Luxury Units Limp Behind Lagging Real Estate Market

According to the Chicago Tribune, new luxury constructions are few and far between these days, but that doesn’t mean that they’re entirely non-existent.

As many Chicagoans already know, construction continues on the much-anticipated Lincoln Park 2520, a luxury high-rise featuring thirty nine residential floors and many more individual units. Construction has also begun on a Ritz-Carlton located along the north side of Michigan Avenue, a new hotel which will include eighty eight long-term residential units.

“The two high-rises share the notable distinction,” the Tribune reports “of being the only sizable Chicago condo buildings that will deliver units to buyers in the next year. Lincoln Park 2520 is scheduled to begin closing units toward the end of 2012’s second quarter, while the Ritz-Carlton plans to start deliveries late this year.”

“If those deliveries are delayed into 2012, 2011 will go down as the first year in the last fifteen years in which no new for-purchase units were added to the market, according to Appraisal Research Counselors. That compares with the peak year of 2007, when 4,800 condo units came online.”

“Strong demand for rental units is leading to rent increases downtown, while the for-purchase market has been stymied by a lack of financing, both for developers and buyers.”

News that renting continues to rule the roost in Chicago is certainly not new, but it is disappointing, nonetheless. Many city dwellers have started to hope that home sales would begin to climb again this year, and many construction companies have been eagerly awaiting new commissions. For the time being, though, it appears that construction activity will continue to lag, and those construction companies can only hope that the housing market will be a little more robust this time next year!

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