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Tracy Cross & Associates, Inc.

1st Quarter 2021

During the 1st Quarter 2021, production homebuilders in the Chicago region nearly doubled their sales volume from a year ago to reach a quarterly level not seen since before the Great Recession more than a decade ago.

During the January-March 2021 period, 1,869 total production homes were sold in the ten-county Chicago region, translating to an 80.1 percent increase compared to the 1,038 contracts written during the same period in 2020. For perspective, builders have averaged 1,056 “first quarter” contracts since 2011.  On a seasonally adjusted, annualized basis, the region is on-pace for 6,624 home sales by the close of 2021, which would translate to a 33.8 percent increase over the 4,952 contracts recorded in 2020.

During the most recent three-month period, sales were split between 1,145 in the single family sector and 724 among attached product lines. Regionwide, the city of Chicago saw an uptick of 60 percent year-over-year with 112 sales, with the suburban region enjoying an 81.5 percent increase with 1,757 transactions completed between January and March.

While pricing in the City of Chicago decreased by nearly ten percent, mainly due to the introduction of moderately-priced product outside of the city’s core, the suburban market witnessed a price increase of more than ten percent year-over-year, as most builders pushed prices due to demand.  Additionally, builders were faced with building material shortages leading to large cost increases for lumber and other products. Those have largely been passed to consumers as the average price of a suburban single family home jumped by 9.5 percent year-over-year, and now stands at just under $400,000, up nearly $50,000 from a year ago when the average hovered around $350,000. The multi-family sector saw an even larger spike with average prices moving from the $325,000s in 2020 to an average of over $365,000 during the current quarter.

When looking at the region’s top five builders, which account for over 70 percent of all suburban sales, prices started creeping up slowly at the end of last summer, but the major spike occurred during the most recent quarter. For example, Lennar, with 319 contracts accepted between January and March, increased its average base sales price by $28,000 over the last three months, with average incremental movements ranging anywhere from $11,000 to $50,000 among its 26 active communities.  D.R. Horton, with 251 transactions during the most recent quarter, increased prices by an average of $17,164, while Pulte Homes, with a sales volume of 229 units this quarter, increased prices by an average of $14,962.  At the same time, M/I Homes, with 200 sales from January through March, moved its prices up by an average of $18,623.  Finally, Ryan Homes, with 159 units sold during the quarter, had the largest average price increase (over $40,000) among its 11 communities.

Grande Reserve in Yorkville was the region’s top selling community during the January-March 2021 timeframe.  Here, D.R. Horton and Ryan Homes combined for 59 sales among three total product lines.  At both Cambridge Lakes in Pingree Grove (D.R. Horton) and Raintree Village (Lennar) in Yorkville, 54 sales were recorded during the 1st Quarter 2021.  In addition, Lennar sold 47 units among three product lines at Stonegate in Manhattan, while Pulte Homes recorded 42 transactions at Wagner Farms in Naperville.  Additive to these Top 5 communities, 73 other developments recorded 10 or more sales during the 1st Quarter 2021. By comparison, only 14 communities managed 10 or more sales during the same period in 2020.

High demand and rising lumber costs mean buyers are paying tens of thousands of dollars more for newly constructed homes.

Dennis Rodkin

Crain’s Chicago Business

May 04, 2021

Twin Vines Real Estate Services
This house in the Grande Reserve development in Naperville sold for about $597,000 in March.

New home sales, like virtually every other part of the housing market, were buoyant in the first quarter of the year in the Chicago area.  

More new homes sold in the first three months of the year than in any stretch since spring 2008, according to data released this week by Tracy Cross & Associates, a consultant to the homebuilding industry based in Schaumburg.

Builders sold 1,869 new homes during the quarter. The last quarter when more new homes sold was April-June of 2008, when 2,092 new homes sold, according to Tracy Cross data.  

The latest data “is a continuation of what we’ve been seeing for a year,” said Erik Doersching, executive vice president at Tracy Cross. “The low interest rate environment is coupled with the outmigration from higher density areas to lower density.” 

Sales were about 76 percent above the norm for first quarter sales. Over the past decade, the winter quarter has averaged 1,056 sales. The figure was also a steep increase from first quarter 2020, but that’s a somewhat shaky comparison because the start of the COVID crisis in March last year crumpled new home sales during what’s usually one of the biggest months of the year.  

