Who Says Foreclosures Sell Fast? It’s Been 5 Months for 930 N. Wood in the East Village
This Fannie Mae owned 2-bedroom at 930 N. Wood in the East Village neighborhood of West Town has been on the market as a foreclosure for 5 months.
After being reduced $55,000 in that time- it finally went under contract this week.
It is currently listed just $5900 above the 2001 purchase price.
At just 991 square feet, the unit, built in 2001, has hardwood floors in the main living area.
From the pictures, the kitchen appears intact. It has black appliances and granite counter tops.
The unit does have the other amenities buyers look for, including central air, in-unit washer/dryer and a parking space.
It is also just a few blocks from the shops and restaurants of Division Street.
Is someone getting a deal on this unit (finally)?
Jack Lewitz at IL Real Estate Specialists has the listing. See the pictures here.
Unit #2: 2 bedrooms, 2 baths, 991 square feet
- Sold in January 2001 for $229,000
- Sold in April 2002 for $266,900
- Sold in April 2005 for $322,500
- Lis pendens foreclosure filed in February 2009
- Was listed in September 2010 for $450,000
- Bank owned in October 2010
- Originally listed in February 2011 for $289,900
- Reduced several times
- Currently listed for $234,900
- Under contract
- Assessments of $119 a month
- Taxes of $4833
- Central Air
- Washer/Dryer in the unit
- Parking space included
- Bedroom #1: 12×17
- Bedroom #2: 10×12
Under 1000 sf and wasted corridor space. No wonder even at foreclosure price it was a hard sell.
No deal. This is so ugly! So small! Nothing is good about this. Should have never been built.
Liveable place in an ok hood. I don’t think the closing price is too out of whack
$450k? In 2010? Total farce. Hard to believe it at over $200 psf, give available alternatives. It is in the ballpark of being a rentsaver, tho I think the copshop directly across is a negative.
Nice looking unit is an great location. A bit small. I’m not surprised one bit this is under contract. It should have sold a long time ago. The buyer will be very happy in a few years and probably make some good money when they want to resell in a few years. Units like this will be all snapped up in a few years time and prices will come back.
“Liveable place in an ok hood.”
Made me laugh.
“Nice looking unit is an great location. ”
Made me laugh even harder.
“Nice looking unit is an great location. A bit small.”
Your uptown studio is 994 sf, if you count the sub-basement storage space you sublease to G, isn’t it?
“Made me laugh even harder.”
Great if you’re a Club Foot regular who also spends a lot of time in lock up. Very convenient for that lifestyle.
This home has a lot of value, obviously more than a few buyers have found value in this unit too since it was built. it’s so damn negative on cribchatter. This would make a nice home for a young professional, maybe a hipster with a good job, 2 bedrooms and make the second an office, or a den, or maybe rent one unit to a roommate to help the mortgage. I wish the new owner the best of luck. THey will be very happy with their purchase.
am i way off saying this place is unliveable? or the neighborhood just ok?
oh I shouldn’t expect anything less from someone who lives in the sopoco
what I meant is… it IS liveable… not ideal, but you get the point…
Sonies: there is no such thing as the perfect home to live. There will always be trade offs. FOr this unit, a trade off is a smaller livingroom kitchen combo and a long hallway. however, this would work well for roommates who want some privacy from each other. and the location is great, only a short bus ride west of river north and/or downtown. Short commute, decent location. I like it. Great price too, a little too cheap, but real estate owners make money on the buy, not on the sell.
I rented in 940 N Wood for a year and it is a very good location. Easy access to the Chicago, Ashland, Damen and Division busses, not too bad of a walk to the Division Blue Line stop, close to the bars and restaurants on Division without having to deal with drunks puking on your steps.
However, all these cinder block buildings that were thrown up in the late 90s, early 00s are incredibly crappy. Only a fool would buy into one of those buildings, no matter how “nice” the brick facade looks.
“what I meant is… it IS liveable… not ideal, but you get the point…”
Be serious Sonies. This place is the FEMA trailer of Chicago condos.
