Welcome back! As we hit 2016 running, I always like to look back at the trends and happenings from the previous year and think about what it all means for the state of Chicago real estate in the year ahead. In the last year we’ve definitely seen consistent strength in the luxury real estate market in Chicago, but as inventories remain fairly low, buyers have faced a competitive scenario for the better part of the year.
Prediction: Luxury Buyers Will Get Off The Fence
Last month, the Federal Reserve announced a increase in interest rates. The news wasn’t terribly unexpected, but undoubtedly has an effect on the real estate market. Many potential buyers assume that rising interest rates will affect the buying market more than the seller’s market. But in my 25-plus years of selling Chicago real estate, I find the opposite to be true. As interest rates crank up, sellers often see the benefit, as buyers get ready to make a move before rates grow any higher.
In Chicago, there is certainly a pent-up demand for housing as the city catches up from several years without any real new construction projects. That being said, I think new construction could have a banner year in Chicago luxury real estate.
New Home Construction Picking Up
Nationwide, housing starts are up and Chicago is no exception. Increases among single-family homes and condos alike suggest that builders are gaining confidence that home sales will keep steady (or grow) over the next year. Despite the interest rate increase, that’s great news for the market and will likely draw additional buyers off of the “maybe this year” fence.
Growth in new construction is evident in Chicago. If you look around the Gold Coast—one of the most coveted neighborhoods for luxury real estate—you’ll see a number of new development projects moving right along. There is also a lot of talk about new construction opportunities popping up on the new east side, a newer area that luxury buyers love thanks to its proximity to downtown and unbeatable views of Millennium Park.
Purchasing New Construction in Chicago
I predict that as more and more new construction projects become available that luxury buyers will be snapping them up. A brand-new or close-to-new home is always at the top of the list for what my luxury clients are looking for, and I think many will be taking advantage of any increased inventory, particularly those close to downtown that offer the proverbial location, location, location.
Working with clients who are looking to buy new construction is a specialty of mine, as I have worked with some of the most prestigious developers in Chicago over the years, both for single-family homes and condos.
As a buyer, a new construction home might sound foolproof, but it comes with a number of things to consider as well. I can help walk you through a number of things, including determining the best unit to purchase, why a unit’s location in the building is especially important and the best tactics for negotiating a new construction deal.
If you’re thinking of purchasing a new construction property or luxury real estate in Chicago in 2016, give me a call and I can walk you through some of the upcoming projects or introduce you to some of my favorite buildings. It should be an exciting year, and the sooner potential buyers get in, the better. Contact me at (312) 498-5080 or email me at email@example.com.