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© Jake Tasharski | Chicago | Illinois

JAKE TASHARSKI IS A REAL ESTATE AGENT AFFILIATED WITH COMPASS, A LICENSED REAL ESTATE BROKER WITH A PRINCIPAL OFFICE IN CHICAGO, IL, AND ABIDES BY ALL APPLICABLE EQUAL HOUSING OPPORTUNITY LAWS. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATIONAL PURPOSES ONLY. INFORMATION IS COMPILED FROM SOURCES DEEMED RELIABLE BUT IS SUBJECT TO ERRORS, OMISSIONS, CHANGES IN PRICE, CONDITION, SALE, OR WITHDRAWAL WITHOUT NOTICE. NO STATEMENT IS MADE AS TO ACCURACY OF ANY DESCRIPTION. ALL MEASUREMENTS AND SQUARE FOOTAGES ARE APPROXIMATE. THIS IS NOT INTENDED TO SOLICIT PROPERTY ALREADY LISTED. NOTHING HEREIN SHALL BE CONSTRUED AS LEGAL, ACCOUNTING OR OTHER PROFESSIONAL ADVICE OUTSIDE THE REALM OF REAL ESTATE BROKERAGE.

Developer Debate | Condo vs. Rental Construction

November 4, 2014

In a booming downtown market with an unheard of amount of rental properties in the pipeline developers now have to think twice - have we reached the tipping point?

 

Sure the sales market is still rebounding, but it's close to leveling out. With historically low inventory buyers are either stuck in bidding wars or waiting it out in a rental for that perfect place. Sure there will always be renters but with current interest rates and tax credits what better time to buy then now.

 

Today developers are challenged with evaluating the risk/return of each structure. Is it wiser to develop a condo building that might not sell as quickly as anticipated, or opening up a rental high rise to find there are no renters in sight?

 

I think what we need is more inventory for our would-be buyers. Inventory at various price points to appeal to a wide range of consumers. The only new construction since the crash has been luxury single family homes or smaller boutique sized developments. Lets get some projects in the works that would appeal to first time buyers and urban professionals wanting to be close to work and downtown. 

 

Worst-case outcome for developers? Build as rentals, wait a couple years until the market is overly saturated with them, then flip their projects from rental to condo. Based on current trends it seems this is what most are betting on. 

 

 

 

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