How long will an older building (say built in the 1930’s) last before it deteriorates to the point beyond repair? And what would happen to one’s ownership of the condo if a building is determined no longer inhabitable?

And then later, the client followed up:

The question of the lifespan of a building may strike you as weird, but this is a totally normal question coming from a place like China, where buildings start to show serious problems after only a couple of years and then crumble after a couple of decades. In China, when a building needs to be demolished and rebuilt, the residents have certain rights to receive compensation in the form of new housing, cash, etc. In this context, the question of what owners of American condos constructed in the 1920s and 1930s do if the building deteriorates beyond repair is entirely natural. I actually don’t know the answer. I’ve never heard of such a situation, which of course doesn’t mean it hasn’t happened.

What a great question, and one that I never considered before.

Chicago is no Rome

I’m always impressed when watching House Hunters International and the episode features some adorable European city with buildings and apartments that date back to the 1700’s.  The charm and grace of some of the old apartments can be breathtaking. 

Here in Chicago, we don’t have any housing that dates any earlier than the 1880’s, primarily because the city burned to the ground in 1871.   A few structures survived the fire, but the Chicago Water Tower located at Chicago and Michigan Avenues isn’t a residential structure.

Homes and apartments in Chicago can date back to the late 1880’s, 1890’s and early 1900’s, but Chicago’s oldest condominiums date back to the late 1910’s and 1920’s.  So let’s look at those buildings and see how they are behaving as they age.

Brick buildings from the 1920’s

One example shown here is your classic Chicago courtyard from the 1920’s.  The construction technique used when building a Chicago courtyard would be an all-brick building on a brick foundation, or maybe a concrete foundation if newer.  The walls would be three or four courses of brick thick, and the outer course of brick would be a fourth or even fifth course added as decoration.

Brick buildings are long-lasting, durable, and require very little maintenance.  The decorative outer skin of brick will require maintenance every 20 to 30 years, and if it were to fall into serious disrepair could be completely removed and reinstalled.  This drastic measure is rarely necessary, and most brick maintenance involves tuckpointing and taking care of the aging windows.  The other major component of brick buildings like this one is the roof.  Flat roofs in Chicago typically last 10 to 20 years.  And can be rather expensive to replace.  However keeping up with the roof and the brick can ensure that a brick building can last virtually forever.

Older high rises in Chicago, such as the Rookery Building shown here, can be either all concrete block construction, or concrete over steel frame. 

Concrete block buildings have walls that get thicker and thicker closer to the ground to support the massive weight of the building above.  Steel frame buildings can be clad in concrete block without needing the additional thickness of their walls near the ground.

Both styles of buildings are nearly maintenance free and durable.  The most common defect found in buildings such as these can be the decoration that can fall off if not maintained properly.  Maintenance of the roofs is similar to that of the classic Chicago courtyard, but on a larger scale.  The same can be said for the maintenance of the exterior.  The giant concrete blocks are just larger versions of the common brick of the courtyard style building.

The old Standard Oil, then Amoco Building, currently the AON building, offers an interesting maintenance history.  By no means “old” by Chicago standards, the Amoco Building was constructed in 1973.  It was originally clad in shimmering Italian Carrara marble which gave the building a gorgeous warm glow in the sunshine. 

Unfortunately, the thin slabs of Carrara marble did not handle Chicago’s change of seasons very well, and after only a year began to warp, bow and crack.  Steel straps were installed to attempt to hold the marble in place.  But eventually the marble crumbled and in 1990 a project began to re-clad the entire building in white granite.

Even with this dramatic defect, the underlying structure of the building remained completely stalwart. 

Probably one of the most dramatic instances of building neglect, and a situation that nearly describes the situation the client asks about in her email above is the situation at Marina City during the 1980’s and 1990’s.

Converted to condominiums in 1977, the Home Owner’s Association did not adequately plan for the maintenance and upkeep of the towers, and over the years the building and some of its systems fell into disrepair.

By the mid 1990’s the concrete exterior badly needed attention and chunks of concrete could be seen falling from the building, parts of the parking garage were closed because it was not longer safe to park cars in some areas, the roof was leaking leading to damage to the condominiums on the upper floors of the towers, and the elevators stopped working frequently.

