26-Feb-17 – Despite the recent surge in mortgage interest rates to above four percent, the luxury home and condominium market in Chicago’s posh lakefront neighborhoods should see moderate growth in 2017 as the economy continues to recover after the presidential election.

That’s the outlook from veteran Realtor Louise Study of Baird & Warner’s Gold Coast office, who conducts the annual Study Study of Residential Real Estate.

The sales analysis surveys the market for upscale single-family homes and condos sold for more than $500,000 in Chicago’s most ritzy neighborhoods – Gold Coast, Lake View, Lincoln Park, River North, and Streeterville – along with expensive properties in 15 other neighborhoods.

28 luxury single-family homes were sold in Gold Coast, River North, and Streeterville in 2016. The median luxury home price in 2016 rose to $2.125 million from $2.06 million in 2015, when 27 sales were completed. Home prices in 2016 ranged from $925,000 to $3,537,500. (Left) Townhomes along East Elm Street in Gold Coast neighborhood of Chicago. Photo by Steven Dahlman.

Last year, 971 upscale condos, co-operative apartments, and townhomes in Gold Coast, River North, and Streeterville were sold for a median price of $735,000, a solid increase from a median price of $725,795 on 991 transactions in 2015. Condo prices ranged from $500,000 to $11.7 million in 2016.

With the stock market surging to a new record high after the election of President Donald Trump, more wealthy home and condo buyers likely will be in the market in 2017, analysts say.

Published since 1984, the Study Study is compiled from Multiple Listing Service statistics on sales of $500,000-plus residential units in 20 target neighborhoods.

Interest rates up but still low

In late February, benchmark 30-year fixed mortgage rates averaged 4.16 percent nationwide. A year ago at this time, the 30-year loan rates averaged 3.62 percent.

Despite a rate increase of about half a percentage point, “interest rates still are historically low,” noted Study (right). “Rental prices are rising. Luxury home and condo inventory has steadily fallen. Inflation is moderate.”

In her 2017 market outlook, Study pointed to a recent National Association of Realtors economics report that said, “There is an overwhelmingly strong desire among the younger generation to own a home. Gains could come from Millennials getting ready to buy a home, increased household formation, and an improving job market.”

Chicago’s other top upscale neighborhoods generally posted strong price appreciation and slightly lower transaction results in 2016 in most housing sectors.

According to the 32nd annual Study Study…

A total of 191 luxury single-family homes in Lincoln Park and Old Town were sold in 2016 at a median price of $1.575 million, down slightly from $1.6 million on 197 transactions in 2015. Home prices ranged from $530,000 to $8.35 million last year. Some 548 upscale condo, co-op, or townhome sales were posted at a median price of $680,000, up from $667,000 on 545 deals in 2015. Prices of condos surveyed ranged from $500,000 to $3.95 million.

(Left) Unit 6DEF at 312 North May Street, currently the most expensive condo unit – actually three combined units – for sale in the West Loop. The asking price for this five-bedroom, 5,000 square foot unit is $2.55 million. Photo by Chicago Home Photos.

A total of 152 luxury single-family homes were sold in Lake View in 2016 at a median price of $1.28 million, down slightly from $1.345 million on 159 deals in 2015. Home prices surveyed ranged from $500,000 to $3.8 million in 2016. Some 520 upscale condos, co-ops, or townhomes sold in Lake View in 2016 at a median price of $625,000, up from $605,000 on 447 transactions in 2015.

Ten luxury West Loop homes were sold in 2016 with a median price of $797,500. Eight homes were sold in 2015 with a median value of $917,150. In 2016, home prices ranged from $557,000 to $1.525 million. The median sale price was $644,000 on 213 upscale condo, co-op, or townhome transactions in 2016. A total of 230 units were sold with a median value of $659,950 in 2015.