FROM LEFT: Brokers Deborah Ballis, Pamela Raia, and Elizabeth Ballis know how to capitalize on the winter real estate market.
According to the latest stats from the S&P/Case-Shiller Home Price Index, “Average home prices across the United States are back to their spring 2004 levels.” Chicago led the most recent monthly gains with a 3.2 percent increase. This news prompted Michigan Avenue to do a temperature check of Chicago’s luxury market with some of the city’s big-ticket brokers: mother-daughter team Elizabeth and Deborah Ballis of Coldwell Banker, and Pamela Raia of Baird & Warner.
Where does this price increase leave the luxury housing market for now?
ELIZABETH BALLIS: Busy, just like the rest of the market. But there used to be real segmentation, with the first quarter starting out high, April to June a little less so, the summer modest, and fall and early winter really slow. Now there’s little segmentation, just clients looking to buy because there’s such a shortage of properties. DEBORAH BALLIS: That also makes this a great time to go on the market. High-end sellers who would normally wait until after the holidays are going on now thanks to the shortage. The key as a seller is to take advantage of that lack of inventory. PAMELA RAIA: Luxury buyers are trying to take advantage of those really high-priced homes that languished over the summer. They’re not new anymore, so a buyer will use this as an opportunity to make an offer under ask, and often get it.
How is pricing right now?
PR: The luxury market has definitely come down from before the crash. At Baird & Warner, we now consider anything over a million to be luxury. But downtown, it’s $1.5 million or more. Either way, properties aren’t taking a hit when they’re new to the market in the winter now. DB: But the type of housing and location count, too. Luxury condos and co-ops start at $750,000, while [single-family] homes start at $1 million—but a million-dollar home in a hot neighborhood isn’t necessarily luxury. Obviously, you get a bigger hit of luxury the farther out you go in the neighborhoods, and Bucktown and West Town are seeing more luxury single-family homes being built. We have a house going up at 2053 North Fremont Street by Middlefork Development for $3.45 million, and interest is incredibly strong—despite the time of year. EB: Building is back, and location can drive up the price of lots, especially in Lincoln Park. We just helped a client buy a potential teardown in DePaul for $30,000 over list, closing at $1.325 million, and there were six offers that first day. Basic lots cost $1.2 million and up in Lincoln Park now. But in this case, the buyer is going to rehab it. It will probably sell for close to $4 million when it’s done. So deals are just humming along, despite the time of year? PR: Not really. Even though deals are being made so quickly that we’re literally writing them on the spot or in the car, they’re falling apart more quickly than ever. EB: Buyers are so challenged to find something that they spend 20 minutes in a place, write a contract, and then back out because they can’t sell the home they own fast enough. It’s becoming common to go through several contracts on a property before you actually close on it.
So you have to get to a place fast, and be prepared to roll with the punches?
EB: This is absolutely true.
Elizabeth Ballis (312-343-4545) and Deborah Ballis (312-286-0300), Coldwell Banker, 1959 N. Halsted St., Pamela Raia, Baird & Warner, 5430 W. Devon Ave., 312-446-3148