also a red gazebo in the back yard.
Originally listed in July, it has been reduced $35,000.
There is only a partial picture of the kitchen, but it appears to have white appliances.
The house also does not have a garage or deeded parking.
Can the McKinley Park neighborhood support single family homes at this price point?
Angie Thomas at Century 21 Kmiecik Realtors has the listing. See the pictures here.
3311 S. Western Blvd.: 5 bedrooms, 2 baths, no square footage listed
- Sold in June 2000 for $240,000
- Originally listed in July 2010 for $435,000
- Reduced
- Currently listed for $399,000
- Taxes of $4082
- No central air
- No garage
- Bedroom #1: 15×21 (second floor)
- Bedroom #2: 15×21 (second floor)
- Bedroom #3: 15×21 (second floor)
- Bedroom #4: 13×15 (main floor)
- Bedroom #5: 13×15 (main floor)
- Unfinished basement
Well, here is the “unique” and “non-McCrapbox” house that y’all are always looking for. I’m not sure if they have any realistic chance of selling this place anywhere near this price, but they can always hope for a sucker.
I guess if someone REALLY liked this neighborhood (ie if they grew up there or had lots of family/friends in the close vicinity) AND had a family, this would be a good house for them. I don’t think this house would appeal (at ANY price) to anyone else secondary to location and general condition.
It’s a pretty house, but weird location (and I’m not talking about the hood, which I know nothing about)… I mean the fact that it’s next to an apartment building and looking out directly on a cement wall. And too close to the highway. From the first photo it looks like it should be on a lovely tree lined street or something. And augh, that may be the ugliest gazebo I’ve ever seen.
No.
Wow. If this is what $400,000 buys, I want no part of it.
Wow. Mc Kinley Park is a blue collar hood. I’ll have to drive by this place for kicks, but it is way over-priced.
A perfect example of delusional sellers. This one will linger, unless the price is cut significantly. why would it go for over the 2000 price? maybe they think so because of the gazebo, which may have been built since then? absurd.
….why would it go for over the 2000 price?
It’s all about supply and demand. I don’t know anything about this particular neighborhood – but IF someone was exclusively looking in this particular neighborhood (for personal/family reasons), I could see them paying a “premium” for this house/yard, etc. – and remember 400k is not THAT much money when you are talking about a single family house w/ a yard. Also, what someone paid in 2000 is irrelevant.
$400K is a lot of money for that neighborhood. It’s very blue collar, and this price is way beyond what it should be.
it’s nice, close to the orange line, etc. I can see someone out there who is in the hood betting that this is a good long-term investment.
a real supply/demand issue here is the double lot – there just aren’t many of them in Chicago.
but the biggest problem is this is on WESTERN.
which kind of negates the entire purpose/value of a double lot and huge open yard.
so… who the hell knows…
Two pix of the gazebo and not a decent one of the kitchen?
“but the biggest problem is this is on WESTERN.”
It’s on the Boulevard, so it’s not quite “on Western”, but this particular spot might be worse, if that’s possible.
It looks like a good building depends on if somebody loves the hood I could see it going for 300kish; if what they say is true in the listing they put in a good chunk of change that could be the reason for the price at least there is plenty of parking on the back side on which seems like an extended sidewalk. but it is too close to the highway and its very near a major street(traffic might go more on damen for highway assess).
This price is totally delusional. it’s the most expensive in the neighborhood. The days of the $400,000 working class neighborhood home is fading. That’s so 2006.
I have gazebo envy, but not home envy.
I too have to admit McKinley park is not for me (though it is pretty quiet, and I’d take it over several of the neighboring hoods, e.g. lil vill and back of the yards).
Listing says it has a “full house fan”. . . anyone know what that is?
I’m picturing a room full of dwarves in the basment, pumping some big accordion apparatus.
I live in McKinley and am familiar with that stretch of Western. It’s very much like the north-south boulevards in Logan Square: Due to where the boulevard is located and how Western Avenue and Western Boulevard split at that spot, it does feel “tucked away” a bit. I don’t know how much noise they get from the Interstate, however.
McKinley does seem to have a higher share of homes on double or large lots, something that helps keep the congestion down. (Another factor is that it seems like a street corner in McKinley is more likely to house a SFH or two-flat than a 6+ unit apartment building.)
““full house fan”. . . anyone know what that is?”
Sort of a ceiling fan for the whole house–but exhausting hot air thru roof vents. See here: http://www.rewci.com/wholehousefans.html
I have to disagree with most people – I really think that this would be a perfect house for a working class family (making 100-120k) who really wants to stay in this neighborhood. 400k for a single family house is not a bad long term investment – again, this is not for an investor or flipper but an ACTUAL family that will use and enjoy the house/neighborhood for years.
