The Chicago housing market will likely post stronger sales in the spring, according to a couple of industry experts. Yes, top brokers have a vested interest in talking up the market, but the veterans we surveyed have their fingers on the pulse and are generally frank about the state of the market.
Rubloff Residential Properties president James Kinney notes that some developers are postponing new projects, waiting for buyers to absorb the oversupply of new condos and homes.
Jameson Realty Group president Charles Huzenis says that lenders will back fewer new projects until the market is in better balance.
More buyers are already starting to cruise the market, realizing that although discounts are available here and there, deep and widespread price cuts aren’t on the horizon, both men say.
“Sooner or later, demand pents up,” Huzenis says. “A client will say, ‘I can’t wait any longer [to buy], I’m getting married’ or, ‘my rent’s going up.'”
Alison – just curious – did Kinney mention any projects by name that are being postponed?
“Help, my rent is going up $50 per month, I need to buy a condo and take on a $2000 house payment. I need to invest in myself….”
🙂
My friend told me this just the other day…
Sam, no he didn’t have any names for me specifically.
How about asking someone other than realtors about what housing will do? That’s like asking Bob Rohrman if it’s a good time to buy a car. Let’s get some independent third party analysis.
George, I was going to save this for another post, but here goes: Erik Doersching of analyst Tracy Cross & Associates says he things there will be an uptick in buying activity in the spring but that overall the market will remain soft for a while. He thinks he’ll have a clearer picture in a few more weeks when he gets more data.
How about these excerpts from Crains, sorry I don’t have the link…
“The market is “still very bleak,” says Chuck Carrano, president of Carol Stream-based Michael Nicholas Carpentry LLC, who entered the business 14 years ago. “This is by far the worst one I’ve seen in my career.”
“It’s not going to shoot back up,” he says. “It’s going to gradually get back to a level in ’08 that is closer to ’01 or ’02” but won’t get back to ’04 or ’05 levels without a big jump in employment.
Amid rock-bottom interest rates in 2004 and 2005, “a lot of people entered the market that weren’t necessarily ready to enter the market,” says Erik Doersching, vice-president and managing partner at Tracy Cross. Thus, the market was living on demand that was borrowed from the future, and sales have fallen now that the future is here, along with higher interest rates.
Demand has declined in the city as the practice of buying condominiums with the intent of flipping them for a profit has “almost evaporated,” Mr. Doersching says.
Lou Cooper, executive vice-president of the Residential Construction Employers Council, a trade group, is not optimistic: “I think the climb out is going to be very slow, and there’s not going to be a significant spurt of activity.”
I saw that story. It also included the suburban market, which is doing worse than the city. Our stats and analysis apply just to the city.
Seems to me that the closer you get to downtown and the better your building is, the better off you are.
I’m sure a bunch of developers are kicking themselves for skimping on the architect.
Remember people: Real Estate only goes up!
Recent history shows that housing booms start at the epicenter of urban areas and then extend to suburban and then exurban areas. When then trend reverses, which is now happening, prices deflate first in the exurban then suburban and finally back to the place of origin. The city is next. The bell tolls for thee!