We may look back on 2008 as a year when developers put their big dreams on hold and focused instead on finishing what they had started. If that’s the case, and if builders are successful in selling off their existing units, 2009 might just be a big year for new project announcements.
None of this is set in stone, of course, but it’s what Gail Lissner and the team at Appraisal Research Counselors expect for the months ahead. Lissner, co-author of the quarterly Downtown Chicago Residential Benchmark Report, offered her observations on the Chicago residential market in the March issue of New Homes Magazine.
The Chicago market, she writes, is in better shape than many other markets across the nation.
Existing home prices in Chicago have been growing annually at a rate of 6.9 percent per year since 2000 and have lost only 4.1 percent in value from their peak. This is a far different story from what is occurring in many other parts of the United States, where pricing climbed quickly and then fell fast…
Locally, a survey of resale prices in 10 major high-rise condominiums developed in downtown Chicago during the last five to seven years indicated that prices have been generally flat for the past three years, with one building outperforming the market and one building underperforming the market. Stable pricing is certainly preferable to declining pricing, and the market is weathering the changes in market conditions relatively well.
As many as 11,000 new downtown Chicago homes will be completed between now and the end of 2009, and developers have started marketing another 4,300 in the past year. With all that inventory, Lissner predicts that “this will be a year to sell out projects currently under development.”