When the financial crisis hit Chicago, the distribution of damage was not laid out uniformly. Some industries, and even niches within industries, beared the brunt of the economic turmoil, and among those most grievously injured was the city’s condo development community.
For years following the collapse of the housing market, condominium development in Chicago rested at a standstill. From 2011 to 2012, not a single unit was proposed on the for-sale side, and in 2013, when the city started to really regain its economic footing, that number only rose to 161 units, according to Crain’s.
Today, development on condos is moving forward a bit more rapidly than in recent memory, but still the pace is slow. Gail Lissner, vice president of the Chicago-based Appraisal Research Counselors, told Crain’s that while condo developers have announced or are considering at least 1,700 for-sale units, apartment development is still leaps and bounds ahead. Through 2015, Lissner says 4,700 new apartments are expected to reach completion.
The issue, according to Jim Letchinger, president of local JDL Development Corp, is that developers shouldn’t expect condos to come back in a grand fashion anytime soon. He told Crain’s that there are simply too many scars from the years 2006 to 2009. Where parents once encouraged their children to go out and buy, they’re now warning them against any potentially hasty investments.
But it isn’t all doom and gloom for condos, as we alluded to earlier. As Lissner pointed out, more and more developers are willing to invest in condos, which suggests renewed optimism for the market.
In July, Related Midwest announced its intention to develop a 67-story, hybrid residential tower, located at the corner of Grand and Peshtigo, which will eventually house 400 apartments and 100 condos.
On the Near North Side, Curbed Chicago reported on a new development that will offer 1,275 square feet of retail space and eight luxury condo units, each 1,800 square feet.
The interest for condominiums is growing, but a major hurdle that stands between planning and development is the dwindling number of undeveloped lots big enough to house substantial condo units, which, as Letchinger said, is “the primary hole in the condo market.” But that’s not to say the market is headed for failure.
“You can build condominiums,” he said, “but you have to pick and choose where you do it.”
Image credit: “Central and North Chicago – March 2013” by Jamie McCaffrey from Ottawa, Canada – Central and North Chicago. Licensed under Creative Commons Attribution 2.0 via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Central_and_North_Chicago_-_March_2013.jpg#mediaviewer/File:Central_and_North_Chicago_-_March_2013.jpg