Seventy percent of the market anchored in 2007 prices?

508 Melrose, Chicago IL

Coldwell Banker’s Matt Garrison is one of my “go-to guys” for information on the mid- to higher reaches of the north side market. Earlier today, Matt sent along the following report:

We have sold $32.8 million so far this year with 18 closed and 14 pending. Our average transaction is way up, partially because we have targeted affluent resale as opposed to the development marketing work we used to do.

Our largest transaction was representing the buyer of Diane Burns’ Lincoln Park home, which sold for $4.525 million in May.

The volume pace is back up to a 2007 kind of level for us, if we can sustain it. We are outperforming the market, which is still not rebounding from a volume standpoint.

I doubt we will be able to sustain our pace. The market has gotten lethargic after July 4th every year since 2006 (with the exception of the stimulus). I don’t see why this year would be any different.

We have noticed interesting trends in the $1M-$1.3M price range in core neighborhoods, representing both sellers and buyers. Of course 70% of the market is still anchored to 2007 pricing. Those homes are not going to sell. But, for accurately priced homes, there is a lot of competition.

We have listed and sold 3 condos in this range in the last few months, and priced them right with realistic sellers. All went under contract in around 2 weeks, and 2 of them were cash buyers. Representing buyers in this price point, we have lost a few deals in multiple offer situations before locking one up.

For the small percentage of listings that are priced right, the bottom is in, and they are met with demand. For the majority that are still over-priced, they won’t sell without a pricing reality check.

Sellers shouldn’t worry about the indexes. They should look at the inventory they are actively competing with and price their unit to compare favorably with the competition, with closed comps as a secondary consideration.

The home pictured above is one of Matt’s recent sales, a penthouse at 508 W Melrose that closed late in May at $1,160,000.

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