“full house fan”. It’s a huge fan in the attic that sucks up warm moist air from the second floor and sends out the roof. It generally makes a breezy feel upstairs instead of a stagnant, warm, southern Mississippi humidness. They are incredibly loud. I can’t describe how loud they are.
how does this place not have a garage? I mean damn that’s just lazy
as for the place/price? um… good luck to the sellers
Why couldn’t that working class family pay $295,000 instead of $400,000 for the house? Realtors can’t prop up prices if there are no buyers at the listing price. This would be a horrible investment decision for a working class family if they paid $400k.
“This would be a horrible investment decision for a working class family if they paid $400k.”
Says who? Seriously, wtf are you talking about? If a family pays 400k for this house (at 4%interest), their monthly mortgage payment is about 1621 add 350/month for taxes and their total costs are a little less than 2000/month. This is a FIXED cost (ok, taxes will go up a little every year) for the next 30 years. I can guarantee you that even in 10 years (let alone 20 or 30), they are not going to find anything near this for 2000/month. So, IMO this would make great financial sense for a family.
“This would be a horrible investment decision for a working class family if they paid $400k.”
You guys are always so focused on the prices you ignore the rear end of the 800 lb. elephant, which is whatever interest rate the buyer can get.
If a buyer wants to live here for the long term, what he/she pays for a 30 year fixed is at least as important as the price.
And right now, rates are pretty danged low. Looking into refinancing ourselves, even though we have a 30 year fixed at 5.6
Look at the ccrd records. Looks like they owe about $225k on it, and I’m thinking maybe there was a divorce and remarriage?
Whole house fans don’t have to be noisy, and they can get you through hot summers without central air pretty well. I’ve always wanted one.
You couldn’t pay me 2000 a month to live in Mckinley park though… unless you threw in some Sox season tickets too
“I really think that this would be a perfect house for a working class family (making 100-120k) who really wants to stay in this neighborhood.”
I really think that any family from McKinley park who wants to spend $400k on a house is going to spend it in another neighborhood. I see two closings in the hood in the past year over $300k, and none over $400k. Bad enough to be the best house on the block, but the best house in the neighborhood??
But thanks all re: the whole house fan. Kinda assumed that’s what it was, but frankly the dwarves seemed a lot cooler.
My point was for that neighborhood, the price was too high. it is on western ave, has no garage, and no AC. Priced at $400,000. Genius pricing strategy in my opinion. Also, how does that working class family have a combined income of $125,000?
Also, you can’t always buy things using the “how much a month” philosophy. At the end of the day, $400,000 is a lot for that neighborhood compared to the comps, regardless of the monthly payment.
“I can guarantee you that even in 10 years (let alone 20 or 30), they are not going to find anything near this for 2000/month. So, IMO this would make great financial sense for a family.”
You actually can’t guarantee anything. And your belief that this will be a screaming deal ten years hence is just that–a belief. You are from the old school paradigm of RE always goes up, at least over a ten year horizon and 400k houses are normal and the norm for America.
Sorry dude its not 2006 anymore and the sea has changed, doesn’t matter if a blind man is standing on the beach or not it doesn’t affect the tides at the end of the day.
400k houses for working class families aren’t what America needs even though our policy makers are hell bent on preserving the status quo:
http://seekingalpha.com/article/221318-5-trillion-dollars-more-to-fix-fannie-and-freddie?source=yahoo
2000 price looks about right.
I don’t know the neighborhood. From the Google satellite it looks pretty industrial. I know Pilsen and like visiting the area, although even that is too industrial for me to consider actually living there. This house also borders on Back of the Yards which seems pretty blighted from the discussion yesterday.
The price per square foot is approximately $200 (not including the unfinished basement). I think that’s too much for this market for the Southside for a house which faces the expressway.
“Also, how does that working class family have a combined income of $125,000?”
You do realize how much Streets & San workers make, right? And, no matter how much you make driving a garbage truck, you’re still “working class”, because it’s not just a marker of income.
“Also, you can’t always buy things using the “how much a month” philosophy.”
Actually, that’s exactly what the lenders care about.
I’m not saying *this* house is some great deal, but the monthly (assuming you’re getting a fixed) nut is really all that counts.
Ignoring the interest rates out there is akin to only looking at at your house’s assessment without understanding the levy that actually drives the tax bill.
Like anon said, “working class” is not just a marker of income. I just used that term b/c I can’t imagine anyone else living in this neighborhood.
The only ‘working’ class families making $120k are union workers with seniority and union city employees. I’ve seen union truck drivers for the city who make in excess of $80,000 a year for 40 hour work weeks and have second jobs with the city that boost them into the $100’s. A handful of other union professions in the city make really good money but those days are waning. it is difficult to get these jobs without connections and it takes years of seniority to get to that pay scale.
These working class families also spend like there’s no tomorrow because they believe (correctly or incorrectly) that their union pensions and social security will bail them out when it comes time to retire. Quite a few of them bought crazy expensive homes on the south side neighborhoods (bridgeport, mckinley park, by midway, becverly, mt greenwood) etc during the boom for $300 or $400 k with no money down because they had the income to support the payments.
now they’re really starting to feel the pain of the $2,000 a month mortgage when combined with all the other bills.
