5-May-19 – With luxury home sales softening in early 2019 due to economic factors, wealthy home buyers in Chicago should have many choices this spring, experts say.

Only 380 properties sold for $1 million or more in the first quarter of 2019, according to the quarterly RE/MAX Premier Luxury Housing Report from RE/MAX Premier of Chicago.

That’s a hefty decline of 22.3 percent in total luxury units compared with the first quarter of 2018. Luxury home sales slumped 10.2 percent in the last quarter of 2018. However, luxury home sales registered a gain of 1.4 percent for all of 2018.

(Left) Living area with piano in penthouse unit at 840 North Lake Shore Drive.

Despite slower first-quarter sales, the median sales price gained 1.1 percent, rising to $1.365 million. The time needed for one of those homes to sell slipped to an average of 190 days from 209 days a year earlier.

Despite those relatively weak numbers, there are some amazing new luxury properties on the market. Take the 8,800-square-foot penthouse at 840 North Lake Shore Drive that recently hit the market at a listing price of $13.5 million.

This pad, with an unobstructed view of Lake Michigan, pretty much has everything. Six bedrooms, eight baths, several living and dining spaces, 1,135 square feet of terrace space, a wine cellar, game and media rooms, and an office, according to listing agent Tim Salm of Jameson Sotheby’s International Realty.

“This condo is in an elite class, a custom build-out with the highest-end finishes,” said Salm (right). “It is a private full-floor unit with more square feet of living area than most of the largest single-family homes in the Gold Coast or Lincoln Park.”

Historically, fewer than ten condos in the Windy City have sold for more than $12 million.

The inventory of properties for sale at $1 million or more in the Chicago area ended the quarter at 2,710 units, only 1.2 percent less than at the same time last year. All of the decrease occurred in the suburbs, where the inventory fell 2.5 percent, while the city’s luxury inventory expanded by 1.1 percent.

In Chicago, first-quarter luxury sales were down a whopping 25 percent to 195 units, the lowest total for that quarter since 2016. However, the median sales price for city luxury homes climbed 7.8 percent to $1.485 million, the highest quarterly median price since 2010.

Experts say the first-quarter median price declines likely were caused by the Polar Vortex in Chicago, a volatile stock market, and the sharp rise in mortgage rates at the end of 2018.

“The luxury market activity has been slightly sluggish over the last six months, but a real test will be in the current quarter when sales usually accelerate,” said Janice Corley (left), broker/owner of RE/MAX Premier. “Typically, we see an uptick in both inventory and buyer activity after the deadline passes for filing income taxes. I’m encouraged by what we’re seeing so far, but we’ll have to see if that translates into stronger sales.”

Corley noted that the positive news in the first-quarter results is that median prices were generally steady or up and the inventory of detached luxury homes continues to decline although it is still uncomfortably high in the suburbs.

“But in the city, we have just an eleven-month supply of detached homes even when you measure it against the first-quarter sales pace,” she said.

North side had the most sales of detached luxury homes

First-quarter sales of luxury single-family homes in Chicago slumped by 11.7 percent to 106 units. However, the median sales price climbed a robust nine percent to $1,523,288. Average market time dipped to 188 days, 17 days less than for the same period last year.

The three Chicago neighborhoods with the most luxury detached home sales continue to be Lake View, Lincoln Park, and North Center, which taken together accounted for 64.1 percent of first-quarter luxury detached transactions. Sales climbed in Lake View, up 11.1 percent to 20 units, and in Lincoln Park, up 16 percent to 29 units, while sales in North Center fell by 32.1 percent to 19 units.

“Those results helped boost the median sales price,” Corley explained, “because the luxury prices in Lake View and Lincoln Park typically are higher than in North Center.”

(Right) Kitchen of penthouse unit at 840 North Lake Shore Drive.

The first-quarter median in Lake View was $1,764,500 and in Lincoln Park it was $1,621,500.

Elsewhere in the city, luxury detached sales were little changed compared to last year’s results. Sales fell by five units in Logan Square, two units in Lincoln Square, one unit on the Near North Side, and one unit in West Town. Sales were unchanged in Uptown and rose by two units in Edgewater.

Sales of luxury attached homes in Chicago were especially sluggish during the first quarter, with 89 units changing hands, 36.4 percent less than in the same quarter last year.

The median sales price gained 4.7 percent to $1.4 million and average market time rose to 169 days from 132 days a year ago. The inventory of luxury units on the market at the end of March was 635, an increase of 6.9 percent.

(Left) View of 840 North Lake Shore Drive from Lake Shore Drive & Pearson Street.

Each of the six city communities that lead the attached luxury market registered a sales decline in the first quarter compared to the same period last year – including the Near North Side, which traditionally dominates the attached luxury market and accounted for 49 sales, representing 55 percent of all city luxury attached sales during the first quarter.

“Even though fewer units are selling, the Near North market seems fairly healthy,” noted Corley. “What we’re seeing are fewer sales of what might be called entry-level luxury properties, and more sales at the high end, which explains why the median sales price there gained 18.6 percent for the quarter to $1.845 million.”

Elsewhere, attached luxury sales fell 42.1 percent in Lincoln Park to eleven units, a whopping decline of 68 percent on the Near West Side to eight units, a drop of 36.4 percent in the Loop to seven units, hefty slippage of 60 percent on the Near South Side to six units, and a drop of 37.5 percent in Lake View to five units.