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CHICAGO-The inventory of new unsold condominiums and townhomes has dropped from a peak of 4,682 units in the first quarter of 2002 to 3,893 units in the third quarter of 2003, according to Appraisal Research Counselors’ most recent Residential Benchmark Report. “That’s been a positive sign in the market,” says Appraisal Research Counselors VP Gail L. Lissner, whose firm tracks multifamily activity from North Avenue to Cermak Road, and west to Ashland Avenue.

Another positive sign is 89% of the available multifamily for-sale product is under contract, Lissner adds at a recent presentation to the Chicago Real Estate Council. Meanwhile, 49% of the unsold inventory is not even under construction yet, she adds.

“We don’t think all of these projects will be built,” Lissner says of proposed developments totaling 3,268 units.

Foremost among the developments that have yet to see a groundbreaking is Trump Tower Chicago, to be built on the site of the current Chicago Sun-Times building at 401 N. Wabash Ave. However, pre-sales have passed the halfway point despite price points beyond the $700 per sf mark.

“(Donald Trump) has been able to create the hype that only Trump can do,” Lissner observes. “I think we’re seeing a high degree of speculative activity.”

Speculative buying, large-scale developments, units with a view and entry-level housing are among the hot trends Lissner foresees in 2004. Meanwhile, projects that have spent two years on the drawing board, units priced from $500,000 to $800,000 and are oversized for the neighborhood will be poorer performers, she adds.

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