Absorption in Condos
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|With just 1.1k new condos being delivered this year and fewer than 100 coming online in 2011, Appraisal Research Counselors' Gail Lissner says absorption should start to take place in the downtown condo market. Gail led off the panel at the REIA monthly breakfast on Thursday. For the roughly 3k unsold new condo units downtown, discounting is starting to work, especially in big projects with large vacancies like 565 Quincy and 310 S. Michigan, meaning fewer auctions, Gail said. Developers are offering units at 40% off, but since no one is sure if that's 40% off of a 2007 price or a 2010 price, she says, they may still be getting close to market rate.|
|JAB Real Estate's James Jann and Mesa Development's Richard Hanson offered differing perspectives on their respective condo markets. James markets in Lincoln Park and Lakeview, where he says the pipeline of new condos is completely closed. He says confidence in jobs is more important than job growth because young people won't buy new condos if they're not sure they'll keep a job for at least three to four years. Richard, who recently opened the luxury Legacy across from Millennium Park, says he's seen a decline in people buying 10-plus units as an investment, partially because no one will finance it anymore. Finding a reliable lender to recommend to his buyers has been key to increasing sales at Legacy.|