What’s the Right Price? 2500 N. Orchard in Lincoln Park
It’s hard to figure out pricing in this market. Price the property too high and it will sit and sit and sit.
But comps are unreliable in a declining market and every seller wants to maximize returns.
This 3-bedroom duplex down at 2500 N. Orchard in Lincoln Park has been on and off the market since Summer of 2007. In that time it has been reduced $80,000.
Here’s the listing:
VINTAGE CHARM WITH UPDATED KITCHEN AND GREAT CLOSETS! ON ONE OF THE NICEST TREE-LINED STREETS IN LP, THIS 3BD/3BTH DUPLEX GREYSTONE HAS IT ALL!
CENTRAL AIR, HWF THROUGHOUT UPPER LEVEL, MAPLE CABINETS, GRANITE COUNTERS, TWO DECKS, NEW CARPET ON LL, NEW IN-UNIT BOSCH W/D, EXTRA STORAGE. BEAUTIFUL ORIGINAL WOODWORK THROUGHOUT THE BUILDING. GARAGE PARKING INCLUDED.
Century 21 Sussex & Reilly has the listing. See more pictures here.
Unit #3N: 3 bedrooms, 3 baths, no square footage listed
- Sold in May 1989 for $247,500
- Sold in September 1993 for $246,000
- Sold in May 1998 for $255,000
- Originally listed in June 2007 for $599,900
- Reduced
- Withdrawn in December 2007 while listed at $539,000
- Re-Listed in June 2008 for $524,900
- Reduced
- Currently listed at $519,900 (parking included)
- Assessments of $255 a month
- Taxes of $5157
- Fireplace
- One bedroom and the family room are on the lower level
- Central air
five percent per year since 98 puts it at $415k. Even giving them 100% back (quite unreasonably) on the kitchen, carpet, and w/d, you *maybe* get to $475k. They were 18 months too late on the first listing.
Prices are based on comps, not the rate of return you feel the owner deserves.
RunnerRunner,
When transaction volume dries up comps cease to have meaning. Prices are based on whatever the buyer and seller agree to.
“Prices are based on comps, not the rate of return you feel the owner deserves.”
Yeah, and that’s why the credit markets are f*cked. Because everyone believed that b/c one idiot overpaid, everyone should overpay, regardless of any underlying fundamentals.
comps are accurate 100% of the time, 60% of the time
comps are a convenient means to justify two properties that are often times un-relatable. I have never seen a accurate comp selected that matches like, or near like properties once I dig into them
Comps reflect the rate of return the owner feels they deserve
I also think ANON was refering the the historical trend line that shows house appreciation at around 4%
This condo is 20% overvalued, $419,000 is a more realistic price.
Once again, sellers are still in denial.
“I also think ANON was refering the the historical trend line that shows house appreciation at around 4%”
Of course I was. And showing that they’re being greedy now and were *extremely* greedy with their first ask.
And I also noted that they might have gotten near their first ask if they’d listed in late fall ’05. It’s a nice street; I’d consdier living there. They just missed the peak.
Of course, Stevo would note this place as a winner, which it still is. But if you aren’t making (nominal) money on your residence after owning for 10 years, you did a bad job buying or had horrible timing.
Don’t buy duplex downs. Water does not come often but when it does, you are done! Stay away!
Well…it’s a big problem in Chicago. There’s sewer backup and then there’s seepage. And there are plenty of poorly done renovations where they didn’t put the proper drainage system in. However, what do you think about properly drained foundations? Or are you thinking that the sewer backup is sufficient risk to avoid these units? Or are you worried about power failures that disable the pumps?
Hmmmm. Maybe I just answered my own question.
Wow – pretty building. I agree about the duplex downs, tho – they don’t have charm of original units and never feel quite right.
Hey stevo:
How ’bout those jumbo rates?
Oh, and, of course, we have *another* exception to the Stevo rule (LP is still going up)–any duplex down.
