For 2009, the challenges include:
- Unemployment levels remain high in the Chicago metropolitan area.
- There are still issues of consumer confidence, although consumer confidence does appear to be improving. With price discounts being offered, buyers are more inclined to purchase, since they are being offered opportunities at price levels significantly off the previous “highs.”
- Price discounting is working in stalled projects and getting product absorbed; however, it has had a ripple effect and is impacting other properties.
- 2009 will be another huge year for delivery of newly completed condo units; unsold, delivered inventory levels are already at a record high level and this additional completed inventory will generate even more competition in an already crowded market.
- Closing the sales of the units currently under contract at time of delivery will continue to be a challenge for developers, particularly due to the tighter lending standards (including Fannie Mae) and the increased hesitancy on the part of investor buyers.
– The flip side to the signs of strength in the downtown condo market, as outlined in Appraisal Research Counselors‘ latest Downtown Chicago Residential Benchmark Report.
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