Tracy Cross & Associates, Inc.

3rd Quarter 2019

 

Overall sales activity in the Chicago region’s production home market remained stagnant during the 3rd Quarter 2019 as builders registered 999 sales across all product lines, down 4.9 percent from the 1,050 sales registered during the same July-September timeframe last year.  Activity was split between 627 single family contracts and 372 multi-family sales.

Through the first three quarters of the year, the region is on a seasonally adjusted annual pace of 4,021 sales, in-line with the 4,019 contracts written in 2018.

In the city Chicago, as builders have been starting to provide more moderately-priced supply in neighborhoods outside of the downtown core, the average price (and size) of a new construction unit dropped by nearly 25 percent over the past year.  Despite this trend, active developments were unable to garner any significant sales momentum as only 85 contracts were written during the July-September 2019 period, down 4.5 percent from the 89 sales registered during the 3rd Quarter 2018.  However, sales in Chicago during the first three quarters of the year were 6.7 percent ahead of last year’s pace.

Sales in the suburbs during 3rd Quarter 2019 totaled 914 units, down 5.0 percent from the 961 contracts registered during the July-September 2018 period. Sales were distributed between 622 single family homes and 292 units in the form of townhomes, duplexes, condominiums, etc.  Prices in the suburban area saw a modest 3.5 percent year-over-year price increase from $336,076 during the 3rd Quarter 2018 to $347,718 during the current quarter.

Suburban sales through the first three quarters of 2019 were nearly identical to those recorded during the same nine-month period last year.

While suburban sales have been relatively flat overall, activity continues to shift geographically.  For example, the Western and Southwestern corridors (combined) recorded a total of 583 sales during the 3rd Quarter 2019, reflecting a 17.5 percent increase from 496 contracts written during the 3rd Quarter 2018 and a current capture rate of 60.7 percent of the entire suburban marketplace.

Meanwhile, other corridors across the region saw substantial decreases in sales during the most recent quarter.  For instance, the Northwestern Corridor registered only 196 sales during the three-month period, down 22.5 percent from 253 contracts recorded during the 3rd Quarter 2018.  In the Northern Corridor, sales during the 3rd Quarter 2019 dropped 32.5 percent year-over-year, while the Southern Corridor witnessed a drop of 83.3 percent.  In those suburban areas where sales are down, supply-side constraints are really weighing on performance levels.

The top five homebuilding companies in the region combined for a total of 2,014 sales during the January-September 2019 period, translating to a market share of 62.8 percent. These included Lennar Homes with 619 sales among all product lines, D.R. Horton with 424, Pulte Group (403), M/I Homes (308) and Ryan Homes (260).

Cambridge Lakes in Pingree Grove by Cambridge Homes was the leading single family home community during the first nine months of the year with a combined 61 sales across two product lines, followed by the two home series at Northpointe by Pulte Group in Plainfield with 57 contracts, Hanover Estates in Manhattan by K. Hovnanian Homes (46), the active adult Liberty Green subdivision by Pulte Homes in Bolingbrook (45), and Stonegate in Manhattan by Lennar Homes (42). Also of note is Pulte’s new community of Wagner Farms in Naperville that started marketing during the summer and generated 41 sales over the three month July-September timeframe.

Sales leaders in the city of Chicago include 1000M with 22 contracts year-to-date, Cirrus, a 363 unit high-rise that started marketing in the Loop over the summer by Magellan Development Group and LandLease Development with 20 sales each, and the townhomes at AAA Residences in the Bridgeport neighborhood with 17 units contracted. No other development was able to break the 15-unit sales mark during the first nine months of the year, with The Palmer and Triangle Square in Logan Square, as well as Grace Pointe in North Center all registering 14 contracts.

Top performing multi-family communities in the suburbs thus far this year include the two series at Cambridge Lakes in Pingree Grove by D.R. Horton/Cambridge Homes with 81 sales, two townhome product lines at Buckingham Place in Des Plaines by Ryan Homes with 42 contracts, Country Club Hills by Lennar Homes in Fox Lake (32), as well as Woodview in Woodridge and Emerson Park in Naperville by M/I Homes with 28 and 24 contracts respectively.

 

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