Well then honus there are a lot of ‘fools’ in chicago. these buildings are inexpensive but sturdy construction material that allowed real estate in prime locations to be built affordably for people like you and I. DO you really expect a developer to put an all high quality brick three story structure on this lot with high end finishes and expect it to be affordable for the masses? No, of course not. This is better, far better than frame, and like everybuilding, it will need maintenance. But it’s much better than the falling down frame cottage aka SHANTY that used to be here.
whatever, my place is only a little bigger than this and we’re fine, and the price of 234k obviously reflects the lack of space. I’d rather live here than some vintage POS for the same price or even more with 1 bathroom, no AC, washer dryer or parking
“Be serious Sonies. This place is the FEMA trailer of Chicago condos.”
Well this place is under contact, it has value, I’m sure they don’t see this place as the FEMA trailer of chicago condos. If it were truly a FEMA trailer it would not be selling and under contract today, and believe me, to be under contact today is a good thing given how difficult it is to sell a home. I hope the deal closes, the buyer is getting GREAT value here.
“Well then honus there are a lot of ‘fools’ in chicago.”
I do not disagree with you.
They do require maintenance, as do all buildings, but even before that, they require competent construction. The era that these buildings were going up was “slap ’em up as fast as you can”. Sure, there were probably reliable builders that did nice work, but I’d venture that they’re the minority.
Better than “falling down frame cottage aka SHANTY” does not a $230k investment make.
Lots of talk about being “just liveable”, long hallways, roommates, etc.
Sounds like a rental to me.
Hopefully an investor grabbed this for sub-$200k and can rent it for $1500+. He could rent the garage spot for another $100 since the hipsters who rent this, with help from the parents, can just park their fixed-gears out front. Low risk of bike theft because of the 5-0 across the street.
HD… I know you’re being tongue-in-cheek and all (and I’m quite enjoying it), but strangely enough I’ve gotten the bug too.
Part of me wants to take the plunge and the other part knows to wait out the shit-storm.
“Part of me wants to take the plunge and the other part knows to wait out the shit-storm.”
AS Ze points out, mortgage rates ain’t going down, and every 100 bps increase in rates is, by his calcs (not disputing at.all.), about equal to 18% of price. So, if you think your target prop is within ~15% of minimum, you’re ahead locking in the current rate so long as it isn’t more than 18% less before rates rise 100 bps.
“AS Ze points out, mortgage rates ain’t going down”
Well, they are going down a little, but certainly the upside risk is far greater. Can get a 5/1 ARM at 3% now. I suspect that will get down to 2.5% before rates go higher.
Seems to me a 5/1 or 7/1 are the best products out there now. Even if you are buying a SFH, what are the odds you will be there more than 7 years (without a refi)?
“AS Ze points out, mortgage rates ain’t going down, and every 100 bps increase in rates is, by his calcs (not disputing at.all.), about equal to 18% of price. So, if you think your target prop is within ~15% of minimum, you’re ahead locking in the current rate so long as it isn’t more than 18% less before rates rise 100 bps.”
Wait, that’s (among other assumptions) a hold it for 30 years calculation, right? I don’t disagree with the point generally, but 18 percent is not the right number to have in mind if you think you’ll move again in say 10 years on average? Is it also a 100 percent financed assm?
“(I’m quite enjoying it)”
Really? I thought we were all being quiet and waiting for it to be over.
Exactly anon(tfo) rates can only go up. They’re at historical lows. If you don’t lock in that rate today, you probably won’t be able to in the future. It’s been shown over and over again that there is little if any correlation between home prices and interest rates. And since we’ve passed the bottom, things can’t go any lower. It’s prime buying time. This unit being a prime example.
p.s. I’ve moved on from Old Irving, I still live here phyically but not for much longer, and in my heart, it’s passed me by. If I have to see another damn 120 year old frame shanty with granite countertops listed between $450k and $800k I’m going to scream. Give me something new, give me something modern. I haven’t decided my new neighborhood but it might be south.
I would be wary of buying in such a small building. I also think this unit is a bit over priced.
Also, I really hate those types of back decks.
The interior seems nice for this price point though.
Well actually I’ve already decided where I’m moving but I don’t want to seem like a hypocrite so ill keep it to myself.
I love how everyone says that mortgage rates have nowhere to go but up and yet they still keep going down down down
last I checked they could go as low as almost zero right?
Hd – Floosmoor?
I do like that mid century modern house there 🙂
“Well actually I’ve already decided where I’m moving but I don’t want to seem like a hypocrite so ill keep it to myself.”
ELP?
There’s a lot more room to go up than there is to go down.