The booming first quarter of 2021 followed vigorous sales in 2020, which finished as the strongest year since 2008.  

Strong demand for new homes has spawned price increases, Doersching said, averaging $28,000 across the Chicago-area market. “Every major builder and every community had increases,” Doersching said.  

SaiRavi Suribhotla has seen it. An agent with Charles Rutenberg Realty in Naperville with many clients buying new homes, Suribhotla said, “Wherever we look, the prices have gone up. I would say people are paying 6 to 10 percent more than they were last year.” 

Suribhotla has clients who put a new construction house in Pulte Homes’ Wagner Farms subdivision in Naperville under contract in August. The four-bedroom house was completed in March, and the buyers paid slightly over $597,000 for it.  

Go shopping for a similar house now, Suribhotla said, and “you’ll pay 35 grand more.”  

Prices on new homes haven’t risen so sharply since the 2003-06 period, “during the boom before the Great Recession,” Doersching said.  

The price increases are the result not only of rising demand but of skyrocketing prices for lumber and other construction materials. But at least, Doersching said, “demand is strong enough that builders can pass those costs along to the buyer” rather than swallowing them in a tight market.  

The super-tight inventory of homes for sale in the existing market is driving some of the growth in new home sales, said Doersching and Matthew Trusk, a Re/Max of Naperville agent-.  

The existing home market “is cold to buyers,” Trusk said, adding that many struggle to find the right home in a low-inventory market and, when they do find one, they’re often thrown into a bidding war to get it.  

Trusk had clients shopping for a home in the far west suburbs near Aurora, the area where they work. When they got frustrated with losing bidding wars on existing homes, they turned to new construction.  

For sellers of new homes, “it’s all business, not a lot of feelings and hard feelings,” Trusk said, which made his clients less anxious. In March, they paid $272,000 for a new three-bedroom, 2,200-square-foot house on Anna Maria Lane in Yorkville.  

Anna Maria Lane is in the Grande Reserve development, which, according to the Tracy Cross report, was the top-selling subdivision in the region in the first quarter. Builders D.R. Horton and Ryan Homes sold 59 homes there.  

In Chicago, builders sold 112 new homes during the quarter. That’s up from 70 in the same period last year, when sales collapsed in the early part of the COVID crisis.  

Based on the quarterly sales total regionwide, builders are on track to sell 6,624 homes on a seasonally adjusted basis, according to the Tracy Cross report. If that holds, it will be the biggest year in sales of new homes since 2008.  

The key obstacle to meeting that figure, Doersching said, is a lack of inventory to meet demand. Because the few years prior to the pandemic were anemic for new home sales, the number of new subdivisions in the pipeline is small.  

At the start of 2020, Tracy Cross counted 358 active developments in the Chicago area, Doersching said. Now there are 330.

“We’re down 28 developments, when demand is so high,” Doersching said. “Supply won’t keep up with demand.” 

Boosting the supply isn’t an overnight task. While thousands of individual homeowners could quickly decide to cash in on the fast-moving real estate market and put their homes up for sale, easing the inventory crunch, for builders “it’s a long, arduous process,” Doersching said.  

The time it takes to find and buy land, get permits approved and start selling “is years,” he said.  

Homebuilders had one of their best quarters locally in a dozen years. 


Dennis Rodkin

Crain’s Chicago Business

August 04, 2020

Daynae Gaudio
These new townhouses on Timber Wolf Drive in Wheeling sold in the low $300,000s, the range where new home sales were strongest in the second quarter.

















Sales of new homes soared in the second quarter in suburban Chicago, a new report shows, due in large part to epochally low mortgage interest rates and COVID-19 prodding some households to get out of dense areas, an industry analyst said.

“In this environment of very low interest rates, we saw people who might have moved out of their apartment building in a few years saying, ‘Let’s make this move now,’” said Erik Doersching, executive vice president of Tracy Cross & Associates, a Schaumburg-based consultant to the homebuilding industry.

Mortgage rates have been falling throughout the COVID crisis and in July dropped below 3 percent for the first time since at least 1971, when the federal government began tracking them.

