Third Biggest Story of 2016: The Luxury New Construction Boom – Will It Continue?
Developers are finally building mid-rise and high-rise condo buildings in Chicago again but nearly all of the new builds have been in the luxury price points.
No.9 Walton in the Gold Coast is a good example of the type of new construction that dominated 2015. It will have just 66 units with the average size at 4,000 square feet. These are clearly meant to be family homes in the sky for the rich.
They start around $2 million.
But the luxury new construction isn’t limited to River North, Streeterville and the Gold Coast.
Webster Square, a 95-unit new construction high rise near the intersection of Webster and Lincoln at 540 W. Webster in Lincoln Park, will begin deliveries in 2016.
This is the largest new construction building in Lincoln Park since 2520 N. Lakeview which is right on the Park and has lake views.
You can get a 1 bedroom, 1.5 bath unit with 927 square feet on the second floor at Webster Square for $459,000 but price points escalate quickly from there.
Check out the development’s website here.
In 2015, the developers showed no interest in building anything but luxury. The price points for the big River South developments aren’t yet known, however. Perhaps those will be more “affordable.”
Is this just the way the city is going?
Will there ever be affordable new construction again in the GreenZone?
I still don’t understand where all of these people are getting all of this money to buy these expensive homes. Honestly, are there THAT many people out there with upper 6 figure incomes? or is it all inheritance? Don’t tell me about the stock market – in order to make substantial money in the market, you have to invest a substantial amount.
Completely agree, Clio. Perhaps it’s a lot of foreign money coming in? Even with an inheritance, chances are you won’t get approved for a new construction GZ 2bd with sub-100k income without a much larger down payment.
For how much longer can this pricing be sustainable? I took the Montrose bus on a whim this weekend to visit a friend in Portage Park… That was a glimpse of the real Chicago; one that is rapidly outpacing the growth of those high-6 figure income earners. (Never taking that bus again, btw)
Sabrina: This captcha stuff is getting ridiculous.
The buyers coming from China, China, and China. It’s going to be a smoggy hell hole out there for the next ~10 years while they slowly transition away from coal and if they can’t get their GDP growth cooking again. The foreign buying will continue as they continue to devalue the Yuan in attempt to cook that growth. Nobody wants to have the majority of their wealth in a decreasing currency.
If you want to make money the next 10 years, buy real estate that the wealthy Chinese would prefer, and invest in stuff that allows the Chinese to get their money out of China without government scrutiny.
Nobody cares if wages can keep up with real estate prices: refer to Manhattan and San Francisco. Push the low wage earners over to Oakland, and push the low wage Manhattan earners into Brooklyn. Same thing will continue to happen in Chicago…. And there won’t be a shortage of low wage earners on websites like this to whine about it 🙂 It’s not the Government’s job to make the most desirable parts of the city affordable. You can leave and somebody else will buy, it is 100% sustainable.
AnonIDGAF says “The buyers coming from China, China, and China…”
I disagree with this – while I agree it’s very true in east & west coast cities, IMO the few Chinese nationals purchasing local res units here are buyers otherwise connected to Chicago. It’s people doing business here or who have family here, including offspring attending colleges/grad schools. Unlike NYC or Cali, Chinese investors can’t collect $10K+/mo. rents here nor can they project significant future appreciation from investing in $1.5 mil+ new condos here.
I do believe some Chinese nationals are purchasing commercial properties here but nowhere near the scale of Chinese investment in NYC or west coast cities.
“Honestly, are there THAT many people out there with upper 6 figure incomes? or is it all inheritance?”
It’s just because it is concentrated on this blog and in your neighborhood that you think everyone has money. They don’t. Leave Lincoln Park or the Gold Coast and drive out to Elgin. Tell me how many people are living in million dollar homes out there?
If you do a search of all the properties in Chicago over, say, $2 million, it’s really not that many given that the city has over a million people.
