What will the 2005 real estate market look like in Chicago?
While the Gold Coast remains the biggest market in the booming downtown area, “new” neighborhoods such as the West Loop, South Loop, Loop, River North and New East Side will continue to receive a growing amount of attention, according to Gail Lissner, of Appraisal Research Counselors.
Lissner spoke at the Chicago Association of Realtors’ annual economic forecast meeting.
The downtown market has continued to boom, with 80,000 units developed in the city center during the last 15 years, but rentals account for only 18 percent of that, according to Lissner. Look for more concessions and lower rents in this softer segment of the market during 2005, Lissner says.
Condo sales, however, bounced back in 2004, and developers will be scrambling to complete the units they’ve sold in the coming years.
“There has been a large focus on reservations, with developers locking people in early. The market should see huge deliveries from 2005 through 2007 based on for-sale announcement inventory levels,” Lissner said.
Housing has proved extremely resilient in recent years, defying economic trends, but some fundamentals remain worrying for all sectors, including real estate, according to Carl Tannenbaum, Chief Economist at LaSalle Bank.
Although retail sales were up 7 percent, he said, the economy still was not creating enough new jobs. “The creation of jobs is critical to consumption, real estate included,” Tannenbaum said.