Builders sold 1,235 new homes locally in the second quarter, up nearly 15 percent from the same period a year ago, according to the Cross report. It was the third-highest quarterly local total going back about 12 years, to when new-home sales collapsed in the wake of the national financial meltdown, Doersching said.

The increase came from suburban sales, which were up nearly 17 percent during the quarter, to 1,166. Sales in the city dropped by about 11.5 percent, to 69 homes.

Because Cross does not have access to data on where buyers come from, it’s not possible to say whether the boom in suburban sales is part of the much-predicted flight from the city because of the virus.

Doersching said it’s clear that first-time homebuyers led the suburban surge, because two-thirds of the sales there were new homes priced at $350,000 or less, typically the range where first-timers buy. First-time buyers are among the most sensitive to interest rates dropping, as they try to maximize the amount they can spend on a house.

“They may have been getting out of their apartments or their parents’ house,” Doersching said.

The second-quarter jump followed a drop of about 12 percent the previous quarter. The dawn of the virus crisis “stopped people in their tracks,” Doersching said. Like other industries, homebuilding scrambled to put new safety procedures in place, opening the door to a sales boom in the second quarter.

Some of the second-quarter homebuying may have been purchases that would have been made in the first quarter if the crisis hadn’t interrupted.

For the first half of the year, combining the steep dive of the first quarter and the steeper increase in the second, local new-home sales are up 1.3 percent from the first half of 2019. Nationwide, according to U.S. Census Bureau figures, sales of new homes were flat at mid-year compared with 2019.

Tracy Cross’ data covers houses, condominiums and townhouses. It captures only homes sold in developments of 10 or more. Homes built on individual lots, a more common model in the city, do not get counted.

“People stopped in their tracks” in March, typically the strongest month of the year.

Dennis Rodkin

Crain’s Chicago Business

May 05, 2020

Coldwell Banker
This newly built house on Stillwater Court in Romeoville sold for a little more than $322,000 in March.

















Sales of newly built homes fell locally in the first quarter, according to a report, pushed down by the arrival of the COVID-19 crisis in March, typically the strongest month of the year.

In the first three months of 2020, builders sold 994 new homes locally, down more than 12 percent from the first quarter of 2019, according to a data compiled by Tracy Cross & Associates. It was the lowest first-quarter sales tally since 2012.

Two key reasons are the COVID-19 crisis and the final sellout of some popular suburban developments, according to Erik Doersching, executive vice president at Schaumburg-based Tracy Cross.

“March is usually about 15 percent of the year’s sales,” Doersching said.

“But this year, March was when everything was shutting down and people stopped in their tracks,” he said.

Doersching said a few developments that had planned to launch sales or ramp up marketing efforts in March pulled back, some as early as February when they saw what was on the horizon.

By April, he said, some builders “had rebooted with a new way of doing sales” and might show improved sales in the second quarter. Construction and real estate sales qualify as essential businesses in Illinois’ stay-home order.

Because Cross’ data sources all report by the quarter, Doersching said, the firm can’t break out the months and determine whether January and February were setting up for a stronger spring than ultimately transpired. That’s what happened in the Chicago area’s overall housing market.

Tracy Cross’ data captures only homes sold in developments of 10 or more and covers both detached houses and attached condominiums and townhouses. Homes built on individual lots, a more common model in the city, do not get counted.

Nationwide, new-home sales dropped in March by 15.4 percent from the same time a year earlier, the Commerce Department reported in late April.

The first-quarter sales decline was more pronounced in Chicago than in the suburban area. In the city, builders sold 66 new homes during the quarter, a drop of almost 39 percent from the same time a year ago. The suburbs had 928 first-quarter sales, down about 10 percent from 2019.

The drop in the first quarter followed 2019’s increase in new-home sales of 3.6 percent, the second consecutive year of increases at 3 percent or more.

Doersching said a second component of the first-quarter drop was the end of sales at some southwest suburban developments that had been sales leaders in 2019. Among them were developments by MI Homes in Plainfield, Lennar in Shorewood and Ryan Homes in Joliet, which combined sold an average of 25 homes a quarter in 2019.



Builders can’t beat the resale prices of existing homes in Chicago’s slow-rising real estate market, says an executive with a homebuilding consultancy.

