Neighborhood Update – South Loop

In early 2008, specifically March, the south loop has seen an increase in market activity above that of the fourth quarter of 2007.  Market statistics indicate an increase in buyers entering the market which has reduced market times and the excess inventory. To illustrate this point I will be using absorption rate.  Absorption rate indicates how long it would take for the current inventory in an area to be purchased if the rate of consumption continued at a steady pace, assuming no new units come onto the market.  In order to determine that pace I will use the number of closed units in the month of February. 

Hence, there were 156 closings of condos in the South Loop during March. (ranging in sales price from $128,000 – $1,900,000)

There are 1254 condos currently on the market (ranging from $144,900 – $4,250,000)

 Therefore, it would take approximately 8 months to absorb the current inventory. 

Meaning for Sellers:

Absorption rates were much higher in 2007.  Eight months of inventory demonstrates a return toward normalcy in the South Loop.  At about 6 months of inventory the market is said to be balanced.  Any lower than four months and you can call it a seller’s market.  I would still suggest that if you’re selling a condo in South Loop, you should hold off listing it until some of the current inventory is sold, the new construction inventory will make your task all the more daunting.  If waiting is not an option, it is of utmost importance that a seller understand the general amount of competition out there and moreover, have the willingness to price your property according to market conditions and the direct competition to your unit. 

Meaning for Buyers:

 From the purchasing side, eight months of inventory still allows a buyer to be selective in their purchases by searching out the best prices, terms, and conditions.  Whether purchasing new construction or a resale unit, opportunity abounds.

I would like to highlight a couple listings I saw this week while previewing property: 

1. Eco 18 at 1818 S. Wabash - New Green Development featuring geothermal heating and cooling, solar hot water, energy recovery systems and a rooftop garden.  Standards include bamboo flooring, stainless steel appliances, and all the modern touches you would expect from a new construction development.  Floorplans range from 1 bedroom 1 bath to 2 bed 2 bath and a den.  Prices range from $279,900 to $659,900. For further details visit: www.eco18.com

2. Lakeside Lofts 1025 – 1035 S. Indiana - Developer Close Out.  1 bedroom, 1 bedroom + den and two bedroom floorplans still available.  Prices range from $245,800 to $395,800. Incentives include a free Garage Parking spot

If you would like to see any of the properties mentioned here, or would like a neighborhood update for another area please feel free to contact me. justin.conner@tregchicago.com

Best,

JLC