“I really think that this would be a perfect house for a working class family (making 100-120k) who really wants to stay in this neighborhood.”
My point about “how much a month” is that it ignores the comps. Who cares if you can afford $2,000 a month, when the comps indicate if should be priced at a level that the monthly payment would be $1,550 a month.
The street & sans workers have all had quite a few furloughs in the past 18 months, decreasing their income.
we were typing the same thing.
bear in mind these guys making $80k driving a streets and sans truck are connected, have connected families, and have been on the job for 20 years or more. and I should also include that from taht $80k they pay some insurance, union dues and a substantial payment towards their pension, well over a couple hundred bucks a paycheck, pre-tax. But regardless, it’s really developing into the haves and the have nots. there’s the city union workers getting 6% pay raises (or whatever the number is) with guaranteed hours, and mostly everyone else in the private sector who is getting paycuts and is worried about job loss. A handful of 45 year old government workers aren’t enough to prop up prices to $400k.
“#anon (tfo) on August 19th, 2010 at 9:50 am
“Also, how does that working class family have a combined income of $125,000?”
You do realize how much Streets & San workers make, right? And, no matter how much you make driving a garbage truck, you’re still “working class”, because it’s not just a marker of income.”
I really hope that potential buyers out there are reading these comments and try to understand that interest rates are at historic lows. Although they may be low for a little while, they WILL increase – this could SUBSTANTIALLY increase the cost of a house/condo – do the math. You will see that even if overall home prices decrease 10-20-30% in the future, you still can be paying much more per month than buying at a slightly higher price now with these ridiculously low interest rates. I truly believe that anyone in the market now who DOESN’T buy is a complete moron.
Prices will come down further if rates really do go up a lot, so you will see no significant change in affordability. i don’t see rates increasing significantly for a while, unless the govt support for the housing market is decreased (fannie and freddie).
That’s awesome, you rock clio!!!! Say it like it is!!!
“I truly believe that anyone in the market now who DOESN’T buy is a complete moron.”
Why buy when sellers are too stubborn to lower their prices to market levels? I have friends who are looking for single family homes in nicer pockets of the city that can’t get any of their offers to be accepted, as seller refuse to lower them to market levels. Too high of a bid-ask spread is the seller’s fault, not the buyer’s.
“Why buy when sellers are too stubborn to lower their prices to market levels?”
OK – do we have to spell it out for you?!! L-O-W I-N-T-E-R-E-S-T R-A-T-E-S!!!!!!!!!!!!!!!!
Seriously, do the math on a 6% mortgage on a 299k place and a 3% mortgage on a 500k place and you will see that it is still cheaper to buy the 500k place. Tell your friends to check their emotions at the door, think rationally and do the right thing.
“we were typing the same thing.”
I was only focused on the “working class $125k family” issue, which, adjusted for inflation and household job count, was the backbone of prosperous Chicago and, while a definitely shrinking group, does not yet count as *rare*. They *would* be foolish to spend $400k on this house, tho. Maybe $325k could make sense.
clio the other side of that argument is when interest rates go up people will have to lower their prices or people can’t buy their property.
Dave M, you bring up a point I wonder about. What should a seller do when they’ve lowered their price as much as they can without having to bring money to the table. Should they lower their price and dip into the money ear-marked for a down payment on the next place (from their savings perhaps) or simply take their home off the market?
for clairification, i’m not talking about the seller who thinks his/her place is worth X when every available comp shows it’s only worth 75(X), i’m talking about someone who realistically set the price to match CMA and then lowered it after an appropriate amount of time.
clio, since I bought last year will I be able to flip my place to someone for like 80k in profits because interest rates will be low?
That would be pretty cool
If a property has been on the market for over a year, is it fairly priced? Say for example, a SFH listed at $599,900, but can’t get an offer over over $550,000, which would be in line with the comps. Shouldn’t the seller at least make a counter-offer – my friends can’t even get them to counter $1,000 lower. But Clio thinks the buyer should just pay $599,900 and get over it. Stupid in my opinion.
“clio the other side of that argument is when interest rates go up people will have to lower their prices or people can’t buy their property”
possibly – but they could also rent out their places in which case rents will skyrocket (because nobody can buy)
also, even if prices decrease, they are unlikely to decrease to the extent that makes up the difference caused by potential interest rate increases (ie they would potentially have to decrease prices by an additional 30-40% which ain’t happenin’)
“Should they lower their price and dip into the money ear-marked for a down payment on the next place (from their savings perhaps) or simply take their home off the market?”
Why the hell would someone who may have to bring money to table at closing even be looking for a new place (when, as you write, they have an option of staying in their current home for the time being)?!!!!!
Note that there are many middle-management “HS diploma ok” jobs at both City of Chicago and Cook County agencies, usually awarded to a deserving clout candidate, which are both blue-collar and white-collar occupations. Many of the blue-collar rank-and-file Chicago and Cook County workers also collect a very good compensation package which will push them into a $100,000 year with overtime. Many Chicago and Cook County promotions are based solely on clout “merit”, rather than true leadership and skill. Regularly reading “second city cop” blog-site, I’ve noted that CPD management appointments seem solely based on clout and connections; I suspect other departments are similarly managed.
