Million-dollar-plus home sales flexed some muscle in the City of Big Shoulders in 2018.
Luxury home, condo, townhome and co-operative apartment sales in Chicago totaled a whopping 1,400 units in 2018, a gain of 5.1% over 2017, and the median price rose 0.2% to $1.35 million, according to the RE/MAX Premier Luxury Report.
Condos and townhomes hot
Attached homes—primarily condos and townhomes—were clearly the sales champions of the city market in 2018, said RE/MAX Premier of Chicago. Sales rose 10.5% to 715 units, and the median attached home price rose 1.3% to $1.335 million.
Despite the strong flow of new-construction units into the market, year-end luxury inventory declined by 3.9% to 465 units. Average market time for those properties sold was 128 days last year, 11 days more than in 2017, RE/MAX reported.
The city market benefitting most strongly in 2018 from the construction boom was the Near West Side, where condo and townhome sales skyrocketed 160% to 117 units, RE/MAX reported. In 2016, that neighborhood posted just 17 $1-million-plus sales.
The Near West Side now ranks second in the city in the luxury-attached category, behind only the Near North Side, which recorded 354 luxury condo and townhome sales in 2018, a 10.6% increase.
Here are sales results in other city neighborhoods with substantial luxury condo and townhome activity in 2018:
• Lincoln Park posted 92 sales, a 28.1% decrease over 2017.
• The Near South Side achieved 59 transactions, a hefty 47.5% increase over 2017.
• The Loop recorded 46 sales, a 22% decrease over 2017.
• Lakeview posted 31 sales, a 20.5% decrease over 2017.
Whether sales rose or fell, the neighborhoods with the most luxury condo and townhome sales activity saw the median price gain ground. Median prices rose 8.1% on the Near North Side, 3% on the Near West Side, 4.2% in Lincoln Park, 4.1% on the Near South Side, 1.2% in the Loop and 1.3% in Lakeview.
However, the condo and townhome market did not escape the fourth-quarter sales slowdown, which analysts said was sparked partly by the brief autumn rise in mortgage interest rates and a volatile year-end stock market.
Chicago condo and townhome sales fell 9.8% to 148 units in the fourth quarter, while average market time rose to 175 days from 118 days in the fourth quarter of 2017. Even so, the median price gained 4.9% to $1.4 million, reflecting the premium prices commanded by homes in some of the new luxury high-rise properties.
Experts have predicted that mortgage rates could move lower in early 2019. On February 7, Freddie Mac’s Primary Mortgage Market Survey reported that average interest charges on 30-year fixed-rate home loans eased from 4.46% to 4.41%—the lowest level in 10 months. A year ago, the 30-year fixed loan average was 4.32%.
Chicago-area lenders were charging a range of 4.256% to 4.57% on 30-year fixed-rate mortgages on February 8, reported rateSeeker.com.
“This is great news for consumers who will be looking for homes during the upcoming spring home-buying season,” said Sam Khater, Freddie Mac’s chief economist. “Mortgage rates are essentially similar to a year ago, but buyers now have a larger selection of homes and more bargaining power than they did the last few years.”
Luxury Detached Home Sales
RE/MAX said sales of detached single-family homes in the city were remarkably steady in 2018. Total sales matched the 2017 total of 685 units though fourth-quarter sales fell 18.7% to 109 units. The median luxury detached home sales price was unchanged both for the year, at $1.36 million, and the fourth quarter, at $1.4 million.
Year-end single-family home inventory fell 12.6% to 285 units, indicative of an apparent decline in speculative construction of detached homes. Average market time decreased to 138 days from 153 days in 2017.
While total detached sales were flat for the year in the city, individual neighborhoods with 20 or more luxury home transactions posted the following results:
• Logan Square. A whopping 75 luxury home sales were recorded, a 66.7% increase over 2017. Median prices rose 2.1%.
• Lincoln Square. Thirty-four luxury homes were sold, a gain of 21.4% over 2017. Median prices rose 3%.
• North Center. A total of 121 luxury homes changed hands, a decline of 20.4% from a year earlier. However, median prices slipped 2.1%.
• Lakeview. Luxury home sales rose 11.8% to 123 units. Median prices rose 4.7%.
• West Town. A total of 94 luxury homes were sold, matching 2017’s production. However, median prices slipped 0.8%.
• Near North. Twenty-three luxury home transactions were recorded, unchanged from 2017. However, the median price decreased 13.6%.
• Lincoln Park. The perennial leader in luxury detached sales, Lincoln Park posted a 16.4% decline in sales to 148 luxury homes sold. However, median prices rose 5.9%.
Chicago-area luxury total
For the full year, 2,694 homes in the seven-county Chicago area sold for $1 million or more, an increase of 1.4% over the 2017 total. The median sales price of those homes was $1.315 million, up 1.2% from the prior year.
Average market time for those sales was 166 days, three days less than in 2017. The year-end inventory of homes priced at $1 million or more fell 7.8% to 1,938 units.
Suburban luxury sales were down 2.4% for the year to 1,294 units. The median price rose 0.4% to $1.285 million.
However, fourth-quarter results suggest that the luxury market might be slowing down. Sales across the seven-county Chicago area totaled 494 units, down 10.2% from the same quarter in 2017. Average market time rose to 192 days, compared with 165 days a year earlier. The median sales price did record a gain, rising 0.9% to $1,336,750.
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.