$450K on Elston – what happened here?

3715 N Elston Chicago IL

It’s difficult enough to fathom how anyone would spend $450,000 for a garden-variety 3-bedroom condo in the 3700 block of Elston Ave. It’s beyond difficult to understand why anyone would have done that in April of 2008.

According to information on file with the Cook County Recorder of Deeds, Unit 4 at 3715 Elston Ave closed on April 15, 2008 for $450,000. The buyer put 10% down and took out a $405,000 first mortgage. The lender filed a foreclosure suit on November 28, a little more than 7 months later. Judicial Sales Corp (JSC) took title to the property on behalf of the lender in November of 2010.

Unit 4 came back on the market came back on the market 2 days ago at an asking price of $239,900.

Unit 1 in the building sold for $250,000 in January of 2008, went into foreclosure in December of that year, and was deeded to JSC in May of 2010.

Unit 2 sold for $418,500 in March of 2008, financed by a mortgage of $376,650. A foreclosure was filed a year later, but the buyer apparently remains in title to the property with the benefit of a loan modification increasing the mortgage amount to $426,432.

Unit 3 sold for $425,000 in December of 2007 subject to a $382,500 mortgage. A foreclosure initiated in July of 2008 was completed in March of 2010.

Unit 3 resold for $115,500 one month ago.

Units 2, 3 and 4 were sold at prices substantially in excess of contemporaneous sales of similar units on the same block of Elston.

The speed at which all four units went into foreclosure would seem to indicate that none of the buyers made a mortgage payment after closing despite having made – at least on the surface record of the transactions – substantial down payments.

I’ll leave it to readers to speculate about what actually transpired here. And no, I won’t volunteer my educated guesses. I’ll simply note that this story is repeated many, many times in many third-tier locations in Chicago. Is it evidence of a market meltdown, or of something else?

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