The Q2 2008 Residential Benchmark Report from Appraisal Research Counselors (ARC) serves up a variety of generally downbeat news for developers of new downtown Chicago condo projects.
Perhaps the worst news is the pace of sales vs deliveries. In a normal market sales accelerate as buildings near completion and units are ready to deliver to buyers. Exactly the opposite has been occurring this year.
In Q1 and Q2 2007, 1,800 new condo units were sold, according to ARC. Excluding the Chicago Spire, only 196 units were sold in the first six months of this year. Just over 3,000 unsold units are scheduled for delivery this year and next in the downtown market.
In previous posts we quoted ARC on resale / rental competition, vulture funds, growing inventories and rising contract cancellation rates.