CHICAGO—The Chicago region's incredibly active apartment market has received a great deal of attention in the past few years. Much of the discussion has centered around when the number of new rental units hitting the market will finally outrun the currently healthy demand. There has been far less chatter about the market for condos. Many developers and lenders were spooked by the sector's collapse during the Great Recession, and decided to concentrate their efforts in the rental market. But conditions may be changing.

“There has been a limited supply of new condos built,” David Wolf, president of ON Collaborative, tells GlobeSt.com. Most of the recent construction projects were small in-fill projects, or handfuls of ultraluxury downtown projects, along with some luxury projects in the West Loop and other neighborhoods on the downtown's periphery. But a restrictive lending environment and high construction costs have kept the brakes on.

“Everyone we meet with is talking condos,” he adds. “All of the developers want to build them, and there is a lot of pent-up demand for new for-sale product,” but it's a question of making the numbers work. Lenders, however, typically ask that to secure construction financing, developers pre-sell at least 35% of a given project's units, and in most cases prefer a number closer to 50%.