Clio, a number of reasons. Maybe they really want to change neighborhoods or have changed jobs and want to cut their commute, or two DINKS have condos and want a SFH
Reading this comment about HS diploma, clout-related jobs, makes me wonder why people even go to college. The value of education is in doubt, unless you get an advanced degree.
“… why people even go to college. The value of education is in doubt, unless you get an advanced degree.”
There are several great reasons to go to college:
1. get away from your parents
2. party
3. delay the start of “real life”
4. party some more
5. make connections
6. meet future partners
7. party
8. “find yourself”
9. party
seriously, though, you need to go to college to get into graduate school (advanced degree)
a number of options:
1. Stay in the home until the market returns
2. Short sale
3. Bring money to the table
4. Have family members bail you out
5. Walk away
there are options. it’s not my fault the seller bought his home in 2006 at the height of the market, or, borrowed a ton of money against his house over the years. I as the buyer can afford what I can afford and that’s the reality of the market place.
But icarus, most sellers are just dilly dallying, insetad of exploring the above options and that’s one of the reason why the market is slow. there’s a number of nice homes in my preferred neighborhood’s I’ve got my eye on…but at 120 days and counting without a price reduction, well, they’re not really exploring one of the five options above.
Speaking of that, earlier this week Redfin released survey results and discovered that in “Chicago’s Cook County had just one-third of all homes listed during 2009 sell by mid-August.” and less than half of all home sales nationally sold after being listed.
“#Icarus on August 19th, 2010 at 10:25 am
Dave M, you bring up a point I wonder about. What should a seller do when they’ve lowered their price as much as they can without having to bring money to the table. Should they lower their price and dip into the money ear-marked for a down payment on the next place (from their savings perhaps) or simply take their home off the market?
for clairification, i’m not talking about the seller who thinks his/her place is worth X when every available comp shows it’s only worth 75(X), i’m talking about someone who realistically set the price to match CMA and then lowered it after an appropriate amount of time.”
“The value of education is in doubt, unless you get an advanced degree.”
An advanced degree is not even a key to success anymore. Just ask all of the laid off attorneys, bankers and consultants.
Sellers need to lower their prices, and at least make counter-offers if they expect to sell their homes, and if their price is more than 10% over relevant comps. Why pay more than market value?
I am so tired of people telling sellers they HAVE to lower their price – no they don’t (especially if they are living in their house, do not NEED to move, and can afford to hold on).
This is akin to the ugly troll at the bar telling all of the beautiful girls that they should pick him soon because if they don’t, they will be going home alone.
here’s an example: 3656 N Tripp, featured on CC on August 25, 2009:
http://cribchatter.com/?p=7341
listed at $449 today and originally listed at $499k over 422 days ago!!! a 10% price reduction in 422 days! COME ON!!
And the sellers only have a $388,000 mortgage. They’ve got some more room to reduce. they may have to bring money to the table. They may take a loss. They may need to short sale if they cannot get an offer that will pay off the mortgage of $388,000 and also the closing costs.
that’s life, that’s reality. Deal with it.
Clio, the market isn’t coming back, and the longer sellers wait, the more they will lose in the long run.
it’s the classic case of chasing the market down. there’s a house i know of, 4323 N kostner, it’s been vacant since 2007 and on the market; they’ve lowered only $75 from $425 to $350 in THREE YEARS. The owner lives in a different state, there’s no mortgage, they pay to do the lawn, heat the place, pay the taxes…..HOW SERIOUS CAN THEY BE IF AFTER THREE YEARS ITS VACANT AND STILL UNREASONABLY PRICED?
The owner will die before this house sells.
So no, sellers don’t have to lower prices; but the estate most definitely will.
“#clio on August 19th, 2010 at 11:21 am
I am so tired of people telling sellers they HAVE to lower their price – no they don’t (especially if they are living in their house, do not NEED to move, and can afford to hold on).
This is akin to the ugly troll at the bar telling all of the beautiful girls that they should pick him soon because if they don’t, they will be going home alone.”
People are stubborn about taking a loss. Often, they only take it if they have to, even though they are often losing on a monthly basis a smaller amount.
Also, the market will get worse before it gets better. Owners looking for the market to rebound sharply are in for an ugly surprise – it’s gonna get worse.
“And the sellers only have a $388,000 mortgage. They’ve got some more room to reduce. they may have to bring money to the table. They may take a loss. They may need to short sale if they cannot get an offer that will pay off the mortgage of $388,000 and also the closing costs.”
why the f@ck should it matter to the buyer how much money the sellers have into a house?!! You assume that prices should be based on how much the person owes on a house???!!! Are y f@cking kidding me?!!!!!!!!!! Also, not everyone who is selling is doing it out of desperation. The vast majority of people are NOT underwater and CAN afford to hold on and WILL NOT go into short sale/foreclose. You are taking a very small percentage of sellers and trying to extrapolate to the properties you like.
