When Are Comps Still Comps? 240 E. Illinois in Streeterville
We last chattered about this large 1-bedroom unit at Fairbanks at Cityfront Plaza at 240 E. Illinois in Streeterville last January.
See our prior chatter and pictures here.
It was priced at $600,000 plus $55,000 for the parking but comps on units sold on nearby floors seemed to justify the high price.
It is 7 months later and the unit has seen just one price reduction.
The comps are all about a year old.
In a declining market, when are the comps still “good” comps?
Here are the similar comps again:
Unit #3110:
- Sold in May 2008 for $574,500
- Re-sold again in August 2008 for $580,000
Unit #3010:
- Sold in May 2008 for $584,500
(I’m assuming these sales included the parking.)
Sophia Klopas at Koenig & Strey still has the listing. See more pictures and the listing here.
Unit #2810: 1 bedroom, 1.5 baths, 1050 square feet
- Sold in May 2008 for $554,500
- Was listed in January 2009 for $600,000 plus $55,000 for parking
- Reduced in April 2009 to $575,000 plus $55,000 for parking
- Currently still $575,000 plus $55,000 for parking
- Assessments of $450 a month
- Taxes are “new”
1 bedroom, 1.5 baths, 1050 square feet. 600K plus.
I just cannot get my head around it. I’d buy a SFH somewhere.
T minus 5 minutes until HD and BOB come in here and start thier signature rants. ALthough this time, I feel the same. 600k.. what a joke! 399k max!
seems like an awful lot. assessments arent out of this world bad though. and CnD gyros, one of the best bars in streeterville, is a hop skip and a jump.
That place is pretty damn gorgeous. But $600k for 1050 sf? What a laugh.
nice place but ill take a 2br at 600 N Fairbanks over this…
I’d buy a studio in the spire which hasn’t nor probably will never be built before I’d buy something like this… what a rip!
two words….
go west
It is a nice building and has some great views, but I think the max price should read $575 and it includes the parking.
I still wish all RE agencies would include correct sq ft and follows NYCs lead in putting in a detailed floor plan/building lay out in the listing.
It would also be of great use to include the # of all units in the building and their standing…Owner Occupied, Rental, Foreclosure, Short Sale, etc. With this much disclosure, the time spent with non buyers would be eliminated and the prospect of a sale would result in just that…a sale. I know when I was investing in high rises or other multi unit buildings, I would furnish my agents with this relevant information and it was much appreciated by both agent/broker and the potential buyers.
Dream on right? Dream on…
No lender will consider those older sales comps now. The most recent comps in the building indicate this is overpriced by a ridiculous amount.
#1810 closed 5/6/09 for $420,000 from the developer.
#1410 closed 8/26/08 for $447,500 from the developer.
#2607 (1/1.5 1107 sf) closed 7/8/09 for $459,900 from the developer.
#2507 (1/1.5 1107 sf) closed 5/22/09 for $470,000 from the developer.
#1709 (1/1.5 1005 sf) closed 6/15/09 for $467,500 from the developer.
#2602 (1/1 1011 sf) closed 4/15/09 for $445,000 from the developer.
#1902 (1/1 1011 sf) closed 1/30/09 for $389,000 from the developer.
#1702 (1/1 1011 sf) closed 4/14/09 for $442,000 from the developer.
#3104 (2/2 1293 sf) closed 6/16/09 for $600,000 from the developer.
#1704 (2/2 1293 sf) closed 3/13/09 for $500,000.
#1704 closed 1/8/08 for $564,000 from the developer.
You pretty much need solid comps that are a closed sale within the past three months to satisfy the banks. This is the hardest thing for Realtors to understand. Just because a similar unit sold for $650k last year or even 6 months ago, does not mean it is an acceptable comp for financing today. If everything else in the past three months is at $600k… guess what? That appraisal is getting cut during underwriting.
I had a deal die on the vine because there weren’t any recent comps that could justify the price the buyer and seller agreed to. There were identical sales in the building from about a 1 year ago, but nothing available within 3 months to justify the price. Mortgage insurance company killed it…
“#1810 closed 5/6/09 for $420,000 from the developer.
#1410 closed 8/26/08 for $447,500 from the developer.”
