Townhome Inventory Drives Increased New Home Sales in Chicago

Chicagoland’s new home market notched its strongest first quarter in years, buoyed by an uptick in supply and sustained pricing strength.

Builders sold 1,568 homes in the first three months of the year, which include houses, condos and townhomes, according to Schaumburg-based consultancy Tracy Cross & Associates.

That’s up 10.4 percent year-over-year, notching the second-highest first-quarter total in a decade, Crain’s reported. It trails only 2022, when the post-pandemic buying surge peaked.

By comparison, new home sales nationally rose just 3.3 percent in the same period, according to the U.S. Census Bureau and HUD.

But analysts say this isn’t a pure demand story, despite the strong numbers. Tracy Cross CEO Erik Doersching attributed the spike to an uptick in inventory. The number of active subdivisions increased from 243 to 246 over the past year, and builders added more units to existing projects. That modest boost helped unlock more of the pent-up demand created by years of undersupply.

Much of the quarter’s growth came from attached housing, such as townhomes and condos, which rose 31 percent year-over-year. Infill land is playing a role, with new mid-rise projects popping up in neighborhoods like Avondale and Edgewater, where an 18-unit building launched with units starting at $799,000.

The top-selling project of the quarter was Rivers Edge in Woodridge, where PulteGroup sold 44 units starting at about $439,000.

“There’s very little new-build opportunity in the core western suburbs,” Keller Williams agent Dave Vivoda, who was not involved in the project, told the outlet. “With that location, you get access to everything.”Meanwhile, home prices across the region are elevated. Chicago saw the fourth-highest year-over-year home price growth among major U.S. metros in April, according to Homes.com. That’s a 7.5 percent increase, even as price growth slowed nationwide. The city followed Cleveland at 10.5 percent as well as Boston and New York City, both with 10.8 percent price increases.

Townhome Inventory Drives Increased New Home Sales in Chicago — (Homes.com)

Looking ahead, any second-quarter turbulence tied to tariff uncertainty or broader economic slowdowns has yet to materialize in new construction data. Builders are watching closely, but many say they’re already feeling the effects.

Tariffs could nudge the average price of a new home up by $10,000, the National Association of Home Builders predicted, while Bank of America suggested material costs will increase by 1.5 percent on average, with some spikes as high as 6 percent. But it’s largely the uncertainty from buyers, sellers and materials suppliers that’s left many with the expectation that the market could shift.

— Judah Duke