Sorry pal, it doesn’t work that way!
so why isn’t that property selling? Is the asking price at market value?
“there’s a house i know of, 4323 N kostner, it’s been vacant since 2007 and on the market; they’ve lowered only $75 from $425 to $350 in THREE YEARS. ”
How low would it have to go for *you* to buy it, HD?
“The owner lives in a different state, there’s no mortgage, they pay to do the lawn, heat the place, pay the taxes…..”
….duh… which is precisely why he CAN wait. If he doesn’t have a mortgage and his taxes are 5k/year and upkeep is 3k/year, he is only losing 8k/year. I (and I bet he) would think that in 4 years prices should be rebounding. At that time he will only be out 32k if he waits. Why reduce 50-100k now (especially if he doesn’t need the money immediately?). It would make no sense at all
After three years it’s going to be time to consider dropping the price substantially or dropping the same amount of money in to upgrade it to justify the still-high cost. Those kitchens and baths are NOT getting any younger, folks … and after a few years they will probably look outdated. That is what kills me about people who insist on hanging onto their properties to “wait out” this bad market. clio is right that if they don’t have to sell they don’t have to sell, but then what the heck? According to you the interest rates are so low you’re a moron not to buy. So these people can recoup their loss by upgrading to a new place and financing at the low rate.
today’s comps which include the house across the street (4324 n kostner), larger house, smaller yard, but way more updated, is $290k. So start backdooring out the updated kitchen, the finished attic, updated everything… and you get in the mid-to-low 200’s.
I would go a little lower than that to capture downward trend of the market since sales collapsed at the expiration of the tax credit.
there are modest sized homes with hefty tax bills in somewhat off areas (montrose and koster???). yes they have large lots. I’ll give you that.
But holding dropping the price 17% in THREE YEARS is ridiculous, just completely absurd. The house is vacant and the owner is out of state pissing away money on taxes, insurance, and lawn care. no mortgage.
“#anon (tfo) on August 19th, 2010 at 11:34 am
“there’s a house i know of, 4323 N kostner, it’s been vacant since 2007 and on the market; they’ve lowered only $75 from $425 to $350 in THREE YEARS. ”
How low would it have to go for *you* to buy it, HD?”
For the house in McKinley Park at 3311 S. Western, scroll down in the Redfin listing and click on the “60608 Demographics” link.
Neighborhood highlights are:
– There is a 17% vacancy rate
– There is a high percentage of residents under the age of 24
– Crime in all categories is higher than the national average except for Burglary and Larceny which are slightly lower
– Fair market rent for a 4 BR is $1,226/mo
– 28.6% of residents are high school grads
– 21.8% of neighborhood residents have no high school education.
I guess you could interpret the last stat a couple of different ways. Either this number is high because there is a high percentage of kids in the neighborhood who have not reached high school age yet, or there are a lot of adults without even a high school degree.
Interesting that 77% of residents claim they are white collar workers vs. 23% blue collar.
Clio,
1) it’s very important to know what the mortgage is. lots of HELOC’s mean that the property is priced for the buyer to provide the seller’s own personal bailout. No mortgage means there is room to negotiate to the comps. etc
2) taxes are 8k a year, $3k a year maintence and utilities. and the market will be rebounding in 3-4 years OFF THE BOTTOM so it will take a number of years beyond the bottom for the seller to finally achieve his current asking price. So $11k a year for 7 years is $77,000 towards a vacant house.
“According to you the interest rates are so low you’re a moron not to buy. So these people can recoup their loss by upgrading to a new place and financing at the low rate.”
GREAT point, ALT – I totally agree. Sellers who want to upgrade should really look at this option.
“No mortgage means there is room to negotiate to the comps. etc”
Not necessarily – I won’t negotiate any differently on properties I own outright when compared with properties on which I have mortgages.
I forgot to include that the median income is $34,198 which isn’t bad at all, but it’s not 100K and it’s not enough to buy a house for 400K even assuming 2 earners at that mark.
The problem is you can’t recoup a loss down the road if all equity is wiped out on the original sale. Most who’ve bought condos or starter homes in the last 5 years don’t have the means to lock in a loss at the moment and still be able to fund the outlay for the next house.
That’s just ridiculous. others must think the same why. that’s why they bleed a little money every month rather than just taking a ‘paper loss’ from the original listing price.
“#clio on August 19th, 2010 at 11:53 am
“No mortgage means there is room to negotiate to the comps. etc”
Not necessarily – I won’t negotiate any differently on properties I own outright when compared with properties on which I have mortgages.”
“But holding dropping the price 17% in THREE YEARS is ridiculous”
Not that I’m saying you’re wrong, but are you independently tracking what they listed for in ’07? Redfin doesn’t show the original list.