Are those w/ pkg or not?
Following the trend* for the tier, ten floors higher is 420-(2.5*27.5)= $351,250.
Or, using the 02s, 9 floors = $3k premium, so *maybe* $425k.
What were the deposits here? Is there any doubt now that the flipper** should have walked?
*joke.
**assumption. anyone disagree?
The deeds are not clear, which is cause for caution. However, the developer doesn’t seem to be including the parking on any unit deeds. There are only a few that transfered separately.
Also, re 1410 v 2810: what’s with the huge (447 v 554) price discrepancy? Was 1410 at pre-con pricing? Was 2810 substantially upgraded? Or were they really charging $7500+ per higher floor? Or did 2810 include a $55k pkg spot, making it ~$3500/floor?
Anyone have any idea (or speculation, baseless or otherwise)?
“I had a deal die on the vine because there weren’t any recent comps that could justify the price the buyer and seller agreed to. There were identical sales in the building from about a 1 year ago, but nothing available within 3 months to justify the price. Mortgage insurance company killed it…”
Russ: How much consideration do lenders give for interior updates/upgrades when comparing to in-complex comps? Will they recognize a $30k-40k difference?
Also, I haven’t seen this but am curious: what if a comp sold-by-owner for a ~5% lower valuation, would lenders recognize that difference?
first thing i’d think about is whether there is a view difference between 28 and some of the lower-floor -10 tier units. In that area it could make a big difference.
I agree with bubbleboi that it would likely vary by tier depending on loss of views.
I don note that the difference in two recent sales 1704/3104 appears to indicate ~$7,000 per floor.
This is my first post…although I read this site quite often. I was looking to buy earlier this year, and ended up renting in this building. I had lived further west (700 N. Larrabee) and wanted to see how much being closer to the lake really meant to me. (i.e., was it worth the premium, etc.). I absolutely love the building. I’m on a high floor (27th) and face North and the view is great, but not as good as the South views. I looked at the 2bdrm (#1704) that sold for $500K when it was on the market, and actually had put an offer on it. Obviously, I didn’t get it. $500K did not include parking btw. Despite nice building, etc., these units in my opinion are way overpriced. Newer buildings in Streeterville still needs to come down in price significantly. And this building, especially with the recent comp of a two bedroom selling for $500K…definitely needs to revisit list prices.
Upgrades help, but not as much as most people would like. Upgrades are not a dollar for dollar return – just because a homeowner spent $40k on a kitchen reno does not mean that his unit is automatically worth $40k more. It is probably worth $15-20k more in this market (just guessin’ here).
Appraising is very much an art and not a science. However, you still have to show specific comps that support the value opinion given. You just can’t say a property is worth $600k and then can’t show any recent sales to justify it, particularly in a market such as this. The only homes that lenders don’t really require recent comps on are true luxury properties where the market moves much slower, even in good times and the comps are far and few.
For the most part, lenders don’t really look at whether a home sold FSBO or not. Sometimes an appraiser will comment that a sale used as a comp was unusual – death in family, foreclosure, etc.
Perfect, thanks Russ. This will all help in a potential upcoming negotiation (more data points to help reset the seller’s unrealistic expectations).
dogowner,
Maybe you can start a Russ fan club? You’ll be in charge of the flyers and membership drive. I bet you’re gonna be heartbroken if he’s married.
i just had an appraiser tell me that prices (this was for a listing in River North) have fallen 6% since April ’09. He isn’t correct, but there isn’t much to do when this is the person that the bank is collecting their info and assessing loan value. Comps from a year ago are worthless in most buildings now. 6 months max.
“prices (this was for a listing in River North) have fallen 6% since April ‘09. He isn’t correct”
So, what is correct, in your opinion?
There’s Bob, being his usual sarcastic self.
Sarcasm is thinly veiled . . . what?
Have to say, i think i read this blog for the cast of characters as much as learning a bit about the RE market in Chicago. Keep up the good work guys 😉
“Sarcasm is thinly veiled . . . what?”
