The second quarter was a highly positive period for Chicagoland homebuilders, with both suburban and city markets posting big increases.
The spring homebuying season is typically the busiest time of the year for homebuilders and real estate agents alike, and it seems that on the new construction front, this most recent spring was a roaring success.
According to new research by Tracy Cross & Associates, Chicagoland homebuilders sold 1,343 homes in 2013’s second quarter, an increase of nearly 40 percent year-over-year, and are now on pace to sell more than 5,000 new homes for the year, which would be a 46 percent jump over 2012.
Chicagoland Homebuilders Surge in 2013
Other notable findings in the Tracy Cross & Associates report include:
- The home-sale increases were widespread across Chicagoland, though interestingly, the city outperformed the neighboring suburbs.
- New home sales in Chicago were up nearly 81 percent year-over-year, while suburban sales were up 30.7 percent.
- Tracy Cross noted that the recently launched South Loop Luxury condominiums by Related, which resurrected two failed boom-era projects, accounted for 154 condo sales in the second quarter, which made up nearly half of the city’s new-home sales.
- If home sales did surpass the 5,000 mark at the end of this year, that’d be the first such occasion since 2008, and would be the second year in a row that new home sales increased on an annual basis.
Homebuyer Confidence and Low Inventory
A big reason for the strong new-home sales increase, said Erik Doersching, executive vice-president and managing partner at Tracy Cross, is consumer confidence on housing, which has been rising strongly in 2013.
“You wouldn’t have this level of sales at all these suburban developments if (buyers) didn’t have some confidence there was security in their investment,” Doersching said in an article by Chicago Real Estate Daily.
However, low housing inventory for new residences could constrain demand. According to Tracy Cross’ report, there were just 320 active housing developments in Chicagoland at the end of the second quarter, down from 394 last year.