chicago-condos Administrator on 28 Dec 2006 12:13 pm

Luxury Chicago Condo Market Slowing?

Phoenix Arizona is a target area when it comes to new real estate development and has been a large participant in the current “luxury condo” boom. This morning as I decided to check on what’s new in the Chicago real estate market and found myself reviewing an article posted on Fox 11 AZ (the Fox news network in Arizona). To my suprise I see a headline entitled “Developers of elite condos prepare for slowdown”.

Now many may ask, “Why were you shocked Jori?” Well primarily because major metropolitan areas tend to follow similar trends, and Arizona is one of the real estate market’s major trend setters. So follows, if the condominium market is slowing in Arizona then undoubtably Chicago condo development will soon come to a halt as well.

Here’s a quick gander/snippet of what I read not but a few hours ago that put me at alarm:

“Currently, more than 30 luxury-condo projects have just been finished or are under construction. More than 20 of the projects, mainly in Phoenix and Scottsdale, have units that cost $1 million or more, according to the Sullivan Group, a real estate analysis and consulting firm. ‘There are just too many of these luxury condos,’ said Bob Kammrath, a Phoenix commercial real estate analyst. ‘For the life of me I can’t fathom why they would be appealing here. People with that kind of money can buy a nice house and hire someone to take care of the yard.’

The National Association of Home Builders says developers and apartment owners jumped on the bandwagon during the boom in condo production and conversions in the last three years when they should have seen it as a warning that the market could become saturated.” — Information from: The Arizona Republic, http://www.azcentral.com

So if most of the nation’s largest real estate development locations follow this trend, it’s safe to say that the consistent erection of new condo buildings and conversion units will soon cease.

Though many may be distraught, this may mean a boost in traditional family home purchases in the near future, as the Chicago housing market has been struggling due to the massive saturation of new homes in the Chicago area.

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