Condominium developers flocked to the South Loop in the 1990s because it contained available land near downtown that was affordable compared to surrounding neighborhoods. They hoped to cash in on the housing boom and offer young professionals an opportunity to own their homes.
But the recession intervened.
“Because the South Loop has had the most growth in the last few years in any neighborhood, you have some of the most troubled projects down here,” says Keith Giles, who started a realty group in 1996 focusing on South Loop real estate.
Chicago real estate experts now expect no new condominium development in the neighborhood for several years and some existing units wait for owners.
“We went for too much of an expansion on condos,” says South Loop Remax real estate agent Barb Buckner. “It had great potential when we thought we had the Olympics.”
According to RealtyTrac.com, September foreclosures in the South Loop were higher than the city average, with one in 217 South Loop homes facing foreclosure, compared to one in 286 homes in the entire city.
According to Buckner, many residents moving to the South Loop are young professionals in their late 20s and early 30s. She feels that the neighborhood needs more businesses and restaurants to attract enough residents to fill vacant condominiums.
Robert Hughes, who works at Krisers, a pet store at 1103 S. State St., says business there has continued to thrive during the economic downturn. However, he sees the impact in the residential units that occupy the same building. At least 12 are in foreclosure, he said.
Gail Lissner, vice president of Appraisal Research Counselors, a private real estate research firm, forecasts no new condominium development in the South Loop. But that doesn’t mean business cant make it in the neighborhood, she said.
Lissner shares that the South Loop’s close proximity to the city and its stock of newly developed buildings still make it an attractive neighborhood, even if development is on hold.
“Long term, the South Loop will do just fine,” she says.