New Construction Numbers Continue to Fall
October 22nd, 2008 categories: Chicago Real Estate News
Remember the housing boom of 2001 through 2006? Seemed everywhere you looked, no matter how remote or far from Chicago, you saw new subdivisions popping up. There might be nothing but cornfield for miles around, but that didn’t stop construction crews from digging up those fields to build roads, homes and fancy stone entrance gates.
Well, those days are over. And it appears they’ll be over for some time.
More proof came from the National Association of Home Builders, which last week reported that the nation’s builders built even fewer homes in September in an effort to cut down their large inventories of unsold homes.
The association, citing numbers provided by the U.S. Commerce Department, reported that housing starts declined 6.3 percent in September to an annual rate of 817,000 new homes. That’s the slowest building pace since 1991.
Production of new single-family homes especially slowed, with starts of these residences dropping 12 percent in September. That’s the slowest pace of new single-family-home production since August of 1982. Multi-family starts, however, did provide some good news, rising 7.5 percent in September.
Like many in the real estate industry, home builders got swept up in the building boom, building far too many houses far too quickly. When the market began slowing, builders suddenly found themselves with unsold newly built homes to unload. It’s a process that, obviously, is continuing today.
We don’t see this as much in Chicago itself, especially in markets such as Lakeview, Lincoln Park, Lincoln Square and Roscoe Village. Here, housing is still at a premium, and homes priced properly continue to sell. Sure, we won’t see as many new condominium units, but those units that have been built are still attractive to buyers.
Of course, it’s a far different story on the far outskirts of the Chicago area, where new subdivisions sit half filled. So, as you’re driving around the outskirts of Chicago and you stumble upon a lonely cornfield, try to enjoy the view. New houses won’t be growing there any time soon.
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