Vintage condos (Chicago, Evanston, Oak Park: apartments, renter, mortgage)

[Buckner Fan]

I had some questions about vintage condos in Evanston. I've noticed some advertised as I've been walking along Central Street and other parts of Evanston. I've consistently heard that new condos in Evanston are pricey (say $600,000 or higher for a 2 BR condo); yet I've seen "vintage condos" along a nice stretch of Central Street advertised for as low as $175,000.

So as a relatively younger person saving up money and thinking of buying eventually but not knowing much about owning a place, I ask: what's the catch? Why are these places so much less expensive. Is it that they need a ton of work, don't have central air, do not have a garage...I picture them to be very small and similar to vintage apartments, thus the reason for the lower price.

And typically (in a good housing market), I would assume that these places don't appreciate as well as a newer place....correct?

Sorry if these are dumb questions. Just curious for some input. This forum is great and I feel like I am learning a lot. Thank you all.

[JanuaryGirl]

Originally Posted by Buckner Fan

I had some questions about vintage condos in Evanston. I've noticed some advertised as I've been walking along Central Street and other parts of Evanston. I've consistently heard that new condos in Evanston are pricey (say $600,000 or higher for a 2 BR condo); yet I've seen "vintage condos" along a nice stretch of Central Street advertised for as low as $175,000.

So as a relatively younger person saving up money and thinking of buying eventually but not knowing much about owning a place, I ask: what's the catch? Why are these places so much less expensive. Is it that they need a ton of work, don't have central air, do not have a garage...I picture them to be very small and similar to vintage apartments, thus the reason for the lower price.

And typically (in a good housing market), I would assume that these places don't appreciate as well as a newer place....correct?

Sorry if these are dumb questions. Just curious for some input. This forum is great and I feel like I am learning a lot. Thank you all.

I am not an expert, but there is no way you need to spend 600K to get a decent 2 bedroom in Evanston. In the lower price range, the kitchens will probably be more "apartment" quality, if they haven't been gutted they will probably have less closet space, smaller bathrooms, may not have laundry space or central air.

As far as appreciation goes, I would just make sure you don't over pay for a new condo as there is much more supply than demand and you wouldn't be able to upgrade the unit as much yourself to add value the way you could in an older unit (if you want to put work into it). However, in an older building just be cautious of assessment fees and be aware that you are more likely to have to foot the bill for fixing up roofing, electrical, etc.

[BRU67]

Not dumb at all. But $600k for a two bedroom condo?? Ouch! I think you need to look at that a little closer, as my bet is it’s off a bit. I wouldn’t expect to see a two bedroom condo in Evanston more than $400k on the extremely high end, especially in this market. Well, maybe people are asking more than that but I sure as heck wouldn’t pay it. $600k gets you a lot, even in Evanston.

I spent a good deal of time looking at condos in various neighborhoods in the City before finally buying a Chicago Bungalow instead (much bigger place with a garage and a yard for the same price). I can tell you as a general rule that condos do not appreciate as quickly as single family homes do, for a few reasons. First, your market is more limited. Homes appeal to a large diverse group, whereas condos generally are limited to empty nesters and young single professionals who aren’t going to stay there very long (meaning that plenty of stock is always on the market).

Second, most Chicago neighborhoods and inner ring suburbs where these condos are located have a very high percentages of rental units (usually 40% and up). According to the 2000 census, 47% of Evanston’s housing stock was renter occupied. That means that there’s plenty of stuff available to convert into condos where the market demands it, which will keep prices down. Informally, I noted that the condos we were looking at in the South Loop as a potential investment were listed at about the same prices in 2006 as they were when I was looking at them in 2001-02. Not good – especially when you’re paying out $2,100/month for something you could be renting for $1,100 and getting no substantial appreciation to offset that.

Homes can be difficult and time consuming to maintain, especially older ones, but you really don’t get a free ride with a condo. All that happens there is you get socked with a special assessment when something on the building breaks or your condo association decides that you need a new roof and windows. At least with a house, you decide what to do and when to do it. Also, some buy condos expecting that they’ll just live there a couple of years and then rent it and be on easy street. But I’ve heard more than a few condo associations placing bans on rentals. A friend of mine is facing this issue in Oak Park now, where his condo is languishing on the market and he can’t rent it to offset the mortgage without violating his bylaws. Real bummer. Plus, condo prices in most desirable neighborhoods are very much out of whack with rental rates, so it’s unlikely you’ll come even close to covering your mortgage, property taxes and assessment even if you can manage to rent it.

Not trying to dissuade you from condo ownership of course but you really have to weigh the pros and cons. Unless you’re terminally single and plan to stay there for awhile, renting may make a lot more sense for you.

[Lookout Kid]

Originally Posted by BRU67

I can tell you as a general rule that condos do not appreciate as quickly as single family homes do, for a few reasons. First, your market is more limited. Homes appeal to a large diverse group, whereas condos generally are limited to empty nesters and young single professionals who aren’t going to stay there very long (meaning that plenty of stock is always on the market).