I’d like to address the $419,000 comment. The lowest priced 3bed/3bath that is currently on market in all of Lincoln Park is 2451 N. Clybourn for $465k. The unit is newer (built in 2000), but lacks the character and fantastic location that the subject unit has. Also, I’d like to note that east of Halsted (a major buyer border street), this is the lowest price priced 3bed/3bath with garage parking on the market. My seller and I have based the list price on comps and trust me, nobody is in denial. Using a straight “appreciation” formula alone simply doesn’t provide an accurate picture of a home’s value.
One other comment…this particular unit has never had any seepage or water of any kind.
Becky:
Thanks for checking in and updating us on the unit. We appreciate having realtor feedback on properties and what is going on in the market.
Becky,
Grab a book and read about the Japan’s Lost Decade. Nice homes in great locations, but prices still fell over 50% even with interest rates at 0% !
Just remember: Bulls make money, Bears make money, but Pigs get slaughter.
This seller is obviously is big fat pig trying to sell at above trend prices in a bursting housing bubble.
See you at $399,000 next year with this listing.
John S.:
There are plenty of properties selling right now- for prices that are far higher than most people would like to believe. (And these are not necessarily the foreclosures.) Not all properties are going to see big price declines.
I also think it’s very difficult for agents to know how to price properties right now because the comps don’t mean much in a falling market.
So Becky is implying that other units in the building HAVE had seepage…. Hmmm.
“Not all properties are going to see big price declines ”
Sabrina on Cribchatter.com (September 25th, 2008 at 10:40 pm )
vs.
“For the immediate future, at least, the outlook (stocks) is bright.”
– Irving Fisher, Ph.D. in Economics, in early 1930
I’ll believe $399 when I see it. No way it gets to that price.
Maybe this unit won’t reach $399 but comparable units in the area will.
Enjoy waiting for that to happen. And what comps? As stated, and I agree with the above posters, it is hard to use comps (especially in an over reaching blanket statement) these days. List it and someone might love it. With that said the first price was extremely high.
For comps in this building what year was a sale recorded for $399k? ’02, ’03?
“Enjoy waiting for that to happen. ”
God yes, I will enjoy it immensely. I wouldn’t be hanging out here if I didn’t. Watching this market crash has quite frankly been one of the most interesting things I’ve seen in my life. It will truly be a once in a life time event.
Sales have dropped off a cliff and we all know that prices will soon follow. The 2,022 sales figure for Aug 2008 is absolutely frightening and it should put the fear of God into anyone tangentially involved in the real estate industry. A few months ago, the downtown sales figure dropping 90% was equally as scary. We’re nowhere near the bottom. It’s looking more like a bottomless pit to me. Sort of like the Mariana Trench. Those who think that prices will continue to hold firm or decline slightly, despite the absurdly low # of sales, and the upcoming winter of capitulation, is deluding themselves.
August is one of the hottest months of the year for closings. People search all summer for the perfect home, sign the contract in July and then close in August. How many more years of Augusts with only 2,022 closing can Chicago handle? Is the market unexpectedly going to jump to 3,000 closing August 2009 and then to 6,000 in August 2010? Are we predicting 10,000 closings in August 2011? Until prices get to the point where enough people can afford housing without toxic financing, we’ll never again see as many closings as 2006.
I don’t think panic will set in until it starts to get noticeably colder. Its still pleasant out in Chicago in September/October, but when it gets cold that will lower showings.
That will be when agents can’t delude the sellers on ask prices anymore. I expect the Chicagoland Case-Shiller index to start dropping in November at the latest. So we should see a resumption of the 1-2% monthly declines in about 4 months when the November CS index is released is my guess.
I predict finding the bottom of the Chicagoland housing market will look like a stairstep effect with the reductions coming in winter and the prices stabilizing in the warmer months, barring a fullscale economic meltdown of course. We’re at 150 so I think an additional 20% decline from here is not out of the question, we’ve only pulled back 10% so far so it will be painful.
They knocked another 20K off about 10 days ago.
“Sold in May 1998 for $255,000 ”
I’ve been saying for a while that we’re heading back to pre-bubble prices, and unfortunately for this seller, his $489,000 list price still has a long way to go. Chasing the market down incrementally; typical greedy seller. Lop off another $50k or $60k today and maybe you can off your falling knife onto someone else.