That–in either formulation–only pops up on tehgoogle a handful of times. The much more common “sarcasm is …” are:
…the refuge of losers
…anger’s ugly cousin
…the refuge of a shallow mind
…the protest of the weak
and, of course,
…the lowest form of wit
“Maybe you can start a Russ fan club? You’ll be in charge of the flyers and membership drive. I bet you’re gonna be heartbroken if he’s married.”
Just showing appreciation for those truly adding value on the site. Russ, and a handful of others the last two days, have provided first-hand up-to-date market intelligence — real, accurate, and highly applicable to transactions in today’s market — which is hard to come by on this site sometimes.
If/when I end up closing on a place, I look forward to being able to help others out like many of the other contributors on this site have done for me the last few months (based on their real life experience in the market/industry). Making uninformed statements isn’t really my style (even though I’ll agree with mac that they’re occasionally entertaining)… but with that said, I’ll bet your an interesting guy to have a few beers with.
I too appreciate the info Russ has been providing and his no BS way of doing so. In the year I have been here, I have seen a number of intelligent and obviously very experienced RE professionals who drop in for a few weeks, contribute relevant, useful and correct information only to be questioned for things as small as the way they worded their comments. These knowledgable contributors do not usually come back for more abuse from the resident (in their own minds) economics experts who spout off useless topic after useless topic that add nothing whatsoever to the thread.
It is very plain to see that those few who feel the need to out manuever and degrade intelligent and successful posters here do so only because they realize that no matter how many pointless debates they win (again in their own minds) they will never possess the brain power to compete with them. True anomosity and jealousy.
So please Russ, simply look past those types of posts and ignore those endless requests for you to break down and explain your knowledgable comments and outlook. Your posts are helping explain what is sometimes a daunting process for every new buyer to go through. Don’t be run off Russ, your contributions are of great value here!!
I just wanted to add that when renovating a home, the $$$ spent on practical and useful improvements (within reason)in the kitchen and baths will allow the seller not only the chance of recouping the $$$ spent, but may actually add additional $$$ to the sellers pocket.
Kitchen and bathroom renovations/updates are the best way to better your chance of selling and getting your investment dollars back. But like most things, there is a fine line between what the would be considered practical and useful improvements.
Replacing old and dated appliances with higher quality feature rich ones, reconfiguring the floor plan to take advantage of every inch of space to make the kitchen/bath more efficient, going with a durable countertop/backsplash in a neutral color…AAA+…installing a cappuccino machine, a built in wine cooler and trendy, color specific lighting that showcases the owners own sense of style…F-.
These types of ‘improvements’ will be appreciated by only a small group of buyers and will cause the buyers who were interested in the other aspects of a home to run out of the place and quickly forget about it all together.
Some recent ‘improvements’ I have witnessed during my regular weekend open house touring? A massive tree house that required a huge majority of a beautiful tree’s main branches to be taken off, a heated and ACed dog house that resembled a mini spa for humans, a total of 8 built in flat screen niches with electrical outlet(s) and cable wires everywhere (some on brick walls) combined with and a surround sound system that operated in every room of the huge house. And finally, my favorite… a wall that ran the length of the master bedroom turned into a closet with hundreds of built in spaces for heels. This wall o’ shoes was divided according to the actual height of the heel of the shoes. An outrageous and useless outlay of over $85,000 that will never be recouped in the sale of the house. This house that has now been on the market for over 16 months and STILL has the closet mentioned in the listing above the details of the $100K gourmet kitchen.
3 months ago, I emailed Jason about the property, and he told me that morning they came to terms with a buyer and they agreed to sell the property at a price “very close to what they were asking.” Two months ago, I noticed that the property was still for sale, so I followed up. Again, he told me the property was sold — what a clown. The unit is worth $500,000 (not including parking). Sellers have yet to accept the reality of the current environment, maybe it’s a result of realtors doing a poor job advising their clients.
anon (tfo) be careful with the straight $ per sq ft calcs. Big price spread north to south facing in some of these buildings. My rough est would be 70+ a sq ft.
I like this site and some of the crazy personalities although the comments are getting kind of predictable. It brings out the RE Voyeour in all of us. I don’t let snippy comments and attitudes get to me… Even though I am a industry person, I never considered myself to be a RE bull. On my own blog I wrote the market was going to crash back in ’05 (although never expected it would be this severe) due to the craziness of the subprime lending I was seeing.
