With all the cheerleading going on, you’d think the luxury market was sizzling hot.
But is it?
Crain’s does it’s mid-year update on the luxury market in the Chicagoland area.
While sales are up 14% from a year ago, and are much higher than the dark years of 2009 and 2010, they are still well under the 2006 peak.
A total of 228 homes sold for at least $1.5 million during the first six months of the year, a 14 percent jump from the 200 homes sold over the same period in both 2012 and 2011, according to brokerage Baird & Warner Inc., which analyzed information from Midwest Real Estate Data LLC.
While that number represents a gain from a low of 168 sales in the first half of 2009, it’s well below the 381 in the first half of 2006, when the market peaked, said Jim Kinney, vice president of luxury home sales at Baird & Warner.
“Everyone’s dancing around saying, ‘Happy days are here again,’” he said. “A 14 percent increase is great, but it’s not anything earth-shattering and it’s certainly not a return to pre-crash-type numbers, so I think we’ve got a ways to go.”
Lincoln Park was the most active neighborhood/city with 45 sales over $1.5 million. Winnetka and Hinsdale tied for second with 27 sales each.
According to MRED, 898 homes are listed for at least $1.5 million in the Chicago area, which translates to a 25-month supply based on current sales trends.
“Any time you get under double digits (in months) for supply numbers it starts getting to be a very, very healthy market,” Mr. Kinney said. “A lot of the stuff in the city is starting to favor the sellers,” partially because there’s less available land to build on.
That’s not the case in the suburbs, where supply continues to outpace demand in many areas. Burr Ridge was the weakest high-end market in the first half of 2013, with 168 months’ worth of inventory — enough to last 14 years based on current sales trends, according to Baird & Warner. Only two Burr Ridge properties listed for at least $1.5 million have sold so far this year.
Does this data also include condos or is this just single family homes? The article isn’t clear.
Most of the unsold condos in the new construction Ritz building and 2550 N. Lincoln Park are not even listed on the MRED so they would not be included in “inventory” calculations. There are over 150 of these in this price range that would be considered part of the “luxury” market.
Adding those to the calculations probably nearly doubles the number of luxury condos on the market.
But either way- inventory is higher than most people think.
With high inventory levels in the luxury bracket, is this the only part of the housing market where you can still get a deal?
Luxury home sales rise 14 percent in the first half [Crain's Chicago Business, Abraham Tekippe, July 9, 2013]