Tracy Cross & Associates, Inc.

3rd Quarter 2020

 

Continuing the upward trend that began during the 2nd Quarter 2020 when new home sales in the Chicago region were up nearly 15 percent year-over-year, builders during 3rd Quarter 2020 wrote 1,448 contracts, translating to an impressive 41.4 percent increase compared to the 1,024 sales recorded during the same period in 2019. And, despite a lackluster first quarter, sales during the first nine months of 2020 reached 3,729, an increase of 15.1 percent when cast against the 3,240 contracts written during the same timeframe in 2019.

Through the first three quarters of the year, the region is on pace to record an annual volume approaching 4,900 units, a level not seen since 2008 when builders sold 6,361 homes before the economic downturn that followed.

The suburban marketplace was fully responsible for gains recorded during the 3rd Quarter 2020 with its 1,397 sales reflecting a year-over-year increase of 48.6 percent.  In the city of Chicago, just 51 sales were recorded during the July-September 2020 period, a drop of nearly 40 percent compared to the same three-month period in 2019.

As the Covid-19 pandemic persisted through the 3rd Quarter 2020, and lifestyle restrictions wore heavily upon urban dwellers in the city, buyers continued their shift from Chicago’s high density neighborhood areas to the suburbs.  Also contributing to the significant uptick in suburban sales was an extremely favorable interest rate environment, coupled with the realization that property tax increases in Cook County were on the horizon.

While the southwestern and western suburbs continued to post strong sales performances during the 3rd Quarter 2020, each rising more than 30 percent year-over-year, the Northwestern and Northern Corridors recorded even more impressive increases.   For example, the northwestern suburban area registered 393 sales during the recent quarter, doubling its sales volume from a year ago.  In the Northern Corridor, sales jumped 51.5 percent on a year-over-year basis.

Throughout the entire suburban marketplace, price was a driving force as most single family homes sold at price points below $350,000, while the majority of townhome activity occurred at price levels below $300,000.

D.R. Horton led all production home builders with 665 sales during the first nine months of 2020, followed closely by Lennar with 661 sales and M/I Homes with 535 net contracts.  Rounding out the top six were Pulte Homes with 361 sales, Ryan Homes at 298, and K. Hovnanian Homes at 210.  These six national homebuilding companies accounted for nearly 75 percent of all new construction home sales in the region during the January-September 2020 period.

Leading developments in the suburbs included D.R. Horton’s four collections of homes at Cambridge Lakes in Pingree Grove with a combined 204 year-to-date sales, followed by Lennar’s Stonegate community in Manhattan with 96 total contracts.  Pulte’s Wagner Farms development in Naperville and Lennar’s Woodlore Estates neighborhood in Crystal Lake both recorded 71 sales through the close of the 3rd Quarter 2020, with Raintree Village in Yorkville giving Lennar another 68 sales during the nine-month period.

Sales leaders in the city of Chicago through the 3rd Quarter included Belgravia’s CA6 condominiums with 24 contracts, followed by 5748 Hermitage with 22 sales, Lexington Village at Avondale (15), Tribune Tower Residences (13) and Peoria Green (10).

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