Sue Fox, @Properties. Direct 773.816.1788
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The return of the multiple offer
MULTIPLE OFFERS AT PARK TOWERS: Located at 5415 N Sheridan, this popular high-rise overlooking the lake in Edgewater offers studios and 1-bedroom condos at relatively low prices. One of my buyers was recently in a multiple offer situation here, with the winner paying nearly full price, in cash, and closing about two weeks later.
With home buyers streaming through Chicago neighborhoods this spring in search of a bargain, I’m beginning to see a phenomenon that hasn’t reared its head much in recent years: the “multiple offer situation.”
Dreaded by home buyers but embraced by sellers, this pulse-racing affair occurs when more than one buyer makes an offer on a property at the same time, sometimes within the space of hours (or even minutes). The seller’s realtor will then advise all parties of the “multiple offer situation” and often ask everyone to submit their so-called “best and final offers.” Sometimes, however, one offer is so outstanding that the sellers will decide to negotiate further with only that buyer, leaving the others by the wayside.
I have been extremely busy during the last month, taking various buyers out to see properties as soon as they hit the market and helping submit dozens of offers (hence my recent lack of blog posts!) Many of our offers have been negotiated and accepted, but I can think of at least five that wound up competing against stronger offers and losing out. The bidding wars weren’t confined to a single price range, either; I saw them cropping up anywhere from a $130,000 condo in Edgewater to a $650,000 house in Ravenswood. In two situations, I was representing an investor who was bidding against five to ten other offers (often cash offers) for houses in Irving Park or Portage Park.
It is becoming commonplace to run into other buyers looking at the same property, and to hear the seller’s realtor mention that he/she has showed the home seven or eight times in one day. By the end of March, I was advising my buyers to move quickly if they really liked a home — especially if it was priced well and in good condition. It’s always better to be the first one in and get the property under contract than to wind up paying more because someone else wants it too.
Edgewater 2-bedroom/2-bath condo for under $150,000
EVERYTHING YOU WANT: This spacious unit has it all -- 2 bedrooms, 2 baths, a fireplace, refinished floors, tons of closet space, parking, and a great location close to Andersonville and the lake -- all for less than $150,000.
Check out my listing at 5400 N Sheridan, a low-rise building located a block from the lake in Edgewater. It’s hard to find a 2-bedroom, 2-bath condo — with parking included — in this area for less than $150,000, especially one that’s not in a high-rise building with high monthly assessments.
The assessments here are just $368 per month, and that includes heat, gas, and basic cable TV. And the unit is big, with 2 large bedrooms, including a master bedroom with a huge walk-in closet, an in-suite bath, and a full laundry room. There are newly-refinished hardwood floors throughout, an updated kitchen, a gas fireplace, and plenty of closet space. It also comes with a parking space and extra storage in the basement.
Best of all, this condo is just a block from the lake and three blocks from Andersonville’s shops and restaurants. It’s also close to the Red line, the Bryn Mawr historic district, and the new Dominick’s store at Foster and Sheridan.
We just reduced the price $10,000 to $149,900 — a great deal for this neighborhood — so give me a call at 773-816-1788 if you want to come see it!
Chicago condos (and houses) for under $200,000
THE LOOP WITHIN REACH: There are dozens of 1-bedroom condos for sale in the Loop at prices below $200,000. This one, located across from Grant Park at 888 S Michigan #902, features an updated kitchen and a large bedroom. It is priced at $195,000 and does not include parking.
Most homes that are sold in Chicago sell for less than $200,000. While that figure may seem surprisingly low, $200,000 actually goes a long way these days. As we head into the 2012 home-buying season, I thought a brief survey of the market in some North side neighborhoods might help answer the question: What can you get for $200,000 or less?
Loop: The great glut of downtown condo buildings has made buying a home in the Loop quite affordable. The supply is abundant here — even at the low end of the market — with 114 condos for sale for under $200,000. In some buildings, like 800 S Wells, there are several units priced under $100,000! Closer to the $200K mark, you’ll find plenty of newer 1-bedrooms in full-amenity buildings, along with a fair amount of shorts sales and foreclosures to choose from. At 208 W Washington, for instance, there’s a 1-bedroom unit on the 21st floor that boasts a balcony, a large 18×12 bedroom, and a den — all for $184,900. It’s a short sale.