When the Home Owner’s Association actually went insolvent, a court ordered receiver took over and began the process of revitalizing the property. 

To my client’s question above, and as a “worst case” scenario, what happened at Marina City was that the new management company levied Special Assessments to make the major repairs to the building.  Some of the Special Assessments actually exceeded the purchase price of the units that some of the owners paid when they bought their condos.

Today, Marina City has been completely revitalized and enjoys a solid reputation as a building owners truly enjoy living in due to the building’s myriad of amenities and superb location on the Chicago River.

Could Capitalism be a factor?

Throughout all of the United States (and most European and Western countries) the building construction materials are of a quality that have an indefinite lifetime with maintenance and care. I think it has to do with the fact that as capitalist economies with an emphasis on property ownership, it is completely normal for the individual home owner to property maintain his or her property in order to preserve the value inherent in the ownership of the property. And that translates into the same instinct for condominium buildings where the Boards, the managers, and the homeowners all strive for the same ideal as well.

From a home inspector’s perspective

I called Michael Massart, a home inspector from Speaker of the House Inspections to ask him whether he ever heard of a condominium building falling into disrepair, and here are some of his thoughts:

• Most of the housing stock in Chicago is 140 years old or younger.
• The question from our client above would be a great question if the property in question were a frame house, especially a frame house in the suburbs constructed shortly after World War II as many of those homes were quite hastily constructed.
• Your Chicago brick condo building from 1890 through 1960 were constructed of solid brick, not hollow bricks, and therefore feature more clay or concrete, and as a result it is very unlikely that this type of building would ever deteriorate during our buyer’s lifetime.
• Chicago’s soils are very stable, made up of mostly clay and sand.  ‘our soils are clay and sand and don’t settle or heave greatly, or as severely as they may in other parts of the country or the world…. Our soils DO settle and it causes a fair amount of hardship for people; they just don’t settle greatly, i.e. bldgs. don’t tumble over because of it; our soils will subside to an extent especially in draughts, but not as much as say, Texas, where there are expansive soils and people have to water their foundations.
• In over 8,000 inspections, about the worst Michael has ever seen are in two situations:
• Buildings built right on top of the water – like on the Chicago River or on the lakefront.  Sometimes there is evidence of settlement in those buildings.
• Buildings that have had their foundations compromised by malfeasance – such as construction immediately next door that undermines the foundation of the nearby buildings.
• Chicago is the home of the Sky Scraper, and most of the world’s most experienced architects come from Chicago architecture firms.
• High rise foundations in Chicago normally feature caissons that drill down as far as the underlying bedrock which makes the construction extremely stable.

The short answer

I haven’t heard of a situation where a condo building has fallen into such disrepair that the building could not be repaired.  Based on my experience and the comments from Michael above, I think our client can be quite comfortable that any condominium we purchase can be expected to easily outlive them.

How about if the building is destroyed?

In the event that a building DOES get destroyed by some catastrophe, such as a fire, your home owner’s insurance would pay you for your loss. And if a building was completely destroyed by a catastrophe, such as a REALLY BIG fire, the home owners that lived in the building would get together to decide whether to re-build the building, or take their insurance money and go somewhere else.

And of course at every outdoor fest, no matter the ethnicity, you can enjoy a beer and a brat!

Check these out:

Edison Park Fest in Edison Park, 6730 N. Olmstead. Music and food, plus a small pet parade.

Glenwood Avenue Arts Fest in Rogers Park, 7000 N. Glenwood. Art and Theatre plus some fun local food.

Gold Coast Art Fair – oddly located in Grant Park, Butler Field. Art, kids activities and some music in the heart of downtown.

North Side Summerfest in Lincoln Square, 4050 N. Lincoln.  Because you haven’t attended enough street fests in Lincoln Square where you can eat brats, drink beer and listen to local bands.

Ukrainian Heritage Festival in Smith Park/Ukrainian Village, 2526 W. Grand Ave.  Ukrainian arts and crafts, music, dance and food.

