12-Feb-19 – Million-dollar-plus home sales flexed some muscle in the City of Big Shoulders in 2018. Luxury home, condominium, townhome, and co-operative apartment sales in Chicago totaled a whopping 1,400 units in 2018, a gain of 5.1 percent over 2017, and the median price rose 0.2 percent to $1.35 million, according to the RE/MAX Premier Luxury Report.

Attached homes – primarily condos and townhomes – were clearly the sales champions of the city market in 2018, said RE/MAX Premier of Chicago. Sales rose 10.5 percent to 715 units and the median attached home price rose 1.3 percent to $1.335 million.

Despite the strong flow of new-construction units into the market, year-end luxury inventory declined 3.9 percent to 465 units. Average market time for those properties sold was 128 days last year, 11 days more than in 2017, RE/MAX reported.

(Left) Kitchen in penthouse unit at The Montgomery. (Click on images to view larger versions.)

The city market benefitting the most in 2018 from the construction boom was the Near West Side, where condo and townhome sales skyrocketed 160 percent to 117 units, RE/MAX reported. In 2016, that neighborhood posted just 17 million-dollar-plus sales.

The Near West Side now ranks second in the city in the luxury-attached category, behind only the Near North Side, which recorded 354 luxury condo and townhome sales in 2018, a 10.6 percent increase.

Whether sales rose or fell, the neighborhoods with the most luxury condo and townhome sales activity saw the median price gain ground. Median prices rose 8.1 percent on the Near North Side, 3 percent on the Near West Side, 4.2 percent in Lincoln Park, 4.1 percent on the Near South Side, 1.2 percent in the Loop, and 1.3 percent in Lake View.

The condo and townhome market did not escape the fourth quarter sales slowdown, which analysts said was sparked partly by the brief autumn rise in mortgage interest rates and a volatile year-end stock market.

Chicago condo and townhome sales fell 9.8 percent to 148 units in the fourth quarter, while average market time rose to 175 days from 118 days in the fourth quarter of 2017. Even so, the median price gained 4.9 percent to $1.4 million, reflecting the premium prices commanded by homes in some of the new luxury high-rise properties.

(Right) One of four bedrooms in The Montgomery penthouse.

Experts have predicted that mortgage rates could move lower in early 2019. On February 7, Freddie Mac’s Primary Mortgage Market Survey reported that average interest charges on 30-year fixed-rate home loans eased from 4.46 percent to 4.41 percent – the lowest level in ten months. A year ago, the 30-year fixed loan average was 4.32 percent.

Chicago-area lenders were charging a range of 4.256 to 4.57 percent on 30-year fixed-rate mortgages on February 8, reported RateSeeker.

“This is great news for consumers who will be looking for homes during the upcoming spring home buying season,” said Sam Khater (left), Freddie Mac’s chief economist. “Mortgage rates are essentially similar to a year ago, but buyers now have a larger selection of homes and more bargaining power than they did the last few years.”

Detached home sales steady in 2018 but inventory is down

RE/MAX said sales of detached single-family homes in the city were remarkably steady in 2018. Total sales matched the 2017 total of 685 units though fourth quarter sales fell 18.7 percent to 109 units. The median luxury detached home sales price was unchanged both for the year, at $1.36 million, and the fourth quarter, at $1.4 million.

Year-end single-family home inventory fell 12.6 percent to 285 units, indicative of an apparent decline in speculative construction of detached homes. Average market time decreased to 138 days from 153 days in 2017.

Fewer luxury homes sold last year and took longer to sell

For the full year, 2,694 homes in the seven-county Chicago area sold for $1 million or more, an increase of 1.4 percent over the 2017 total. The median sales price of those homes was $1.315 million, up 1.2 percent from the prior year.

Average market time for those sales was 166 days, three days less than in 2017. The year-end inventory of homes priced at $1 million or more fell 7.8 percent to 1,938 units.

(Right) 400 square foot closet of penthouse at The Montgomery.

Suburban luxury sales were down 2.4 percent for the year to 1,294 units. The median price rose 0.4 percent to $1.285 million.

However, fourth quarter results suggest the luxury market might be slowing down. Sales across the seven-county Chicago area totaled 494 units, down 10.2 percent from the same quarter in 2017. Average market time rose to 192 days, compared with 165 days a year earlier. The median sales price did record a gain, rising 0.9 percent to $1,336,750.