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Last week, I reported that sales of new condominiums and townhomes collapsed in 2008, falling 75 percent from the year before and dipping below 2002 levels. So what did the new condominium market look like in 2002?
The answer: It was very concentrated. I looked at every residential home sale between 2002 and 2008 and segregated new condominium sales by neighborhood. Take a look at this chart. In 2002, five neighborhoods dominated new condo sales: Near North Side, Near West Side, Near South Side, Lakeview, and the Loop.
Five years later, new condo sales were much more widespread. To my eye (and I looked at all 77 community areas), new condo sales were concentrated in 12 neighborhoods, with Lincoln Square, Edgewater, Irving Park, Logan Square, Uptown, Rogers Park, and Lincoln Park all in the mix. The dominance of the five neighborhoods started to erode in 2003 and 2004 and had become twelve neighborhoods by 2007.
Will new condominium sales revert back to the geographic concentration of the pre-housing boom? There are still a lot of new units left in conversions in neighborhoods like Rogers Park. How quickly those units sell in an era of tighter credit will likely affect construction lenders’ willingness to finance projects outside the traditional preserves of downtown and neighborhoods near the lake.
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{ 2 comments }
Interesting. Thanks for putting this together!
This is great stuff. I am already seeing the concentration of buyers in the core markets near downtown, but, including Lincoln Square, Ravenswood, Northcenter, and Andersonville… these are very popular neighborhoods for buyers and here to stay for the long run.
Although typical two bed, two bath new construction starts have halted on a couple 12 plus unit buildings in Ravenswood, I think that Damen Avenue from Montrose north and the Sunnyside/Wilson Corridor around North Ravenswood will still be attractive as credit flows again. These have become very, very pleasant neighborhoods with tons of parks and transportation. Because the area was not saturated with new construction even in the boom, I think there will be future demand for quality if not a bit more affordable new construction.
Condos are dead west of Kedzie and north of Peterson. Logan Square really fizzed out and there are great deals there if you want the Blue Line and proximity to Bucktown/downtown… but there is a ton of inventory to work through there even at low prices.
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