• Residential Real Estate
  • After four years of increases, luxury home sales fell in 2019

    Along with familiar issues weighing on the market (property taxes in particular), agents say the drop also is the result of a shortage of attractive, market-ready homes.?

    VHT Studios

    This newly built house on Woodlawn Avenue in Glenview sold for a little under $1.54 million in December.

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    Sales of Chicago-area homes at $1 million and up fell in 2019, after increasing each of the previous four years.

    Last year, 2,519 homes in the seven-county Chicago area sold for $1 million or more, according to a report compiled by Mary Jo Nathan, a Compass agent in Roscoe Village. That’s down 6.5 percent from 2018.

    79彩票注册网址The median price of homes in the million-dollar market increased slightly last year to $1,327,500, up 1 percent from the year before.

    In every year from 2015 through 2018, the number of sales increased, although a cooling trend showed up in 2018, when sales were up only 1.7 percent 79彩票注册网址after a spike of nearly 10 percent the year prior.

    Crain’s was not tracking million-dollar home sales prior to 2015, so it’s not possible to say how much further back the increases in sales volume might stretch.

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    Some of the reasons are familiar to anyone who’s been monitoring Chicago’s real estate market: high property taxes, the uncertainty about how much higher they’ll go as the city and state work to fill their pension-debt holes, and population loss, which diminishes demand for homes.

    79彩票注册网址“There’s really been a negative sentiment in the market,” said Jeff Lowe, a Compass agent who is among the leading local agents for buyers and sellers of high-end homes.

    For some households, the city’s bumper crop of lavish new apartments79彩票注册网址 offers an alternative to buying a million-dollar home and comes with an easier exit strategy than having to sell it later.

    Beyond those factors, agents told Crain’s, the fault lies with a shortage of desirable homes in the price point.

    For the city alone, the drop was slightly larger than the regionwide figure. In Chicago, 1,294 homes sold for $1 million or more in 2019, down 7.5 percent from the year before.

    Nathan said she believes a key reason for the drop in the city is a slowdown in construction of new single-family homes in neighborhoods like Lakeview and North Center after a mid-2010s surge that led to an oversupply and the usual result: sagging sale prices.

    79彩票注册网址At the same time the final product’s sale price was dipping, Nathan said, “it costs more to build and more to buy land.” In recent years in North Center, builders have cut what they'll pay to buy a two-flat in teardown condition from about $725,000 to the $650,000 range, Nathan said. “It’s harder to make those numbers work, so the builders have gotten cautious.”

    A related culprit is the surfeit of homes built in city neighborhoods in the years leading up to the housing bust, Lowe said. Many of them are dated now, but their sellers either don’t see it or can’t afford the upgrades needed to make their homes market-ready.

    “Those mid-2000s homes are a big problem in the $1 million to $1.3 million range,” he said. Buyer shun them, opting to wait until more up-to-date inventory becomes available.
     
    These are the city neighborhoods with the largest numbers of million-dollar home sales in 2019, according to Nathan’s report. The sales total is for both houses and attached housing (condos and townhouses). The figure in parentheses shows the increase or decrease from 2018.
     
    Near North: 339 sales (+10.1%)
    Lincoln Park: 307 sales (+27.4%)
    North Center: 129 sales (+6.6%)
    79彩票注册网址 Lakeview: 125 sales (-18.8%)

    79彩票注册网址The big uptick in Lincoln Park was accompanied by decreases in median sale prices (down almost 8 percent for houses, to about $1.66 million, and down 1 percent for condos and townhouses, to just under $1.3 million). “Some sellers have been coming to their senses and adjusting their prices” downward, Lowe said.

    Both West Town and Logan Square saw declines in the number of houses that sold for $1 million or more. (They have few condos and townhouses in the price range.) In West Town, 88 houses sold, a decline of 6.4 percent, and in Logan Square, 63 sold, down 16 percent from 2018.
     
    These are the suburbs with the largest number of million-dollar home sales in 2019, according to Nathan’s report. The figure in parentheses shows the increase or decrease from 2018.
     
    Winnetka: 144 sales (-5.3%)
    Hinsdale: 123 sales (-15.8%)
    Wilmette: 108 sales (+2.9%)
    Lake Forest: 88 sales (-15%)
    79彩票注册网址 Glenview: 82 sales (+17%)

    Glenview’s big increase, which amounts to 14 sales, is something Connie Dornan, an @properties agent based there, has witnessed. Glenview, she says, “has this urban suburban living that people come out from the city looking for, and you get more house in a great location for the same price” as Wilmette, Evanston and other places wannabe transplants from Chicago look first.

    In the past year, Dornan said, she’s had four buyers who did exactly that: started shopping in higher-profile towns along the lake, and felt they’d have to compromise on either house size or neighborhood to get a good home in their price range. They all bought in Glenview.

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