City leads area with new starts, home closings
Naperville ranked first in the number of new homes under construction and also in new home closings in the Chicago area during the past four quarters, according to a market research and consulting firm.
Metrostudy, which analyzes new construction in a 12-county area around Chicago that includes Northwest Indiana and southeast Wisconsin, reports Naperville had 222 new home starts in the past 12 months. Pingree Grove, west of Elgin, was second with 215, while Elgin was third with 208. The new construction includes single family and multi-family homes..
“Naperville is still a premiere address in the Chicagoland market,” said Chris Huecksteadt, director of Metrostudy. “If developers are getting houses to market in a community like Naperville, then chances for success are pretty good. That’s not the case in many areas around Chicago.”
While those numbers are nowhere near the 35,000 new homes started in the area in 2005 and 2006, they indicate a bit of a rebound in new housing construction since the market took a hard nose dive in 2008, Huecksteadt said. His market area has seen about 4,000 new housing starts over the past year, up from a low of about 2,500 in 2008.
“We’re well below the historical high, but things are improving slightly,” Huecksteadt said. He views a normal market as having about 18,000 to 20,000 new homes being built in a year.
The number of new construction permits, 214, issued in Naperville in the past fiscal year ending April 30 was nearly double that of the previous year, said John Rutkowski, development services team leader for the city.
“We’re moving in the right direction. It’s good for the city,” he said, adding with undeveloped land in Naperville dwindling, new construction numbers should level off.
About 30 to 40 of last year’s permits were for tear downs, most in Naperville’s downtown, while most of the single-family homes are being built on the city’s southwest side or in pockets of undeveloped land in city neighborhoods. A townhome development near 75th Street and Route 59 also accounted for much of the new construction.
The median transaction value of new Naperville homes sold for most of the months in 2012 was about $350,000, Huecksteadt said, adding that shows the strength of multi-family home sales.
Near 75th Street and Route 59, the townhome Mayfair development by M/I Homes of Chicago is 90 percent sold out, said Cheryl Bonk, vice president of sales and marketing for the company. M/I Homes entered the Chicago market about five years ago.
“We stuck to the old adage of location, location, location. And price,” Bonk said. “Even in a challenging market there is success to be had. The townhome market has a little more resiliency.” The price of Mayfair townhomes range from about $216,000 to about $327,000.
Meanwhile, Pete Stefani of King’s Court Builders said he is heartened by the uptick in business this year. The custom home builder has six homes underway from $550,000 to $1.2 million in Naperville along with other homes in nearby communities. He closed on 26 homes in the past year, down from a high of 73 in 2005, but up from a low of 15 in 2011.
“Certainly, there has been a lot of blood let over the last number of years,” Stefani said of the number of builders and developers who have had to lay off employees or go out of business. Today, he feels there is more demand than inventory in towns like Naperville.
“In comparison to recent years, I’d have to call the market hot,” Stefani said.