But this transaction provides a snapshot of what is going on within
University Village, which itself is a microcosm of the entire city of
Chicago. Here are a few other short sale/foreclosure closings that
have occurred in the last 6 months in University Village:
- 1531 S Halsted, Unit 201, a 1 bedroom/ 1 bath condo that was listed at $169,000 and is currently under contract
- 1461 S Halsted, Unit 1A, an 1157 sq ft 2 bedroom/ 2 bath condo that sold for $260,000 in a short sale
- 842 W Village Ct, a 2600 sq ft 3 bedroom/ 2 1/2 bath townhome that sold for $542,000 in a short sale
Excluding the mid-rise buildings in University Village, only 11 sales have closed or gone under contract in the last 6 months and of those 4 were either short sales or foreclosures. Only 4 have closed or gone under contract in the last 3 months and 2 of those were short sales/ foreclosures. So the distressed properties are setting the market prices and this is where the story gets really interesting. First, there are more foreclosures and short sales coming to University Village. Second, during this time period the developer sold 3 single family homes (included in those 11 sales) at prices ranging from $1.1 MM to just over $1.2MM. Now imagine how those buyers will feel when the learn that a similar home just sold for $800K. Granted, 1454 S Emerald was not nearly as nice as any of these more expensive homes but for $300 - 400K you could do a lot of custom renovations and still have money left over.
Now here's the real kicker...look at what's currently for sale in University Village, with short sales or foreclosures highlighted in yellow:
That's 30 listings, when only 11 have sold in the last 6 months - and most of those before the tax credit expired. How can the developer hope to get anywhere near $1.3 MM for 1401 S Emerald, which is in a much worse location than 1454 S Emerald? Or 1461 S Sangamon at $775K when 832 W Village Ct is at 520K? Or for that matter 1448 S Sangamon at $689K when 842 W Village Ct sold for $542K? I think the answer is pretty clear: those prices have to come down.