Wait, that’s (among other assumptions) a hold it for 30 years calculation, right? Right
say 10 years on average? 10 yrs would be about 9.5%
Is it also a 100 percent financed assm? It is saying for every 100k you borrow.
Sonies I never said anything about it going down, I will say the upside/downside is getting a bit uneven at this rate. My sole point was where the risk is/might be.
offtopic perhaps, but can someone explain to me why interest rates vary from state to state? aren’t they all based on the same Fed rate?
Speaking of foreclosures I was driving on the Kennedy again today and saw the Castle house. Anyone have any updates on that place? Did it actually sell?
“offtopic perhaps, but can someone explain to me why interest rates vary from state to state? aren’t they all based on the same Fed rate?”
Some states allow pre-payment penalties, and those tend to have lower rates. Also, not all companies can write loans in all states, so of course there is the issue of supply and demand for loans. Some states have more competition than others.
Ze, can you humor me with a sketch of your calculation.
I can assume a $100K 30 year mortgage at say 5.5 versus 4.5 percent, and there’s a stream of payments from the two scenarios. And there’s a delta between the two streams, that would apply for the 10 years or 30 years or whatever assumed.
And then are you discounting that delta stream back to present and expressing it relative to the 100K? I’m not getting as big a number as 9 or 10 percent for 10 years. (Maybe you have to adjust for differences in principal amortized or something, I’m a bit ignorant on this, not sure which way it would cut.)
Or are you doing something very different and/or I’m missing something major? Thanks much.
“Or are you doing something very different and/or I’m missing something major? Thanks much.”
As I understand it, not very diff and not anything major, but you are looking at it off 30 deg or so from how he is.
DZ.. ever since you made your last comment I have been thinking how much it would suck to have 30yr fix below 5%, to be 10yr in and move with rates now 7%.
My bet is you are discounting faster than I am or only using a single discount rate. I used the gov notes and bond rates (to make my life easier) so 10yrs in I am only discounted at 85%. Which is amazing, but when you take 4 yrs to get out to 1%, it is correct.
“30 deg”
??
Funny conceptually, that at a lower rate you make the back end of a deal more risky and so by lowering rates you can actually stiffle deals.. funny shit.
““30 deg”
??”
Looking at the same thing from a somewhat diff perspective.
DZ.. one other thing of importance. This is not an exercise in isolation, this is a comparison to renting and the inherent risks of a renter. It is not to get things to define the pimple on the elephants ass either, but simply to illustrate there is an elephant in the room.
“““30 deg””
more like 65 degrees difference anyway. Too cool, I’m upside down.
“maybe a hipster with a good job”
Or maybe a unicorn or bigfoot?
“Looking at the same thing from a somewhat diff perspective.”
I was ballparking based just on payment amounts. I think it was the difference in how much principal is left at end of say 10 years that accounts for the difference. I get more or less Ze’s numbers on the 10 year, although on 30 year I have to use something like 1.5 percent discount rate to get it down to 18 percent.
“one other thing of importance. This is not an exercise in isolation, this is a comparison to renting and the inherent risks of a renter. It is not to get things to define the pimple on the elephants ass either, but simply to illustrate there is an elephant in the room.”
Understood, but I’m trying to figure out what kinda elephant, regular, pygmy, or dwarf.
This property had two mortgages when it went into short sale. It looked like the owners just up and left in the middle of the night with their children. They left dirty dishes in the dishwasher, full closets and all the furniture. My friend made an offer of $270K (dead-set on the neighborhood, and afraid of being priced out forever!). The banks mulled over the offer for 13+ months before the smaller-mortgage bank asked for an extra $15K. Thank goodness a water leak developed behind the washer, and my friend came to her senses, backing out. Now, the unit sold for at least $35K less than an offer the banks had over a year ago. Good luck to the new owners, and the banking industry.
“although on 30 year I have to use something like 1.5 percent discount rate to get it down to 18 percent.”
DZ, are you using a single number as an input for discounting?
“DZ, are you using a single number as an input for discounting?”
Yup, what should I be doing? I don’t have a term structure in mind or anything.
