Tracy Cross & Associates, Inc.

1st Quarter 2019

 

There were 1,144 new production home sales in the Chicago metropolitan area during the 1st Quarter of 2019, representing a 6.2 percent increase from the same time period a year ago. When seasonally adjusted at an annual rate (SAAR), production builders reached a volume of 4,054 units during the January-March 2019 period, a 5.4 percent increase from the 3,847 seasonal rate seen last quarter. Sales were distributed between 705 single family homes and 439 in the attached sector, showing modest increases in year-over-year volumes of 9.5 and 1.4 percent, respectively.

The city of Chicago recorded 127 sales, in developments with 10 units or more, reflecting an uptick of 18.7 percent over the 107 sales seen during 1st quarter of 2018. The city’s increase in contract activity can be partly attributed to a number of newly launched developments located outside of the immediate city core, at price points under $1 million.

Sales leaders in the city of Chicago included AAA Residences, a new development in Bridgeport that wrote 23 contracts during the first three months of 2019, distributed between 13 single family homes and ten townhomes.  Prices at this community range from roughly $400,000 to $650,000.  Following AAA Residences was 1000M, which sold 20 units during the quarter, while recently introduced condominium developments in Logan Square, The Palmer (nine sales) and Triangle Square (seven sales), as well as Grace Pointe (seven sales) located in North Center, rounded out the best sellers.

The suburban area recorded 1,017 sales during the first three months of 2019, witnessing a slight increase of 4.8 percent over the 970 sales recorded a year ago. Sales were distributed between 691 single family homes and 326 duplexes, townhomes and condominiums.

Suburban sales leaders included D.R. Horton’s multiple product lines at Cambridge Lakes in Pingree Grove with 33 total contracts, followed by Lennar’s Indian Ridge community in Minooka with 28 sales. Pulte Home’s two remaining series at Atwater in Naperville combined for 21 sales and the company’s new active adult community in Bolingbrook, Liberty Green, recorded 20 contracts during the first three months of 2019.

Despite relatively flat year-over-year sales in suburban Chicago as a whole, a notable geographic has been taking place. For example, the number of active new construction developments continues to decrease in the Northwestern Corridor as communities sell out and are not replaced in kind.  Specifically, there were 61 developments marketing new housing units in the northwestern suburbs during 1st Quarter of 2019, 14 less than during the same time period last year when 75 communities were active.  As a result, the Northwestern Corridor’s regional share has shrunk. The 214 contracts recorded during 1st Quarter 2019 represented a 21.0 percent market share of suburban sales activity, which compares with a 29.1 market capture rate seen during the 1st Quarter 2018.

During the same time period, the once robust Southwestern Corridor has been moving back into a more prominent position.  For instance, active developments in southwest suburban Chicago recorded a relatively impressive 299 sales during the first three months of 2019, capturing 29.4 percent of the suburban market. This compares with a 20.8 percent market share during 1st Quarter 2018 and a 17.7 percent share during the same period in 2017.  Driving sales in the Southwestern Corridor is price.  During the 1st Quarter 2019, nearly 70 percent of all production home sales occurred at price points below $350,000.

Four individual home building companies registered 125 or more sales during the quarter.  Lennar/CalAtlantic reported the highest volume at 209 followed by D.R. Horton/Cambridge and Pulte Group with 168 and 151 sales, respectively.  Rounding out the top four was MI Homes with 126 total sales.

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