Comments ( 25 )

• Why has River City gone to hell? Is it b/c of the assesments? It’s a shame, it’s a unique building.

• My guess is that the insanely high assessments is the biggest reason why River City has gone to hell….when I was looking to buy a condo a few years ago, I looked at River City and was initially intrigued, but their high assessments were a dealbreaker for me. For this specific apartment, if one were to put 20% down and get a loan at an interest rate of 5%, the mortgage payment would be $855. So the assessments would essentially not only double one’s monthly payment, but then tack on another $100 on top of it. No thank you.

• Sir Isaac,

  Lots of amenities and services to support here. $951, to my knowledge, is not a high assessment for a 3-bedroom in a full-amenity building.

  You do have some reference data to back up your “insanely high” statement, don’t you?

  Oh, wait – given many an opportunity here you’ve carefully hidden any knowledge you might have.

• Do I have some reference data to back up the assertion that a property whose monthly assessments are $100 than its mortgage payments, is “insanely high”? I didn’t have documented referenced data at the time, but didn’t feel it was necessary because I have common sense and assumed that all of the other readers on here did as well….I guess you are the exception. This does not surprise me given that you seemed to actually believe that the prices of homes in East Garfield Park and Humboldt Park have depreciated by more than 95% in the last couple of years….as opposed to there being a few isolated incidents of either realtors misrepresenting the true price the homeowner intends to offer or houses that were in good condition, and for whatever reason, are now in complete shambles.

  If I were to state that William “The Refridgerator” Perry was “insanely overweight” when he played for the Bears, would you need me to provide you with “some reference data” for that as well? Perhaps I would need to run a multivariate regression that would measure people’s weights over the history of time as well as calculate what percentile the Fridge is in, in terms of weight over the entire US population? Or maybe that wouldn’t be enough and I’d need to check out the hypothetical percentiles the Fridge would be in for various countries, had he been a resident there instead, to prove that he is “insanely overweight” by other countries’ standards as well?

  I’m not going to waste my time compiling a database of assessments to prove my point – when you are spending almost a grand a month to live in a condo that is worth less than $200k, and that is in a building that isn’t overly new or modern whose only amenity/service offered that isn’t the norm large condo buildings is Heat/AC, that is reducing the desirability to live in that unit, which might help explain why a 3-bedroom unit that is just a few blocks from the loop is going for so low in the first place. I’ve also looked at hundreds of condos in person and thousands online, to know that the assessments at River City, even with the Heat and A/C, are at the very high end. The few condos I own that are in Chicago are in the range of 25% – 50% more valuable than the River City property, yet all have monthly assessments that average about one third of what the River City’s assessments are (and some are even less than one third). Even if you add in the average heat & A/C bill per month, to my assessments, they are still less than half of $951.

• Sir Isaac,

  Prices in some distressed properties in East Garfield Park, including the one I cited, have in fact dropped by more than 90%. To claim otherwise – and to call me dumb and gullible for reporting facts – makes you appear more than faintly ridiculous.

  $950 a month assessments are not at the very high end of 3-bedroom condos in Chicago in older buildings with a high level of amenities. Not even near the high level. That’s a fact.

• Joe,

  I think when you quote a property like the 3550 Franklin property, you need to factor in that there is no working association, most likely an array of building and city violations that need be fixed in order to get clean title, and it will be years before financing becomes available due to clouded title by FRAUDULENT developers and mortgage brokers, make a lot of units that you couldn’t give away for free. It’s not like someone could just walk into a unit and live there for $3500 or whatever the price may be.

  Also a $900 plus assessment on a $200K unit is very pricey.

• j,

  The Franklin property is clearly a mess. Anyone can see that from the listing. Sir Isaac – apparently not understanding that – wanted to view this as a bait-and-switch / broker lie scenario, which it isn’t.

  River City also has its problems, as reflected in the radically low price for a 3-bedroom in a full-amenity building. The price, however, has nothing to do with the costs of operating the building or with whether the assessment is in line with assessments for comparably sized units in buildings with comparable amenities.

  I’d agree with you that the typical buyer is going to balk at paying $950 a month assessment on a $200k unit. But then the typical buyer of a $200k unit isn’t expecting a 3-bedroom in this type of building or location either. Focusing on just that one number makes no sense to me. If I wanted a 3-bedroom in a full-amenity downtown building the total monthly cost appears attractive here for anyone willing to incur the risks that come with this building.

• Don’t disagree with you.

• Zekas,
  I’m not trying to be rude with this comment, but I felt Isaac’s comment was more than fair and you kind of tore it to shreds. His point that paying half your monthly big in assessments should raise a big red flag is certainly fair. Oh well, I guess this is a SPONSORED POST.

