The lure of lakefront breezes has had an uplifting effect on resale home prices in four key Chicago lakefront neighborhoods, boosting the average sale price above $1 million for the first time, according to a new study.
The average price of the 125 single-family homes sold during the second quarter in the four neighborhoods – the Near North Side, Lincoln Park, Lakeview and Uptown – was $1,032,760, according to Sudler’s Lakefront Market Report.
That compares with an average price of $953,610 during the same quarter last year, an 8.3 percent increase. The average price was $831,776 during the first quarter of this year.
The average home sale price ranged from highs of $1,504,666 on the Near North Side and $1,188,985 in Lincoln Park to $806,000 in Lakeview and $652,317 in Uptown.
However, sellers are taking more time to get those prices. The average market time for selling a single-family rose to 70 days from 47, an increase of 49 percent. A year earlier, average market time was 52 days.
Though the single-family average in these premium neighborhoods has passed $1 million, condo and co-op prices have dropped slightly. The overall numbers actually reflect a market moderating after large increases in recent years, said Jeanine McShea, president of Sudler’s residential brokerage division.
“As dramatic as it may be to say that the average price of a single-family home has passed the $1 million mark, what we are really seeing is a solid market in which upward pressure on prices is subsiding thanks largely to the steady supply of new construction and a more cautious attitude on the part of buyers,” McShea said. “…The gain pales in comparison to the 18.6 percent increase we saw in the second quarter last year and the 38.7 percent gain recorded in 2000.”
The average sales price for a condominium or co-op unit was $324,580 for the quarter, down 1.5 percent from the $329,710 average for the second quarter of 2001 and off 1.2 percent from the $328,603 average price during the first quarter of 2002.
The average market time for condominiums and co-ops held steady at 44 days when compared to the prior quarter, according to the survey. In the second quarter of last year, average market time was 45 days.
The Sudler Lakefront Market Report analyzes all transactions reported by the Multiple Listing Service of Northern Illinois (MLSNI) involving single-family houses, condominiums and cooperatives in five Chicago neighborhoods – the Loop, the Near North Side, Lincoln Park, Lakeview and Uptown. The MLSNI data includes many but not all new residential developments and is best viewed as a gauge of the market for existing homes.
The level of market activity, documented by the number of transactions closed during the period, also presented a mixed picture. Activity in the condominium and co-op segment was up strongly, both for the quarter (15.7 percent) and the first half (19.6 percent) when compared to 2001.
However, single-family home activity was more restrained. Transactions were up 4 percent during the first half of 2002, but down 9.1 percent in the second quarter.
“The large number of new condominium units coming onto the market this year is certainly a factor in generating those numbers,” said McShea. “In many instances you are looking at sales that are closing now that the buildings are completed even though contracts were signed last year.”
Overall, Lincoln Park turned in the strongest second quarter performance of any lakefront community, with single-family sales up 13.2 percent and condo sales up 14.7 percent.
“Homes in Lincoln Park are viewed as incredibly solid investments, which is why prices keep rising and market times remain lower than other neighborhoods,” said McShea. “The limited opportunities for new development also play a role.”
As for other neighborhoods, condominium sales were strong across the board, especially in the Loop, where they were up about 50 percent for the quarter.
In the single-family market, Lakeview experienced a noticeable decline in activity, with just 50 sales closed during the quarter compared to 62 in the same quarter last year. However, the average price of a single-family home in Lakeview rose to $806,000, up from $636,123 for the year-earlier period, an increase of 21.1 percent.
Real estate columnist and media consultant Don DeBat has written about Chicago-area housing and mortgage markets since 1968. He is president of Don DeBat and Associates, www.dondebat.net.