The number of available empty lots in Chicago for residential development fell yet again in 2012’s fourth quarter, hitting its lowest level since 2009.
For five straight quarters, now, the city’s supply of empty lots have been on the decline, dropping from a 19.9-year supply in 2011 to a 14.4-year supply at the end of 2012, according to a recent report from Crain’s.
Empty Lots in Chicago Increasingly In Demand
As Crain’s noted, the construction trends in Chicago seem to be positive:
- Though the number of vacant lots available remains, in Crain’s words, “stubbornly high,” the recent drop in empty lots has corresponded with an increase in construction activity.
- The number of housing starts in Chicago has risen for five consecutive quarters, rising to 3,753 at the end of 2012.
- The advent of investors, though, has thrown the supply of desirable construction lots into disarray, with less and less high-end city lots now available.
- As Crain’s described it, investors will strategically acquire desirable lots without buyers in mind, and will either build on the land at a future date or re-sell the lot at a higher price.
Chicago Homebuilders Confident with the Market
But still, homebuilders in Chicago are growing more confident with housing’s current trajectory. Ken Brinkman of Environs Development Inc., a luxury homebuilder on Chicago’s North Side, told Crain’s that he’s finding high-end homebuyers a “much more confident” bunch these days, and he does not see any unforeseen economic developments getting in the way of housing.
“We learned in 2008 there are a lot of macroeconomic issues we have absolutely no control over, and we’re a bit more anxious about this in the future,” Brinkman said. “I personally don’t see any serious deterrent.”