Two townhomes in University Village on South Campus Parkway. 6 doors down from each other. 5 months apart. Identical floorplans. One sells for $775K and the other sells for $591K. That’s just weird. How does this happen?
Normally the real estate market is pretty efficient, which means that things sell for a pretty fair price and it’s hard (but not impossible) to find bargains. But I think in this case there is clear inefficiency at work.
The first University Village townhome was listed at $828,000 and went under contract at the end of March at the higher price. BTW, it sold for $695K in August 2004. Now I’m aware that home prices have held up really well in University Village but this is ridiculous.
This first townhome was fully furnished and showed well. It amazingly grew in square footage as it changed hands from one listing agent to another – 3300 sq ft, 3400 sq ft, and finally 3500 sq ft.
When this first townhome was on the market my wife and I checked it out because we live in a 3000 sq ft townhome in the immediate neighborhood. One identical to ours had sold in 2008 for $720K. After viewing the South Campus Parkway townhome we decided it wasn’t as nice as ours:
- The layout was not as good. 136 sq ft was on a 4th floor that we didn’t have, the second and third bedrooms were larger than the master bedroom, and it had one less room on the main level where several family members may be simultaneously and need separation from each other. It sure didn’t feel like 3300 sq ft, let alone 3500.
- The first floor is partially below grade, compared to our first floor, which is entirely above grade.
- This townhome had a backyard which we didn’t but that meant that you had to maintain it and your garage was accordingly detached. We really like our attached garage – especially in the winter.
- These townhomes face the UIC sports fields. It’s a little known fact that during some sporting events the constant drone of the announcer at a very high volume can drive you nuts, not to mention the high intensity lights that are on during the night games.
So how did it sell for such a high price? Well, the listing agent tells everyone that he has some special skill but in reality he doesn’t really do anything different from any other capable realtor. In fact, if he did have a special skill in achieving a higher price for his listings then buyers would be well advised to avoid his listings. What’s more likely is that a buyer came along that was willing to pay a high price for something that exactly fit their needs. But why didn’t their agent get them a better deal? I can only speculate but it is interesting to note that the buyer’s agent in this case works in Glenview.
The second University Village townhome was listed at $579,900 and went under contract in early September. It was vacant, bank owned, needed paint, carpet and some appliances. However, otherwise it was in pretty good condition and that should have been apparent to anyone interested. However, there was one other fly in the ointment. There had been extensive water damage at some point from broken pipes and that had resulted in basement mold. The damage had been completely repaired and the mold remediated. Usually this work is guaranteed so….
Clearly the listing agent was pricing this for a quick sale. Personally, I liked the place enough that I put in a full price bid for myself. My wife and I weren’t exactly sure what we would do with it if we got it so we only wanted it if we could get it dirt cheap.
At the end of the day my conclusion is that the buyer of the first townhome overpaid and the buyer of the second townhome got a great deal. If I was the first buyer I’d be ______________.