Chicago homebuilding activity drops as developers face rising costs, buyer apathy

Single-family home construction in Chicago is lagging behind previous years, with builders facing rising costs and a shifting housing market.

Through April, developers secured permits to build 100 single-family homes, a 37 percent decrease over the same time last year, when 160 permits were issued, according to Crain’s. In 2017, 170 permits for single-family home construction were issued through the first four months of the year.

Overall, a total of 500 permits were issued to builders last year, down from 600 in 2017.

Home construction has especially tapered off on the city’s North Side, where the price of land and construction costs are making single-family development too expensive, builders told Crain’s. Builders are finding better luck in South Side neighborhoods where land costs are relatively cheaper.

Construction materials, meanwhile, increased in price by 8 percent last year, Crain’s reported. On top of recent property tax hikes, new progressive tax proposals have threatened to cool the homebuying market in Chicago.

And a decline in the number of home sales in 2018, combined with stagnant prices and increased inventory, have made the housing market increasingly buyer-friendly, reducing the market for new construction. [Crain’s] — Joe Ward