Lincoln Park: This is one of the most popular, and most expensive, areas of the entire city. But you can still afford to buy here on a $200K budget. There are currently more than 70 condos for sale for $200,000 or less — many of them studios or 1-bedrooms in the high-rise buildings clustered along Clark or Lincoln Park West. A corner 1-bedroom condo at 1850 N Clark #901 with unobstructed view of Lincoln Park, the lake and the city, for example, is now priced at $199,000 after nearly a year on the market. Parking is available for $150 per month.
Edgewater: If you live in Lakeview or further south, Edgewater may not be on your radar. It’s one of Chicago’s northernmost neighborhoods, nestled right beside the lake, with plenty of trees and parks and low-rise vintage buildings where neighbors stop to chat as they walk their dogs. There are also dozens of high rises along Sheridan that boast lake views as blue as any you’ll find downtown (but with a lot more space for the money.) Edgewater has been hit especially hard by the downturn, and there are now more than 300 condos for sale for less than $200,000. This is the place to go if you’re looking for a 2-bedroom and even a second bath. Examples include 5823 N Ravenswood #116, a 2-bedroom/2-bath loft with a large eat-in kitchen and a separate dining room. Garage parking is included in the $189,000 price.
A HOUSE ON THE CHEAP: This 4-bedroom Irving Park house was priced at $339,000 when it hit the market in May. The seller must have quickly wised up to Chicago's new real estate reality, because the house is now a mere $190,000.
Irving Park: If you venture a few miles west of the lake, housing prices drop to the point that you can buy a house for what a small condo would cost in Lakeview. That means that in Irving Park (and many of the “Park” neighborhoods like Albany Park, Portage Park, Jefferson Park etc.), you can find a tidy 3-bedroom bungalow, ranch house, or even a turn-of-the-century Victorian or Dutch colonial for less than $200,000. I’m not kidding. There are dozens of homes out there like 4114 N Central Park Ave., a rambling 4-bedroom Dutch colonial built in 1907, now for sale at $190,000. Many of these houses need at least some cosmetic updating, but they are affordable options for anyone who’s ever wanted a house of their own, complete with a backyard and garage.
Sauganash: Located in the far northwest corner of Chicago, Sauganash is a lovely, leafy community, almost suburban in its placid beauty. It’s relatively pricey, with many single-family houses going for $400,000 and up. There are still a few bargains to be had here for under $200K, however, including two 2-bedroom townhomes and several condos, most of them located in the same building at Cicero and Peterson (just off the Edens expressway and above the Whole Foods grocery store.)
In sum, there are hundreds of great deals out there right now at low prices — lower, in many cases, than it would cost you to rent a similar home. Happy house-hunting, and please call me at 773-816-1788 if you need any help!
Chicago home sales up since last July
SLOW GOING IN EDGEWATER: Condo sales are faring better in more central neighborhoods with well-developed business districts like Lakeview and Lincoln Park. But further north in Edgewater, it's gotten increasingly tough to sell a condo. This 2-bedroom duplex-down condo on Balmoral Ave. is finally under contract after more than a year on the market. It is priced at $255,000 and does not include parking.
The latest Chicago housing data is out, covering the month of July, and it looks like both sales volume and prices have climbed slightly compared to last July. (But before you imagine a real estate rebound, remember that last summer Chicago home sales were in the gutter, once the federal tax credit for buyers expired. So things can only go up from there!)
Anyway, there were 1,655 home sales in the city of Chicago (single-family houses and condos) in July, an increase of 4.2% over the previous year. And the median home price in July 2011 was $210,000 — up 6.9% compared to the previous year.
“This is the first month, year-over-year, where we are without a federal tax credit and are encouraged by July’s sales, hopefully a positive outlook for the remainder of 2011,” said Mabel Guzman, president of the Chicago Association of Realtors. “There is an ongoing absorption of units throughout the city, specifically in the performance of the condo market over 2010, as well as compared to 2009.”
Some neighborhoods are obviously selling better than others. In Lakeview, for example, a popular area that is home to Wrigley Field and close to both the lake and downtown, there are now 260 condos for sale with 2 bedrooms and 2 baths. Another 64 of these condos are under contract (pending sale), and 122 have closed in the past three months. That’s a pretty good ratio in this market, with closed sales at roughly half the number of active listings. Condos in Lakeview, in other words, are selling.
Now consider Edgewater, another lakeside neighborhood just a couple miles north. There are 137 condos for sale right now that feature 2 bedrooms and 2 baths. Another 28 are under contract. But just 45 have closed in the past three months — a much worse ratio than in Lakeview. The closed sales don’t even amount to a third of the number of active listings in Edgewater.
