Chicago Loop Condos – Prices Trending Downward in 2010

Chicago Loop Condos – Prices Trending Downward in 2010
While the national housing market continues to attempt to stabilize itself, Appraisal Research Ltd., a real estate appraisal, research and consulting firm in Chicago, believe that the economic drag will sharply pull the price of Chicago Loop condos down in the early part of 2010.
A Rehabilitating Economy

A couple of different aspects of the current economic condition are figured to play a major role in the downturn pricing of Chicago Loop condos, according to The Chicago Journal and Frank Nothaft, vice president and chief economist for Freddie Mac.

* Projected heavy foreclosure activity in 2010
* Slower recovery of any recession over the last 50 years
* High rate of mortgage defaults
* Growing inventory of loans in foreclosure
* Weakened bank balance sheets
* Banks’ reluctance to lend
* Depressed household net worth

Nothaft compares the aftermath of the recession in the United States right now — some will argue that we are still in a recession — to the aftermath following the recessions of 1974-75 and the early 1980′s. In both of those cases, economic growth was sustained at 7 percent or more. In 2010, economic growth is expected to be less than half of that.

Pricing Instances For Some Chicago Loop Condos

The economy’s impact on real estate is expected to continue so much so that The Chicago Journal refers to Chicago’s downtown market as becoming “Bargainville” for prospective buyers. And it doesn’t appear as if they’re joking. Here are a couple of downtown condominiums they list as bargain examples, with the result of re-pricing noted:

* A high-rise at State and 9th street in the South Loop has dropped one-bedroom units to $159,800, down from $199,800.
* Penthouse units at that same State and 9th street condominium are down 27 percent: now $549,800, previously $699,800.
* A condominium conversion at 10 East Ontario in River North sells units between $219,000 and $245,000, down upwards of $150,000.
* In some cases, some buyers at the 10 East Ontario condo conversion can be bestowed with free parking, previously valued at $40,000.
* At a West Loop condo at 565 Quincy, a junior one-bedroom and one-bath unit’s price was cut from $201,000 to $164,000.
* At that same complex, two-bedroom, two-bath units can be now purchased for $331,000, down from $441,900.
* Like with the 10 East Ontario units, parking at 565 Quincy (valued at $35,000) is included in one and two-bedroom units.

Although it’s a sign of an economy still in trouble, the backsliding prices of Chicago Loop condos should be seen as welcome news to downtown condo-seekers everywhere. Prices in “Bargainville,” the federal government says, are projected to continually decrease through 2010.