Chicago Air and Water Show

The U.S. Navy Blue Angels and U.S. Army Parachute Team Golden Knights will headline the 52nd Annual Chicago Air and Water Show along the lakefront from Fullerton to Oak Street, with North Avenue Beach as the focal point. New time this year; the water and air portions have been combined for one continuous show beginning at 11 am and ending at 4 pm both days.

Stay hydrated…bring water, bring water bottles – there are fountains along the beach. Bring sunscreen, hats and umbrellas as there is very little shaded area.

Don’t forget Lake Shore Drive, and most of the other Lakefront Streets between Irving Park Road and Grand Park are going to be a nightmare!

Rockin’ on the River Ribfest

A new, three-day fest includes live music and finger-lickin’ food vendors. Try ribs from local spots Smoke Daddy, Robinson’s No. 1 Ribs, Uncle Bub’s BBQ and Bar-B-Que Bob’s, plus a half-dozen national joints, and additional eats from the Original Rainbow Cone, Joe’s Crab Shack and others. DJ Sye Young spins throughout the weekend.

August 13 : 11 a.m. – 10:30 p.m.
August 14 : 11 a.m. – 10:30 p.m.
August 15 : 11 a.m. – 8:30 p.m.

Grand Avenue at the river, 560 W. Grand.

http://www.rockinriverchicago.com/

Honorable Mentions

14-15:  Armenian Fest (Galewood) St. George Armenian Church @ 6700 W. Diversey

14-15:  Chicago Korean Festival (North Park) Bryn Mawr between Kimball & Kedzie

14-15:   Gethsemane Garden Center Art Fair (Andersonville) Gethsemane Garden Center 5739 N. Clark St.

14-15:  Wrigleyville Summerfest (Lakeview) Seminary Ave & School St.

15:  Croatian Fest (Bridgeport) Princeton Ave & 28^th Place

The photography is not in question in this shag-a-delic living room.  It’s the remarkable decor!

Not only is the futon perfectly matched to the carpeting – how in the world does that happen?  But the Futon is displayed in its full open glory.  Amazing.

Low Interest Rates

In June, 30-year mortgage rates averaged around 4.75%. Less than 60 days later, the average rate on the 30-Year Fixed has dropped below 4.5%, its lowest level since Freddie Mac began surveying rates back in 1971. That’s not hot; that’s scorching.

Skip a Step

Low prices and the prospect of slow appreciation have many buyers taking a longer-term view of their home purchase. Buyers today are thinking about how the home they buy will meet their needs five to 10 years down the road versus the three- to five-year window that was common during the boom. As a result, many buyers are skipping a step on the housing ladder and purchasing larger homes they can grow into.

New Construction Deals

Price cuts and special financing programs have been effective in whittling down excess new-construction inventory in several areas including River North, the West Loop and the Loop. By the end of next year, new construction in these neighborhoods should be largely absorbed, with no new product scheduled to come online. Translation: if you like new, your time is now.

Shrewd Buyers

Buyers today are approaching the market not only with more information but also with a totally different psychology. The focus is on location and space, and value is the watchword in every price range from $200,000 to $2 million. If you’re selling, be prepared to demonstrate that your home is the best in its class, because today’s astute buyers won’t settle for anything less.

Putting Down Roots

A large home, in good condition, near top-rated city schools is suddenly attainable for the first time in years. That’s causing many homebuyers to rethink typical suburban migration patterns and put down roots in the city. And the neighborhood improvements that can result from long-term investment might just be one of the most positive outcomes of the housing bubble. That’s hot…and very cool.

Buying, selling or just looking for more information — I welcome the opportunity to help. And please remember that referrals are always hot.

I happen to have a lot of one bedrooms in Lincoln Park and Lakeview for sale at the moment.  The remainder of my inventory is mixed between townhomes, houses, condominiums in various neighborhoods and a commercial condo.  With the one bedrooms representing a hefty chunk of my inventory, let’s take a look at what’s going on from that perspective.

