Downtown Sales Down 73% in First Half

According to Appraisal Research Counselors, a consulting firm that closely monitors sales of new condos and townhomes in the heart* of downtown Chicago, sales of new homes in that area were down 73% in the first six months of 2008, compared to the first half of 2007.

That is a much bleaker picture than emerges from overall sales of new and existing condos in all of Chicago.

As reported on this blog in July, based on figures generated on the Multiple Listing Service: Year to date, through June 30, dollar volume of Chicago condos was down 15% and units closed were down 26%. But median sales price was up 10% and average days on market was up only 4%.

In an August 18 article based on the ARC report, entitled "Condo Chasm Hits New Low," Crain's noted that a record-low 685 downtown condo and townhome units were sold in the first six months, compared with 2,443 units in the first half of 2007.

"Sales are expected to continue to fall this year," Crain's reported, "making it unlikely that the market will reach 1,200 contracts in 2008, far below the previous low recorded by ARC of 3,258 in 1998."

Crain's further predicted that, "despite a continuing slowdown of new projects, which will eventually reduce supply, the new-home market is likely to remain stuck at this level well into 2009."

According to ARC, developers are building at a record pace, with 9,528 units scheduled to be finished by the end of 2009. Nearly 33% of those remain unsold. At least 10 projects totaling 1,100 units have been put on hold.

*ARC's report covers only condos and townhomes with at least 25 units under construction in an area between Cermak Road, North Avenue, the Lake and I-94.