University Commons Plagued With Foreclosures And Short Sales

Chicago’s University Commons development in University Village has a lot to offer – great spaces, and fantastic amenities. However, the development has been plagued with a host of distressed sales – short sales and foreclosures – in the last year. I was actually shocked to discover that, of the 21 2 bedroom/ 2 bath units sold in the last 12 months, fully 11 were either short sales or foreclosures.

If you look closely at the data (sorted above by selling price) you will see that there is a higher concentration of distressed sales at the low end. In other words the lofts that sold were the ones that sold at the biggest losses. However, if you also sort the data by closed date you would see that there is a higher concentration of distressed sales as time progressed. My interpretation of that is also fairly negative – i.e. as time goes on sellers in University Commons are getting increasingly desperate and being forced to sell under distressed circumstances.

Having recently listed and sold one of those 21 units (1000 W 15th #414), I can speak first hand of the challenge in selling the lofts there. You just can’t get the traffic. Part of the problem is that University Commons is just not that well known. People looking for lofts in that price range typically think of either the West Loop or the South Loop and may not even be aware that very nice loft options exist in that area. So when you set up the listing you find out that it does not match the criteria of very many people and very few of the people whose criteria do match the listing will express an interest. You have to really work hard to find a buyer.

However, another problem is that the people who bought these units from the developer received a substantial 8 year property tax benefit – e.g. taxes of $1000/year on a $450,000 purchase. Doesn’t sound like a problem? Well, this tax benefit allowed the developer to charge a premium for the condos. But the tax benefit can’t be passed along to the next buyer so that premium is lost upon resale. I think this has contributed mightily to the losses that sellers are experiencing.

The good news is that if you are interested in buying in University Commons there could be bargains to be had because there is a lot of inventory available relative to the rate at which it is selling.

0 thoughts on “University Commons Plagued With Foreclosures And Short Sales

  1. Gary, I think you hit the nail on the head. I have done some looking in UC and the tax benefit being removed definitely makes it tougher to buy since it’s hard to know what the taxes will be. It’s also somewhat off the beaten path – West and South of UC is still not the friendliest area in the mind of your typical loft buyer, and working downtown, I really didn’t want to live and die by the #60 bus. Still, you’re right that there are deals to be had and units are selling (distressed, usually). I saw a place that was immaculate (1151 W 15th St #331), and after the owner trimmed $100k off the top, it was under contract within about a week. I thought long and hard about it, but ultimately my decision was made for me.

  2. These lofts are located less than one mile from one of the dirties coal-fired power plants in the United States. Add that with pollution and noise from the elevated highway and the train tracks.

  3. hey, that’s my place listed above there!

    yes, it was a foreclosed property, but it was in excellent condition, and i got a great deal on it. it’s hard to find a spacious and relatively new 2bd/2br in the city. these are quality buildings, and for the prices and amenities that it offers, i think it’s a good value.

    yes, the transportation options to downtown are few, but that wasn’t too big of a deal for me.

    i’ve always wondered what others think of this building, now that the prices have decreased to appeal to a wider range of (most likely 1st time) buyers.

  4. sorry, i meant spacious, good quality, and relatively new place in the city (close to downtown) for under $250k.

  5. I will be posting the current listings in University Commons on my University Commons page sometime soon. However, it’s hard to determine from the MLS what is a foreclosure before closing. From a buyer’s perspective it makes more sense to just focus on where the best values are, regardless of the circumstances of the sale. I did just do a quick check and found that 9 of the 45 currently listed properties are short sales. However, more may end up being short sales, depending upon the offers and the loan balance.

  6. What is missing from this post is the fact that there are over 900 units in University Commons and these 21 alleged “short sales” and/or foreclosures constitute a rate of approximately 2%, which is remarkably low in this economy. It is incredibly misleading to suggest that there is a run on foreclosure properties at UC.

  7. Well, they were not merely “alleged”. They were in fact real. Since then the situation has gotten even worse and I am planning a follow up soon. Just glancing at some 2 bedroom units recently…everything below 250K is a short sale and I stopped looking at 250K.

    Despite there being 900 units there a huge percentage of what is for sale or has sold is distressed.

  8. I live in university commons now for few years bought new construction. The neighborhood is great, the people living in these buildings are very nice, professionals. Very dog friendly too because walls is very thick and most concrete – rarely hear anything even if party going on. No rif RAF here either. Building the new police station off of Racine, and knocked down a lot of the public housing off blue island. Most young couples and singles in this community. I would recommend it to anyone who wants to be near downtown, have available street parking without permit, and is in this price range. Builders did a fine job and I never had any problem with anything. The association dues are low and they are quick to maintain everything. Noise from train or businesses is not an issue, I never hear anything in my place.

