Bubble Schmubble. Gail Lissner, of Appraisal Research Counselors, acknowledges that resales have softened and other major real estate markets have slowed, but in an upcoming column for New Homes Magazine, she writes that developers sold about 1,850 new units downtown during the first three months of the year. That pace that was 20 percent higher than the one recorded during the record-breaking first quarter of 2005 — and it represents the greatest number of new-construction and adaptive reuse condo sales ever recorded by housing analyst Appraisal Research.
Despite the level of development underway and incessant talk of a bubble, demand so far is keeping up with supply in downtown Chicago, according to Lissner. Excluding units in condo conversions — currently about 1,350 homes — only 6.5 percent of attached housing units have been built and not yet sold. This includes new-construction condos, townhouses and loft / adaptive reuse units.
Many of the new developments won’t be ready for buyers to take occupancy for some time. About 48 percent of the unsold units are under construction, with deliveries expected over the next three years, and 46 percent of the unsold units have not even broken ground, with deliveries projected to occur through 2009. These numbers, in Lissner’s view, indicate that the new condos are being added to the market at a rate that’s allowing for good absorption.