We’ve been chattering about quite a few new construction 3 and 6 flat projects around the north and west sides of the city in the last six months.
But those projects appear to be an anomaly in the new home market as new home sales in Chicago rose just 4.6% in 2012 to 586 properties.
A lack of supply in the city may tell part of the story. Though the city condo market has come back — Chicago condo sales jumped nearly 18 percent in December over the year-earlier period — developers have yet to start building high-rises again. Because condo prices have dropped so much the past several years and construction costs have not, it’s still hard to justify a new tower, Mr. Cross said. As a result, buyers have fewer new projects from which to choose.
In the entire metropolitan Chicago area, 3445 new construction properties sold in 2012. That was up 18% from 2011 and was the first year over year increase since 2005.
But sales are also coming off of record lows. At the peak, in 2005, 33,000 homes, condos and townhouses were sold in the Chicago metropolitan area.
The good news is that the pick-up in building is creating jobs.
The recovery is good news for the carpenters, electricians and plumbers who logged overtime during the boom but have struggled to find work since the bust.
“I did more houses last year than I did in the past four years combined,” said Jim Venhuizen, owner and president of Cimarron Construction Inc., a New Lenox-based carpentry contractor that employs about 10 carpenters now, down from as many as 80 before the crash.
Cimarron worked on about 25 homes in 2012, several for the Neighborhood Stabilization Program, a federally funded program to rehabilitate homes in struggling neighborhoods, he said. But the firm, which used to rely on residential construction for 99 percent of its business, has survived by diversifying into commercial construction. Mr. Venhuizen will take more residential work if he can get it, but he’s wary of getting too exposed to the market.
“Even if residential were to come back, we’re going to stay here and not put all our eggs in one basket,” he said.
Will it take the construction of new condo towers to really perk up Chicago’s new construction market?
Local new home sales jump 18 percent [Crain's Chicago Business, Alby Gallun, February 5, 2013]- be sure to check out the great historic home sales chart in the article.