Dennis Rodkin

Crain’s Chicago Business

July 31, 2019









LIttle Realty
A row of townhouses under construction in Naperville. They’re priced at about $270,000. 

The number of new homes sold in the Chicago area dipped in the second quarter after ticking upward in the first three months of the year, part of a long series of essentially flat business, according to a consultant to homebuilders.

In the 10-county metropolitan area, 1,080 new homes sold in the second quarter, according to data released July 30 by Tracy Cross & Associates. That’s down 2.5 percent from the same period in 2018 and follows first-quarter sales that were up more than six percent from the corresponding period a year ago.

“They go up a little and down a little, but if you look at the long-term line, it’s hasn’t changed in a long time,” said Erik Doersching, executive vice president of the Schaumburg-based firm. “We’ve been seeing long-term flatness, and this is more of the same.”

When reported as percentages, the vacillations are exaggerated somewhat by the small number of sales in either period, Doersching noted, which tends to mask the stasis in the market.

Second-quarter sales have consistently been in the 1,000 to 1,300 range for the past six years, less than one-quarter the norm during the suburban homebuilding heyday of the 1990s and early 2000s. From 1994 through 2006, Chicago-area new home sales were consistently above 4,000 in the second quarter, and at the peak in 2005 surpassed 9,400, according to Cross’ data.

Combining the first two quarters, local sales at mid-year 2019 were up about 1.3 percent from the same period last year. Nationally, sales of new homes increased by 2.2 percent in the first half.

Several factors are holding down local new-home sales, Doersching said. Chief among them is that “builders can’t deliver a new product at a price that competes with existing homes” whose values have grown slowly since the housing bust. The S&P CoreLogic Case-Shiller Indices released yesterday showed Chicago-area homes remain at about 15 percent below their peak value in 2007, while nationwide, home values are 13.5 percent above their highest 2007 level.

With the cost of labor and materials rising and some municipalities pushing for development of only higher-priced homes, Doersching said, homebuilders “can’t make it work against the resale market that doesn’t have a lot of upward movement on price.”

Combined with population loss and the shift in buyers’ tastes from outer suburbs toward the city and inner-ring suburbs, the difficulty in competing with existing-home prices has dramatically reduced the local homebuilding industry. In the northern half of Lake County, one townhouse development and six single-family developments are underway, Doersching said. In the early years of the 21st century, before the housing bust, the corresponding numbers were 35 and 50, Doersching said.

The firm’s data captures only homes sold in developments of 10 or more and covers both detached houses and attached condominiums and townhouses. Homes built on individual lots, a popular model in the city, do not get counted.

In the city, Cross counted 77 sales in the second quarter, up from 59 in the same period last year. In the suburbs, there were 1,003 sales, down from 1,049 in the second quarter of 2018.

The increase in the first quarter follows a full-year uptick in 2018, but a Tracy Cross exec notes that the numbers look good in large part because “you’re coming up from a low base,” an extended drought in new-home sales in the Chicago area. 

Dennis Rodkin

Crain’s Chicago Business

May 2, 2019









Landmark & Property Group

Newly built houses in Bridgeport, along 33rd Place, several of which have sold in the past few months. The house at far left sold for $528,000 in April.

Sales of newly built homes in the Chicago area rose in the first quarter, according to an industry consultant’s data. The increase comes on the heels of a full year when new-home sales also rose.

In the first three months of 2019, builders sold 1,144 new homes locally, up more than 6 percent from the first quarter of 2018, according to the report from Tracy Cross & Associates.

The increase follows a year-end sales tally for 2018 that was up 3.1 percent from 2017.

The first-quarter growth in the Chicago area was stronger than the national figure. Sales of new homes nationwide were up about 4.3 percent in the first quarter from the same period in 2018.

“These numbers look good because you’re coming up from a low base,” said Erik Doersching, executive vice president at Tracy Cross. New-home sales have been meager for a decade, since the housing bust, and early 2018 was particularly weak. At this time last year, the Schaumburg-based firm reported sales were down 17 percent from the first quarter of 2017.

Even so, “we’re glad to see the activity,” Doersching said.

The firm’s data captures only homes sold in developments of 10 or more and covers both detached houses and attached condominiums and townhouses. Homes built on individual lots do not get counted.

