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.