79% Of New Condos Downtown Are Priced At $700+ Per Square Foot
If you are shopping for a new downtown Chicago condominium this summer better bring a wheel barrel of cash to the deal, experts advise.
Seventy-nine percent of the unsold new-construction condo inventory units are in buildings priced at an average of $700-plus per square foot, reports notes the “Downtown Chicago Benchmark Report,” the latest analysis of the condo market by Appraisal Research Counselors Ltd.
“This is considered to be the ultra-luxury segment of the market, targeted to a rather thin group of affluent buyers,” noted Gail Lissner, vice president of Appraisal Research.
The top of the ultra-high end of the market downtown is the 94-story Wanda Vista Tower hotel and condominium complex now under construction at 363 E. Wacker Drive. The tower will have 406 condo units and 191 hotel rooms. The tower’s 21 penthouses are priced in the $8 million to $10 million range, according to Magellan Development Group, co-developer with China’s Dalian Wanda Group.
Also under construction is One Bennett Park, a 68-story mixed-use project at 451 E. Grand Ave., which will feature 279 rental apartments and 69 ultra-luxury condos.
Despite lofty price tags, developers managed to market 107 new luxury condo and townhome units downtown in the first quarter of 2017, and closed sales on 62 units. A total of 486 units were sold downtown in all of 2016, up from 415 units in 2015.
At the end of the first quarter of 2017, there were 845 unsold new construction condo and townhome being marketed for sale downtown. Here are the neighborhoods, and the number of unsold units in each: Loop (271), West Loop (120), South Loop (10), River North (208), Streeterville (63), and Gold Coast (142).
The unsold new-construction condo and townhome inventory downtown totaled 663 units at the end of the first quarter of 2016. Inventory totaled 471 units in the first quarter of 2015.
By targeting first-time buyers, The Guild, a 14-story condo at 1555 S. Wabash, sold out in the first quarter of 2017. Rebranded after the Great Recession, the 176-unit building’s prices were set in the affordable mid-$300 per-square-foot bracket.
Originally built in 2009, developers sold 35 units then got caught in the economic downturn. Remaining units were rented, then extensively renovated five years later making the project comparable with new construction, noted Ron DeVries, vice president of Appraisal Research.
• Boutique condos popular. Five luxury boutique condo projects with a total of 129 units were launched in early 2017, Appraisal Research reported. The smaller 9-story to 14-story developments range in size from 10 to 38 residences. Average unit sizes range from 2,100 to 3,400 square feet of living area, and prices run from $690 to $913 per square foot.
• Existing condo bargains. Buyers hunting for an affordable condo downtown should shop existing buildings for condo bargains, experts advise.
An Appraisal Research survey of 65 existing downtown buildings with a total of 20,895 units found that prices have risen from an average of $338 per square foot in 2012 to an average of $420 per square foot in 2016.
“Overall, prices in these 65 buildings have risen 25% since 2011, while the sales volume for 2016 was up over 50% from the low point in 2011,” said Lissner.
For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.