Chicago’s suburbs are many, and within them there are dozens of thriving, diverse, and healthy communities. But there are also cautionary tales for builders and buyers alike. Near these developed communities, there are half-built skeletons of what could have been; illustrations of the failures of the market, such as what we see today in Ashwood Park, a 10 year old development off the southwest corner of Naperville.
Recently, Crain’s Chicago Business published an article detailing the 10 year history of the development and the struggles of the builders and buyers to successfully cope with the ups and downs of the market. Here are a few things you can learn about real estate from looking at this wholly undesirable situation for all involved.
The Ashwood Park developers had lots of experience and good intentions, but they encountered a bubble they weren’t prepared for.
Before the bubble burst in 2006, there were 88 building companies operating right around Naperville (there are now about 30). Up until then, they had been selling homes just as fast as they could build them. The area was forecasted to support thousands of new jobs, and the housing outlook was bright. But when the housing crash hit late in 2006, prices bottomed out and work largely stopped. Homes today are going for around 40% less than the pre-bust prices.
Buyers jumped the gun in assuming they were in for a great deal and about to get in on the ground floor of something special.
And why wouldn’t they have thought so? Naperville’s expansion seemed like a sure thing, as it had recently been named the #3 place to live in America by Money magazine and the developers were selling million dollar homes just as fast as they could build them.
The developers are now struggling to free themselves of the project while many of the homeowners are living in half-finished neighborhoods.
The fact is that, no matter how good the market looks, growth doesn’t continue infinitely. It eventually stalls and the market levels out. In extreme cases like we saw in 2006, the unforeseen happens and it can take builders (and homeowners) a decade to rebound.
While those who bought homes in Ashwood Park undoubtedly saw an exciting potential future for themselves and their families, what they ended up with was something half-formed. That is a large part of the reason why, when I am helping a family or individual look for a home, I help them look in neighborhoods that are fully formed, that are already great communities to live, work, play, and go to school in.
It’s also the reason I’ve invested so much time and energy into renovations. Not only does a freshly renovated home look and feel brand new, it actually helps save the homebuyer a lot of money! Beyond that, you get the added benefit of knowing that, being in an established community, chances are your property will appreciate, rather than depreciate in value over time.
If you want to learn more about what happened in Ashwood Park and about the real estate bust of 2006 in general, read the article in Crain’s. If you want to talk about how I can help you find your dream home in the Chicago area for less money than you imagined, get in touch. You can email me at firstname.lastname@example.org or call or text me at (630) 333-6393.