New Home Sales Drop Y-O-Y in Chicago Region
Chicago-area new home sales increased in the second quarter, but not by enough to counteract a steep plunge in Q1, according to a report from consulting firm Tracy Cross & Associates. As a result, sales were down 7% in the year’s first half, compared to the year-ago period.
A key factor is the increasing price gap between new and existing homes in suburban markets. That’s because values on existing homes in the 10-county metro area have increased only gradually since the recession, while homebuilders have faced steeper rises in construction and land costs.
As a result, homebuilders “come in at a bigger differential above existing-home prices than what [buyers] consider a reasonable premium to pay for new construction,” Erik Doersching, EVP of Tracy Cross, told Crain’s Chicago Business. The Schaumburg, IL-based firm serves the development sector nationwide, focusing on both single-family and multifamily projects.
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