Metrostudy Report - Chicago, IL– November 1, 2011 - The Chicago housing market saw an increase in new home construction during the third quarter, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Unemployment in Chicago remains elevated at 9.9%, but lower than nearly 11% a year ago. For the twelve-month period ending in August of 2011, the Chicago market saw an increase of approximately 11,700 jobs. “It will likely yet be some time before any job growth starts to manifest itself in terms of housing demand, but following two and a half years of steep job losses, any positive news on the job front is welcome,” said Chris Huecksteadt, director of Metrostudy’s Chicago division.

Chicagoland started 2,192 new units in the 12-month period ending in 3Q11, up 1.5% compared to the annual rate of 2Q11. During 3Q11, 728 homes were started, the highest quarterly start total in over 2 years and an increase of 4.5% over the 3Q10 total. Closings were down to 2,931 during the 12 month period ending 3Q11. “This marks the first time that the annual rate of new home closings has dropped below the 3,000 unit threshold since Metrostudy began surveying the Chicago market in 1989,” said Huecksteadt.

“The silver lining, though, is that closings have tracked closely with starts indicating an absorption of housing inventory,” said Huecksteadt. Housing inventory overall has declined over the past year (and has done so since 2008). Finished and vacant inventory in the Chicagoland market is down 379 units compared to one year ago, a 5.8 month supply. (2.0-2.5 months is considered normal.)

“Even with the positive indications from the jobs front, housing inventory, especially existing inventory and foreclosure units will remain a concern for this year. The hope is that steady improvement in the job market will provide the demand to absorb this excess inventory,” said Huecksteadt. “Still, this will take some time, keeping a lid on any potential recovery in the new home market for this year.”

For information contact:
chris huecksteadt @ 847.214.5291
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