Unfortunately, I’ve been witnessing sluggish condo sales in other northern neighborhoods, like Lincoln Square, Andersonville and Uptown. With condo buyers scarce in 2011, many of them seem to be opting to live in areas that are closer to the Loop. For first-time home buyers (or anyone else with cash or good credit), this is an excellent time to snag a great deal in the most coveted, central parts of Chicago.
The return of the Chicago two-flat
A SOLID INVESTMENT: This Chicago two-flat, located at 1300 W Norwood St. in Edgewater, sold in April for $370,500 -- a price that makes sense for a buyer hoping to rent out one or both units. It was originally priced at $600,000.
Chicago two-flats are back… as a good investment option, that is. For much of the last decade, their price had climbed so high as to no longer make sense for many owners. As I had warned in previous posts, it is ludicrous to pay $500,000 or $600,000 (or more) for a two-flat when each unit will only rent for $1,200 or $1,300 a month.
And once the recession hit, this obvious math finally caught up with many two-flat owners. Suddenly people were scrambling to unload these properties, and the price of multi-unit buildings plunged. Now that they are priced more realistically — meaning that if an owner were to rent out both units, it would come close to covering the mortgage and other expenses — Chicago two-flats are suddenly in demand once more.
In Edgewater, for instance, a classic red brick two-flat located at 1300 W Norwood Street recently sold for $370,500. The math here makes sense: Assuming the buyer put down 10% and got a 30-year loan at a 4.5% interest rate, the monthly payment (including property taxes and insurance) would be about $2,525. Each unit has 3 bedrooms and a bath, which in Edgewater would rent for around $1,400 per month, giving the owner $2,800 in income. That’s enough to cover the expenses… which indicates that this purchase is a sound investment. (And in my example, the buyer didn’t even put down 20 percent! The numbers would work even better if he/she had.)
What wouldn’t make any sense at all is paying $600,000 for the same property, which is where it was originally priced in January 2010. The seller had to reduce the price seven times over the next year, finally settling at $429,000. Still, this two-flat closed for nearly $60,000 less when it sold in April 2011.
In Chicago, people sometimes buy two-flats with the intention of converting them into a single-family house. But even then, the property must be obtained for a reasonable price to make financial sense. These days, dozens of affordable two-flats can be found in appealing neighborhoods. I just searched the MLS in four North side neighborhoods relatively close to the lake — Edgewater, Uptown, Lincoln Square and North Center — and found 29 two-flats for sale from $149,000 (a foreclosure in Lincoln Square) to $400,000.
Is it time to jump back into the two-flat market? If the numbers make sense, I say yes.
More troubled sales at Catalpa Gardens
CATALPA GARDENS FALLS SHORT: Over the past year, 9 of the 12 sales here was a short sale. Another was a foreclosure.
For a building that is only four years old, Catalpa Gardens has seen more than its fair share of trouble. This colorful complex had the misfortune to be built and unveiled to the public just as the Chicago condo market was beginning a steep decline. This plunge not only caught off guard the developers — who were forced to slash their asking prices by as much as $150,000 on some 2-bedroom units — but it pretty much trapped dozens of buyers who purchased their units here before the massive price cuts in 2009.
I’ve written about the problems here before; in fact, in late 2009 I warned potential buyers to beware of this 126-unit building, a virtual ticking time bomb since so many owners were deeply underwater. Now we are seeing the fallout.
Over the past year, there have been 12 sales in the building, including 9 short sales. One was a foreclosure, and the last two were the developer’s “liquidation” of the final units. One of those, a sixth-floor unit with 2 bedrooms, 2 baths and garage parking, sold for $230,000 — the highest price in the building all year. It had previously been priced as high as $417,301 (with parking an additional $31,900.)
But the real losers in the Catalpa Gardens debacle are the regular folks who paid top dollar for a new building whose value was sinking by the day. Like the owner of #703, who paid a whopping $439,661 for a 1200-square-foot 2-bedroom, 2-bath condo in the summer of 2008. The housing market was already crippled then, and a year later this owner was trying to get out. But Catalpa Gardens was in serious trouble, and unit #703 (priced at $399,900) did not sell. The owner was forced to cut the price seven times, to $189,000, before it finally sold as a short sale last spring.