• Andy,

  My response to Sir Isaac was deliberately harsh. Sir Isaac has a long off-and-on history here. Suffice it to say that he’s not added to the store of knowledge during that history but has taken a number of crude shots, including recently calling me out as “dumb” and “gullible” based on what strikes me as his blind bias against people in the industry.

  I believe the relevant point here is that these assessments are not out of line for 3-bedroom condos in comparable buildings. The assessments are not, by any objective measure, “insanely high” as Sir Isaac contends. They’re not even “high” for this type of product.

• Joe:

  You can keep quoting that a grand a month isn’t insanely high for a 3 bedroom with amenities, but that is based on a three bedroom priced at 600k or more. If the monthly assessment is higher than the mortgage that is an out of balance proportion any way you slice it. River City doesn’t have that great of amenities when compared to theluxury high rises you would typically pay a grand a month for assessments. No pool, long and confusing walk from entrances or garage to units and the park isn’t a park but land waiting development that is ill kept full of dog poop, broken glass litter and rats. The point of Sir Isaac’s post was a fair and reasonable one, and you know that the reason a 3 bedroom isn’t moving at that incredibly low price based on a square foot basis is because the assessment makes the unit unattractive. Being defensive and argumentative doesn’t change the fact that River City’s relatively high assessments have been a huge drag on their sales ever since the building changed from rental to condo.

• JJ,

  If you know that the cost of maintaining a building and providing services to its residents has something to do with the price of units in the building then you know something that no one in the real estate business does.

  There’s no such thing as the “proportion” you refer to except in the perception of some people.

  River City has a range of issues that depress the price levels there. Assessment levels are the least of its problems.

• I live in River City. It is a building of architectural significance – and it has some serious structural problems. These 500 units sold for mid 500s at the peak – they are interesting. I really like the garden units with an outdoor patio, and there are some fab views of the city over the river units. It is an ok layout. However, the building has some serious issues. It is in need of rehab, the amenities are below status quo, and the condo board is not tip top. There is a pool in the gym downstairs – that is free for owners. The lobby and front circle have been redone and look quite good. However, the residential area is is such terrible shape. I am in the market to buy and we thought about these units but for what you get in RC the assessments are way too expensive. Its too bad. I love the building. I don’t know what will make it better…

• Joe:
  You said:
  “If you know that the cost of maintaining a building and providing services to its residents has something to do with the price of units in the building then you know something that no one in the real estate business does.”

  Really? So the fact that any potential buyer of a River City 3 bedroom will be advised they will be hit for an extra grand a month in assessments will have nothing to do with what price will make the unit attractive to a buyer?
  I know personally that the assessment level at River City turned me off from looking at units there. A decade ago I passed on a conversion unit at the Park Shore on a low floor primarily because while its price was reasonable, its assessments were at the same floor as higher floor units of the same size that were priced over 100k more.

  If the costs of maintaining the services at River City by way of the high assessments are not a drag on their sales, why are units priced way below market at $150 a square foot not moving? Put another way, they are priced for bargain hunters, but it seems clear that the bargain hunters are turned off by the assessments. Adding 12k in non tax deductible payments on a 200k unit is out of balance for similarly priced units.

• JJ,

  You’ve either ignored or misunderstood my point. Let’s try it one more time.

  Assessment levels can affect selling prices. That’s obvious: everything else being equal most buyers would opt for the lower assessment. Everything else is, however, almost never equal. In this case, the selling price of 3-bedrooms is far below those of comparable units. Most buyers, as you quickly learn when you talk to real buyers, look at their total monthly cost of ownership, not simply at assessments.

  Selling prices don’t affect the cost of maintenance or services. The exception would be if a building attracts owners who aren’t willing to face cost realities and thus reduce services or defer needed maintenance to lower assessments.

  Assessments on 3-bedroom units at River City are in line with similarly-sized 3-bedroom assessments in similar buildings. They are not out of line. The steep price differentials at River City are primarily due to factors other than assessments.

  Your argument seems to be: I’ll pay $4,500 a month for a 3-bedroom elsewhere rather than $2,500 a month for this one because the assessments here are too high!

• Let me try one more time. First, what similar building is charging $900 a month in assessments for a 1500 square foot unit?

  And if it isn’t a $900 assessment for a 200k unit that is discouraging buyers, what is it?

• Joe Zekas can correct me if I’m wrong, it had been known to happen, but I believe JJ is also missing something fundamental about assessments. Developers in Illinois can “apportion” percentage of ownership for condo buildings either on a square footage basis or based on the purchase price outlined in the condo documents. That percentage would directly affect an individual unit’s assessment level.

  I’m guessing the Park Shore used the square footage to determine the percentage. JJ also seems to have a big “hangup” regarding assessments. Assessments are only one factor in determining whether a condo purchase is a good deal.

