Magazine

Chicago Blues


When I bought my first home in 2005, I did everything right, from studiously researching the neighborhood to boning up on adjustable and fixed-rate mortgages. I even haggled with the sellers, knocking $4,500 off the list price and getting window treatments thrown in.

All of those smart moves won't save me from taking a loss, though. Like many homeowners across the country, I'm a victim of circumstance. I bought almost at the peak, spending $240,000 on a two-bedroom condo in the trendy Chicago area of Lakeview. Then, earlier this year, BusinessWeek transferred me back to New York. As with many people in my predicament, I never figured I would have to move so soon.

It has been a tough four months since I first put the condo on the market, a situation compounded by a dreary Chicago winter that made home sales there especially slow. I'm thankful that I found a buyer, and the deal is set to close at the end of May. It's happening just in time: I'm reaching the end of the goodwill with my New York friends, who have been putting me up in their apartments. In a sense, I've been homeless, unwilling to rent a place in New York until I've taken care of business in Chicago.

I'm suffering a big hit on the condo. My situation is known as an "underwater" sale, meaning my selling price came up short of what I owe on the mortgage. The median home price in the Midwest fell just 0.2% over the past year, but my condo will fetch $234,000, a 2.5% loss. Plus, I'm ponying up $2,400 worth of incentives for the buyer, and I recently paid $1,600 for new stainless steel appliances to help sell the apartment. Counting commissions, closings costs, and all the rest, I'll be out roughly $20,000.

Most of that is coming straight out of my pocket. Uncle Sam won't offer any solace: Because of long-standing tax rules, I won't be able to write off the loss from the sale of my home, as I could for stocks and bonds.

I remember vividly the pride I felt on the first night in my new place. Now the experience conjures up anxiety, restlessness, and regret. It'll be a long time before I jump back into real estate. But at least, as I've reminded myself during the darker days of this ordeal, I love my job.

By Adrienne Carter


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