  9. I largely agree with you. I’m a big fan of the development and I love the neighborhood, obviously, since I live in the area. The one complaint I hear over and over again, and I’ve experienced it firsthand also, is at least one person in that management office is just plain rude. Apparently, she doesn’t like to be interrupted when she’s on Facebook or playing Farmville or whatever personal business she’s engaged in.

  10. I love our condo there. I think the location is great. You can (in good weather) walk to Greektown, eat on Taylor St or in Pilsen. Have even walked to Chinatown. Our utilities are extremely low. As for transportaion there is a lot more than the #60 bus. Use the Halsted, Roosevelt, Archer buses all the time with a transfer. The building is very quiet. Has great amenities. Landscaping is great. In this economy, all developments are suffering but I still think this place is a great investment.

  11. I think if you got a place that you couldn’t afford in the first place you are probably screwed. But I live in this unit and the tax break is awesome! The construction is amazing – not a single thing has gone wrong. The concrete building also allows for a great sound barrier!
    It’s a great property to buy AND hold on to. Since the location is near schools, near the Loop and there are cool bars, galleries and coffee shops. Obviously if you are used to Lincoln Park this might not work for you. But in terms of actual quality of construction – these are amazing.
    Second floor units sometimes have lower ceilings then 3rd floor and I think the duplexes there suffered a lot. But in general, I can’t complain.
    The coal powered plant – well it beats facing the highway like the suckers that bought those million dollar homes on the east side of Halsted. I think the pollution is really a problem there.

  12. I still like the development and I think there are some great deals to be had. The only thing is that each building has its own association and you have to make sure that that particular one is in good shape. I’ve heard that some are not.

    Also, with the new development going on West of University Commons it should help the units at the West end.

  13. I own one of the units in Building 5. I’m currently renting it out (because of my current job location), but plan on moving back into it in the future. I’m a little nervous because I think I over paid for one of the smaller units and I’m not sure (even in the best economies) that I’ll be able to get back what I paid. I love the location, but I hope the new police station will help our property values on the west side (that area can get pretty bad the further west you go). Any body have any idea when the new police station will be done? Also, does anybody know how my property taxes will change, considering I’m not gonna get the tax freeze benefit anymore (because I’m no longer a permenent resident)?

  14. Can’t be sure on the date of completion of the police station but with the skeleton going up as we speak I have to believe it’s within a year. I agree that should help. Will provide a nice buffer zone between University Commons and where all the murders take place.

    As for your taxes…the rule of thumb we use is 1.5% of the current market value. You just have to make sure that your assessed value is not substantially higher than the market value.

  15. I own a unit in this development and I love it. The combination of floor to ceiling windows, hard wood floors, high ceilings and the tall cement beams creates an organic yet urban feel. There is a deck on the unit and it looks over a train yard which brings a surprisingly wonderful and peaceful feeling. In the summer we eat on the deck and as the trains creep by the train engineer smiles and waves. The glass on the windows is so solid and thick you cannot hear the trains through them. Moreover the trains are moving very, very slowly so they are not loud. The gym also has a lovely view, TVs, ample equipment and is not crowded. The pool adds a friendly place to chill out. The management is professional and helpful. The upgrades that were offered at the time of development were affordable but at the same time made the units very appealing. The huge windows and the high ceilings make even the smaller units seem spacious. I am quite happy with this property. I know that it has lost value but no where near the degree other markets in the country have so I plan on holding on to this gem. The tax deal was amazing and the assessments are very reasonable. As a single female I felt safe walking to the shops and restaurants near the complex. The bus to downtown is 1 short block away and it’s an easy 15 minute walk to the el.

  16. Yes, I like the development also and we have a fair amount of activity there. The only thing I would disagree with in your description is that the management office there is professional. There is one individual there that has generated a lot of complaints for being rude and unresponsive. Other than that the amenities are very nice.

  17. There seems to be plenty of more units going up for sale recently. I imagine that the tax freeze coming to an end soon has something to do with it. Has anyone recently purchased or know of anyone that has, and willing to share what the tax bill came to?

    I’m seriously considering purchasing here, so if there are any other updated opinions regarding anything, I’d love to hear them. Thanks all.

  18. You can assume that your tax bill will be about 1.6% of your purchase price. That’s the average tax bill in the city as a percent of the assumed market value by the tax assessor.

    There is a lot of activity there and almost all of it is distressed. Armed with the right data you can get a pretty good deal and I’m still a fan of the development. You can call me at 312-738-0232 to discuss further.

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