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My story "Building Tomorrow’s Real Estate Market" ranked #4 in the Chicago Agent Magazine cover stories for 2021

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Services for Real Estate Pros with R. Michael Brown LLC Digital Marketing & Public Relations

By R. Michael Brown

Residential real estate sales have been a bright spot for the economy since the onset of the pandemic, but along with retail, entertainment and other economic sectors, new-home construction has struggled.

Wild fluctuations in the cost of building materials, rapidly changing buyer preferences and a variety of other factors have compelled builders and developers to find innovative solutions to get their projects completed.

The Home Builders Association of Greater Chicago and New Home Source websites show there are 503 homebuilders in Chicagoland selling 296 communities. Shoppers can tour 213 model homes and 196 quick move-in homes are available. Prices are from $220,310 to $6,550,000.

Chicagoland new-home sales lost much of their early 2021 strength in the spring, mostly because prices rose as building-material costs spiked, according to a report released by Tracy Cross Associates, a Schaumburg-based consultant to the homebuilding industry. In addition, inventory was unable to keep up with high pandemic-era demand. After a first quarter when sales were about 76% above the norm, second-quarter sales were up by only 13%.

Part of the difficulty right now is the cost of construction — houses are selling for less than the replacement cost, which requires builders to think ahead and creatively to deal with the material supply issue. “It’s been really challenging, but we’ve been able to navigate through it,” said Kerry Dickson, director of residential real estate at Vermilion Development. “We had agreements in place before the supply crisis, so we were able to get [most of the material] at the earlier prices. But we’ve had to be flexible too, substituting material when we couldn’t get what we originally designed.”

As far as a rebound in the new construction market goes, the data shows that whatever Chicagoland developers are doing, it’s working. Homebuilding companies sold 3,185 new-construction units in the Chicago region during the first six months of 2021, the Tracy Cross report continues, an increase of nearly 40% compared to the first half of 2020, when 2,314 contracts were recorded.

See More [Chicago Agent Magazine]

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