Thankfully, this "general rule" isn't always on the mark. It really depends on the location.

My rule is to never buy a condo in a market where single-family houses are the dominant housing type. For instance, a friend of mine bought a condo in West Rogers Park, a neighborhood dominated by bungalows. She paid $300,000 for a 3-BR condo, but a bungalow could be had for just a marginal amount more. Why would anyone buy that condo when they could have a house for just a little more money?

Things are different in neighborhoods like Lincoln Park and Lakeview (or more dramatically, in Manhattan). Most people will need to live in condos in those neighborhoods if they want to be homeowners. And there are far more condos than SF homes. There will always be a market for condos in these neighborhoods, because there is no other option for most people. And there are many 3-BR condos on the market now that are occupied by families--not just empty nesters and young people.

Evanston is a bit more iffy, but is probalby a better place to own a condo than some far-flung suburb. $600,000 is WAY too much money for a 2-BR in Evantson! I've seen many HUGE 3-BR condos in the $400,000s, so I'm not sure where you're getting those numbers.

[BRU67]

Originally Posted by Lookout Kid

Thankfully, this "general rule" isn't always on the mark. It really depends on the location.

My rule is to never buy a condo in a market where single-family houses are the dominant housing type. For instance, a friend of mine bought a condo in West Rogers Park, a neighborhood dominated by bungalows. She paid $300,000 for a 3-BR condo, but a bungalow could be had for just a marginal amount more. Why would anyone buy that condo when they could have a house for just a little more money?

Things are different in neighborhoods like Lincoln Park and Lakeview (or more dramatically, in Manhattan). Most people will need to live in condos in those neighborhoods if they want to be homeowners. And there are far more condos than SF homes. There will always be a market for condos in these neighborhoods, because there is no other option for most people. And there are many 3-BR condos on the market now that are occupied by families--not just empty nesters and young people.

Good points but you have to consider that the condo-heavy neighborhoods usually still have a very healthy supply of rental units to convert should demand call for it. There will of course always be a good market but appreciation for the individual condo-owner will be tempered by zealous developers who will come in and start converting (or tearing things down and building new units) once a strong enough demand develops. I still submit that, at least in this market, you'd probably be better off renting in Lincoln Park than buying a condo there.

I've heard of some families buying larger condos but I think that's more of an exception rather than a rule. And the stock of relatively affordable large 3-bedroom condos is small unless you move into a more SFH dominated neighborhood. That, as you observe, defeats the purposes.

[Buckner Fan]

Thanks all for this helpful information. I'm not looking to buy a condo at this time, but eventually would like to buy something (just not sure what). I just threw $600,000 out there and I realize it is off. Thanks for the correction.

I have always been a renter and will continue renting for at least a few more years. I need to keep on saving money and as long as I'm doing that while renting (with careful budgeting), I feel like I'm doing ok.

Thanks again for this information.

[Nysee53]

There are 2 bedroom Evanston condos going for over $800,000 even Vintage units. I would say about $450,000 to $500,000 is the average price for a new 2 bedroom. Vintage units for $175,000 will be lower end, but you can have nice vinatage units 1 or 2 bedroom for around $350,000 to $400,000.

[aragx6]

It's true that there is at least a couple 800+ 2 bedrooms on the market in Evanston right now:
Condo/Townhouse/Co-Op - 1220 SHERMAN AVE Unit: 1220, EVANSTON, IL, 60202 - Realtor.com

There's a few more 2s in the 700 range. That just seems insane to me...

[Lookout Kid]

Originally Posted by BRU67

I've heard of some families buying larger condos but I think that's more of an exception rather than a rule. And the stock of relatively affordable large 3-bedroom condos is small unless you move into a more SFH dominated neighborhood. That, as you observe, defeats the purposes.

I personally know at least a dozen families living in three-bedroom condos in the city. And "relatively affordable" is, well, a relative term. For instance, in East Lakeview a SF home will be in the millions of dollars, but you can get a large 3-BR condo for $500,000. That's a big jump, and many people are snatching the 3-BRs up in the Nettelhorst school district. I'd actually say that the appreciation on 3-BRs is outpacing the glutted 2-BRs on the North Side.

[Lookout Kid]

Originally Posted by Nysee53

There are 2 bedroom Evanston condos going for over $800,000 even Vintage units. I would say about $450,000 to $500,000 is the average price for a new 2 bedroom. Vintage units for $175,000 will be lower end, but you can have nice vinatage units 1 or 2 bedroom for around $350,000 to $400,000.

Your prices are WAY off. Subract a bedroom off of your "averages" and you'll be much closer. Condos in Evanston are not more expensive than condos in North Side neighborhoods like Lincoln Park and Lakeview. I know a few people who bought condos in Evanston, and they did so because it was CHEAPER than the trendy North Side neighborhoods.