Price discounts are becoming more publicly advertised, although developers remain concerned about the ripple effects. Several buildings have undergone substantial re-pricing of their entire unsold inventory in order to quicken the sellout of the building. Other buildings have opted for individual “loss-leaders,” testing the effects of particularly well-priced units on their sales pace.
Whether or not a developer is employing price discounts, buyers are attempting to negotiate on price in the same way that the resale market operates. Negotiating with a developer has become much more of “make me an offer,” although we are hearing that the discounts buyers are desiring are often too extreme for the developer to accept. This disconnect between buyer and seller expectations is also occurring in the resale market, resulting in sales volume which is approximately half of the 2007 volume levels.
– From Appraisal Research Counselors‘ 3rd Quarter 2009 Downtown Chicago Residential Benchmark Report.
Along with reported contracts, Appraisal Research Counselors now tracks unit closings from public records. Below is a breakdown of signed contracts and unit closings in the downtown market during the first three quarters of 2009, courtesy of ARC’s report.