If you have been driving around Chicago in the last few years you will have seen a lot of cranes int he air. In fact, right now there are currently 50+ cranes reshaping the Chicago skyline and landscape. With all of these cranes you would expect there to be a lot of condos coming to the market soon. Well no. Most of the cranes you see right now are either helping to raise rental buildings or office buildings. The few condo buildings you do see will need very large pocketbooks. Any new condo building going up will have units priced around a million or more.
Why is this?
The main reason you do not see high rise condo buildings going up is the cost of building them far exceeds the profit margin for the developers. Developers are in the business to do one thing, make money. Becuase materials and labor costs have risen so much in the previous years it is affecting builders bottom line when it comes to developing lower priced high rise condos. This is why you see the big price tags. If a developer is going to put up a condo building it is going to be a luxury one right now.
How does this affect the market?
In a healthy market supply and demand equal each other. Right now, demand is far greater than supply. Typically this void is filled by new construction. Since that is not possible currently in the mid price point the market continues to be a seller's one. The hope is one day some of these rental buildings will become condo buildings creating more units to hit the market and balance things out. unfortunately, that is far from happening. So in the meantime enjoy the gorgeous new buildings and hope that you know someone buying in them.