A rebound in residential construction is taking hold in such Chicago areas as West Loop and the upscale Lincoln Park, driven by a supply shortage and slowly improving economy. Nevertheless, the third-largest U.S. metropolitan area remains plagued by foreclosures and a surge in homicides that’s hurting home sales in some neighborhoods.
“In the good neighborhoods in the city, there’s pent-up demand,” said Alan Lev, chief executive officer of Chicago developer Belgravia, which started construction about a month ago on 14 $1-million Lincoln Park homes. “It’s like the stock market and the investment arena -- it’s a flight to quality.”
Chicago's for-sale housing starts in 2012 are expected to total about 150; more non-rental housing starts than in the past two years combined.
In the third quarter, the Chicago area had the most foreclosure filings -- 38,667 -- of the 212 largest metro regions followed by RealtyTrac Inc., and had the ninth-highest rate of foreclosures per household. Home prices in the Chicago area dropped 1.6 percent in August from a year earlier, and are 30 percent below the peak reached in September 2006.