A number of custom house building companies in Chicago have been exerting all efforts to survive the downturn and the devastation brought about by bargain-priced foreclosure homes.
According to the Home Builders Association of Chicago, a huge number of home builders have collapsed, battered by lack of financing, lack of buyers, huge construction debts and the foreclosures that wiped out their projects.
In 2005, there were 1,600 home builders in Chicago that were members of the association. Today, the number has plunged by 75 percent to only 400 firms. Rita Unzner, head of the association, said she had a staff a few years ago. Now, she is alone.
One of the custom home builders trying to survive is Richter Builders LLC, which was founded by owner Patrick Richter in 1978. Richter said that in the early 1990s, he was building homes in more than ten subdivisions simultaneously. In 2008 and in the early part of 2009, he was not building anything.
Now, clients are starting to come back. He said he has nine clients and is now brave enough to build one speculative house – his first in almost three years of drought. It sits on 4,400 square feet and priced at almost $1.5 million. He is now confident that someone will buy it despite the continued foreclosure crisis in the country.
Custom house building is still the desire of a number of people amid the economic downturn. In 2008, a high-income couple chose CBI Custom Homes to construct their home in Glenview. When CBI was not able to complete the project, they hired another custom builder, Orren Pickell Designers and Builders, to finish the project despite losing about $200,000 in their first try.
The couple increased the total floor area and added a library, gym, billiards room and a grand high-tech kitchen. Despite the cost ballooning to $3.3 million, the couple committed to the completion of the home.
One home builder who has not yet started recovering is Abdul Alwan, who owns Alwan Builders in Glenview. Alwan specialized in custom homes priced in the $2 to $5 million range. His homes feature double steel-reinforced foundations and grandly-designed plaster ceilings.
According to Christopher Huecksteadt, head of market research firm MetroStudy, a large number of custom house building firms in Chicago have not yet recovered because of the high number of luxury homes still on the market. He said that there are still almost 400 new homes in Chicago that are for sale at prices above $800,000.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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