One of the defining traits of the post-bubble housing market was the excess supply of new housing units, many of which languished on the marketplace for months, if not years.
Few areas in Chicago better demonstrated this fallout than the West Loop, where hundreds of unsold condo units sat vacant without a buyer.
But that was then. Now, condo inventory in the West Loop has undergone an about-face, and the same market that was once plagued with an excess of units now has too few available; and it’s inspired some interesting behavior among developers.
Condo Inventory in the West Loop Plummets, Inspires Developers
The numbers speak for themselves – according to a market report from Appraisal Research, there were 973 unsold units in the West Loop in Q3 2008; now, there are just 46, a remarkable turnaround for the market that has made one developer rethink his business strategy.
As David Lee Matthews reported earlier today on Crain’s, Bill Senne, the developer of the the 212-unit Emerald condominium at 123 S. Green St., had begun renting his units when the market slowed, but now, with condo inventory down and homebuyer interest up, Senne has opted to not renew the leases of Emerald’s tenants, and will instead focus on selling the condominium’s units. And Senne seems confident – according to Matthews’ report, the $378-per-square-foot average listing price for Emerald’s units is greater than the $367 average when the project launched in 2006.
Chris McComas – “Buyers are out there”
Chris McComas, a consultant with @properties on the Near West Side, said Emerald’s return to the for-sale market shows that “buyers are out there,” and that the condo market in Chicago’s western neighborhoods is poised to make a strong return.
Echoing the sentiments of a Reis study from late 2012, McComas explained that rents on the West Side have been “skyrocketing” in the last three/four years, with renters having few options for their housing needs; now, though, owning is cheaper than renting, and he’s anticipating many renters to enter the homeownership market in the next couple months as their leases expire. And given that housing inventory remains low on the West Side, he’s also anticipating additional developments to return to the for-sale market.
“I think the first quarter will be a very strong quarter,” McComas said.