December 31, 2008 - The last day of 2008 brings news that yet another Chicago real estate project is being put on ice. Developer AvalonBay Communities is at least temporarily shelving their planned 1,000 unit South Loop apartment complex that was to be located on the southwest corner of Clark and Polk Streets, according to an article in Crain’s. AvalonBay VP Walter Rebenson stated that they intend to “wait until we see how severe this recession is going to be.”

That seems to be the sentiment echoed by many Chicago condo and even a few apartment developers right now. Most experts have revised their initial predictions of a mid 2009 housing market turn-around and pushed back their expectations of recovery until 2010. In the article Rebenson went as far as saying that “You’re crazy if you’re developing right now.”

AvalonBay had expected to start work on the 500 apartments of phase one of the project around May, but has now decided to wait a minimum of another year before reevaluating the situation. Fewer jobs means fewer renters, and with an estimated 2,000 new apartments coming online in 2009 the demand will decrease even more. That doesn’t even begin to figure in the condos that are being put up for rent when developers and investors are unable to sell or the Rent to own condos in Chicago that are also available right now.

We’ll have to wait and see if any other developers who have plans to launch apartment projects also decide to pull back before being swallowed by the incoming wave of new rental units hits.

Technorati Tags: Avalon Bay, Chicago Condos, Chicago Real Estate

December 30, 2008 - With more Chicago real estate developers trending towards smaller buildings with fewer units, it’s a perfect time to take another look at The Catalina on the 2500 block of North Ashland in West Lincoln Park. The project is from Graystone Development and they describe it as “12 elegant new extra-wide condominium homes are finished with everything discriminating buyers have come to expect.” And now we are starting to see the prices on these luxury condos come down a bit.

Of the 12 Chicago condos in this building, there are 6 left for sale right now. Prices had been ranging from the high $400,000s to high $700,000s. Now the developer is listing the remaining condos from $459,900 to $729,900 and those prices are said to probably drop a bit further if sales don’t pick up. Square footage on these two bedroom, two bath and three bedroom, three bath condos runs from 1,478 to 2,740.

Standard finishes at The Catalina include Jenn-Air and Bosch appliances, wine coolers, walnut custom cabinets, granite counter tops and back splashes, built-in bookshelves, steam showers and radiant heat in the master baths. High speed phone lines, cable and stereo surround sound wiring are all in place and ready to go by the time you move in to one of these condos. Parking and a spacious deck are also part of the package there.

You can compare The Catalina with other Chicago Luxury Condos in the area and see how they measure up in terms of prices and finishes.

Technorati Tags: The Catalina, Chicago Condos, Chicago Real Estate

December 29, 2008 - The biggest Chicago real estate stories that may unfold at least in the early months of 2009 may center on foreclosure suits and the rental market. With a number of Chicago condo developers facing looming loan deadlines and flat sales, the potential for lawsuits is a real possibility. By now everyone is aware of the dueling suits filed by Donald Trump and Deutsche Bank over the past due construction loan for the Trump Tower. And with our recent post about the possible collapse of the Anglo Irish Bank, the Spire’s troubles may be deeper than its foundation hole.

But a side effect of the condo crash is that more units are coming up for rent in luxury developments. There are a number of units currently for rent at Trump Tower, often at a lower rental price than similarly sized condos in other luxury buildings. Recent listings for one bedroom condos at Trump have come on the market for around $2,500 per month. And many developers are opting to rent unsold units themselves, rather than sit on inventory that isn’t generating any income at all.

According to a recent article in the Tribune, the Chicagoland Apartment Association expects 2009 rental rates in Chicago to remain steady and in some cases even decline a bit. In 2007, average rent for a top of the line one bedroom downtown apartment was $1,850 per month. That number had decreased to $1,750 per month by 2008, according to data from Appraisal Research Counselors. The addition of 1,974 new rental units drove that number down, and at least 954 more rental units will come on line in 2009. That doesn’t even figure in all of the condos that investors end up renting when they can’t sell, and that amounts to as much as 20% to 25% of all downtown condos.

The only exception to the steady rental price prediction is that prices for units in high-rises near the lake or in vintage buildings may tick up slightly. So if you think you may be priced out of buying one of the Downtown Chicago Condos, you may want to check into renting, even if the developer isn’t openly advertising that option.

Technorati Tags: Chicago Apartments, Chicago Condos, Chicago Real Estate