Tracy Cross & Associates, Inc.

2nd Quarter 2019

 

The overall production home market in the ten-county metropolitan area continued its flat-line trend during the first half of 2019 as builders recorded a total of 2,214 sales during the January-June period, an increase of just 29 sales (1.3 percent) from the 2,185 contracts recorded during the same period in 2018. When seasonally adjusted, the region is on pace to reach 4,040 sales by the end of 2019, generally on par with the region’s 4,016 contracts in 2018.

Sales during the January-June 2019 timeframe were split between 1,419 single family units, an increase of 7.4 percent from the 1,321 homes sold during the same period in 2018, and 795 contracts in the attached sector, a drop of 8.0 percent from the 864 sales registered in 2018.

Sales in the city of Chicago for the first six months of 2019 were up 11.4 percent with 185 contracts written during the period.  This compares with the 166 sales recorded from January through June 2018.  The suburban market, in turn, remained flat with 2,029 sales registered during the first six months of 2019, only ten more than the 2,019 contracts recorded in the first half of 2018.

Notably, builders in the city of Chicago are starting to look beyond the city core with new projects in areas such as Bridgeport, Logan Square, Near West Side, North Center and West Town representing more moderately-priced alternatives to communities found in Lincoln Park, Loop and Near North Side. In fact, there were 42 developments marketing attached for sale product in the city at the close of the 2nd Quarter of 2019, which compares with 33 active developments one year ago.  At the same time, the average price of an attached unit sold in the city of Chicago dropped to $1,120,813 during the current quarter from $1,418,782 witnessed a year ago, a decrease of 21.0 percent.

The four sales leaders in the city during the first half of 2019, combining for 51 sales, or 29.1 percent of the city’s attached sector, were all located outside of the downtown area and selling at price points below the $1 million mark. The Palmer in Logan Square recorded 14 sales at an average price of $506,900; the townhomes at AAA Residences in Bridgeport wrote 13 contracts at an average price of $449,000; Triangle Square in Logan Square, with an average price of $794,286, sold 12 units; and Grace Pointe, located in North Center, recorded 12 contracts at an average price of $674,000.

A similar “value” trend can be observed in the suburban marketplace as the Southwestern Corridor, where homes are being offered at some of the lowest price points in the region, captured over 26.0 percent of all suburban activity during the first half of 2019, compared to an 18.2 percent market share in 2018 and a 17.7 percent share in 2017.

Suburban sales leaders during the first six months of 2019 included D.R. Horton’s multiple product lines at Cambridge Lakes in Pingree Grove with 100 total sales; Lennar’s multiple offerings at Remington Pointe in Volo with 63 contracts; and Lennar’s single family and attached offerings at Stonegate in Manhattan with 55 contracts.

The top building companies in the region during the first half of 2019, with more than 100 sales each,  included Lennar Homes with 433 units sold, D.R. Horton/Cambridge Homes with 307 sales, Pulte Homes with 250, M/I Homes (228), Ryan Homes (160), and K. Hovnanian Homes (113). These six companies, combining for a total of 1,491 total sales during the January-June 2019 period, captured 67.3 percent of all sales region-wide.

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