Historically, the month of August is slow.  This is the month that most Chicagoans realize that  the days of summer are numbered, folks leave town for vacation, and otherwise people simply don’t pay a lot of attention to real estate.  Buyers that needed to have a home selected in time for the start of the school year did their shopping in late Spring and early Summer.  There were a lot of July closings and a few more closings to take place in August.

The economy is also dealing the real estate market a one-two punch.  Illinois’ unemployment is higher than the rest of the nation’s at 10.4%.  And the banking crisis, or the leftovers of it, make it challenging to get a mortgage even though rates today are at historic lows (Guaranteed Rate is offering a 30 year, fixed, conforming, loan at 4.375%!)

In a strong economy, studios and one bedrooms are strong sellers.  In a weak economy, demand for studios and one bedrooms falls off.  Demand for buying a studio or a one bedroom falls off even more.  This happens as fewer people can afford to live alone and start doubling up in larger units such as two and three bedroom apartments and condos.  The economy also removes a large section of people from the market as their purchasing power is diminished. 

Figures for the end of July tell a striking tale:

In Lincoln Park and Lakeview, combined, for the month of July, about twice as many two bedroom condominiums sold as one bedrooms.  The same ratio holds for properties that went under contract – or pending sales.

July 2010, one bedrooms, pending sales = 38

July 2010, one bedrooms, closed sales = 36

July 2010, two bedrooms, pending sales = 65

July 2010, two bedrooms, closed sales = 70

You can expect that traffic will be lighter than you have experienced in June and the first three weeks of July.  Traffic will stay light until the first weekend after Labor Day when buyers come back out shopping during the fall market.  This fall most Realtors are expecting a better fall market than last year’s and better than the Summer Market. 

The expiration of the buyer tax credit is far enough back in history that the “pulled forward” demand for homes should be exhausted.  And as the economy improves, though slowly here in Chicago, there are some folks relocating to Chicago, expanding their families, and needing to choose new housing.  We’re expecting demand to increase from “weak” to something even better than perhaps “tepid.”  Certainly nowhere near “blistering” by any stretch of the imagination.

During the month of August, while we have the time, it’s a good idea to have me, or your Realtor, prepare a new Market Analysis for your property.  If there are any new strategies to implement, or price changes that need to me bade, having the decision made during the slow month will allow the change to made promptly on Tuesday after Labor Day.  Expect a call from me in the coming days to set up an appointment to get together to go over the new Market Analysis.

Northalsted Market Days

Join Joan Jett and a crowd of more than 40,000 on Halsted Street to celebrate the annual Northalsted Market Days®. This event is the largest two-day street fair in the Midwest and lives up to its reputation as one of the country’s finest festivals!

The event spans six city blocks, has 17 entrance gates and features three music stages with more than 40 musical acts performing. Many of these artists are top-name, national headliners, giving Northalsted Market Days® a reputation for some of the best live music in Chicago.

www.northalsted.com

All day on Saturday and Sunday.  Halsted Street between Belmont and Addison.

Lollapalooza

At this point, if you don’t have your tickets to Lollapalooza, you’re not going.  But at least you’ll know to avoid Grant Park, Columbus Drive, and the whole south end of the Museum Campus.

Big names at Lollapalooza this year include Soundgarden, Green Day, Lady Gaga,  The Strokes, Blues Traveler, Erykah Badu, and a whole bunch more. 

www.lollapalooza.com

Friday night, all day Saturday and Sunday in Grant Park.

Retro on Roscoe

Retro features Chicago’s top talent and entertainment on 3 main stages. Artisans, antique vendors, and cool merchants will provide a shopping experience that is second to none. Local restaurants fill the venue with summertime samplings and tasty treats. All this and more liven up this tree-lined street for an enjoyable two-day festival that brings back great memories while providing an excellent entertainment for the entire family.

Retro On Roscoe is the primary fund raising event that enables Roscoe Village Neighbors to sponsor so many community improvements. Proceeds from Retro On Roscoe provide funds for major projects such as the recent streetscape project, and projects that have improved local parks.

http://www.roscoevillage.org/Retro_On_Roscoe 

Saturday and Sunday from Noon to 10:00 pm.

