Recovering new housing market restarts some unfinished subdivisions
WOODSTOCK – Unfinished subdivisions such as the one on the north side of Woodstock are scattered across McHenry County.
Some are mostly filled while others still look half done with unfinished roads and missing amenities, the result of developers going bankrupt after the housing bubble burst.
But for the first time in years, new homes are going up in some of these subdivisions, including the Woodstock subdivision called The Sonatas.
The development – along with 10 other communities in the Chicago metropolitan area – was purchased by Ryland Homes from an investment firm that had bought the lots when the previous developer went out of business, said John Carroll, the president of Ryland Home’s Chicago division.
Restarting these communities can be a time-consuming process that requires working closely with the municipalities, but it can also be less expensive than starting new, Carroll said.
These restarted communities are one of the reasons some municipalities are issuing more building permits for new residential construction.
The recovery has also been tied to a reduction in the number of used homes on the market, Carroll said.
In February, the inventory of homes for sale in McHenry County dropped 17.9 percent to 1,840, down from 2,241 in February 2013.
That translates to about a three- to four-month supply, meaning those homes would sell out in about four months – a sign of an extremely healthy market, said Robert Meyn, the Midwest director of sales and marketing for Orleans Homes.
With the pickings slimmer, more people are opting for new construction, Carroll said.
The city of Woodstock issued a total of 59 permits in 2013, 48 single-family homes and 11 townhouses or other attached single-family homes. That was up from 37 in 2012 and 27 in 2011.
Huntley, another town Ryland Homes is developing in, also saw a bump last year. It issued 176 permits for detached and attached single-family homes, the result of a somewhat steady climb from 76 permits in 2009.
Not every municipality is seeing the return of new residential construction, though.
The village of Algonquin issued 77 permits in 2009 but only two permits last year. Eleven 20-unit apartment buildings were OK’d in 2012 but no single-family houses.
The city of McHenry has seen the number of permits it issues hover around six to eight for the last four years, though 12 permits were issued for multi-family homes in 2013 after three years of no permits.
McHenry County is also seeing a slight rebound, returning to 2009-2010 numbers. The county issued 27 permits in 2013, up from 12 in 2012.
The issue is that even though the market for new homes is starting to return, it’s not enough to hit every community, Carroll said.
Meyn expects the market to continue to improve and eventually spread to more towns.
With prices falling, in-fill locations in suburbs closer to Chicago and other work places became a better value, he said. Those areas have recovered first, which has meant that outer areas like those in McHenry County haven’t recovered as much.
“I think to expect a return to peak housing levels, I don’t know if any of us will see that again in our lifetimes, but I certainly see a healthy market returning,” Meyn said.