Jeff Baird is a real estate valuation consultant based in Chicago. He founded Lakeshore Analytics to bring comprehensive, understandable housing data and analysis to Chicago-area readers. The site features a blog with free market news and charts, summary data on 20 top neighborhoods, and quarterly data subscriptions.
Building permit activity in Chicago has been hovering at a low level for the last two years, Census data show. Over this time, Chicago has permitted about 20 single family homes per month.
Multi-family permits tend to be more volatile because developers take them out in blocks for their apartment or condo buildings. There were about 150 multi-family units permitted in August and September, though this measure flirted with single digits over the summer. (It’s important to mention that not all permitted units get built.)
This is consistent with a very pessimistic outlook from the nation’s home builders, whose confidence has been below the previous one-month record low for 30 of the last 32 months. Neither this index, nor the sales traffic index, show any real improvement, despite some headlines to the contrary.
Though residential investment is an important part of most economic recoveries, it’s probably a good thing on balance that we don’t have major additions to housing stock through new homes. A report today from CoreLogic (PDF) shows that Chicago has a 30-month inventory of distressed homes at the current pace of sales, the third-highest among metro areas.