Monday, April 07, 2008

CHICAGO’S CONDOMINIUM MARKET SHOWING SIGNS OF LIFE THIS SPRING

It’s not yet time to publish the death notice and schedule the wake for Chicago’s condominium market.

Despite all the negative national press about the demise of this segment of housing market, Chicago Realtors and housing experts say the condo market this spring is showing signs of life.

“Smart buyers are finding good values in the condominium market,” said David Hanna, president-elect of the Chicago Association of Realtors. “We see several factors at work. Developers are providing attractive incentives to move their product. Consumers continue to be drawn to new construction by pricing, design and finishes.”

Hanna said the upper end of the condo market is holding its own and “Realtors who do their homework are finding affordable choices at all price points” for their clients.

One condo success story is at the 309-unit 200 N. Dearborn Private Residences, a 47-story high-rise conversion in the heart of Chicago’s Loop, where American Invsco recently held a five-day mass closing at Chicago Title & Trust Co. for nearly 100 units.

“We are averaging seven or eight sales a month and are approaching the 50-percent sold mark,” said Stefanie Neuman, sales manager at 200 North Dearborn. Prices range from $238,600 for a studio to $562,600 for the most expensive penthouse.

“Buyers include a mix of Loop workers who want to walk to work, pied-a-terre purchasers seeking an in-town near the Theatre District, and investors from as far away as California,” Neuman said.

Ric Cox, president and CEO of www.ChicagoCondosOnLine.com noted that dollars generated from sales of condominiums in Chicago declined 8 percent year-to-date at the end of February. However, by the end of March the dollar volume slipped by only 4 percent.

Those percentages are based on total transaction dollar volume of city condos closed on the Multiple Listing Service, January 1 through March 31, Cox reported.

“In simple terms, comparing the first quarter of 2008 to the first quarter of 2007—no matter what you read elsewhere about the condo market having ‘tanked’ or whatever—the city’s condo market is down only 4 percent year to date,” Cox insisted.

“Although the number of units sold in the first quarter of 2008 is down 18 percent compared to the same three-month period in 2007, that is a significant improvement over the 24-percent decrease at the end of February, and 36-percent decline at the end of January,” he said.

Cox believes those decreasing percentages indicate a rebound in the market. Whether they provide evidence that a bottom has been reached, it is too early to tell.

In addition, condo median sales prices are up 11 percent in the first quarter compared with the same period in 2007, and average market time is down 3 percent, he said.

Despite improving numbers, Hanna said: “We still see long-term challenges to the overall market in the unsettled financing climate.”

However, mortgage rates continue to be affordable. Benchmark 30-year fixed-rate home loans averaged 5.88 percent in early April, up slightly from 5.85 percent a week earlier, according to Freddie Mac’s Primary Mortgage Market Survey. Last year at this time, 30-year fixed loans averaged 6.17 percent.