A recent survey of 65 large downtown condo buildings found that resale prices on a square-foot basis fell 18 percent on average from 2008 to 2012. The Gold Coast registered the smallest decline, 11 percent, while the South Loop suffered the largest, 30 percent, according to Appraisal Research Counselors, the Chicago-based consulting firm that conducted the survey.
The disparity makes sense considering the South Loop was the epicenter of the city's development boom — and its bust, as buyers failed to show up for many new projects after the market started falling in 2006. Overbuilding was less of a problem in the Gold Coast, an older, wealthier neighborhood.The only way we can spin this is that the "large downtown condo buildings" in the South Loop were filled with investors more so than residents. As a result, people potentially were buying in these buildings for investment purposes and taking out mortgages they couldn't afford. Maybe the other, smaller buildings in the neighborhood are doing better? Anyway, the article specifically points to 1720 S. Michigan as a prime example of the South Loop's pain:
Distressed sales (i.e. - Foreclosures or short sales) have been a bigger issue in the South Loop, accounting for 23 out of 25 sales this year — 92 percent — in a building at 1720 S. Michigan Ave., where prices have fallen 40 percent since 2008.Yikes!
If there is any solace to this, it appears that the rental market continues to heat up in the South Loop. We continue to hear plans about new rental high-rises coming to the area (see Curbed Chicago article on a new rental high-rise for State and 9th street).
If you can't sell, maybe you could rent?