Chicago Condo Directory

February 18, 2009 - The latest news for Chicago real estate developers isn’t exactly encouraging, especially for those who have condo projects with unsold inventory. According to a recent article in Crain’s, downtown Chicago condo developers were hit with a net loss of 253 sales in the last quarter of 2008. Appraisal Research Counselors reported that it was the worst quarter for downtown condo developers since the early 1990s.

This negative sales number is the result of an increasing amount of pre-construction buyers who are now deciding it is better to give up their deposits than follow through with a contract when the unit may be worth less now than they agreed to pay for it a few years ago. Some buyers are also unable to get a loan when closing time comes and have no other alternative but to break the deal. Those buyers who were planning on a fast resell on their condos to make a profit are most likely to default on their contract.

The actual number of downtown condos sold last year is only 592, according to ARC. That is 84% less than the 3,724 condos that were sold in 2007. ARC stated that this is the third year of declining sales since the market topped out in 2005 at 8,162 condos sold.

A total of 4,734 downtown condos will be completed in 2009 and 42% of those are still not sold. The areas showing the highest glut of inventory are the West and South Loop. ACR estimates that only 620 condos will be completed in 2010 and a paltry 86 in 2011. With no major developments in the pipeline and demand for units still at record lows, it could be another two or three years before we see large scale New Construction Chicago Condos being built again.

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