Winnetka’s Row of Woe
The December 21st sale of a bank-owned 18-room home in Winnetka for $2.375 million wrapped up the four-year saga of a row of four newly built mansions that all went at big discounts. If sold at their original asking prices, the four would have gone for a combined total of $18.49 million; instead, they were sold for 43 percent of that: $8.025 million.
But there may have been more at play in that sharply reduced payoff than the devastating downturn in house sales nationwide. “The original agent set [the prices] too high,” says Alla Kimbarovsky, the Prudential Rubloff agent who handled the most recent Winnetka sale. “That street didn’t have any other houses in that price range.”
The story began in 2006, when a limited liability company bought a four-acre site on Longmeadow Road for $5 million and divided it into four lots. As the original developers and their real-estate agent envisioned it, the homes would have risen in price from east to west, starting at $3.9 million and ending at $5.1 million. As things turned out, the house on the east end was the top seller, going for $2.65 million, while the house on the west end went for $1 million, the lowest sale price in the bunch.
The first sale in the row came in March 2009, for the easternmost home. The bank had taken the property’s title from the builder five months before. Selling the house for $2.65 million, it got 67 percent of the builder’s $3.9 million asking price.
The westernmost house and its neighbor immediately to the east were both sold unfinished in 2009; I don’t know how much was spent on finishing them. The westernmost house was sold with an incomplete roof, no exterior siding, and many other aspects left unfinished by the builder. The cost to make it habitable may have run into the multimillion-dollar range. Its eastern neighbor was closer to being finished when it sold for $2 million, down from an asking price of $4.999 million.
The fourth and last house to sell—the one that closed December 21st—went for 52 percent of its original $4.5 million asking price, making it the final entry in what I dubbed the Year of the Half-Priced New Mansion. It was built by a different company than the other three (because it was another LLC, I can’t locate the builder). It has six bedrooms, seven-plus baths, four fireplaces, and a four-car garage. The house stands on an acre of land. When I last wrote about Longmeadow’s woes, this house had fallen into short sale status, where the bank approves the seller taking less than the value of the mortgage. The asking price at that time was $2.99 million.
Frank Lardino—the @Properties agent who was representing the house then—told me this week that in the summer of 2009 he had two different offers of about $2.65 million, but that the lender, United Central Bank (which had taken over the assets of Mutual Bank, the original lender), opted to hold out for more. Now that the house has sold for $2.375 million, he noted, “they’ve lost $275,000, plus their carrying costs” for the 18 months in between.
United Central Bank took the property’s title from the builder in July 2010. Prudential Rubloff’s Alla Kimbarovsky got the listing in August and put the asking price at $2.5 million. Offers from investors came in as low as $1.5 million, she says, but ultimately a buyer who will live in the house prevailed with an offer of $2.375 million.