Ontario Place, Millennium Centre, 200 N. Dearborn, River City, Century Tower….you know these buildings right? Well, if you were looking to pick up some cheap foreclosures you definitely would. If you were an investor 4 years ago too, you definitely would know these buildings. These are all American Invsco developments. Developments in prime locations that unfortunately were marketed mostly to uneducated investors who were enticed with cash back at closing, cheap financing, and guaranteed rental income for 2 years.
In the last few years, after the market crashed, these conversions by American Invsco showed some of the greatest price declines of any developments throughout all of Chicago. For those of you who have read my previous blogs regarding American Invsco you understand my extreme dislike, even hatred for the company and their development style. They were smart, they got out, they made their money, but they left destruction in their path.
Thankfully, I am happy to say that investors have come back into the market and have cleaned up the majority of their mess. 10 E. Ontario has seen 94 sales in the past year, almost all of which were foreclosures or short sales. Investors have gobbled up Convertibles and One Bedrooms between $129,000 and $160,000 (with some including a deeded parking space). These same units sold for well over 300,000 in the heat of the market in 2007. Assessments are still high and taxes are still pushing the upper limits but the purchase prices are unbeatable.
When condos in 10 E. Ontario first dropped below $200,000 a couple investors jumped right in. Most however, waited on the sidelines asking themselves “how much lower are prices going to go?” As an agent with clients interested in the building back in 2009 I didn’t know how much lower prices would go. I honestly had not the faintest clue. I started to steer people away from this building; I didn’t believe it was a good investment at the time. Then one day, I started to follow the sales there again and noticed prices below $150,000, some at $135,000….then I started to see these units go under contract. One by one they went. Soon, as units in this building hit the market they were gobbled up. Finally….normality had started to return.
We’ve seen the same with 345 N. LaSalle (The Sterling) and 33 W. Ontario (Millennium Centre). While these buildings are still seeing some short sales and foreclosures hit the market; investors are eager to jump on them when they do. Century Tower and 200 N. Dearborn have weathered the storm. While there are a good handful of units in foreclosure and some short sales on the market, there is nothing near the devastation we saw at 10 E. Ontario.
What does this mean? This means that the market is starting to rebound. Not shoot up…but stabilize from the chaos we had before. When investors are willing to jump into some of the riskiest buildings in downtown Chicago for an investment…that means we’re getting back to normal.