Sue Fox, @Properties. Direct 773.816.1788
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I have some clients looking for a townhome in the $700,000 range in Wicker Park, Bucktown, or Lincoln Park, and lately we have run across several impressive homes with a least three bedrooms, garage parking and a roof deck. Because Wicker Park and Bucktown tend to boast newer construction than other areas of the city closer to the lake, their selection of mid-range townhomes has been more attractive than that of, say, Lincoln Park, where many townhomes were built in the 1980s.
Take, for example, the 4-bedroom, 2-and-a-half bath townhouse at 1757 N Paulina, Unit O in the heart of Bucktown. Tucked away in a narrow courtyard off a nondescript street, these brick townhomes aren’t much to look at from the outside. (This is often the case with Chicago townhome developments; you’ll find an expanse of brick broken up by an occasional bay window jutting out, usually framed in metallic cladding or limestone as an accent. Nothing too exciting, generally, but once you step inside some homes rapidly distinguish themselves from the masses.)
Here on Paulina, the home immediately opens up into a soaring living room bathed in light, anchored by a dramatic floor-to-ceiling stone fireplace. The kitchen –which has seen some $60,000 in upgrades — was truly beautiful, with custom Brookhaven cabinetry and white Brazilian granite. There was a huge island and room for a large table (or a built-in banquette, in this case.)
This elegant home was priced at $669,000 — and it’s not alone. We have seen several at this price point that are worth consideration, a welcome change from the lofty prices such upgraded homes used to command. There was a similar unit in this development that sold for $800,000 in 2008.
Even in this market, a lovely home in a good location that is well-priced is likely to sell. People still value beauty (and location). And while this Bucktown townhome wasn’t quite right for my buyers, it sold quickly — just three weeks after hitting the market.
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.
Condo prices have tumbled 10.4% nationwide in the last year, according to data just released by the National Assn. of Realtors. But the plunge was much worse in the Chicago area, where prices dove 24.1% in the first quarter compared to a year ago.
The region (Chicago-Naperville-Joliet, in terms of the realtor’s association) fared worse than almost every other metro area in the country. Only the Tampa and Sarasota regions in Florida and Barnstable Town, Mass., saw condo prices fall further.
No wonder it’s getting so difficult to sell a condo in Chicago. What was once an active market has become seized and sclerotic, with thousands of condos for sale that just sit and sit and sit. I’m now seeing this troublesome trend in desirable neighborhoods like Andersonville and Lincoln Square, as well as much of Edgewater, Uptown, and even parts of Lakeview. Chicago’s North side seems to be awash in condos, may of them recent rehabs or nicely restored vintage units, that languish on the market for months despite their appeal. For many condos, showings are scarce and open houses attract only a few people, even at the height of the spring market.
What is going on here? Are young people, who traditionally drove the market for first-time condo buyers, deciding that it’s simply better to rent? Or are so many of them unemployed or under-employed that they can’t qualify for a mortgage? There are definitely fewer first-time buyers in the market these days; according to the realtor’s association, first-time buyers purchased 32% of homes in the first quarter, down from 42% last year when a $8,000 tax credit was stimulating sales.
If first-time buyers sit on the sidelines, our market will become paralyzed. First-time buyers drive sales by buying at the lower end, which then frees up those sellers to go buy another home. But if people can’t sell their condos, most of them won’t be able to buy again. They will be stuck. And unfortunately, this year many Chicago sellers are discovering that is exactly where they are.
This week, one of my buyers made an offer on a foreclosed 2-bedroom, 2-bath condo in Rogers Park. In years past, I did a healthy business in Rogers Park; it was a popular destination for first-time home buyers who wanted to live in an affordable area close to the lake.
But Rogers Park, like so many other up-and-coming neighborhoods throughout Chicago, has been just about crushed by the real estate downturn, resulting in a massive tide of foreclosures and short sales. This has made Rogers Park something of a buyer’s banquet, with deals you can only dream of in other North side areas, like newly-rehabbed 2-bedroom condos with parking for well under $200,000.
There are now 99 condos with at least 2 bedrooms and 2 baths listed for sale for less than $200,000 in Rogers Park (and more than 20 of them have 3 bedrooms.) But the truly shocking part is that nearly all of them are distressed properties, either foreclosures or short sales seeking to avoid a foreclosure. I just combed through all 99 listings, and I only counted 28 that were NOT foreclosures or short sales.
In fact, it’s so rare to find an ordinary seller selling a ordinary home in Rogers Park these days that it’s become a selling point: “REGULAR SALE!!!!” shouts the description for 1900 W Touhy Ave #1C, a rehabbed condo priced at $135,000.
The flip side of so many great deals is that most of them, unfortunately, will be difficult to actually buy. At least half of them are short sales, which require lender approval that takes months and often never comes. Many of these will eventually slide into foreclosure and be seized by a bank. Even the foreclosed condos can be tough to buy, though, because if they are located in a troubled building with other distressed units, lenders will not want to loan in that building.
So if you are a buyer considering Rogers Park — especially if you’re a condo buyer — please tread carefully. The neighborhood’s housing market has become a veritable thicket of problem properties, and you need to make sure you are well represented as you sort through the real estate rubble looking for a gem.
Check out my new listing, an elegant duplex-up condo in the heart of Lincoln Square. In real estate parlance, a duplex-up is a two-story condo unit where the bedrooms are upstairs, rather than tucked below grade on the basement level in a duplex-down unit. Duplex-up condos are much harder to find than duplex-downs, and they are prized because the bedrooms feel light and airy since they are often on the third floor or above.
