Back in September Crain's ran a story about how downtown Chicago condo prices had returned to peak levels. Their conclusion was based upon data from a pretty reliable source: Appraisal Research Counselors, who looked at more than 65 different condo buildings in downtown Chicago. ARC pointed out that within 65 buildings prices per square foot were within 4.3% of their 2008 peak. I think they were looking at prices for the first half of 2014.
Let me point out that ARC was looking at Chicago condo prices per square foot, something that a pack of appraisers jumped on me for in a previous post about bad appraisals.
Anyway, I've seen so many underwater condos - even now - that I had to look at some of this data myself. Not to mention that I have a hard time believing data if I haven't seen it myself. I decided to start with a premier building - The Pinnacle at 21 E Huron. And, yes, I looked at prices per square foot. But I'm reluctant to use averages because averages lose all the individual nuances. Therefore, I took all the Pinnacle sales from the beginning of time and dumped them into a scatter diagram over time so that we could see the distribution of individual sales. I also flagged all the large 04 units with red squares since these units carry a premium per square foot because of the view and the floor plan.
You can get a pretty good idea of the averages by eyeballing the graph. A few patterns become clear:
- You can see the pre-construction cluster of sales at the very beginning. Those occurred at some discount to later sales.
- Prices drifted down, starting in 2008 and running through the middle of 2012
- Then prices started rising until very recently. The most recent sales seem to be at lower prices/ sq ft but there are too few data points to really draw that conclusion.
- The recent peak in prices seems to be higher than what was hit in the 2008 timeframe
- You can clearly see the premium pricing on the 04 units
- The total decline in pricing at the Pinnacle seems to have only been about 20%, whereas Chicago condo prices fell by 40% on average from peak to trough according to the Case Shiller index. So a premier building like this didn't fall as much as the average to begin with and didn't have as much ground to recover.
One other interesting side note...see that outlier I circled in red on the graph? I've previously written about that penthouse unit, which was sold above $1000/ sq. ft. by an extremely colorful couple, and was totally pimped out so to speak - very tastefully though.
#ChicagoRealEstate #RealEstate #ChicagoCondos
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