By Dennis Rodkin
August 5, 2025
Crain’s Chicago Business
Credit: Coldwell Banker Realty
The number of newly built homes sold in the Chicago area was flat in the first half of the year, frustrating a veteran analyst who believes there’s enough demand to fuel a big increase if builders would only tap into it.
“There would be twice as many sales if that many homes were getting built,” said Erik Doersching, president and CEO of Tracy Cross & Associates, a Schaumburg-based consultant to the homebuilding industry. He bases this belief on the fact that individual new-home developments, mostly in the suburbs, sell homes at a healthy clip, but “when they sell out, they don’t get replaced.”
The number of actively selling subdivisions in the Chicago area dropped to yet another low in the second quarter of the year, Cross’ first-half report, released this week, shows. Across the metro area, there were 241 subdivisions active, down slightly from the year before and less than one-quarter what was getting built in the heyday of Chicago-area homebuilding.
In the years 2005 to 2008, the average number of active developments per year was 1,204, according to Cross’ historical data.
A major difference between those years and the present is that a decadelong shakeout left Chicago’s new-home sector dominated by five big national builders, which “go where they want to go,” Doersching said.
That is, they may focus on places like Texas and North Carolina, where steady population growth and low taxes and regulation facilitate lots of construction. They also “do a little bit here in Chicago,” Doersching said.
The lack of construction contributes to the region’s tight inventory of for-sale homes — whether new or resale — which in turn fuels the growth in home prices.
The Cross report echoes one from Construction Coverage that, as Crain’s reported last week, put Chicago last among the 10 biggest U.S. metros in terms of the volume of new homes built.
In the first six months of 2025, builders sold 2,904 new homes in the Chicago area, essentially flat with the 2,906 sold in the same period in 2024.
The decline was largely in single-family homes, where sales dropped 10.2%, to 1,764 sales. Even so, Doersching said the big builders’ developments for the most part sold between about 3.3 and 7.5 homes a month, “which is a really good pace.”
The five major builders all make a rule of declining to comment for Crain’s on the Cross reports. Together, the five — D.R. Horton, Lennar, Pulte Homes/Del Webb, M/I Homes and Ryan Homes — sold 2,449 homes in the Chicago area in the first half of the year. That’s 84% of the sales.
The two biggest-selling developments in the first half each had 50 sales: Heritage Park, a townhouse development in Lindenhurst, and Westview Crossing, single-family homes in Algonquin. (A Westview Crossing house is seen in the image at the top of this story.) Both developments are from Lennar, a Miami-based builder, which with 653 sales in the metro area had a 22.5% market share. It’s behind only Arlington, Texas-based D.R. Horton, which had 25.2% of the market.
Small local builders like Silverthorne Homes, based in Elgin, would have to scale up enormously to fill the demand gap. Silverthorne sold 30 homes, or 1% of the metro area’s total, in the first half of 2025.
“We have no midsized companies building here,” Doersching said. “Zero.”
Cross’ reports cover developments of 10 homes or more. Individually built houses, such as those on teardown lots in the city or suburbs, do not get counted.