I’m interested, however, in whether you think our instant access to information is fueling a change in the way business in transacted.

Just a moment ago, I received a telephone call from a Real Estate Appraiser who wanted information about my Home Owner’s Association.  He wanted to know the number of units, the number that are rented, and the number of parking spaces.  This is normal information that an Appraiser might ask during the course of business.  What struck me about the phone call was the Appraiser’s statement:

I left you a message an hour ago and I haven’t heard back.  I need this information quickly as I’m under a lot of pressure from the bank.”

I’m curious about when the timeframe for returning routine business calls of a non-urgent matter transformed from “Same Day” or “First Thing Next Day” to “59 Minutes Or Less?”

Mind you, I always want to be available to my clients whenever they need me.  Most of the time I have all my clients’ numbers programmed into my cell phone, so when they call, I know who’s calling, and if I can help them, I’ll answer.  About the only time I don’t answer is when my hands are full (this includes food, ice cream, beer or ropes on a sailboat) or I’m in a movie theater.

But the Appraiser who called isn’t working on something for one of my clients.  He’s working on a financing deal for someone who happens to be in the association where I’m on the Board.  Work done for the association is Voluntary.  No pay.  But there’s still an expectation that I’m available in “59 Minutes Or Less.” 

If you’re reading this on the blog, please leave your comments here and if you see this on The Facebook, comment over there.  I’d love to hear what you think?

Ummm… Where’s the house?

Two days of family fun including great bands, food from local vendors, activities for the kids and a chance to win some great prizes. Great performances on the main stage by acts such as How Far to Austin, Send in the Clones, Eric Howell’s Greatest Hitch, Infintity, Open to Suggestion, the Jesse White Tumblers and Dance Connection. Catch teen and kid favorites such as the School of Rock and Mary Macoroni.

BenFest is at Saint Ben’s Church – 2155 W. Irving Park Rd.  www.benfest.com

Old Saint Pat’s Block Party

Old St. Pat’s Church, Chicago’s oldest public building and a treasured historic landmark, is the host of the 26th annual World’s Largest Block Party. This event is a party for a good cause. Proceeds support the mission and outreach activities of Old St. Pat’s including the Education Center, the Outreach Group, Horizons For Youth, Career Transitions Center of Chicago and Global Alliance for Africa.

www.worldslargestblockparty.com/ 

Logan Square Boulevard Bash

Bands, food and drink vendors and artists set up camp in Logan Square for this inaugural neighborhood fest.

Logan Boulevard and Milwaukee Avenue

July 9 : 5 p.m. – 10 p.m.
July 10 : 12 p.m. – 10 p.m.
July 11 : 12 p.m. – 9 p.m.

/www.boulevardbash.com/ 

Chicago Folk and Roots Festival

Fun event sponsored by the Old Town School of Folk Music in Lincoln Square.  The Main Stage in Welles Park is the sonic centerpiece of Folk & Roots with a boundless supply of rhythms, grooves, and melodies to last you all weekend long. From the trance inducing desert pulse of Etran Finatawa to the slinky, psychedelic soul of The Budos Band, the Main Stage is where it’s at!

www.chicagofolkandroots.org

Rock Around the Block

Rock Around the Block eatures about thirty of the windy city’s best bands continuously performing on three unique stages and four full blocks of interactive fun! Located at one of the most highly visible intersections in Chicago on Lincoln Avenue at Belmont.

July 10 : 12 p.m. – 10 p.m.
July 11 : 12 p.m. – 9 p.m.

http://starevents.com/chicago-events2/rock-around-the-block/ 

Roscoe Village Burger Fest

The savory patty will take center stage THIS WEEKEND at the inaugural Roscoe Village Burger Fest on Saturday and Sunday, July 10-11, on Belmont at Damen in the Roscoe Village neighborhood.  Sumptuous burgers, live music, arts & crafts and activities for kids will highlight the weekend. In addition, visitors will be able to vote for Chicago’s best burger. 

Burger Fest hours are Noon-10:00 p.m. both days.

http://www.chicagoevents.com/event.cfm?eid=179