I said it once before, arguing with people online is like the Special Olympics…but for G’s benefit I will leave it at that.
Russ, we already know you mock and belittle “retards” for laughs.
“although never expected it would be this severe”
Back in early ’08 before the market crash StevO was arguing against continued housing declines as they would bring down the entire economy. Hate to say it but Stevo was right.
G, you still burning up from that? Stop being so sensitive.
Bob, I don’t think it was hard to see that it was going to crash. I based my prediction on the fact that housing prices could not continue upwards and the funny money subprime stuff I saw. I just didn’t realize the extent of it at the time.
What I saw with the subprime stuff was basically that subprime was acting as foreclosure bailout money (most of the subprime lending was refi’s). People would get themselves into trouble financially, get themselves in a 2/28 ARM as a temporary reprieve, and then refi again once the trouble came back. A lot of the subprime borrowers are perpetual financial disasters. There is always an emergency, job loss, or something going on in their life. The problem was that at some point they weren’t going to be able to refinance again.
I actually think the foreclosure rate over the past 5-8 years has been artificially low due to subprime lending. Subprime lenders were heros to people for saving their asses. Of course, once the music stopped they all of sudden were considered predatory by the same borrowers who probably should have been foreclosed on earlier.
Many of the borrowers didn’t do what they needed to do to get out of the 2/28’s into a conventional/fha and I knew sooner or later, the doo doo was going to hit the fan when those 6% margins started kicking in on the ARMs.
I never realized how much crap was being underwritten though since I primarily deal with high income professionals with good credit. In 6 years, I have only closed three subprime loans and they were because the loans were denied as FHA. Never closed a single Option ARM after I explained to borrowers how they really worked.
If Wall Street and credit agencies would have spent just five minutes talking to any decent loan officer at the street level to see what was being originated, none of this would have happened imho.
“anon (tfo) be careful with the straight $ per sq ft calcs.”
thx, but I don’t see any psf calcs by me in this thread. $$ per floor higher, yes, but that was only half serious in any case.
“G, you still burning up from that? Stop being so sensitive.”
Why? You obviously wanted to make it clear to everyone that you still mock and belittle “retards” for laughs.
So, I’ll make it clear that you are still an a***ole.
G, I don’t belitte mentally challenged individuals. You obviously are a little sensitive and holier than thou as I have a hard time believing you have never made a joke about “retards.” At least be man enough to admit it.
While I agree the previous comment about Special Olympics was a little tasteless, the point of it still seems to escape you given you find it necessary to stoop to calling me an asshole. The subtle nature of the comment in the context of the thread when it was made obviously was above your schooling hence why you keep making a big deal out of it.
Given that, I will take my own advice about arguing with people on the internet and the comparsion I made to the Special Olympics. Therefore, there isn’t anything else to say or discuss with you about the issue.
So, I’ll make it clear that you are still an a***ole.
wow!!
G, He’s not belittling retards, he’s belittling arguing on the interwebs.
I am “man enough” to admit that I am sensitive to the belittling of the developmentally disabled.
Will Russ, Sonies and Bob be “man enough” to admit that they are insensitive to the belittling of the developmentally disabled?
“Will Russ, Sonies and Bob be “man enough” to admit that they are insensitive to the belittling of the developmentally disabled?”
Sure, but there’s no need to get your panties all bunched up about it. Yes its childish, and yes its very evil and silly to make fun of things people can’t help, but its what humans do, all the damn time.
Is it really any worse than you making fun of the stupid people that overpaid for their 1 bedroom condos and vacation homes in 2006 and now are filing bankruptcy? Its all misfortune any way you look at it.
“Is it really any worse than you making fun of the stupid people that overpaid for their 1 bedroom condos and vacation homes in 2006 and now are filing bankruptcy? Its all misfortune any way you look at it.”
So, they were compelled from birth to buy a condo or vacation home? Or are you saying that “peer pressure” (construed as broadly as you like) makes people developmentally disabled?
Yes, Bob they are. I used to do it when I was immature, too.
Sonies, very poor justification as anon already pointed out. Perhaps you made that comparison so nobody thinks you are a fool in a few years?
