CHICAGO, IL - Residential developers Habitat Co. and Thrush Cos. settled for big discounts in recent auctions of condominiums and townhouses at two South Side projects, selling some units for less than half the original asking price. The steep price cuts represent a new reality for developers struggling to close out projects amid a worsening recession and uncertain lending climate. Builders in some cases might think selling discounted units is a better than not selling them at all.
"The condo market in Chicago is very soft," says Rick Levin, president of the Chicago firm that led the auctions. "There's an oversupply and financing is difficult, I think you'll see that continue through 2009." At its completed McKinley Park Lofts project, Chicago-based Habitat tapped Rick Levin and Associates Inc. to auction off the 34 condominiums that were unsold in the 163-unit development.
The good news for Habitat was that buyers at the Dec. 9 auction picked up all 34 units, albeit at an incredible discount. The 34 condos at McKinley Park Lofts, 2323 W. Pershing Road, sold for $150,000 to $250,000, Mr. Levin says. They had been originally priced at up to $374,900. Habitat Co. Chairman Dan Levin couldn't be reached for comment.
Buyers at a separate Mr. Levin-led auction Dec. 10 got similar bargains when 12 condominiums and 10 townhouses were put on the block at Thrush's Jazz on the Boulevard project.
Thrush originally had asked for up to $363,000 for the condos and up to $625,000 for the townhouses at Jazz on the Boulevard, a 137-unit complex at 41st Street and Drexel Boulevard in North Kenwood. But at auction Thrush sold 10 of the 12 condos for $150,000 to $200,000, and the 10 townhouses sold for $250,000 to $300,000, Mr. Levin says.
"It's better to close out and move on," says Thrush President William Wolk, adding that the project has completely sold out since the auction. "The carrying costs will eat you alive."
Source: ChicagoBusiness.com