Reasons for the Rebound of Luxury Chicago Condos
Kinney thinks condos will be able to recover more quickly due to the fact that downtown won’t welcome any new luxury high rise condo developments for five to ten years. While rental towers and mixed-use developments will go up in the next couple years, any plans for condominium developments, like the Chicago Spire, are on hold. Another condition of the Chicago real estate market supporting the rebound of luxury condos over single family homes is the size of the respective inventories. There is 25-month supply of luxury condos for sale versus a 36-month supply of luxury houses. This statistic refers to how many months it will take to sell off the current number of units for sale at the current rate that they are selling. In a balanced market that doesn’t favor the buyer or seller, there is usually a 6-month inventory of homes for sale.Support for This Theory
The Chicago condo inventory was the lowest it had been in four years in May 2010. Although many of the two- and three-bedroom condos were taken off the market by owners exploiting the tax credit before its June deadline, this still supports the idea that unsold condo inventory will dry up before single family homes will. Â However, these numbers only reflect condos actually listed in the MLS – if developers are sitting on a large inventory of unsold condos that aren’t yet listed for sale, the Chicago condo inventory could again rise.Additionally, the size of the condo inventory in Chicago is clearly seasonal. The summer brings a larger market of condos for sale, but the peaks are lower than they have been in recent years. This could signal an overall tightening of the condo market in Chicago, as Kinney expects.
With many trends indicating a recovery for luxury Chicago condos, relief for sellers and developers with unsold condos appears to be on the way. Read more on market conditions here or contact an agent to learn more!
