Posted by: union03g | May 28, 2009

Southport Dream Condo or Bad Investment?

Wow. This awesome duplex-up condo on Southport is under heavy criticism mainly due to its price point. Its listed at $875,000. Even though this place has nearly everything you could want in urban living, it lacks privacy. For that price point I’d rather live on a tree-lined street buried in Lakeview instead of owning this “trophy property” in plain visibility on SoPo. I think some people like the idea of walking out onto their mezzanine and looking down on people headed to restaurants, as if they were Juilet or something.3250-n-southport-approved.jpg

3250-n-southport-_2-livingroom-approved.jpg

Below is an interesting best use analysis from a RE investor.

This building is an example of specific residential development which should never occurred. Two condos on a busy street, with livingrooms practically on the sidewalk and open for display – for an asking price of $875,000. Absent an exuberant bubble real estate market, the location calls for inexpensive small starter-unit rental studio and one-bedroom units, like the multi-use “retail ground-floor/residential on two floors above” model of Chicago urban development along busier streets. That model made sense; very expensive (though cheaply constructed) condos on infill sites on busier streets are a truly bad investment now. These units will rapidly depreciate – because of location, because of cheap construction, and because of lack of demand coupled with extreme competition from far nicer units at same price-point.

We’ll see a great deal of vacant residential real estate at all price points. Size, granite counter-tops, low assessments, etc are meaningless when the underlying assumptions don’t work.

What he may be overlooking is that just as residential demand (and conspicuousness) has plummeted, so too has consumption at boutiques, bars and art galleries. If the “old model” was followed, there might be a vacant commercial space in this building today like the other 30% of SoPo.

More pics here

Advertisements

Responses

  1. In cities like chicago there are many investors. But nowadays people show interest to invest in a good IRA. Following a result oriented IRA will help the investor to accumulate more wealth when he retires.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: