The West Loop is hot with trendy restaurants and new tech offices, and now a shortage of family-size condos is leading to bidding wars and higher prices.
“I’m being contacted repeatedly by brokers on behalf of their buyers wanting to know about any larger units coming to market,” says Berkshire Hathaway KoenigRubloff agent Cindy Wilson. “Interest in three-beds and two-beds with a den is off the charts.” Wilson sold two 2,200-square-foot units at 850 West Adams Street this summer—one for more than $100,000 above its $699,000 asking price, the other before it had even posted to the Multiple Listing Service.
How quickly are prices going up? A three-bedroom loft at 16 North Carpenter Street sold for $548,000 in August 2013 and again for $825,000 in June of this year. Another, at 6 North Throop Street, closed for $473,000 in January 2012 and $715,000 this July.
Meanwhile, a Baird & Warner analysis of data from Midwest Real Estate Data shows almost a two-month inventory of two-bedroom, two-bath condos in the West Loop, meaning it would take that long for the market to absorb all the for-sale if no one listed any new units for sale. That’s down from a high of 16 months in 2009.
“We went to see a three-bed at 14 North Peoria on its first day on the market and wrote up an offer that night,” says Baird & Warner’s Clare Zaro. “By the next day five other offers had come in.” They beat the competing offers only by inserting an escalation clause into their offer, pledging to best the top offer by a certain amount—a risky move, but an attention grabber. They ended up closing for $635,000, $40,000 above list price.
“You don’t see as many bidding wars in areas like Lincoln Park, because sellers come right out of the gate with high prices,” Zaro says. In the West Loop, sellers have recently listed for lower prices in hopes of triggering a bidding war.
You might it’s time for some new construction. Maybe, but density is a tough sell in the West Loop. Residents are serious about preserving the heights established by converted warehouses west of Halsted, typically six to eight stories. In June one developer cut its proposal for a 13-story, 205-unit rental tower at Peoria and Monroe Streets down to nine stories and 95 condos in the face of staunch opposition. A trickle of projects with 30 or fewer condos are moving in, but only one other condo builder is pushing 100 units at a single site. And the towers lining Halsted and stretching east over the highway are predominately rental.
“We’re expecting project size to grow here and across the city,” says appraiser Gail Lissner of Appraisal Research Counselors, “but developers for now want to stay small in order to get contracts on most of their units during pre-construction marketing.”