June 23, 2009 - While most of the housing market is still limping along, there is one sector that is picking up some speed. According to the National Association of Realtors, half of all home sales in the first quarter of this year were made by first-time buyers. And sales of condos and single-family homes priced below $100,000 have seen a 25% increase so far this year over last year. Those are better sales numbers than any in other price tier. If you look at homes that are sold at auction for $50,000 or less, those sales have increased 48% over last year, according to a recent NAR report.

Foreclosures are still accounting for about half of all sales as well, with Chicago condo auctions and bank short sales a prime source for those $50,000 and under condos and homes. But while sales of more expensive Chicago condos and homes are down, there is some speculation and a fair amount of hope that these lower priced sales and first-time buyers will provide enough of a boost to the housing market as a whole to get things moving. The theory is that owners who sell a less expensive condo are then in a position to purchase a bigger, higher priced one.

However, another piece of not so encouraging Chicago real estate news was reported in Crain’s yesterday. McGraw-Hill announced that local construction starts have fallen 39% from last year. Construction starts through May of 2009 came to $2.9 million and are expected to be $11 million total for ‘09. The article states that it is the third year in a row they have fallen in Chicago and the biggest drop in starts since records began being kept in 1967.

McGraw-Hill noted that this year’s decline is due mostly to a drop in commercial construction, while the drop in starts the past two years has been due to slow housing starts. Commercial starts are expected to drop 73% this year while residential construction is predicted to fall 22%. The residential side is still better this year than last, when starts plummeted 53%. According to data from the U.S. Commerce Department, housing starts across the country rose 17.2% from April ‘09 to May ‘09. This was attributed to apartment construction, which saw a one month increase of 60% nationwide.

So while there is some improvement in sales of Cheap Chicago Condos, it will still probably be some time before we see an up tick in sales of higher priced units.

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This entry was posted on Tuesday, June 23rd, 2009 at 9:35 am and is filed under Market Update(t) , Luxury Condos(t) , News(t) . You can leave a response.