0
0
0

4 Important Stats on the State of New Construction in Chicagoland

by Peter Thomas Ricci

What is the state of new construction in Chicagoland, as the market creeps towards recovery?

construction workers in the sunset

New construction in the 10-county Chicagoland area stumbled somewhat in 2015’s first quarter, with new home sales falling 4.2 percent from 2014 to 1,047 sales, according to the latest report from market research firm Tracy Cross & Associates. The declines were particularly pronounced in the city of Chicago, where new home sales (both condo and single family) fell 48.4 percent.

Beyond that eye-opening stat, though, Tracy Cross’ report included many more findings about Chicagoland’s new construction market, and we’ve organized those stats into four chief points:

1. Depressed Supply (and Suppliers) – January and February may have brought lousy wintry conditions to Chicagoland, but regardless of temperature and precipitation, new construction remains historically low throughout the region. Consider: in 2015’s first quarter, only 280 production developments were active through the region’s 5,300-square-mile land area, a 75 percent decline from the 1,100 developments that averaged from 2003 to 2008.

Even more disconcerting, the number of builders working in Chicagoland has collapsed. In 2005, there were 529 individual establishments in the new home marketplace; at present, that number has fallen to just 79.

2. Fox Valley, Kane and DuPage Drive Sales – Unsurprisingly, a huge share of 2015’s new home sales have been concentrated in specific areas of Chicagoland. According to Tracy Cross, the Northern Fox Valley area of Kane County, Southwestern DuPage County/Aurora/Kendall County and the Southwestern Corridor accounted for 52.7 percent of total new home sales. At the neighborhood level, Pingree Grove, Elgin, South Elgin, Hampshire, Naperville, Aurora, Oswego, Lisle, Yorkville, Joliet, New Lenox, Bolingbrook, Shorewood, and Plainfield saw the most new home sales activity.

Such findings, we should add, are wholly consistent with our earlier reporting on both new construction and new home sales.

3. New Construction For the Affluent – We have been closely monitoring new construction’s huge swing towards affluent consumers, and though our reporting had focused on national stats from the Census Bureau, Tracy Cross’ analysis shows that our findings are wholly consistent on the local level.

Indeed, the numbers are striking: in 2015’s first quarter, the average sales price for a newly built single-family home in Chicagoland’s suburbs was $351,422, up 8.5 percent year-over-year; the increase was even more dramatic for townhomes and condos, where the average sale price rose 16 percent to $306,694. Driving that increase, Tracy Cross noted, are developments in Palatine, Glenview, Schaumburg, Hinsdale and Naperville.

4. The D.R. is In – D.R. Horton, with 192 sales in 2015’s first quarter, was easily atop of Chicagoland’s homebuilders. Following Horton’s lead were: Ryland Homes with 129 sales; K. Hovnanian with 93 sales; M/I Homes (78); PulteGroup (73); and Toll Brothers (60). D.R. Horton, by Tracy Cross’ metrics, is on pace for 680 new home sales this year, with Ryland at a pace of 457 and the others on pace for at least 200.

But again, those numbers pale in comparison to the past. In 2005, for instance, 13 companies sold more than 400 homes, and the top six soared past 1,000 units. These were the leaders for that year: PulteGroup (3,453 contracts), D.R. Horton (1,185), Lennar (1,519), K. Hovnanian (1,150), Neumann (1,127) and Ryland (1,124); consistent with our first point, notice that both Lennar and Neumann are not even present in the the top five, nowadays.

On one hand, such comparisons are patently unfair. In 2005, the housing bubble was in peak form, and therefore, no housing market for some time will stack up to its numbers. Yet, on the other hand, new construction remains depressed in Chicagoland, and such numbers offer a reminder of that fact.

Related articles

Join the conversation

New Subscribe