Marketing expensive homes and condominiums in Chicago’s posh lakefront neighborhoods is getting harder as economic uncertainty lingers through spring, real estate experts say. Home sellers saw the amount of time required to market homes in lakefront neighborhoods more than double, according to the Lakefront Market Survey, a quarterly analysis by local real estate brokerage Sudler.
The Sudler Lakefront Market Survey analyzes all transactions reported by the Multiple Listing Service of Northern Illinois involving single-family homes, condominiums and cooperatives in six Chicago neighborhoods: the Loop, Near North / Gold Coast, Lincoln Park, Lakeview, Uptown and Edgewater.
The average market time for a single-family home in this area climbed to 106 days in the first quarter, up from 52 days in the first quarter of 2002, a whopping increase of 104 percent, said Jeanine McShea, president of Sudler’s residential brokerage division. The average market time during the fourth quarter of 2002 was 91 days.
The condominium and cooperative market slowed even more dramatically. The average market time increased 139 percent, to 108 days from 45 days in the same quarter last year. Market time for condos and co-ops averaged 41 days in the final quarter of 2002, McShea said.
“Historically, low interest rates for home mortgage financing have encouraged buyers to stay in the market despite the economic and political uncertainties that dominated the first three months of this year,” said McShea. “On the other hand, that uncertainty has slowed buyers’ decision-making process, changing the character of the marketplace. Sellers are facing much more competition and need more patience.”
Despite the longer market times, sales volume is up on the lakefront. Total sales volume for single-family homes rose 3.7 percent during the first quarter when compared to the same quarter of 2002, reaching $72.9 million, while the volume of lakefront condo and co-op sales increased 2.4 percent, to $528.9 million.
The number of residences changing hands declined slightly in both categories, with single-family sales down 11.4 percent, to 78 transactions for the quarter, and condo and co-op sales slipping .7 percent, to 1,631 transactions.
As a result of the slowdown in market time, luxury home buyers seeking $1 million-plus mansions on Chicago’s Gold Coast this spring have the best selection of available properties in years, said James Kinney, president of Rubloff Residential Properties. There currently are 34 Gold Coast homes and rowhouses on the market with listing prices of $1 million or more, he said.
“That is an amazingly high number of listings, when you consider that only 83 single-family homes exist in the exclusive Gold Coast neighborhood, bounded by Oak Street, Clark Street, North Avenue and Lake Michigan,” said Kinney, who also is president of the Multiple Listing Service of Northern Illinois.
Rubloff currently is offering 12 Gold Coast properties for sale, around 35 percent of the single-family market, he said.
Sudler reported that the Near North / Gold Coast area had the highest average price for a single-family home during the first quarter – $1.22 million – but only three homes changed hands.
The average price of a home sold in Lincoln Park during the first quarter was $1.16 million, up from $1.03 million in the same quarter last year. The average price of a single-family home in Lakeview was lower than in Lincoln Park, at $975,000, but significantly higher than the neighborhood’s 2002 average of $764,000.
“Of the 28 homes sold in Lakeview during the first quarter, 12 were new construction properties that combined luxury amenities with higher price tags, and that is a big reason the average price was so high,” McShea said.
Overall, the average price of a single-family home along the lakefront during the first quarter was $934,415, up 12.3 percent from the same period last year and 7.9 percent from the prior quarter.
The Near North / Gold Coast slowdown was also reflected in a major increase in average market time for lakefront condos and co-ops for the first quarter, which jumped to 124 days this year from 34 days a year ago.
The average price of a lakefront condo or co-op sold during the quarter was $324,300, a 3.1 percent increase over the average price of $314,464 during the first quarter of 2002.
“The pace of price increases is clearly slowing in this more competitive market,” noted McShea. “Even so, the trend is still upwards.”
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.