By Dennis Rodkin

Crain’s Chicago Business

April 25, 2018

Photo by Little Realty This new house on Thomas Court in Wheaton sold for just less than $600,000 in March.

Sales of newly built homes in the Chicago area dropped in the first quarter, according to an industry consultant’s data.

In the first three months of 2018, builders sold 1,069 new homes locally, down more than 17 percent from the first quarter of 2017, according to the report from Tracy Cross & Associates.

The first quarter of 2017 was the last of four quarters when builders made big gains in sales. In most quarters since, Cross’ report has shown double-digit drops from the year before. The exception is the fourth quarter of 2017, when sales were essentially flat.

The latest data is more of the same for this “yawn of a homebuilding market,” said the Schaumburg firm’s principal, Tracy Cross. “Chicago simply isn’t recovering as other markets in the country are.”

On a seasonally adjusted basis, the quarter’s sales figure suggests builders would finish 2018 with about 3,790 home sales for the 10th year in a row. From 2000 through 2006, year-end totals ran above 20,000, and in the two peak years above 30,000.

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 do not get counted.

In Chicago, the report shows 107 sales in the first quarter, down almost 18 percent from a year earlier. The suburbs had 962 sales, down more than 17 percent.

Among the reasons sales have stayed low: Prices on existing homes are growing slowly enough that buyers aren’t forced to look at lower-priced new construction, and the Chicago area’s population shrinkage over the past three years has reduced demand.

Those and other factors make builders reluctant to start new subdivisions, which usually require a multiyear buildout. This year 281 suburban subdivisions are underway, about one-fourth as many as in 2006, Cross said.

 

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