Anon(tfo)…
Have you ever been to the south? Like the deeeep south.
“Have you ever been to the south? Like the deeeep south.”
Yes. But I think that’s a genetic thing, too.
yea so stop being a retard, doooooooooood!
According to Sonies, mac, that means you.
Russ said, “G, I don’t belitte (sic) mentally challenged individuals.” And yet you do and have now admitted it.
You have also been proven to be quite the hypocrite about the “subtlety” of your original comment, too. Then again, that comment is typically used by the loser of the argument, which is obviously why you are familiar with it.
Now, that’s funny.
G, you are right. You win… but you know what they say about arguing with people on the internet and Special Olympics? You may win, but you are still a…
Way too easy.
“If Wall Street and credit agencies would have spent just five minutes talking to any decent loan officer at the street level to see what was being originated, none of this would have happened imho.”
The credit rating agencies should have. Wall Street was/is paid based out of cash bonuses and its free to speculate with bondholder and stockholder’s money. If you win you get a fat bonus paycheck, if you lose you lose your job but its not like you have to pay the stockholders or creditors any money.
They made a ton underwriting these loans and some knew they could blow up like they did (ie: Jamie Dimon, Brady Dougan) and moved out of it before the fall.
Looking for suggestions:
Looking for 1 bedroom in decent building – not top end (this building may be out of my reach) but not the endless problems that you all have pointed out in the Invesco buildings such as 345 N Lasalle and 440 N Wabash. Almost made an offer until I started the due diligence and found this site.
Any suggestions of buildings in River North or Streeterville that would be good suggestions. I work in Chicago but commute from Boston each week.
Appreciate all of your insights.
Andy:
There are simply too many buildings to list. Do you like high rises or low rise? Do you want a view? Do you want amenities (pool, exercise)? Do you need a doorman? Do you need a parking space? Do you want central air? Do you want in-unit w/d?
As you can see- there are just too many factors involved in answering your question.
You need to get a good agent who can narrow down the buildings for you.
If you’re looking for something with less “luxury”- consider 211 E. Ohio which is in a great location in Streeterville (no in-unit laundry though unless you’re on the “loft” floor.) You might also want to look at Kingsbury on the Park on Kingsbury or some of the other buildings in far west River North- as there are some better deals there.
You might also want to check out some of the loft buildings like 333 W. Hubbard and 300 W. Grand.
Editor’s Note:
I’ve deleted a bunch of the back and forth comments (you know who you are)- on several of the threads.
Insulting each other gets tiring after awhile.
It’s nice when actual data is posted. Please try and stay on topic.
Thanks.
Yet Russ’ ignorance remains?
Andy, 512 N. McClurg or 401 E. Ontario. Not top end but excellent reserves and well managed. Good Luck
Thanks for help. I do have an agent and she worked hard to find me some places that met my needs but they were all in the buildings you all mention negatively (a lot!). I told her I would do some research over the weekend to find more buildings to look at.
I am looking for high rise in River North or Streeterville or Near East since I work in loop and walk to work but want to be north of park. Too far to walk to work from west side of River North. In unit laundry and exercise are the most important. View nice but not necessary if pushes price up a lot.
Thank you all for the excellent commentary – I am getting much more comfortable and found your site one of the best on the net to get some insight!
What about the Heritage, 130 Garland Ct? Very nice well run building..
Lancaster, 201 Westshore,is nice in Lakeshore East-definitely some deals to be had in there.
Or just rent in one of these buildings and see how you like it!
FYI:
Unit #2710, right below the unit in this post, is now on the market for $449,900 plus $65k for parking.
That’s the punch in the stomach for 2810. I am sure if 2710 is still listed in a month this guy in 2810 will still keep his price up and insist to himself (and anyone willing to listen) that his place is worth 550+
2710 seems nice/reasonable if you could negotiate parking into that price.
The corner units in this building are nice
To Andy – I bought 1 bd/1.5 bath with balcony and fireplace in May at 530 N. Lake Shore Drive on high floor with north view (includes Lake to the right)for under $400,000 including parking. People in building are friendly too. There are other units for sale by current owners.
According to public records, #2710 sold for about $426,000 including parking.