A few months back I wrote about how dreadful home sales were going in Chicago's University Commons development. At the time, there was a huge proportion of short sales and foreclosures dominating the recent sales activity there and sellers were finding themselves taking significant losses on their homes. So, with the recent surge in activity, I decided to check back on this development and see how more recent home sellers were faring over there and to see how the prospects looked for people who are trying to sell their homes right now. Anecdotally it looked like there were a lot of overpiced lofts there that were not moving.
The data below is for the last 12 months, just like in my earlier post.
One big difference this time around is that the volume is up significantly. The previous 12 month period only contained 21 sales while this 12 month period contains 37 sales. Also, while there are still a lot of short sales and foreclosures, it's not nearly as high a percentage as last time we checked in.
However, as you can see, almost all the action is below $300,000, which has been the strongest part of the market for Chicago in general. So where does this leave the sellers of the larger lofts in University Commons? In a pretty poor position. When I factor in the size of the units, where the square footage is available, it becomes apparent that the smaller units are selling for a higher price per square foot than the larger condos, after adjusting for parking. This is not unusual in condos since there is some fixed value in having a place to live that goes beyond square footage.
The problem is that the sellers of the larger lofts in University Commons have not come to grips with the reality of the market and their units are overpriced. This becomes obvious in the following chart that compares where the larger units (more than 1000 sq ft) are priced on a per square foot basis compared to where they've been selling.
Only one of the larger lofts sold above $250/ sq ft and it turns out that that one is an anomaly that I am well familiar with because I sold it. It was the model unit and had probably $100K in upgrades in it (BTW, a common realtor advertising trick in a situation like this would be to advertise how I achieved the highest sales price per square foot in the development - but I digress). However, a lot of the larger lofts are priced well above $250/ sq ft. On the other hand, several lofts sold below $200/ sq ft but none are currently priced at that level. That's a pretty big disconnect. No wonder so many of these condos are not moving in University Commons. Hope springs eternal.
When I look at the smaller lofts I don't see this pricing discrepancy. In general, based upon recent sales, the smaller lofts in University Commons are priced to sell - and that they are.