Appraisal Research Counselors vice president John R. Jaeger acknowledges some previously announced projects are being pulled back. However, he told the Chicago Real Estate Council recently, "The market has potential for very long sustainability."

Still, there are questions. "In Chicago, we've got a massive amout of ordinary condos being built," Walton Street Capital Principal Neil Bluhm told last week's National Association of Industrial and Office Properties. "If I could figure out a way to short condos, I'd make a lot of money."

Fifield Realty Corp. is not pursuing any condo projects now. "We think there's enough supply," says company founder Steve Fifield.

Appraisal Research Counselors vice president Gail L. Lissner, SRA, has visited sales offices of various Downtown condominium projects since Sept. 11, and has not heard of any large-scale cancellations of contracts. However, there has been an effect.

"Sales people are very lonely," she says. "They had a slow summer, but summer is typically slow here. Usually we see traffic pick up in September, but we haven't seen that happen."

Lissner agrees with other developers who report the visitors to sales offices now tend to be more serious buyers. "But they're still having a problem signing the bottom line," Lissner adds.

The bottom line is an increasingly higher price per square foot, which has expanded the local definition of luxury into the neighborhood of $500 per sf. Those include the conversion of the former Blackstone Hotel on S. Michigan Avenue, 65 E. Goethe, 840 N. Lake Shore Dr., The Fordham in River North, Maple Tower in Near North and St. Clair in Streeterville.

While the consumer price index has risen 38.1% since 1988, Appraisal Research Counselors reports the Downtown condominium market has seen price per sf rise by 118.7%, as well as increase in each of the previous 12 years.

However, Lissner cautions 6,403 units – not necessarily constructed – remain unsold, with unsold inventory rising for the 10th consecutive quarter in the three months ending Sept. 30.

"The success of future projects will depend on the quality of the project, the location and amenities," Lissner says. "We certainly think uniqueness does count."