I've been rather surprised over the last few months to find that not only are Chicago builders building spec homes once again but they are actually succeeding in selling them - and fast. Given the condition of the real estate market in Chicago - slow sales, declining prices, and lots of distressed properties - I've been somewhat mystified. But I guess buyers like new homes and the builders who are succeeding apparently really know what sells.
Crain's just ran a story today on the return of the spec homebuilder in Chicago, pointing out that if these guys can get the financing they can take advantage of lower property prices and construction costs. Some of the developers highlighted in the story are building in Lake View, Lincoln Park, and Bucktown:
- Hibernian Development is building two single-family homes on Wayne Street in Lake View with six bedrooms and 5½ bathrooms and priced under $2.6 million.
- Middlefork Capital has sold three high-end spec homes close to the Hibernian homes recently
- O'Neill Development Group is building a Roscoe Village home for $1.3 million
- Barrett Homes is building 3 homes in Roscoe Village, west Lake View and Bucktown, two of which are frame homes. The frame homes can be as much as $200,000 cheaper than the equivalent masonry home.
As the article points out, all the information on spec homes is rather anecdotal because you really can't pull data on this sort of thing. But what really got my attention was the 3 new homes built by Noah Properties in the 1800 block of West Erie in West Town and listed between $850 - 870K. All 3 went under contract within 1 month and it's not like this is the hottest neighborhood either (except that it's no secret that I'm looking for myself in that area and everyone knows what a trendsetter I am). Clearly the price was right and the finishes on these homes were pretty cool. In fact, I'll do a follow up blog post on these homes because I was really impressed with them.