Wednesday, January 2, 2013

South Loop Condo Boom in 2012?

Real estate agent Eric Rojas' had a recent blog post looking at the number of sales in the South Loop for 2012.  Apparently the neighborhood saw a nice bump in 2012:
Image from Eric Rojas
770 South Loop condo units sold from January 1st to December 26th in 2012. That' up 94% over the same period in 2011. A pretty astonishing number. Many factors may have contributed...low interest rates, stabilizing condo associations, low prices for the location and compared to incomes and faster processing of short sales and foreclosures. New development completely halted after 2008. Four years later people are beginning to feel comfortable with pricing and value in the new normal.
The median price in 2012 was about $250,000 for an attached condo. Same period in 2011, the median price was about $260,000 for an attached condo.
We've always maintained that the South Loop is a desirable neighborhood for many many reasons and with time our real estate conundrum would play itself out for the positive (if you could afford to ride out the short term issues).  Given signs of improvement in the economy it's not entirely surprising to see sales up so much in 2012 especially when we're comparing it to 2011.  Anyway, the post also goes on to show the number of sales over the last 5 years:
South Loop Condo Unit Sales 2008-2012 
  • 2008 unit sales 1,127 
  • 2009 unit sales 637 
  • 2010 unit sales 568 (affected by Federal First Time Buyer stimulus) 
  • 2011 unit sales 405 
  • 2012 unit sales 770 (as of Dec 26th)

So what do you think?  Are you optimistic about your real estate?


Anonymous said...

Everyone believes their own neighborhood is desirable--by definition, since it's unlikely that a person will choose to live in a neighborhood they find undesirable. So you might want to curb an enthusiasm that seems to be fueled by selection bias.

Median sales price is in a downward slope, but I wouldn't put too much stock in that. Sold homes are a biased indicator: if the only homes sold in a downturn are pricier homes, then they will show an upward trend even as the market is contracting. Charting median sales year to year without some sort additional economic indicators will just yeild garbage.

I'd put more weight on the number of units sold, and using the Sloopy numbers there might be a mild upswing. Given that there is no fiscal stimulus and growth is likely to be tiny or negative in 2013, I'd be surprised if numbers in 2013 weren't somewhat lower than 2012.

Paul Botts said...

Actually the professionals whose livelihoods depend on getting economic predictions right [as distinct from echomedia pundits for whom there are no consequences of being wrong] think that we're heading into a moderate economic rebound:

For that and other reasons I'd be happy to wager lunch at any SLoop restaurant that total units sold in the SLoop for 2013 ends up being higher than for 2012.