Although the “usual suspects” of hot-selling neighborhoods – Lincoln Park, River North and West Loop – are still getting attention, the South Loop, Logan Square and the Gold Coast (where the first high-rise since 2007 recently broke ground in Sept. 2014) are up-and-coming in terms of new construction. Inventory is up in those hot neighborhoods, and even with each location’s popularity, buyers have many more options and can afford to be more particular with what they want – whether it be a high-rise, mid-rise, rowhome, townhome or single-family home.
Each neighborhood or suburb also seems to dictate the type of “hot” housing, as well; for example, single-family homes, townhomes or rowhomes (like Flexhouse 2, a Ranquist development being sold by Karen Ranquist of Berkshire Hathaway HomeServices Koenig Rubloff Realty Group) are popular in Logan Square. For growing families and those looking for a more suburban lifestyle without leaving the city, the construction of homes vs. mid-rises and high-rises is picking up in areas like Old Irving Park, Logan Square and Roscoe Village.
Heather Gustafson, vice president of business development at CMK Realty, is seeing the same neighborhoods benefit from new construction.
“People looking for a greater amount of space and a true neighborhood feel are excited about these areas, she says. “These smaller neighborhoods offer families the possibility of staying in the city to raise their children, and some of these areas are close to downtown, such as River North with CMK’s sold-out Basecamp community. Those locations and their advantages – convenient public transportation, ability to enjoy downtown amenities with a short commute home – will continue to flourish in 2015.”
For people who do want to move to the suburbs, the hot areas are Naperville, Palatine, the North Shore, Fox Valley and Park Ridge. Construction has been strong in all these areas, and several developments have recently finished or are underway, including Lexington Homes in Palatine, The Reserve of St. Charles and even individual custom tear-downs on lots all along the North Shore communities. Buyers are still most attracted to proven suburbs with great community infrastructure, and fast-growing areas with great school systems and local amenities. Demand can seem more urgent in certain areas where there aren’t as many new construction developments, because resale and new construction inventory is on the tight side, such as with Evanston.
“Church Street Village represents a rare opportunity to buy a new-construction townhome in Evanston, as there simply aren’t any currently on the market,” says Steven Maher, managing broker of Kinzie Brokerage, which is selling Church Street Village. “That is part of why demand has already been so high for these homes.”
According to Tim Greene, CEO of Naperville-based john greene Realtor, with low inventory levels still prevalent throughout Chicago and its suburbs, homebuyers and builders alike are focusing on new construction. This has resulted in strong new-construction demand in traditional downtown-oriented markets, as well as those areas hardest hit during the recession. New construction growth over the past year has been particularly strong in Naperville, ranking first in total housing starts (360 starts) in Chicago’s suburban market. Both Naperville and Elgin tied for the top total number new-home closings in 2014 (286 closings), and there has been steady traffic in new construction redevelopment in the downtown Naperville market in the first quarter of 2015.
“In addition to downtown infill luxury product, we have seen prospective buyers seeking affordable, first-time buyer product, as well as downsizer/empty nester housing,” he says. “We expect that Naperville’s demand for new construction will continue in the years to come as inventory catches up with demands for housing in our market.”
Open floor plans, clean design and outdoor space are leading the way in new construction trends. Buyers are gravitating toward higher design finishes, open floor plans and outdoor spaces ideal for entertaining, so a balcony or yard is a huge selling point.
“Open floor plans with functionality for the way people live today definitely defines much of 2015’s design,” says Mike Golden, co-founder of @properties. “Other trends include 10-foot ceilings, floating vanities and stand-alone tubs in baths, and integrated appliances in kitchens.”
Golden’s team is building with those trends in mind, and at 4 East Elm, the development team worked on the floor plans for months. “Luxury is something that you feel, not just see,” he says. “The space is very refined.”
Many buyers, according to Ranquist, come to her with realistic wish lists that include yard space, even if it’s a small space, and high-end finishes in the kitchens and master bathrooms. And because of the higher-quality finishes buyers are gravitating towards in new construction homes, prices are starting to pick up. Ranquist’s last seven sales in FlexHouse2 started at about $500,000; Gustafson says buyers should expect mid-$200s for a one-bedroom condo and mid-$300s for a two-bedroom condo in the South Loop, and single-family homes in Old Irving Park for just under $700,000.
“Prices have definitely increased and will continue to slowly increase,” Ranquist says. “The market is good at correcting itself. I have seen my last seven sales in the FlexHouse2 start at $500,000 and above.”