The Spire Sales Center is Open!
By now, I’m sure many of you have seen yesterday’s Chicago Tribune article talking about the opening of The Spire’s sales center. The Spire was also featured on some of the local tv stations.
There were some interesting stats in the article, though, which I thought I’d post here. It seems that interest in The Spire is pretty high:
Already about 600 people have made appointments to visit the sales office at 455 N. Cityfront Plaza.
“In this market, for the Spire to get several hundred contracts to move ahead with construction will be difficult,” said James M. Kinney, president of Rubloff Residential Properties, a Chicago-based, high-end broker.
“If they introduce 600 units priced at $2 million or more, that’s a 71/2-year supply for the downtown Chicago luxury market,” Kinney added.
But sales are slowing in the downtown Chicago condo market:
Through the third quarter of last year, buyers signed contracts to purchase 3,312 newly built downtown condominiums, a decline of 35 percent from a year earlier and off 52 percent from the record year of 2005, according to Chicago-based Appraisal Research Counselors.
“This year we expect sales to fall further from the strong level of 2004 through 2006,” said Gail Lissner, vice president at Appraisal Research. “There is no segment of the market that’s immune from the slowdown.”
But as sales fall, the downtown housing market will be inundated with new units.
This year, the delivery of new condominiums will rise to 6,300 units, up about 50 percent from two years ago, she noted.
We have also already seen some of the new units close and then come back on the market in the form of flips- which is also adding to the inventory.
The Spire’s sales will be watched closely. Stay tuned.
But, just admit it. You want to make an appointment to go and see The Spire’s sales center.
I thought so. Me too.
The article doesn’t make the right connection between signing of contracts and delivery of condos–the condos being delivered this year had many (most) of the purchase contracts signed in the 2004-2006 period. The real question of course is are the contracts actually going to lead top actual closings.
In order to get this whole building sold they should lop off the top 25 stories and have Laurana Bobbit walk the sales center. I kid because I do believe this will be the biggest failure in US Real Estate Development history. The timing and scale sum doom for the spire unless asians really love ferris wheels.
GP
I really hope the spire get’s built, I guess we will see how many international buyers Chicago really has!
I’m the real estate editor at Chicago Journal newspaper. I’m wondering if anyone would be willing to comment on the prospects of European buyers in Chicago. The weak dollar seems like a really good incentive, even if the pricing may appear ridiculous at The Spire. What about elsewhere in the city? Is there some market research behind the pricing at The Spire? Who writes this blog? Any leads here?
They’re really relying on international buyers who know little to nothing about the Chicago market. Fortunately they have the Calatrava namebrand to capture interest. I won’t say they can’t pull it off, but it seems less likely than more likely, unless they readjust prices.
Are wealthy people from Europe that stupid. I thought that conventional wisdom is to buy the least expensive property in the best location. Not the most expensive property in a so-so location. If they are buying these units as investment, how will they ever get rents to cover there costs. And what renter is going to pay the rent on a studio for the equivalent rent on a 3br apartment. None of this makes any sense to me. I completely agree with Grant this could be the greatest disaster in Chicago Realestate. It reminds me of when the dot-com bubble burst, and wealth evaporated overnight. Before the stock bubble burst, I remember hearing all these experts on television on how this was a new economy and things were different. Well things always revert back to the mean…. and so to will this happen in realestate.
Word (rumor?) is they sold/reserved 200 units yesterday (first day sales center was open).
Vee: Thanks for the update even if it is just a rumor. I wonder how many were to “friends and family”? Trump did this as well (charging less than the going rate to friends and family of the developer, agents, lawyers, architects etc.) It’s good for business because they get some early sales.
They clearly want to get out the gate quickly so that they can put out good numbers.
200 reserved just means people put them on hold, buying time to study the market. I’ve done this many times and backed out.
I truly hope though that they pull off sales here, it would be great for the neighborhood.
Some recommended viewing…
Santiago Calatrava actually already did a twisting building in Malmo, Sweden , “Turning Torso” completed in 2005. (See link below)
An excellent doumentary was made on the whole design process called, “The Architect, The Socialist and the Twisted Tower”.
Aside from it being a unique glimpe at the whole building process, it depicts a monumental clash of design inspiration vs economic reality.
Architectural vision is one thing. Going over twice the budget and delivering a project 3 year late is another.
If you are looking for a “cautionary tale” this is it.
http://www.civicdesigncenter.org/Events-filmvideo-twisted.html