Unlike New York City and some other areas of the country, Chicago's residential real estate market has been slower in recovering from the recession. Nevertheless, signs of a full recovery are on the horizon.
While the number of new condos breaking ground or scheduled for occupancy in Chicago and its surrounding areas may not be enormous, there is still some encouraging movement; developments that had been intended as condos but converted to rental are now for sale. Most of the new residential development that is being built is intended for rental tenants, but that also is a sign that the local market is becoming more robust. Indeed, some of the rentals being built could ultimately be converted to condos as the market strengthens. And renters, industry experts point out, often transition to home ownership as their financial picture develops.
When experts say it's a slow year for development in the Windy City, they're not kidding; just 144 new condo units will come to market this year in Chicago. Compared to the 3,000 or so that were being built yearly up until about a decade ago (and which were still being delivered between 2006 and 2010), it's just a trickle of new growth. Nevertheless, things are looking up for the market. With 2,800 new rental units coming to downtown this year, industry experts are looking at the positives and expecting more.
Last year was a rebuilding year in the Chicago market, and sales of condos inched up, building momentum for some new product to be delivered this year. One project that was long on the market, 235 West Van Buren, sold the last of its 714 units last year. The 46-story building, which broke ground back in 2008, continued to sell throughout the economic downturn, with its last remaining units selling fast. The activity boded well for 2015.
In terms of new development, most of the condo units entering the market in 2015 are high-end, and since there are so few of them available, the impact they will have on prices and availability is still unclear. But industry experts say that lack of an abundance of new product, coupled with high-end inventory coming to market, should increase the confidence of buyers and developers.