1 0.00% 0.00%
2 0.38% 0.03%
3 0.68% 0.06%
4 1.11% 0.09%
5 1.53% 0.13%
6 1.88% 0.16%
7 2.23% 0.19%
8 2.50% 0.21%
9 2.70% 0.23%
10 2.94% 0.25%
11 3.01% 0.25%
12 3.08% 0.26%
13 3.15% 0.26%
14 3.22% 0.27%
15 3.30% 0.27%
16 3.37% 0.28%
17 3.44% 0.29%
18 3.51% 0.29%
19 3.58% 0.30%
20 3.65% 0.30%
21 3.72% 0.31%
22 3.79% 0.32%
23 3.86% 0.32%
24 3.93% 0.33%
25 4.01% 0.33%
26 4.08% 0.34%
27 4.15% 0.35%
28 4.22% 0.35%
29 4.29% 0.36%
30 4.37% 0.36%
columns, yr/annual rate/monthly discount
this is rf curve..
AAA corporate curve is only about 1% higher which would make 30yrs 16.5%, you decide the elephant.
Thanks! Are these current rates? Would they differ after the assumed 1 percent increase?
“you decide the elephant”
Still only getting 16.0 percent with your curve (and comparing 4.5 to 5.5 percent rates) but maybe doing something wrong (in 30th year about 0.4*nominal).
“the smaller-mortgage bank asked for an extra $15K.”
I hope they don’t get a penny.
“Are these current rates?” w/in a few days. Not the cleanest curve, but way more than good enough.
“Would they differ after the assumed 1 percent increase?” Yes down to 16.5 on 30yr.
This risk would be bothering me right now more than price risk.
“Good luck to the new owners, and the banking industry.”
The banking industry is insolvent. That’s why they’re taking their time (13+ months) on foreclosure offers such as this: they’re going to drag this out as long as they can in the hope the economy will turn and cure rates will increase.
DZ.. 1 % is probably the simple difference of us using different pmt periods, other 1/2 percent is I’m toggling 5 to 6% and bonds have convexity so change is not linear, you’ll see a lower change.
I ran this all as a quick cuff to throw G a number… From now on I stick to drug references 🙂
“Now, the unit sold for at least $35K less than an offer the banks had over a year ago. Good luck to the new owners, and the banking industry.’
Isn’t this a classic story of catching a falling knife? How many other buyers are doing the same thing? She just got lucky that something happened and pulled out of the deal. Others haven’t figured it out (that prices continue to fall- even on foreclosures.)
“Not the cleanest curve, but way more than good enough.”
Yeah, I wasn’t hassling you about whether you were updating in real time, just whether it was pre or post increase. I’m not convinced a riskfree-ish discount rate is necessarily right, but I take the point about the general usefulness of the exercise. And appreciate your humoring me.
I do also think that increases in rates could themselves affect prices in a way that hasn’t always been the case in the past. If you are increasing rates from truly historic lows and don’t expect to go back down, that is a lot different than if you blip up from a typical rate and may just as likely blip back down next year or two.
“they’re going to drag this out as long as they can in the hope”
that just never seems to end well, does it? But has been going on for quite some time now, eventually they will be right, just where?
I’m starting to get the sense that when they see GDP contraction they panic, hit the gas, and QE3 it. Say hello to $ vs Real 1.30…LOL
“If you are increasing rates from truly historic lows and don’t expect to go back down, that is a lot different than if you blip up from a typical rate and may just as likely blip back down next year or two.”
I agree. If we are down here *when* we see a blip in the business cycle, get out of the way.
“I’m starting to get the sense that when they see GDP contraction they panic, hit the gas, and QE3 it. Say hello to $ vs Real 1.30…LOL”
We could be several quarters away from GDP contraction depending on what they do with the budget (and how many government jobs are cut.) Didn’t the UK go into contraction almost immediately after it did its big austerity program? That could be us. I don’t see them doing any sort of QE3 until then.
Also- Bernanke basically said in the press conference there was nothing more they could do for housing. Essentially- they got rates as low as they’ve ever been and have kept them there and STILL it hasn’t done anything to revive it. He said “confidence” and “employment” would have to come back in order for housing to recover.
“I don’t see them doing any sort of QE3 until then.”
There is already talk that the Fed might start targeting interest rates instead of specifying purchase amounts once QE2 wraps up due to the public anger over QE. It would basically be QE3 with an uncapped amount but some think the MSM will play along and not discuss that.
“this is rf curve..”
Another perhaps stupid Q. What is the 30 year rate? If it’s the annual rate of interest that is paid on a 30 year bond then it’s not clear to me that isn’t the single discount rate to use for each in in present valuing. E.g., if you borrowed on that basis, you’d have to pay that each of the 30 years and those payments at those rates, starting in year 1, are part of what sets the rate, not just the rate in the last year. Here we are present valuing a stream of payments over same 30 years.
