The Chicago-area’s $1-million-plus home market was on a roll in early 2018 showcasing its best performance in seven years.
A whopping 489 existing luxury homes, townhomes and condominiums with price tags of $1-million–plus were sold in the first quarter of 2018—an increase of 7.5% over the same quarter last year, and the most in that quarter since 2011, according to the RE/MAX Luxury Report on Metro Chicago Real Estate.
The median sales price of $1-million-plus homes rose a hefty 5.5% to $1.35 million. It was the second consecutive quarterly gain following four quarters in which the median price declined in comparison to the same period one year earlier.
“Demand for luxury homes is clearly on the upswing right now,” noted Jeff LaGrange, vice president of RE/MAX’s Northern Illinois Region.
“Only time will tell if this is a temporary situation sparked by buyers eager to act before interest rates move higher, or if this reflects a longer-term trend that will help pare down the large number of luxury listings on the market,” LaGrange said. If the median sales price continues to advance, it will confirm that demand and supply are moving into better balance, he said.
Luxury Sales hot in Chicago
Chicago’s luxury-attached home market—townhomes and condos—enjoyed an upbeat first quarter, with 140 luxury units changing hands, 16.7% more than the same period in 2017.
That compares with 120 luxury detached single-family homes sold in the quarter—a decline of 1.6%—but still the second strongest first-quarter sales figure for this category of homes since RE/MAX began tracking that data in 2011.
The median sales price for luxury single-family homes rose 3.9% to $1.39 million during the first quarter. The median price of luxury townhomes and condos gained 4.7% to $1.33 million, RE/MAX reported.
The hottest neighborhoods for $1-million-plus homes were North Center and Lincoln Park, which together accounted for slightly more than half of all first-quarter luxury detached sales in the city.
• North Center. The neighborhood led the city with 28 luxury sales with a median price of $1.37 million, a gain of 12% over the first quarter of 2017.
• Lincoln Park. The neighborhood posted 25 luxury sales with a median price of $1.7 million, a gain of 8.7% over the first quarter of last year.
• Near West Side. RE/MAX reported one noteworthy shift in the city’s luxury townhome and condo market. The Near West Side emerged as a sales leader for attached luxury residences. During the first quarter, that area registered 25 luxury-attached sales.
RE/MAX said that fact is particularly striking because from 2011 through 2017, first quarter sales of luxury-attached homes in the Near West Side totaled only eight units. In 2017, there were 12 luxury-attached sales there during the first six months, then 33 sales in the July through December period.
However, the combined 7.4% increase in city luxury sales volume for the quarter came with an uptick in average market time to 166 days—a 12-day increase. And while the inventory of luxury homes for sale in the city remained essentially stable, falling just 0.6%, that result masked an interesting split.
Spurred by new development, the inventory of luxury townhomes and condos rose 12.9%, while the luxury single-family home inventory declined 14.7%. This reflected a recent slowing of new construction in that category, RE/MAX said.
Another encouraging development in the first quarter was a continued reduction in the number of unsold homes listed for at least $1 million. Luxury listings in the Chicago area fell 5.6% to 2,742 units. However, they declined only 0.6% in Chicago. RE/MAX reported that there is an 11.8-month supply of luxury home listings in Chicago.
Luxury home sales in suburbs
Suburban luxury sales, which almost exclusively involve detached homes, delivered generally positive results. Sales activity rose 7.5% to 229 units during the first quarter, and the median sales price climbed 2.4% to $1.3 million, compared with the same period last year.
However, average market time increased to 257 days from 228 days a year earlier. Luxury-home listings in the suburbs fell 8.4% in the first quarter. Inventory had been especially high for the last few years, RE/MAX said.
Even with that reduction, existing luxury listings in the suburbs still represent a 22.5-month supply of homes based on the pace of first-quarter sales.
• Hottest luxury suburbs. Hinsdale had the most active luxury market during the quarter, with 29 sales, a 16% increase over the same quarter in 2017. Winnetka, recorded 23 sales, a decline of 17.9% over the first quarter last year.
• Suburban home leaders. Solid sales gains were seen in several other leading suburban luxury markets, including: Wilmette, up 8.7% to 25 units; Lake Forest, up 84.6% to 24 units; Naperville, up 116.7% to 13 units, and Glencoe, up 120% to 11 units.
For more housing news, visit www.dondebat.biz. Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit www.escapingcondojail.com.