Tracy Cross & Associates, Inc.

1st Quarter 2018



New home sales in the production sector of the ten-county Chicago area totaled 1,069 during the 1st Quarter 2018 marking a decline of 17.3 percent from the same period a year ago when builders signed 1,293 contracts.  At a seasonally adjusted annual rate (SAAR), this year’s first quarter volume equaled 3,791 units sold representing an activity level that has now run under the 5,000-unit mark for 37 consecutive quarters.


Sales recorded during the current quarter were distributed between 644 in the single family sector of the market and 425 in the form of duplexes, townhomes, and condominiums reflecting respective declines of 18.2 percent and 16.0 percent year-over-year.  In the city of Chicago, new home sales during the January-March 2018 period totaled just 107 representing a year-over-year drop of 17.7 percent while suburban activity of 962 equated to a similar year-over-year downward slide of 17.3 percent.


On a per project basis, single family programs active in the city during the January-March 2018 period averaged 0.81 monthly when seasonally adjusted while those in the suburban area were selling at an average monthly pace of 1.06.  On a comparative basis, and over the last 20 years, single family detached program volumes in the city have not moved past the 1.25 monthly mark largely a result of the small sale of most projects.  In the suburbs, the 1st Quarter 2018’s monthly pace of single family project sales was quite similar to the average monthly rate recorded in 2017 and the 1.01 monthly average witnessed over the five years prior.  Compared to the 1999-2006 period, however, when suburban single family developments averaged 2.57 sales monthly, current quarter community volumes represent a downturn of 58.8 percent.


In the city’s attached sector, 1st Quarter 2018 per project rates averaged 0.82 monthly when seasonally adjusted representing a decline of 24.8 percent from the 1.09 monthly pace set in 2017 and a drop of 67.8 percent from the 2.55 monthly per project pace set during the 2013-2016 timeframe.  Per project attached sales in the suburban area, in turn, averaged 1.17 on a monthly, seasonally adjusted basis during the January-March 2018 period.  This rate represents a modest 12.5 percent increase from the suburban market’s 2013-2017 pace of 1.04 monthly per development.


In Chicago proper, the 107 contracts signed during the first 90 days of the year were generally isolated to condominium activity in the four Central District community areas of the Near North Side, the Near West Side, Lincoln Park, and the Loop where attached sales totaled 80 units or a multifamily capture rate of 81.6 percent.  Sales leaders in these neighborhoods included The Hamptons (Lincoln Park), Vista (Loop), Ritz-Carlton Residences (Near North), and Renelle on the River (Near North), each with seven or more contract signings.


New homes sold in the production sector of the suburban market during the current quarter were heavily concentrated in three of the area’s 16 submarkets.  These included Southwestern DuPage County/Aurora/Kendall County, the adjoining Southwestern Corridor, and the Northern Fox Valley portion of Kane County.  In aggregate, these submarkets recorded 637 sales during the three-month period representing close to two-thirds of all activity outside of the city.


Single family sales leaders in the suburban area during the current quarter included four developments with 15 or more sales.  Ryan’s Grande Reserve community led the market with 30 sales followed by three D.R. Horton/Cambridge Homes neighborhoods in Pingree Grove—Cambridge Lakes-Horizon, Carillon at Cambridge Lakes, and Cambridge Lakes-Meadow/Prairie.  Sales in these Cambridge Lakes communities ranged from 15 to 17 during the quarter.


Two attached neighborhoods in Pingree Grove by D.R. Horton/Cambridge Homes also had 15 or more net contract signings during the first 90 days of this year along with K. Hovnanian’s Tramore community in Naperville.  The D.R. Horton/Cambridge developments included Cambridge Lakes-Seaboard, a courtyard series that had 30 sales and Carillon at Cambridge Lakes-Bayside where the company recorded 15 net.  Rounding out the top sellers, K. Hovnanian’s newly opened Tramore community posted 19 sales with three duplex plan offerings priced from the $360s.


Pingree Grove, Naperville and Yorkville represented the leading areas of new home sales in the region during the January-March 2016 period with respective volumes of 105, 91, and 52.  These three municipalities were followed by Joliet, Lockport, New Lenox, and Plainfield, four Will County communities that are part of the Southwestern Corridor submarket.


Five individual home building companies registered 70 or more sales during the quarter.  D.R. Horton/Cambridge Homes reported the highest volume at 221 followed by M/I Homes and CalAtlantic (now Lennar) with 131 and 124 contracts, respectively.  Rounding out the top five were the PulteGroup (116 sales) and K. Hovnanian (72).


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