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Downtown Chicago condo sales still sluggish

filed under: Buyers, Chicago home sales, Developments, Downtown, First-time buyers posted on November 20th, 2011

Chicago downtown condos for saleCondo sales in downtown Chicago continued to sink this fall, dropping 9% over this time last year. Developers closed just 229 sales downtown in the third quarter, according to a new report from Appraisal Research Counselors, a Chicago consulting firm.

In a weak market, some buyers were inspired to make the move only after steep price reductions. A recent story by Crain’s Chicago Business said that Parkside of Old Town, a redevelopment built at the site of the old Cabrini Green towers on Division Street, had the highest number of closings in the third quarter — 26 units — after chopping prices 30% to 40% over the summer. One-bedroom condos priced at $259,000 were reduced to $155,040 with a free parking space, while two-bedroom units went from $379,900 to $229,500, including parking. Parkside also offered buyer incentives like a $10,000 grant from the city.

First-time buyers seem to be driving the condo market in the lower-priced buildings, such as 200 N. Dearborn, Silver Tower, 757 Orleans, 235 West Van Buren and Quincy 565, said Gail Lissner, an Appraisal Research vice president. At luxury buildings such as Trump International Tower, Legacy at Millennium Park and Aqua, third-quarter sales were also solid, helped along by cash buyers.

Overall, though, it’s hard to imagine the downtown market getting much worse. Downtown developers closed only 614 condo and townhouse sales in the first nine months of 2011, compared with 1,431 a year earlier — and last year wasn’t all that great.

Keep in mind that Chicago developers once enjoyed crowded sales centers, rarely cut their prices and easily sold thousands of glittering high-rise condos each year. In 2005, for example, developers sold more than 8,000 units in downtown Chicago.

But the downturn means it’s a great time to buy a new condo downtown, many of them with sweeping lake or city views, sleek gyms and swimming pools. The supply is steadily being absorbed — especially since so many condo projects have now been converted to rental buildings. No new units will hit the market this year, and the only buildings now under construction, the 89-unit Ritz Carlton Residences and Lincoln Park 2520, are scheduled for 2012 deliveries.

“We’re still looking at a few years of unsold inventory levels in the market,” Lissner told Crain’s. “It’s being absorbed, but slowly.”

Written by Sue Fox //

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