Thursday, October 29, 2009

Not Getting the Olympics Good for the Sloop?

We were all for the Olympics for a variety of reasons but mainly because of the infrastructure improvement that would have come to our neighborhood. However, the Chicago Tribune blog, Chicago Tribune 77, has a post today essentially saying that the South Loop will be better off because we didn't get the Olympics:

A healthy, sustainable real estate market requires a balance between supply and demand. Supply includes commercial and residential units available for sale and rent, as well as funding required to buy or lease these properties. This supply would have undoubtedly increased markedly with the increase in demand prior to and during the events. Olympic-related jobs would have provided income for purchase and rent of these properties, and commercial enterprises would have set up shop to serve workers and visitors at a record pace. Following the closing ceremony, however, visitors return home, jobs end, and demand would have dropped off drastically.

This imbalance would have had a significant negative impact on existing property in and around the Olympic venues. Empty commercial space does not indicate a healthy neighborhood to potential buyers, and I wholeheartedly believe that prices of residential properties in both near south and South Loop neighborhoods would have taken a serious hit in pricing. As we have recently seen, high levels of inventory take years to absorb. Nothing good comes of an oversupply situation. Post-Olympic buyers would not have benefited either - there wouldn’t be enough of them to take advantage of the situation.

It's a valid point and an argument we brought up and debated with people a lot. We still think the infrastructure improvements would have improved the neighborhood which in turn would have encouraged more people to come to the neighborhood which in turn would help with retail and real estate.

We still think the neighorhood will grow and flourish, but it will be slower since we did not get the Olympics in our opinion.

Hope we're wrong though.

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