“today’s comps which include the house across the street (4324 n kostner), larger house, smaller yard, but way more updated, is $290k. So start backdooring out the updated kitchen, the finished attic, updated everything… and you get in the mid-to-low 200’s. ”
Yeah, if you value the 2/3s larger lot at ZERO and value the (per assessor) extra 13 (yeah, thirteen) square feet at something. The kitchen is an issue, but the finished (but UNheated!!) attic is not a reasonable tradeoff with the extra land. $350k is definitely too much (at least w/o an updated kitchen), but $250k is too low, especially including the fact that the comp was a short sale, and the marketing limitations that creates. I’d think that $290-ish would be reasonable, *if* you were prepared to deal with the kitchen yourself.
Sabrina always finds the most ridiculous properties!!
“#Milkster on August 19th, 2010 at 11:54 am
I forgot to include that the median income is $34,198 which isn’t bad at all, but it’s not 100K and it’s not enough to buy a house for 400K even assuming 2 earners at that mark.”
We’re going to talk neighborhood stats w/out going into Everett elementary?
We are talking about a family buying this place, right?
94% low income, didn’t meet annual yearly progress requirements last year, 88% grade promotion
“We are talking about a family buying this place, right?”
Some families don’t really care about schools (otherwise most people w/children would move out of Chicago) into the suburbs where public schools, as a whole, are MUCH MUCH better.
Oops! 34K is the median HOUSEHOLD income it turns out. (Not median individual income.) Very, very low to buy this house, and I doubt many people would choose to move into this neighborhood from another one to buy a 400K house.
the lot is only 1/3 larger, not 2/3rd (50 ft vs 35 ft); it’s a little more than 13 feet from the assessor because there is an extra room on the short sale property. i know the attic is unheated, that’s an issue. the place also needs some serious work (it has the original shag carpet from the 70’s all throughout the house) so it needs floors (ain’t nobody going to live with shag carpet very long); the kitchen is really really dated and ug, there’s no shower on the second floor by the bedrooms – yeah, that’s right, no shower on the second floor with the bedrooms.
You start adding up all the imperfections, and there are a lot, and all of the sudden; to put in a shower on teh second floor, to take up the carpet and redo the floors, to update the kitchen, etc etc, the short across the street is a much much better deal for $290k than this house would be at $250k.
i stand by my original assertion that I’d pay slightly less than the mid-to-low 200’s to capture the declining market. but that’s all academic anyway. if the wife doesn’t like the house, she doesn’t like it and that’s the end of the story. move on to the next house.
“#anon (tfo) on August 19th, 2010 at 12:03 pm
“But holding dropping the price 17% in THREE YEARS is ridiculous”
Not that I’m saying you’re wrong, but are you independently tracking what they listed for in ‘07? Redfin doesn’t show the original list.
“today’s comps which include the house across the street (4324 n kostner), larger house, smaller yard, but way more updated, is $290k. So start backdooring out the updated kitchen, the finished attic, updated everything… and you get in the mid-to-low 200’s. ”
Yeah, if you value the 2/3s larger lot at ZERO and value the (per assessor) extra 13 (yeah, thirteen) square feet at something. The kitchen is an issue, but the finished (but UNheated!!) attic is not a reasonable tradeoff with the extra land. $350k is definitely too much (at least w/o an updated kitchen), but $250k is too low, especially including the fact that the comp was a short sale, and the marketing limitations that creates. I’d think that $290-ish would be reasonable, *if* you were prepared to deal with the kitchen yourself.”
“
“the lot is only 1/3 larger, not 2/3rd (50 ft vs 35 ft);”
Check your facts dude. I did. It’s also deeper. Doing the exact math, it’s 63.5% larger, so not quite 2/3s, but way more than 1/3.
“i stand by my original assertion that I’d pay slightly less than the mid-to-low 200’s to capture the declining market.”
“if the wife doesn’t like the house, she doesn’t like it and that’s the end of the story.”
And, with that combo, you’re likely in for a *long* house hunt–cheap enough for you, good enough for her. Someone else would readily pay over $250k for 4323. Not $350k, obviously, but more than $250.
“I am so tired of people telling sellers they HAVE to lower their price – no they don’t (especially if they are living in their house, do not NEED to move, and can afford to hold on). ”
Clio, they have to lower their price, so that it eventually sells to a vulture and the realtor gets their pay. Quick math:
6% of 400,000 = $24,000
6% of 350,000 = $21,000
seller “loses” $50,000 while reatlor only loses 3K. Of course the selller hasn’t really lost anything since no one was offerng $400K, but then you can’t really go back in a time machine and see if you would have gotten a better offer by waiting it out a little longer.
‘seller “loses” $50,000 while reatlor only loses 3K.”
Only $47k, thanks to paying the realtor less!
“clio the other side of that argument is when interest rates go up people will have to lower their prices or people can’t buy their property.”
If interest rates go up, so will wages and asset values. Real interest rates will not increase so much as to make housing unaffordable. People bought houses in the early 1980s at 16% rates. And housing didn’t crash through the floor like it has today.
The simple truth is a 30 year rate is risk free. And it is very low.
