Crain's Chicago Business reports:
The downtown condo market has joined the growing ranks of slowing Chicago-area real estate markets, according to a report on second-quarter housing sales.
Sales of new homes in the city fell nearly 21% compared with the second quarter of 2005, while suburban sales slid almost 24% in the April-to-June period, according to Tracy Cross & Associates Inc., a Schaumburg-based real estate consultancy. Overall, new-home sales for the entire metro area fell 23%, to 7,231 units.
The city's drop-off is a dramatic change from the first quarter, when new-home sales grew 6% from the previous-year period; suburban sales fell 12%.
But the soft market has now extended into the city condo market, which accounts for nearly all the new housing construction in the city.
"What you've seen in the suburbs for the last three quarters is hitting the city now," says Mr. Cross. "There is coolness now in the city market."
The main source of that chill: higher mortgage interest rates. Moreover, rock-bottom interest rates over the past five years encouraged buyers to accelerate their home purchases, reducing the pool of buyers in today's market.
Also adding to the interest rate factor is the drop in population.As the
Chicago Tribune reports:
Cook County lost more people between 2000 and 2005 than any county in the nation, according to Census Bureau estimates released Thursday that also show continued gains in suburban and exurban counties across the region and portions of the nation.
The new figures--based on administrative records and estimates for births, deaths and net migration--show the county lost more than 73,000 people, or 1.4 percent, since the last official count in April 2000.
Between July 2004 and July 2005 Chicago lost 18,000 which was 6000 more than Detriot during the same time frame.In areas with declining population only speculators can hold up prices.
