River North Real Estate - Boom? Crash? How to know? (Phoenix: for sale, apartments) - Chicago - Illinois (IL) - City-Data Forum

MeganMegan79 · 08-20-2007, 10:42 AM

I'm interested in a place at 600 North Dearborn. How do I know if I am getting a good deal? My real estate agent says I am, but I am spending a whole lot of money on this and I really want to make sure. We've run the comps, and a similar unit closed last week. I'm offering slightly more (this unit is in better condition and is higher up in the building). I just don't want to get caught with my pants down when/if the market collapses. I just found out that the seller paid more than his most recent offer to me - isn't this something to be concerned about?

BRU67 · 08-20-2007, 11:33 AM

Not to scare you but you have to have some concerns about the viability of a condo in this market. I shied away from buying a loft in the South Loop 4 years ago because of all the building and conversions. And sure enough, I see the same lofts for sale in that area now for the same asking prices as in 2002. I'd have lost my tail had I done it.

Longer term upside will probably be better but you don't really know that for sure, or how long it will take before the market ticks up and your condo becomes a good investment. There's a lot of inventory and the market isn't good. If it's cheap enough so that assessment, taxes and mortgage are less than rent, then it may make sense given that it's probably not going to go down (though it may). If not, you have to get comfortable with the fact that you may have to stay there awhile (5+) or become a landlord eventually (if the by-laws even allow this) to avoid a loss. If you can't, you may be better off renting and saving for a house.

mdz · 08-20-2007, 11:46 AM

You'll get a billion different opinions on this, but I think it's safe to say that if you're only planning on staying for a year or two, it doesn't make sense to buy in this market. If you're planning to stay for the long haul and you really, really like the place, go for it. Just don't consider it an investment (and if it does make money, well great).

And the question about the seller paying more--yes, that should trigger some alarm bells.

jessiegirl_98 · 08-20-2007, 02:42 PM

I agree. If you are willing to hold it for a few years (and rent if necessary), then you are probably fine. Other things to consider is any buildings that may be built in the neighborhood that might block any views, etc (this is what got my friend in trouble in the south loop).

stylusx · 11-10-2007, 09:18 AM

This may be just a little late...there hasn't been a lot of activity on this thread for a while...but here is my take:

Forbes called the River North zip code (in the Fall of 2006) the second worst in the nation. Phoenix was the worst. New Condo prices have dropped nearly 50% and resale Condos by over 20%. And the building is still going on at a pace. This is a bad place to make an investment. If you won't need to sell for several years, you may wait out this market. However, if you are the averate person and need to reposition in 5 years or so...you better rent, because this rotten market is gonna stay with us for a while. Realtors are lying like mad about it...but this has been the ugly truth since 2002, and there is no end in sight.

Quote:

Originally Posted by MeganMegan79

I'm interested in a place at 600 North Dearborn. How do I know if I am getting a good deal? My real estate agent says I am, but I am spending a whole lot of money on this and I really want to make sure. We've run the comps, and a similar unit closed last week. I'm offering slightly more (this unit is in better condition and is higher up in the building). I just don't want to get caught with my pants down when/if the market collapses. I just found out that the seller paid more than his most recent offer to me - isn't this something to be concerned about?

Windy City John · 11-11-2007, 08:59 AM

2 br 2 bth at 600 N Dearborn should be in the low to mid $300'sK depending on amenities-- I would be cautious if you are offering over $349K

Lookout Kid · 11-11-2007, 10:29 AM

Whoa Windy City John, those prices are way too low! I have to doubt that you're familiar with this market. A 2br 2 bath place in Lakeview would go for that much in the market right now! River North is probably another $100,000 to $200,000 more expensive for a condo of that size.

As far as a market collapse is concerned, it's already happened. You can try to time it to buy at rock bottom, but you will never be able to do this correctly. I agree with the other posters who say you should only buy if you plan to stay there for a while. And make sure you can afford it in the long term! You dont' want to be stuck with a condo you can't sell if you lose your job or something like that...

Windy City John · 11-11-2007, 05:16 PM

I know what I am talking about-- last 2 2 bedrroms sold for under $350K at 600 N Dearborn-- with teh market tanking-- you better take another 30K off the prices.

soothsayer1234 · 11-12-2007, 08:35 AM

Quote:

Originally Posted by mdz

You'll get a billion different opinions on this, but I think it's safe to say that if you're only planning on staying for a year or two, it doesn't make sense to buy in this market. If you're planning to stay for the long haul and you really, really like the place, go for it. Just don't consider it an investment (and if it does make money, well great).

And the question about the seller paying more--yes, that should trigger some alarm bells.

So true.....condos are usually larger and the buildings nicer than apartments. And almost always they are newer. It is not uncommon to see rental units from the 20's-50's, but rarely do you see many conversions from that era.
If you want something new, condos would be the way to go. Unless the north loop becomes unpopular fast, which I doubt, I would not see it as a loss. Its not like stock, where you can lose your whole wad. However, you can bet that the prices wont appreciate like they did in the past for awhile. I think the advice to wait it out 5 years is wrong, because people may be in a different life situation at that point and be looking for homes in the suburbs or outlying neighborhoods. There is a narrow age window for folks just living in those areas alone, let alone the timeframe in which they can swing a mortgage. I say just go with it.