Take a look at this for historical comparison. Really look at it and you will have a clue what we’re talking about today.
http://www.freddiemac.com/pmms/pmms30.htm
No one pays 6% commission on sales today.
Sorry anon I forgot the lot was longer not just wider…
regardless, we’ll have to agree to disagree. but in the meantime, i’ll keep looking….3 years ago people said prices were at a permanent plateau, they would never fall…..last year people said we were at the bottom and prices can’t go any lower….
Fortunately, less than 1/3 of Cook county homes listed actually sold in 2009, and sales have fallen off a cliff since the tax credit expired…
I have a feeling that my house hunting will be a lot shorter than you think. My 2008 prediction of affordable housing for those with good credit and a down payment is coming nearer every day.
“And, with that combo, you’re likely in for a *long* house hunt–cheap enough for you, good enough for her. Someone else would readily pay over $250k for 4323. Not $350k, obviously, but more than $250.”
JMM –
japanese interest rates from 1982 – 2006:
http://www.mybudget360.com/wp-content/uploads/2008/12/japan-rates.jpg
japan has been at ZIRP since 1996.
Interest rates won’t be going up anytime soon. they won’t stay low forever, but we’ve got a long time, a long long time, before they start rising again.
You can take that to the bank 😉
“I have a feeling that my house hunting will be a lot shorter than you think. My 2008 prediction of affordable housing for those with good credit and a down payment is coming nearer every day. ”
You’re forgetting/ignoring that, as prices drop, you’re price target does too, while her expectations for acceptable (probably) increase. And, as prices drop, more people will be willing to pay closer to the asking price than you (likely) will.
HD —
Do you know anything about the Japanese economy? How many Mexican and other world immigrants do they take in a year? How is their organic population growth these days? How much excess land is available for new housing, retail, commercial and industrial growth? How much do they borrow from other countries?
Not saying you would know how to process the answers to these questions even if you could find them, but don’t come with some uneducated BS about the Japanese economy and how we are bound to repeat it just because you read the same in some no name blog.
Be careful clio being so sure that interest rates will go up. I looked at your charts and the sample size is very small. I could look at a chart of long term rates in Japan for the past ten years and conclude rates never go over one percent.
“I could look at a chart of long term rates in Japan for the past ten years and conclude rates never go over one percent.”
Or you could look at a chart for Zimbabwe and conclude that there is something wrong with the US data.
you would hope that we’re a little more realistic than that. we’ve got a price set in our head that our budget will comfortably allow us to pay the mortgage if either one of us unexpectedly became a ’99er. And she has a very reasonable level of what is acceptable. Not looking for anything special, just livable and not 30 years old or requiring major structural and/or cosmetic work prior to moving in. No home is perfect and there are trade offs. if I’m being unreasonable, so be it. I guess i’ll learn the hard way.
but the evidence since 2008 has showed that the market is coming more in line with my expectations every day. and I’m just trying to predict the end game here.
“You’re forgetting/ignoring that, as prices drop, you’re price target does too, while her expectations for acceptable (probably) increase. And, as prices drop, more people will be willing to pay closer to the asking price than you (likely) will.”
Oh boy.
i’m just pointing out that mortgage rates are going lower every day, interest rates keep dropping, Helicopter Ben has pledged to keep us at ZIRP for years to come.
Where’s this inflation supposed to come from? japan has been trying to reinflate since 1996 and it has been a complete and utter failure.
we’re doing basically the same thing. Why will it be different this time? i’m being serious.
“#JMM on August 19th, 2010 at 12:53 pm
HD —
Do you know anything about the Japanese economy? How many Mexican and other world immigrants do they take in a year? How is their organic population growth these days? How much excess land is available for new housing, retail, commercial and industrial growth? How much do they borrow from other countries?
Not saying you would know how to process the answers to these questions even if you could find them, but don’t come with some uneducated BS about the Japanese economy and how we are bound to repeat it just because you read the same in some no name blog.”
“
“Where’s this inflation supposed to come from? japan has been trying to reinflate since 1996 and it has been a complete and utter failure.
we’re doing basically the same thing. Why will it be different this time? i’m being serious. ”
He’s not *necessarily* saying there will be inflation, just that Japan is not instructive for what will happen here, for a number of reasons. Which he is *very* correct about.
Anon(tfo)
http://www.redfin.com/IL/Chicago/4323-N-Kostner-Ave-60641/home/13480936
Another $21,000 price cut and a relisting. How apropos.
Oh boy. you’re as confident that he’s correct as I am confident that he’s incorrect. this is going nowhere, I gotta go, my day is packed from now until 10 pm – see y’all later
“Which he is *very* correct about.”
“Oh boy. you’re as confident that he’s correct as I am confident that he’s incorrect. ”
You’re confident that the Japanese economy from 1980 to 2010 is SOOOO similar to the US economy from 2000-2030 that the same thing will happen here? Got it.
“Another $21,000 price cut and a relisting.”
Now, that is funny.