“In an era of deepening income inequality, those people in the top 5 percent who are being classified as middle class are pulling further away from the rest of us. Americans at the bottom or in the middle have experienced five years of falling or stagnating income; those in the top 5 percent have generally seen their incomes increase. Between 1967 and 2014, median household income went up by $9,400 while those 5 percenters are now making $88,800 more, all adjusted for inflation.”
http://www.nytimes.com/2015/12/28/opinion/campaign-stops/250000-a-year-is-not-middle-class.html
$250,000 is still working class just high earning. all the families in the country earning $250k combined is just a drop in the bucket compared to the sqazillionaires who donate millions to PACs or own the companies that produce everything that you and I consume or use.
If $250M/yr is working class you’re doing it wrong
My $0.02 The LP luxury boom is being driven by UMC Baby boomers and Gen X empty nesters and wanting to move back into the city. Its going to be the new Viagra Triangle in 3 to 5 years
“the city has over a million people”
Over two million, even.
Over a million households, I believe.
“own the companies that produce everything that you and I consume or use”
Why are *you* bringing up the Chinese, HD?
“Between 1967 and 2014, median household income went up by $9,400 while those 5 percenters are now making $88,800 more”
Which 5%-ers? The threshold? The median? Unclear writing.
“It’s just because it is concentrated on this blog and in your neighborhood that you think everyone has money. They don’t. Leave Lincoln Park or the Gold Coast and drive out to Elgin. Tell me how many people are living in million dollar homes out there?”
Elgin isn’t Chicago. Why compare?
You say it’s concentrated to LP and the GC…what about Bucktown, West Town, Lakeview, Old Town, River North, West Loop, Streeterville, North Center, Lincoln Square? Plenty of 6 figure incomes live there.
The market is overheated and will slow. Chicago (city and metro) aren’t growing, local job growth trails the national average, Rahm is on his way out, taxes are rising, and there’s lots of long-term local fiscal uncertainty. 2016 will be fine in terms of real estate, but no more big price increases.
“Elgin isn’t Chicago. Why compare?”
Because people keep saying “everyone has money” but they don’t. That “everyone” is like 9 million people in the metro area. And most (nearly all) don’t live in million dollar homes.
Okay- drive out to East Humboldt Park (west Ukrainian Village) and walk around. Not everyone living in a million dollar house there.
If your whole universe consists of working in the Loop, taking the El or a cab back to your River North condo and eating out at Gibson’s or Lux Bar every weekend, then, yeah, you think everyone has money.
Last post as this site has become a complete bore.
I told you so people. Cry all you want but the GZ is not a place for affordable housing. Go to Elgin if you want affordabLe housing. Best of luck to all of you. Sabrina, for god sake quit complaining about so much. Life is short!
“Last post as this site has become a complete bore.”
This is Heitman’s last post?
You know what that means, right? Lincoln Park is SLOOOOOWWWWW. The million dollar homes aren’t selling now. No bidding wars. Gasp.
What is going on?
Because if it was hot, hot, hot, he’d be trumpeting it. But he’s not.
Oh boy. What does this mean? Are the rich getting worried about the stock market now? What’s the inventory in LP and Lakeview for SFH’s over $1.5 million? How many months of inventory just sitting there on the market?
By the way- just because the calendar changed to 2016 doesn’t mean that a ton of inventory comes on the market. When I was looking at the old posts for 3900 n pine grove, one was in the third week of January in 2012 and I apologized for the boring post because there was simply nothing else on the market at that time.
January still blows as far as inventory. This winter hasn’t been snowy or cold (yet) so that has enabled more people to be out looking. But usually people really don’t care about buying real estate in January. It doesn’t heat up again until February.
So the listings right now still aren’t that great. And I’m tired of cribbing about the McMansions (most of which aren’t selling.) All the new construction looks the same right now.
But it WILL get better in the next few weeks. We’ll just have to discuss Brad’s dating life in the meantime, apparently.
Isn’t it post Super Bowl that people start actually looking and sellers really start listing?