This duplex, located at 2646 W Gunnison #2, is nearly new and packed with upgrades. The building was gut rehabbed and converted to condos in 2007, and this unit features a gourmet kitchen with cherry cabinets, granite counters, a tile backsplash, a breakfast bar, and all stainless-steel appliances. The kitchen opens to a striking living/dining area with classic recessed ceilings, a gas fireplace, and large windows that let in the sunlight. There are hardwood floors, crown molding, and elegant finishes throughout. You can check out more photos here.
On the upper level, there are two bedrooms and two luxury baths, each ensconced in a private suite. There is also a laundry room down the hall, making it easy to wash and fold clothes without trekking up and down stairs.
The condo is located in an intimate 10-unit building that is across the street from a park. It’s close to the Brown line and all the restaurants and shops of Lincoln Square. This is a beautiful, modern home, priced to sell at $299,900. If you would like to see this duplex, or any of my other listings, please call me at 773-816-1788. Thanks!
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.
The monthly sales data is out for February, and the median home price in Chicago — now $177,500 — appears to be pretty much what it was a year ago. It’s actually a tad higher (by $1,000). Perhaps prices have finally stopped their relentless downward slide in the Windy City.
Yet sales volume continued to plummet, meaning that fewer properties are actually changing hands. A year ago in February, there were 1,225 single-family homes and condos sold in Chicago, according to the Illinois Association of Realtors. But in February 2011, only 1,056 homes were sold, nearly a 14% drop. This is not encouraging news for sellers who are hoping to attract buyers during this year’s spring market.
And prices are way down from where they were even in 2008, which was well after the downturn began. Take a look at Chicago’s median home prices in February over the past four years:
- February 2011: $177,500
- February 2010: $176,500
- February 2009: $218,625
- February 2008: $290,000
This simple chart shows the devastating impact of the thousands of Chicago homes that have fallen into foreclosure or are being marketed as short sales. All these distressed properties have pushed the year-over-year median price down nearly 40% in just a few years.
Good news for Chicago home buyers: Lenders are finally starting again to offer loans with minimal down payments. Guaranteed Rate, for example, announced this week that it can now do conventional loans (not FHA!) with 3% down, provided the borrower has a credit score of 680 or higher.
This is especially good news for condo buyers, who have been forced to turn to FHA in recent years for a low-down-payment loan… but in Chicago, FHA and condos are often a lousy fit.
The trouble is, many first-time buyers can’t scrape up much cash to buy their first home. Ever since the real estate downturn led lenders to dramatically tighten the purse-strings in 2008, many buyers have been told to come up with at least 10% down. For hundreds of thousands of people, the only alternative was to use an FHA loan, which requires just 3.5% down.
This was all (usually) well and good if you were buying a house. But many first-time buyers in Chicago want a condo, and the vast majority of Chicago condos are NOT currently FHA-approved. Making matters worse, the FHA changed its rules last year to make it even more cumbersome to get condo buildings approved.
But now, buyers with good credit can avoid the whole FHA bottleneck and choose whatever condo they like — and still only put 3% down. This is great news for sellers, too, since it will smooth the path for buyers who may be interested in their homes.
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.
Trying to make fast money by investing in Chicago real estate these days is like squeezing blood from a stone. But that isn’t stopping a few bold rehabbers from snapping up foreclosed houses, renovating them top to bottom, and popping them back on the market a few months later at double or triple the price.
I’m seeing this trend in otherwise sleepy neighborhoods like Irving Park and Albany Park, which boasts a lovely swath of vintage bungalows in its Mayfair area. Consider this renovated bungalow, located at 4839 N Springfield in Albany Park, which has 3 bedrooms (plus another one in the basement) and 3 baths. I chose this house as March’s Bungalow of the Month to call attention to the enduring phenomenon of house flipping.
The owner bought the house — a foreclosure — in July for $104,000, according to public records. It was a simple frame bungalow with white siding and black trim, being sold “as is” after spending three years on and off the market at steadily reduced prices.
Three months later, it was back on the market, totally renovated and set at nearly triple the price: $299,000. The exterior was now a soft gray with brown and white accents, the kitchen boasted dark (but plain) new cabinetry and stainless steel appliances, the floors had all been refinished and the walls repainted, the basement was finished with carpet, and the backyard now featured a new deck.
And the upgrades weren’t merely cosmetic. The house now had a new roof, HVAC system, siding and windows, electric wiring, and other improvements. There was also a new 2-car garage.
But the goal of any house flipper is to find a buyer, and in this case they have yet to do so. This bungalow has been on the market for five months now and the price has been cut twice, most recently to $259,000 last week. We will have to wait and see what the final sale price is to decide whether this was a wise investment.
Chicago is chock full of bungalows and other homes that are now languishing in foreclosure, or are trapped in a slow downward spiral as short sales. I see them in virtually every neighborhood these days, but they are especially prevalent on the South and West sides of the city. Even on the North side, you can find them in Rogers Park, Albany Park, Irving Park, Avondale, Portage Park, Jefferson Park… and the depressing list goes on.
I love bungalows, and I hate to see these historic homes abandoned and decaying. Now, this particular bungalow looks like it was stripped of whatever built-in bookshelves or hutches it once had, and it lacks a fireplace or any leaded glass windows. The new interior now has something of a generic, condo-ish feel and the finishes look like they came straight off the shelf at Home Depot. However, whoever bought and renovated this house did save it from a fate all too common these days in Chicago’s bungalow belt: utter neglect.
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