DZ,
If you can make a curve, *always* use it. It is much more correct. Think if I told you I would give you a $1,000 in 30 yrs… think if i told you I would give you $1,000 in 12 months, would you use the same rate for both if each were stand alone transactions? We used monthly granularity so we need to use the same for discounting *each* pmt forward.
As for correct rate, rf, reinvestment rate, cost of capital (later 2 not the same for everyone). to me this felt like I would want to discount to inflation anyway since if I got $1,000 coming to me in 12 months I’d want to know what that was post inflation. (so close to rf rate and soooo much easier for me to always start at).
And your questions are not stupid. Questions are never stupid, particularly the stupidest ones. Stupid mistakes made for fear of asking stupid questions is what’s stupid.
OK, guys, here’s my [stupid] question: is this whole discussion suggesting that one should buy when rates are at historic lows or should not buy when rates are at historic lows?
“Think if I told you I would give you a $1,000 in 30 yrs… think if i told you I would give you $1,000 in 12 months, would you use the same rate for both if each were stand alone transactions?”
So, here’s what I don’t understand. I think what you’re using for discount factor to present value year N is 1/[(1+d1)*(1+d2)…(1+dN)], where the di are each year’s rate on the curve. I’m not sure why it shouldn’t be 1/(1+dN)^N, since dN is the rate that applies each year if you want to give me money back in year N. And maybe the discount should be greater than that since (if I understand what yield curves represent, if it’s t-bond rate for each maturity) what you get on e.g. a 30 year t-bond is payment of d30*principal each year plus principal back at year 30. If you had a zero coupon bond maturing in year 30, which is what the year 30 payment is taken in isolation, I’d think you’d need a higher rate of return.
“is this whole discussion suggesting that one should buy when rates are at historic lows or should not buy when rates are at historic lows?”
Ze is saying the potential for rates to go up more or less permanently from current levels is a major factor for buying now, and that the risk of your borrowing costs going may be greater than price risk.
“Ze is saying the potential for rates to go up more or less permanently from current levels is a major factor for buying now, and that the risk of your borrowing costs going may be greater than price risk.”
That’s what I thought. I wasn’t sure, though, because he’s been arguing against real estate for as long as I can remember.
“Ze is saying the potential for rates to go up more or less permanently from current levels i”
Please strike the words… “more or less permanently”
As for the rest… If you hadn’t noticed, I was purposefully avoiding a discounting convo for multiple reasons (there is no 1 specific answer and it is not the same for everyone). Use what you wish. A curve is always better though.
http://en.wikipedia.org/wiki/Net_present_value (see discounting)
to note: you are going through a lot of work here on this DZ to bring something to the 7th decimal when the other side (price risk) is a big giant guesstimate.
“Please strike the words… “more or less permanently””
Don’t you need that to get the bulk of your effect?
“it is not the same for everyone”
Agree completely.
“A curve is always better though.”
Depends on the curve or the constant rate you have. If I had the right constant rate that would make you indifferent between money now versus stream of fixed payments for 30 years, that constant rate estimated from a 30 year coupon only (or whatever the right term is) bond seems just as good. And I’m not convinced you should e.g. be cumulating the curve over the 30 years to discount the 30th year, as opposed to just taking that rate for the 30th year and applying it for all 30 years to discount the 30th year.
“you are going through a lot of work here on this DZ to bring something to the 7th decimal”
Well, I’ve never run mortgage payments scenarios (never had a loan of any kind), so it was quasi-educational anyway. But the difference based on what discount rate and methodology you use seems non-trivial to me (even accepting the imprecision on price risk).
One year later, and mortgage rates are still going down… When will you guys listen to me 🙂
“Sonies (May 30, 2012, 12:35 pm)
One year later, and mortgage rates are still going down… When will you guys listen to me”
WHAT!!!!!! you are still alive.
I’ve been busy groovester!
“I’ve been busy groovester!”
so have i, but come on family comes first. you could just drop in once a week and throw a shot at bob.
I like bob, he is a reminder that it takes all types to make the world go round
Looks like I might win my bet with Ze, maybe anon can find the thread here where we wagered what the 10 year would be trading at first 1.5% or 2.5% because my google fu is not so good