That’s right. This poor homeowner owned the place for less than two years, sold it for an appalling 57% less than he paid for it, and destroyed his credit in a short sale. And consider the fate of a similar sixth-floor unit, #603, whose owner paid $435,061 in 2008. That one has been for sale now for almost two years, currently priced at $175,900. It’s also a short sale.
Today there are six units for sale at Catalpa Gardens, and five of them are short sales or foreclosures. The cheapest is a 1-bedroom, one-bath condo priced at $103,500. More distressed sales are certainly ahead for this star-crossed building, but prices are now so low that these units are beginning to seem like a deal.
Chicago for sale: Priced right & sold in a week
SOLD! In just a week, this nearly new 3-bedroom condo in a luxury building had a buyer. The property was priced just right at $359,000, a price determined by recent sales -- or lack thereof -- of similar units in Edgewater.
I was going to write about my latest listing, a 2000-sq-ft luxury condo with three bedrooms, two baths, garage parking and a roof deck with a great view of the lake. But it’s already been snapped up by a buyer, after just a week on the market.
So what’s the secret? Yes, it was a lovely unit with plenty of space and high-end finishes, in a snazzy building built just a few years ago. But the reason is sold so quickly, which I see time and again in Chicago, is that it was priced right. My sellers were realistic, asking $359,000 for a unit they purchased new from the developer in 2006 for nearly $90,000 more.
No one likes to take such a loss. But consider the fate of two similar luxury units in the same little lakeside stretch of Edgewater, just south of Loyola: One condo, at 5722 N Winthrop #3S, was on the market for a tragic 1,134 days. The price started at a lofty $489,500 and finally fell to… $359,000. But it didn’t sell. The owner, probably beaten down by three years of relentless price reductions, finally gave up and took it off the market a month ago. Another similar condo, at 6121 N Winthrop #2N, was originally priced at $359,000 in January, and it went under contract in less than two months.
So when it came time to list their unit, my sellers carefully considered the recent comps, listened to my take on market trends and priced their unit accordingly. Within a week, we had a buyer!
And that is really the point. What good is listing your home if you don’t sell it? We’re now seeing thousands of Chicago home sellers each year that — despite months on the market and multiple price cuts — ultimately fail to attract buyers. If you price your home correctly, you needn’t be one of them.
Gorgeous vintage 2-BR condo in Edgewater for $229,000
A VINTAGE VISION: This bright corner sunroom features beautiful oak woodwork and a new slate floor.
It’s rare to find a vintage condo in perfect condition these days, exquisitely restored to accentuate its charm and yet updated for modern living. But I just listed one of these historic Arts and Crafts beauties in Edgewater, at a very reasonable price!
This 2-bedroom, 1-bath condo at 1355 W Rosemont Ave. has gorgeous original woodwork and crown molding throughout, along with oak floors and a working fireplace flanked by built-in bookshelves. It’s a corner unit, so it gets a lot of light from both northern and western exposures.
In addition to a warm living room anchored by the fireplace, there is a large formal dining room and a sunroom with new slate floors. I sold this condo to its current owners five years ago, and they have lovingly restored it, renovating the kitchen with new stainless steel appliances, a farmhouse sink and granite counters and painting every room in historic hues of paint meant to bring out the lovely wood trim.
You can check out more photos here. The condo is priced at $229,000 and it’s close to the Red Line, shopping and the lake. Please call me at 773-816-1788 if you’d like to see it.
Lovely Edgewater houses for under $500,000
HISTORIC EDGEWATER: This beautiful American four-square home, at 6329 N Hermitage, was listed at the end of September for $459,000. It boasts a total of six bedrooms. Maureen Barone of Coldwell Banker has the listing.
The decline in Chicago real estate prices does have its upside. For example, it’s now possible for buyers to afford a historic home in leafy, tree-lined Edgewater for less than $500,000.
And they aren’t all fixer-uppers. Many of these spacious houses are already in fine condition, with perhaps a bit of cosmetic work to do.
Consider 6329 N Hermitage, a rambling American four-square home built in 1903 that has four bedrooms on the second floor and two more upstairs in the attic. The lot is large by Chicago standards: 37.5 feet wide and an extra-long 162 feet deep. It looks fairly well-maintained and gets lots of light, and it features a large unfinished basement with high ceilings (a plus for those inclined to renovate.)
Other recent Edgewater offerings include 1413 W Hood, a 3-bedroom house with original oak trim throughout, refinished floors, a new kitchen and baths, and a six-year-old roof. Priced at $475,000, it’s been on the market less than a month.