  If similar 3 bedrooms near River City are selling for 150-200 thousand dollars more than this unit then their monthly cost would be 900-1200 dollars more just on the mortgage.

  One question I have though is what problems is Joe Z alluding to at River City.?

  Legal, structural, earthquake fault line? Inquiring readers wanna know.

• Pirate you got my point, the assessment cost is priced in by the square foot cost and yet the units aren’t moving.

  The Park Shore did use square foot versus unit value which I personally felt was not equitable. If that is a hang up with assessments I plead guilty.

• IrishPirate,

  I have too many conflicts of interest here (among other considerations a friend is my main source, and I can’t compromise his position), and too limited a familiarity with the current situation, to go into detail.

  You can glean some background from this Crain’s article, and from Nicolle’s comment, above.

• Good enough Joseph.

  Thanks for the background article.

• Ok all I need some advice, unbias and truthful, because I am a first time home buyer in my early 20s and have looked at about 1 bedroom units (short sales) in this building, liked one of them, and have put an offer on it. These short sales and foreclosures in River City seem like a good investment for me as a first time home buyer. Up until reading this article and comments I thought getting a one bedroom for around $90,000 (which is about my max price point right now) and putting 20% down would be a great long term investment since I plan on living in the unit for atleast the next 5 years. If anyone with any FACTUAL knowledge (i’m a scientist, i need hard evidence) can please tell me about this building or point me in the direction of websites or people you know that could tell me more about the building operation i would appreciate it. Let’s face it, buildings settle and so do houses, when it comes to foundation. But what I’d like to know are where the exact structural problems lie. Yes I’ve seen some of the cracks on the exterior but also understand that since the place was built in 1986 the ground has moved, the plot has settled. It isn’t tilting like a structure up in edgewater that I was told about (which will remain nameless). Try not to influence my possible purchase with hersay; i’m on a new terrain as a new home buyer who needs to live in the city so my commute to work isn’t almost 2 hours. Please help me out minus the bickering. I am open ears for pros and cons to the building (every building has them)
  Thank you all for your time. Can this place be worth my money? I’d like to think so, since many of the foreclosures in there are because high rolling investors bought them up at prime prices and lost their behinds when they couldn’t get a tenant or just decided to let it go. The south loop is an up and coming area so I feel like the river city building will bounce back, as with the economy. thoughts and opinions appreciated.
  Thank you!

• 1sttimebuyer

  Evaluating any info you find in this type of forum is difficult and uncertain. Here’s what I’d suggest as a practical way to satisfy yourself.

  Line up an attorney to represent you on the purchase. Also line up a good home inspector who has experience with large condo developments.

  Write a contract to purchase a unit you’re interested in. Your attorney will include a requirement that you be provided the extensive disclosures mandated by the Illinois Condominium Property Act and minutes of board meetings. Your contract should also request a copy of the original Property Report prepared by the developer. That report includes an independent engineering report on the status of the building at the time of conversion.

  Make your contract contingent on your attorney’s review and approval of all the documentation you requested, and on the home inspection.

  You’ll have quite a bit of factual data to analyze as a result of this process – much better information than you’ll get from commenters on the Internet. And, you’ll have the option of voiding your contract if you’re not satisfied with what you find.

• Joe:

  Thank you for the information. I actually made an offer on a unit and it was accepted. The unit is foreclosed and is being sold ‘as-is’ by a bank. I was reading the documents yesterday about the ‘as-is’ addendum and one clause states seller basically has no report or makes no warranty on the structural integrity of the building among other things. Because of it being sold ‘as-is’ is it still possible to request the things you mentioned or will seller refuse because it is ‘as-is.’ I will definitely consult with the lawyer being used.
  The unit itself is in great condition: electrical, plumbing work well, no cracks or leaks in walls/ceilings, no bugs, etc. I was thinking since it is ‘as-is’ that i wouldn’t do an inspection; but part of me wants to do one. What do you think I should do? Do an inspection for my own benefit or not since it is sold ‘as-is’…In doing an inspection will I get info like the “original Property Report prepared by the developer. That report includes an independent engineering report on the status of the building at the time of conversion” or is that something a seller provides. i’ll have to read the addendum again but i feel like there was something in there referring to seller not being boung by the IL condo property act you mentioned b/c of as-is clause. i will re-review that in the meantime.

• 1sttimebuyer

  At this point your best bet is to address your questions to your attorney. Your contract will govern what your rights are, and it’s difficult to express any meaningful opinion without seeing it.

• As-is doesn’t and shouldn’t mean you don’t get an inspection, it just means the seller will not fix anything, though you might find out something to dissuade you from buying or get more bargaining power. You can also learn from the inspection if there are any quirks in the operation of various mechanical items in your unit as well.

  Good Luck!

  Joe – does the condo act differ in sales of units by developer/sponsor vs. resales?