Here is one source of inflation (people gotta eat):
http://www.mgex.com/quotes.html?&page=chart&sym=MWU0
Aren’t there limits on the relative benefit of low versus high interest rates at the time of purchase for homeowners? Including:
1. The value is only for as long as you will own the home.
2. The value has to take into consideration the fact that even if you start with high rates you can refinance if rates move lower.
3. The price of the home may decline as interest rates increase (and will depend on, among other things, the first two factors).
4. You also have to be consider whether you believe deflation is a significant risk (that is, whether the low rates we see are truly low).
The benefit will depend on each person’s expectations regarding length of ownership and the time path of interest rates, among other things.
“The benefit will depend on each person’s expectations regarding length of ownership and the time path of interest rates, among other things.”
can’t you tell yet that you aren’t supposed to make any sense on this topic around here?
Oh, boy. Someone has been drinking the kool-aid. Diversity is a strength, except nobody can ever put for a good argument to back it up. The Third World immigrants the US imports are net tax consumers not tax payers. Does anyone think that if Japan imported tens of millions of penniless Nigerians and Mexicans that would help their economic situation??? let alone their nationhood?
“Do you know anything about the Japanese economy? How many Mexican and other world immigrants do they take in a year?”
clio sez:
“Seriously, do the math on a 6% mortgage on a 299k place and a 3% mortgage on a 500k place and you will see that it is still cheaper to buy the 500k place.”
huh? I guess it depends on what you mean by “cheaper”.
Certainly not cheaper in terms of monthly payments. $1793 vs. $2108, so how do you figure “cheaper”? Less interest over the life of the loan, but it’s still another $100+k more total.
And, where is there a 3% jumbo loan, anyway?
logansquarean – I guess if you really want to look at ALL of the details, you are correct – but seriously, nobody likes a “Debbie Downer”. Why not just let people live out their dream of owning? There is nothing wrong with it – again, the intangible benefits (psychological) are tremendous and are worth more than the financial gain of waiting w/ uncertainty about the direction of the market.
Interesting that this is a rather typical size “double lot” by Chicago standards. I read somewhere that McKinley Park was an anomaly among Chicago neighborhoods in that the typical residential lot was actually SMALLER than the usual 25 x 125. Can anyone back me up on this?
I think there is an intangible psychological benefit to renting – you could be much more mobile, which in today’s economic environment is valuable, as anyone could lose their job tomorrow. It’s much easier and cheaper to get out of a lease, than it is to sell a property. Not everyone has a dream of owning. Take lots of other large US cities – NY and SF in particular – there are a lot of people who rent their whole lives there, and many of them have significant net worth.
“there are a lot of people who rent their whole lives there, and many of them have significant net worth”
I’ve lived in Boston, S.F. and chicago and have yet to meet someone w/ “significant wealth” renting…. but, then again, to each his own.
I have friends who are traders in Chicago and NY who rent, and chose to do so they can leave at a moment’s notice. They are under 35, and have 7 figures easy put away.
“They are under 35, and have 7 figures easy put away.”
I get it and agree – I guess I was talking about more established professionals.
I used to be a rental agent in a Gold Coast apartment building. Quite a few of the tenants had “significant wealth” and preferred to keep it in stocks, business investments, CD’s, etc. while paying relatively low monthly bills to live comfortably in a full-service hirise on the lake.
(I knew about their financial situations via “held mail” in the management office while they vacationed or “summered” or “wintered” elsewhere. The return addresses on the envelopes pretty much told the story.)
So traders aren’t established professionals?
A friend of mine rents a LP apartment, and OWNS a vacation home in Florida. The owning/renting thing means nothing to him. Owning is overrated unless you have a reason to want to be less mobile and want to put more of your eggs in one basket.
“I knew about their financial situations via “held mail” in the management office while they vacationed or “summered” or “wintered” elsewhere. The return addresses on the envelopes pretty much told the story.”
WOW – what a great way to measure and determine someone’s wealth!! I should be more careful about who sees my mail – I didn’t realize that you can tell how much someone is worth based on return addresses.
“I didn’t realize that you can tell how much someone is worth based on return addresses”
If the return addresses are certain funds, with certain minimums, you can tell a reasonable amount. Banking/investing at Northern Trust is *not* sufficient, obv’ly.
Family offices *typically* connote wealth. Clio, I’m sure you’re aware of that.
Either way, rich people can be renters by choice. It’s also possible that someone could rent and still become rich. Owning property does not guarantee to make you wealthy, even though that is what the bad realtors did during the boom to convince people to buy.
“I have friends who are traders in Chicago and NY who rent, and chose to do so they can leave at a moment’s notice. They are under 35, and have 7 figures easy put away.”
They had better have 7 figures put away. Not many people who go to work and can actually lose a significnat portion of their net worth. Those people are perpetually at risk, in more ways than one. Professional poker players, basically.
De-listed a couple of times.
Re-listed on 1/7/12 for 298.5K.
Finally, in contract!
Sold for 280K on 6/15/2012.