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]
Why won’t the Lincoln Park 2550 developer just say what they’ve sold if it’s so great?
That’s easy for someone with the MLS to figure out- right? So why hide it?
I never see any lights on in that building when I drive by (other than construction lights.)
2550 must not be going well. I just don’t understand their target market and the value proposition seems to be way off. If they were more like $400-500 / sft it would make much more sense – you pay a little more per square foot to get the “lifestyle” they are offering. But $700+ is just too much of a premium.
To be fair, Sabrina, the developer declined to say how many have sold at 2550. As for prices, why would the developer broadcast such information? Doing so would set a price ceiling, not floor, in the minds of potential buyers.
If it’s so easy to discover the prices of the units that have closed so far, if there are any brokers on here today, let’s see the list (or G, perhaps this would be a time for you to shine).
Agreed, Yoss, I’d bet things are going very poorly with the generic 2 beds in the building. The larger, very expensive units, are likely doing (or will do) fairly well.
Fully 75% of Bloomberg articles are thinly disguised advertising pieces.
My guess is they’re going to have to cut prices significantly at 2550 if they want to sell the lesser condos there. The 2 BR we saw on CC a few weeks ago wasn’t a place that looked like someone would want to pay $700/sft for.
I believe lesser units at Trump also saw prices fall significantly from original, right?
Also, if the units at 2550 are worth so much, how come the online listings don’t show interior photos?
So the new expensive properties in the good neighborhoods are doing okay? Shocking.
I saw the building and several 3/4 bd units a couple weeks back. The building is gorgeous and the amenities were fabulous, especially the indoor pool. I thought the wallpaper in the lobby looked pretty bad through – whoever hung it didn’t do a good job. The SE views were perfect and I would be a buyer, though not at this price point, if I wanted to live in LP.
the agent we spoke with said IIRC about 40 units had sold.
“I believe lesser units at Trump also saw prices fall significantly from original, right?”
Which original? Their original, original prices, or the prices Trump raised to, when canceling the F&F contracts? Think they are marketing the remainder at something above the original, original prices, but below peak prices, no?
“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.”
“Red” oak (select or better) is standard common crap they use in tract homes in Plainfield.
“Fully 75% of Bloomberg articles are thinly disguised advertising pieces.”
Yeah, it’s not that difficult to print up a “press release” and basically do the 28 year old “journalist’s” job for her, so she can go out after “work” and get drunk at some breast cancer fundraiser. These developer’s don’t need JZ, that’s for sure.
I can’t say that this is complete data but the MLS shows LP 2550 with 23 closed and 12 under contract.
Are developers EVER honest about the number of properties sold?
“Are developers EVER honest about the number of properties sold?”
Sure. When times are good. 😉