Prices eased in 1st quarter for prime lakefront houses

For sheer snob appeal in Chicago housing, nothing beats a posh single-family home in Lincoln Park or a luxury condominium on the Near North Side.

Among five prime lakefront neighborhoods, a whopping 67.9 percent of the total dollar volume of sales was concentrated in Lincoln Park during the first quarter, according to the Lakefront Market Survey, a quarterly analysis by local real estate brokerage Sudler. Of the 81 single-family houses sold in those neighborhoods (the Loop, Near North, Lincoln Park, Lakeview and Uptown) during the first quarter, 44 were in Lincoln Park.

“Lincoln Park is obviously the heart of the lakefront single-family home market, and demand there remains exceptionally strong,” said Jeanine McShea, executive vice president of Sudler.

In Lincoln Park, the number of transactions was up 57 percent from the same period last year. Even more significant to home sellers, the average market time for a single-family residence declined 23.8 percent, to 61 days during the first quarter of this year compared to 80 days during the first quarter of 2001.

However, there were some signs of moderation in the first-quarter marketplace as the nation began its recovery from the recession, McShea warned.

“The average home price for the quarter actually declined 2.8 percent in Lincoln Park this year, to $1.03 million from $1.06 million a year ago,” McShea said. “That is a function of the specific properties available and demonstrates that buyers, while still eager, are also careful shoppers.”

Sudler also reported that the largest increase in condominium sales activity was on the Near North Side, which experienced a 56.4 percent jump in sales volume and a 55 percent gain in transaction volume.

Among the five lakefront neighborhoods studied, the Near North Side accounted for roughly half of all sales volume in the condo and co-op category during the quarter.

The Sudler survey studies all resale transactions reported by the Multiple Listing Service of Northern Illinois (MLSNI) involving single-family homes, condominiums and cooperatives in five lakefront Chicago neighborhoods.

Led by a continued upsurge in condominium and cooperative sales, Chicago’s lakefront housing market enjoyed a buoyant first quarter, according to Sudler. Total sales volume for residential properties in the market area rose to $554.4 million, a gain of 27.8 percent over the same quarter in 2001.

The average price of a condo or co-op residence sold during the first quarter rose 3 percent, to $328,603 compared with the year-ago quarter. However, the average single-family home transaction in the five lakefront neighborhoods was $831,776, down 2.1 percent from the first quarter of 2001.

Overall, single-family home activity was brisk, with total transactions up 19 percent, to 81 sales and the average market time down 27 percent, to 47 days. Except for a slight decline in Lakeview, condominium and cooperative transaction volume was up in every neighborhood covered by the Sudler Lakefront Market Report.

Total transactions involving condos and co-ops rose 25.7 percent, to 1,482 from 1,179 a year ago. Sales volume for attached housing also rose across the board, reaching $487 million, a gain of nearly 30 percent over the $376 million in sales recorded a year earlier.

Average market time for condo and co-op properties essentially held steady, declining from 45 days last year to 44 days this year. However, that total includes a significant reduction in average market time in Lakeview (down to 46 days from 68) and a notable increase in Uptown (up to 51 days from 38). The Loop and Lincoln Park saw market times rise slightly for condos and co-ops, while in the Near North area the average fell by three days.

“From what we are seeing today, I’d say the spring of 2002 will be a much more pleasant experience for buyers than was the case last year,” McShea said. “At the same time, sellers should do quite well if they price their homes realistically.”

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.

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