There’s also 1619 W Bryn Mawr (which is closer to Andersonville), a cute 3-bedroom with a new kitchen, new baths, and a fully finished basement. It was listed for sale a month ago at $499,900.
These are charming houses in good locations at prices that were unthinkable even two years ago, when similar houses were selling for $600,000 and up. So if you are one of Chicago’s many condo owners who face a loss if you sell now, take heart! You will only gain when it comes time to buy your next home, especially if you’re moving up into a single-family house.
How to get a Chicago condo FHA approved
NOW FHA-APPROVED IN EDGEWATER: My buyer Michael just closed on this new 2-bedroom, 2-bath condo at 5876 N Ridge in Edgewater... thanks to FHA. With the help of Condo Approval Professionals, the condo building applied for FHA approval so that Michael -- and now others -- could use an FHA loan to buy a unit there. We closed yesterday!
These days, a lot of sellers and some condo associations have become interested in getting their condo building approved by the Federal Housing Administration (FHA). That’s because FHA loans — which are insured by the government and require only a 3.5% down payment — have exploded in popularity, with more than a third of buyers now using them to purchase homes.
But in order to use an FHA loan to buy a condo, the entire condo building must be FHA approved. This is a somewhat laborious process that involves gathering up detailed paperwork to prove that the condo’s budget, reserves, collection of assessments, percentage of ownership and other factors all meet FHA’s rather stringent criteria. In Chicago, where many smaller condo buildings are self-managed, it may seem a confusing and overwhelming task for individual owners to put together an FHA application that stands a chance of being approved. Even larger buildings could often use a hand when it comes to FHA’s rules.
That is where an expert in securing FHA approvals can help. This spring, for example, I had a buyer named Michael who made an offer (which was accepted) to buy a newly-rehabbed 2-bedroom condo in Edgewater. But due to a combination of factors involving both the buyer and the building (he could only afford to put 5% down, and more than 10% of the building’s units were still owned by the developer) Michael wasn’t able to secure a conventional loan. He could use FHA, but then he was up against a major roadblock many Chicago condo buyers encounter: Most Chicago condos are not already FHA approved.
So we decided to see if, with the cooperation of the developer, we could get this 22-unit building approved. Wintrust Mortgage, Micheal’s lender, put us in touch with Steve Stenger of Condo Approval Professionals, LLC, a local company that specializes in getting FHA approval for condo buildings. And it worked!
Stenger worked hand in hand with the condo board to bring the building into FHA compliance, assembled the necessary package of documents, submitted everything to FHA and got the building approved in less than 30 days. And yesterday, Michael finally was able to close on his new condo.
“I think the key is really having someone with the ability to get it done, who knows what things need to be worked on to get the building into compliance,” Stenger said. “Some condo associations might try to do it on their own, but it’s difficult because there is a lot involved in terms of the budget, having the right insurance, looking at the declaration of bylaws. It’s not just ‘gather and submit.’ That’s why the FHA doesn’t want people to just pull documents together and send them off.”
Stenger, who has been in the business for 16 years, said he starts by “prequalifying” the building with a condo questionnaire and a budget review “to determine if they’re even eligible for FHA right out of the gate.” Sometimes, as was the case with Michael’s condo, the building isn’t in compliance — but could be, with a few changes. In this case, Stenger advised the board to collect some unpaid assessments (FHA won’t allow buildings with more than 15% of the units beyond 30 days delinquent in their assessments) and to use the condo reserves to cover some upcoming sewer repairs rather than levy a special assessment, which could also derail FHA approval.
“When I put that package together, I fully expect it’s going to be approved,” Stenger said.
Condo Approval Professionals doesn’t charge to prequalify a condo building, he added. But to work with the building and shepherd the whole FHA application package through, the fees are:
$500 – Building with 5 units or less; $750 – 6 to 10 unit building; $1500 – 11 to 20 unit building; $2000 – More than 20-unit building
In my opinion as a realtor who helps many condo buyers, it may be well worth the investment. Once a building is FHA approved, buyers can now use FHA loans to finance units there — which gives the building a huge competitive edge in a very sluggish market.
Steve Stenger of Condo Approval Professionals can be reached at (847) 293-2962.
Recent Posts
- Short sales jump 35% in Chicago
- The return of the multiple offer
- Sue Fox interviewed on WBEZ
- 3 ways to improve your house hunt
- Lincoln Park house prices fall, but condos hold their value
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