The condo market is showing signs of rebirth, but Chicago new construction still leans heavily for rentals.
Though the condo market is making a slow and steady recovery here in Chicago, it still has some ways to go before catching up with the city’s flourishing rental market, according to new research reported by Crain’s.
Per new research by Appraisal Research Counselors, there are 381 condos/townhouses set to hit the market in 2014 and 2015; though an improvement over years past, that compares with 4,700 rental units set for that same time.
The Future of Condo Development in Chicago
Gail Lissner, a vice president of Appraisal Research, told Crain’s that there are at least 1,700 for-sale units that have been either announced or considered by city developers. In 2011 and 2012, there were no such proposals, and only 161 units hit the market in 2013. Furthermore, developers are now once again considering larger-scale condominiums. Though late 2013, there were no downtown projects with more than 50 units, but in March 2014, CMK Cos. launched a 144-unit tower at 1345 S. Wabash, and three buildings with 100-plus units are in proposal stages.
The hunger is certainly there, though, for city condos. In the first half of 2014, there were just 270 sales for downtown condos, compared to 389 in 2013’s first half; according to Appraisal Research, that’s because condo supply has not caught up with demand.
Will Condos Ever Truly “Return”?
Even with condo development on the rise, it’s unlikely that we’ll see the level of interest from the boom years.
Jim Letchinger, the president of Chicago-based JDL Development Corp, explained to Crain’s that he sees the urban market remaining “heavily weighted for rentals,” especially for younger adults, who will not jump on the homeownership bandwagon like they did in the early 2000s.
“Back then, their parents were telling them to buy,” Letchinger said. “They’re not going to do that anymore … You can build condominiums, but you have to pick and choose where you do it.”