CHICAGO BUSINESS

Letters to the editor

Residential real estate market still strong in city

Recently, a new movie came out about Chicken Little, who thought the sky was falling. If the movie is a flop, maybe the little fellow can set up shop as a real estate prognosticator. Fortunately, Chicken Little is fiction. But when the subject is residential real estate, doom-and-gloom predictions are all too real, too common and too often way off the mark.

Once again, there may be less here than meets the eye ("New-home sales spring a leak," Dec. 19). As Crain's points out, 2005 will be "the fourth year of record sales here," and 2006 looks to be "one of the strongest years ever in the local homebuilding market."

Maybe there are price reductions and other incentives in the suburbs, but we haven't seen this as a trend in the city, where the market remains robust. This isn't to say that housing is risk-free, even in Chicago, which has less dramatic highs and lows than the coasts. Of course, we're watching interest rates closely.

Residential development has become a major force in Chicago's continued economic health. This is especially true in the central part of the city. The number of housing units in downtown Chicago has increased from approximately 48,000 units in 1990 to more than 80,000 today, according to Appraisal Research Counselors. We expect Chicago housing to continue to prosper. It will never see the amazing price run-ups found in the other areas of the country when the economy is booming, but we shouldn't worry about the sky falling.

Alan D. Lev President, Chicago chapter Home Builders Assn. of Greater Chicago