As I meet with sellers in the Lincoln Square, Andersonville, Lakeview and Ravenswood areas, I am asked, and continue to ask myself, “What determines value?” This is especially true in today’s market, when actual sold prices can be all over the place.
Wikipedia defines value investing, according to Berkshire Hathaway’s chairman Warren Buffet, “…the essence of value investing is buying stocks at less than their intrinsic value.
What is intrinsic value when it comes to real estate versus stocks? That depends. Are you talking about condo, home, townhome or land? Let’s talk condos, since they make up the majority of the property in our neighborhoods.
Can you determine a condos intrinsic value just by looking at the unit itself, and its location, location, location? Not in today’s market. Value in a condo is also based on financial stability of the condo association itself, along with how well maintained the building is. A great condo in a great location in a building that has been well maintained is truly an excellent value.
While you are looking, be sure to take a close look at the roof, the walls, the grounds, and the common hallways. Value leaves clues. Clean hallways, uncluttered with shoes and debris are what you want to see. If you want to see photos of condos that offer great value, visit 4531Magnolia.com and 4900Marine.com for examples of very well maintained buildings. Clean hallways, solid buildings, excellent roof condition, nice grounds. And Marine also comes with an excellent stationery engineer, adding more value.
Maggie Finegan, ABR, Move with Maggie Chicago Real Estate Team