McHenry County builders pick up pace on new residential construction

Residential construction is occurring for the first time on the land north of Route 120 on the east side of Wonder Lake since it was annexed into the village and approved for the development of thousands of new homes more than a decade ago.

The recently started work, along with growing interest expressed by home builders over the last year in some of McHenry County’s long-dormant subdivisions still with empty lots, is a sign new housing in the area is hitting the market at its fastest pace in years.

When the developer of the new Wonder Lake neighborhood, known as Stonewater, was first given the green light to proceed by village officials, market analysis at the time projected the subdivision’s full build out of 3,700 homes would be reached in 12 years, by the end of 2021.

Instead, work on the first homes got underway in just the last few months, as home builders passed up the chance to break ground in Stonewater for more than a decade, said Andy Teegen, president of the subdivision’s developer, McHenry-based NRB Properties.

Federal COVID-19 recovery funding and promises to keep interest rates low for the foreseeable future, combined with the departures of many residents across the country from crowded, virus-battered population centers into the suburbs, revived the market for Stonewater and other neighborhoods in McHenry, Teegen and other housing industry leaders said.

“A project like ours, where we’ve been on the shelf for a decade here, those factors ended up helping us to finally open our project up,” Teegen said.

The publicly traded home builder D.R. Horton is planning on building more than 700 homes in Teegen’s development. The company also has other active construction in the county and prospects to bring more, it said.

“With our disciplined approach to starting and delivering homes to our customers and the communities we build in, we are well-positioned to continue to offer homes at a great value in McHenry County in the coming years,” D.R. Horton Vice President of Investor Relations and Communications Jessica Hansen said in a statement.

Teegen said he hopes the new construction market in the Chicago metropolitan area makes its way to and stays steady at about half of pre-Great Recession levels.

An industry goal, he said, should be about 15,000 total housing units added to the metro region’s stock annually.

“We’ve seen a slow upward trend from the trough in 2009 to 2020, with no decline due to COVID-19. We are still a long way from previous peaks in 1994 and 2002,” McHenry County Director of Planning and Development Dennis Sandquist said.

His data shows 2020 saw 585 building permits issued across McHenry County, the most since 2012 and up from the valley of 2009 when just 295 were issued. More than 3,000 were issued each year leading up to 2005, when the slowdown started, according to the data.

Sue Miller, a professional real estate agent and the alderwoman for McHenry’s 7th Ward, said she thinks her city, where the builder Lennar has revived construction work in the subdivision Legend Lakes in the past year, is in a strong position to keep capturing some of the expected growth.

“Buyers are screaming for options in the marketplace. If they can’t find what they want in an existing home they are turning to new construction and willing to pay the price,” Miller said.

The area’s rising interest in the home market will not be limited to single-family products, predicted Steve Tarzian, president of Crystal Lake-based DeLauter, which provides pre-construction services as well as general contracting and construction management for commercial and multi-family properties.

While having access to more private outdoor space for pets or kids than is offered in many apartment complexes has become desirable amid the pandemic, there still are multi-family housing designs that would serve McHenry County’s market while also providing bigger recreational areas to attract those looking to exit larger cities, he said.

“I do think there is a value on the multi-family where you have the ability to still have a community but you still have your independence,” Tarzian said. “They could be 200-unit buildings, but you’re on 6 acres with a pool, community and decent-sized apartments where you have your space.”