Market Conditions: Bloomberg Reports Chicago’s New Construction Luxury Market Is Picking Up- Or Is It?
Bloomberg reports that Chicago’s luxury new construction housing market appears to be recovering.
Belgravia Group Ltd., which started construction about a month ago on a Chicago row-house development, is charging almost $1 million for each of the 14 Lincoln Park homes as buyer demand surges in the neighborhood.
The three-story properties will have high-end features such as granite countertops, Sub-Zero refrigerators, Wolf ovens and Bosch dishwashers. The first floors of the 3,200-square-foot (300-square-meter) homes in the development, known as Montana Row, will have 10-foot (3-meter) ceilings and red-oak flooring in the kitchens and living and dining rooms.
“In the good neighborhoods in the city, there’s pent-up demand,” Alan Lev, chief executive officer of Chicago-based Belgravia, said in a telephone interview. “It’s like the stock market and the investment arena — it’s a flight to quality.”
The city is coming off of very low new construction numbers in 2011.
Developers began construction on 90 units of for-sale housing in Chicago this year through September, and the total for all of 2012 will probably be about 150, said Chris Huecksteadt, a director at housing-research firm Metrostudy in Elgin, Illinois. That’s more non-rental housing starts than in the past two years combined.
“It has started to pick up a little bit,” he said. “It’s just going to be a long, slow recovery.”
For-sale housing starts in the city of 2.7 million fell last year to 38 units, the lowest in data going back to 2004, according to Huecksteadt. In 2006, construction starts on single-family homes, townhouses and condominium units totaled 11,485, the highest for years tracked by Huecksteadt.
Here is more data:
This year through Sept. 15, 258 Chicago condominiums sold for $1 million or more, a 34 percent increase from a year earlier, boosted by sales at Lincoln Park 2550, a tower that opened earlier in 2012, said Jim Kinney, a broker at Baird & Warner Real Estate in Chicago.
“It’s one of the largest residential projects Chicago has seen in years,” John Murphy said. “We’re doing very well,” he said, declining to disclose how many units have sold in the building. (Mr. Murphy’s the developer.)
And what about the existing home stock?
“The for-sale market is still uncertain,” Smith said. “You don’t know if the market has really hit a bottom yet.”
Are these luxury new construction housing starts really that great or is this just a selective way to look at so-so data?
Chicago luxury homes rebound as foreclosures plague the southside [Bloomberg, Brian Louis, November 13, 2012]