Chicago new home permits down

New-home permits were down about 28 percent in the Chicago area in 2007 compared with the more prosperous 2006 -- and 2008 could be worse.

That was the word from a forum of eight suburban builders Friday.

Through November, 31,890 permits were issued for single-family and multi-family homes in the Chicago metropolitan area, according to the National Association of Home Builders. That is down from 44,080 in the same period of 2006.

Several builders at the forum said 2008 sales should mirror those in 2007 or drop lower.

The gloomiest prediction came from Andy Konovodoff, president of the Illinois division of Town & Country Homes, owned by K. Hovnanian Homes, based in New Jersey.

His company sold 1,230 homes in 2006, 890 in 2007 and is expecting 355 Chicago-area sales this year.

Due to foreclosures of existing homes and the number of homes on the market, he does not expect sales to be good until 2010.

Town & Country has 40 already-built homes for sale because of buyers' cancellations, he said.

Pulte Homes and its Del Webb subsidiary seemed to have the best report of the builders present.

Chris Naatz, vice president of sales and marketing, said the company sold almost 1,200 homes in 2007.

Naatz said Pulte sold three homes this week that will close in three weeks because buyers are not committing on new homes until they have sold their existing ones.

The existing-home market has to improve before new homes will sell, builders agreed.

Buyers also tend to be buying slightly smaller homes -- for example, 2,500 square feet instead of 3,000 -- to save money, said Pat Curran, president of West Point Builders & Developers, which is building in Elgin.

Chris Shaxted, executive vice president of Lakewood Homes, based in Hoffman Estates, said home sizes had also decreased for his buyers.

Debbie Beaver, vice president of sales & marketing for William Ryan Homes, based in Schaumburg, said her company held sales almost constant at 385, but expects to see fewer sales in 2008 because it has less land.

Buyers need information to counteract their financial fears, she said.

"Our sales people can show a buyer what their home used to be worth two years ago and what ours sold for then and how they can buy the same home today for a lower mortgage payment than if they had traded their home for ours back then," she said.