In the city of Chicago, the report shows 127 sales in the first quarter, up nearly 19 percent from the first quarter of 2018. Leading the increase, Doersching said, was a run of 23 sales in a single Bridgeport subdivision of houses and townhomes.

Called AAA Residences, the homes are around Hillock and Throop streets in an isolated section of Bridgeport tucked between the South Branch of the Chicago River on the north and the Stevenson Expressway on the south. Their prices run from about $400,000 to $650,000. “You can’t get a house at that price anywhere closer to downtown Chicago,” Doersching said. (The houses in the image at the top of this story are in another part of Bridgeport.)

In the suburbs, there were 1,017 first-quarter sales, up almost 5 percent from a year earlier.

The first-quarter sales figure continues what the firm’s chief, Tracy Cross, has referred to in the past as a “low plateau.”

Local new-home sales have been below 4,000 annually for more than a decade, with first-quarter sales in the range of 800 to 1,000 for much of that time. That long, flat line came after the housing bust. In the early years of the 21st century, Chicago-area home sales were generally above 20,000 per year and 3,000 in the first quarter.

Last year’s increase followed a decline the previous year and prolonged the trend of “hovering at below 5,000 sales, where we’ve been for 10 years,” a consultant says. Sales nationally have climbed about 50 percent in that time.

Dennis Rodkin

Crain’s Chicago Business

February 6, 2019

This newly built home on Grant Street in west suburban Westmont sold for $545,000 in December.

Local sales of new homes rose a bit in 2018 but continued a decade-long trend that an analyst called “our low plateau.”

Developers sold 3,985 new houses, condos and townhouses in the 10-county Chicago area last year, up 3.1 percent from 2017, according to Tracy Cross & Associates, a real estate consulting firm that tracks new-home sales.

The increase followed a decline the previous year and prolonged the trend of “hovering at below 5,000 sales, where we’ve been for 10 years,” said Erik Doersching, executive vice president at Schaumburg-based Cross, which consults for homebuilders. “We haven’t come up off our low plateau.”

In the years before the mid-2000s housing bust, new-home sales in the region were usually more than 25,000 a year, as the chart below shows, or more than five times the annual sales of the past decade.

In a decade when new-home sales locally have been relatively flat, they have grown by about 50 percent nationwide, although they have not yet regained all the ground lost in the housing bust.

Many of the factors holding down Chicago-area sales have stayed in place, and in some cases worsened, over the past decade, Doersching said. They include slow increases in the prices of existing homes,  preventing new construction from being the lower-priced alternative; a shift in homebuyers’ interest away from outlying suburbs where new-home construction has traditionally been strongest; and population losses in the metropolitan area that reduce demand for housing overall.

Another factor is on the supply side, Doersching said. “Builders tend to go with the luxury-priced product” as a way to justify paying the high land prices that prevail in city neighborhoods and close-in suburbs, Doersching said, “but we see a lot of demand at prices below that, for product priced in the $350,000 to $750,000 range.” The mismatch between supply and demand creates “a void,” he said, and if builders could find a way to deliver new homes at those prices in desirable locations, “we could see sales go up to 8,000” per year.

The developers of 1000M, a high-rise condo development designed by architect Helmut Jahn and planned for South Michigan Avenue, rejiggered the plans on seven floors in 2018 to create smaller, lower-priced units, the Cross report notes, and became one of the city’s biggest sellers of new construction.

When pricing at 1000M was first announced in fall 2017, the lowest prices in the building were above $550,000. In 2018 the developers quietly rolled out a new arrangement: The units on floors 41 to 47 of the 74-story tower will be 325 to 850 square feet, and those prices start at $313,000. The result: The developers announced this week that 20 of the lower-priced units have sold. In all, 37 units have sold in 1000M, according to Cross.

“There’s a lack of supply like that” both in the city and suburbs, Doersching said, “but we see that there’s demand.”

The Cross reports track sales at developments of 10 or more units. Builders in the city and many inner-ring suburbs often build on single lots or a small number of lots; those projects do not show up in the firm’s study.

In the city, 308 new homes were sold last year in the developments Cross tracks. That’s a decrease of more than 30 percent from 2017. Suburban sales totaled 3,677, last year, an increase of 7.4 percent from 2017.