There are so many luxury homes on the market in Chicago, prices are starting to drop. Does that mean it's time to buy?
Lincoln Park listing 1939 North Howe Street boasts a spacious center courtyard plus a striking loggia and front courtyard-facing library.
Luxury listings in Chicago’s swankiest neighborhoods are rising in number, sitting on the market, then dropping in price. Buyers are playing waiting games to snag the best pricing, yet sellers are still listing their places. Why—and what’s the best way to buy right? To understand the situation, we talked to two of Chicago’s shrewdest luxury brokers—Berkshire Hathaway KoenigRubloff’s Melinda Jakovich (312-953-3425) and Coldwell Banker’s Karen V. Peterson (312-282-2933).
Tell us about the numbers. KP: From February to December 2016, for Near North properties [i.e. Streeterville, Gold Coast, Old Town, and River North] at $1 million to $10 million, there were 102 attached listings averaging $2.465 million and 268 days on the market, and 13 single-family homes averaging $5.047 million and 376 days on the market. In the first 10 weeks of 2017, we had 281 attached listings averaging $2.308 million and 203 days on the market and 26 listings averaging $4.416 million and 357 days on the market. For attached, that’s almost a 175 percent inventory increase and a 6 percent price drop; for single families it’s a 100 percent increase and 12 percent price drop. MJ: The months supply of inventory (MSI) is up about 10 percent in homes over a million but only up 3 percent in homes under a million.
The sumptuous living room at 55 West Goethe Street No. 1248.
Any specific reason why this is happening now? KP: People sat on the sidelines for much of last year because of elections, but now we have a hot stock market and we’re finally past the pre-recession prices. So everything from divorce, death, relocation, downsizing, upsizing, schooling, and more is at play.
How are sellers and buyers responding? MJ: Brokers are helping their sellers be creative. One strategy is to rent those ultra-high-end homes to high-profile clients, sometimes with options to buy. Some listings are reduced. I have two that are great values right now—a five-bed, six-bath home at 1440 North Dearborn Parkway for $6.85 million with two wine cellars, a two-car garage, a rooftop deck, and more, and a recently reduced condo at 161 East Chicago Avenue for $2.925 million that’s three combined units at more than 4,000 square feet. KP: Brokers are also helping their buyers find the best value, which is often in resale rather than new construction. Hardly any new developments in the luxury market are under $1,000 per square foot. But you can find remarkable value in resales for $600 to $800 per square foot, and amenities that you can’t get in new construction—such as those wine cellars, outside spaces, and multiple parking spaces. We are marketing two such properties: an eight-bed, eight-and-a-half-bath home at 1939 North Howe Street, which is on three lots with multiple outside spaces and almost 11,000 square feet above grade. Another great value for the space and location is 55 West Goethe Street, No. 1248, a four-bed, four-bath townhome that is almost 3,500 square feet for $1.295 million