Downtown condo resale market rebounding

The Home Front

08/29/2012 10:00 PM

DON DeBAT

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While the new-construction condominium market in downtown Chicago has slowed to a crawl, there appears to be a rebound underway in the resale-condo market, experts say.

A new report by Appraisal Research Counselors Ltd. covering 65 existing downtown condo buildings comprising more than 20,000 units indicated a 33 percent gain in sales volume in the first half of 2012, compared with the same period in 2011.

“Existing condo sales is the first half of 2012 is averaging 96 units per month in these 65 buildings, and 667 units currently are listed for sale — a seven-month supply of units,” noted Gail Lissner, vice president of Appraisal Research, which recently launched the new, expanded analysis of used-condo sales downtown based on data from MRED, LLC, a multiple-listing service.

“Overall, average condo prices for closed sales on a per-square-foot basis peaked in 2008 at $414 downtown,” Lissner said.

“The 2011 average was $340 per square foot. And, the average price was virtually unchanged at $338 per square foot in the first half of 2012.”

While average condo prices have declined 18.3 percent downtown over the past five years mostly because of the large number of distressed properties in the marketplace, Lissner said the most recent analysis shows “condo prices appear to be stabilizing” in the area bounded by North Avenue, Ashland Avenue, Cermak Road and Lake Michigan.

The new Appraisal Research analysis revealed how average resale condo prices have declined in various downtown neighborhoods between 2008 and 2012. Here is a breakdown on how prices varied by neighborhood:

  • Gold Coast: The average condo sold for $433 per square foot in 2012, down 11 percent from $487 per square foot in 2008.
  • The Loop: In 2012, resale condo prices averaged $417 per square foot in 2012, down 12.7 percent from $478 per square foot in 2008.
  • River North: The average condo sold for $430 per square foot in 2012, down 15.6 percent from $498 per square foot in 2008.
  • South Streeterville: In 2012, resale condo prices averaged $357 per square foot in 2012, down 17.1 percent from $431 per square foot in 2008.
  • South Loop: The average condo sold for $233 per square foot in 2012, down 29.6 percent from $331 per square foot in 2008.
  • West Loop: In 2012, resale condo prices averaged $242 per square foot in 2012, down 22.1 percent from $311 per square foot in 2008.
Appraisal Research also reported that a handful of new condominium developments posted strong sales in the second quarter of 2012. Hefty price reductions and an aggressive marketing campaign by American Invsco at 200 North Dearborn, a Loop condo conversion, placed the high-rise as the top sales volume leader in the second quarter with 35 closed sales with an average price of $232 per square foot.

In the second half of 2011, 40 sales were posted at 200 North Dearborn with an average price of around $260 per square foot.

Other leading new downtown condo projects showing strong sales were

  • 235 W. Van Buren with 18 closings in the second quarter of 2012 at an average per-square-foot price of $306. Appraisal Research said CMK Development, the developer, closed 62 units in the past year at the Loop high-rise.
Van Buren Lofts in the West Loop posted 18 closings at an average per-square-foot price of $192. “Strong sales were generated by substantial price discounts at Van Buren Lofts,” Lissner said.

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