The Chicago Tribune reported over the weekend what Crib Chatter readers have known for over a year: the upper bracket market is dead.
And now there’s a glut of million dollar homes with no buyers in sight.
From the Tribune:
In Oak Brook, it’s a $5.75 million stone castle. In Burr Ridge, it’s a Middle Eastern-influenced home named Villa Taj, once priced at $25 million and headed for the auction block next month. In Barrington Hills, it’s a nearly 12,000-square-foot home sitting on five acres. In Chicago, it’s an unfinished, four-story, bank-owned home with an elevator. And in Lake Forest, it’s an elegant country home whose already trimmed price was just slashed by another $1 million.
All are newly constructed, ultrahigh-end homes, reminders of the housing market’s headier, healthier days. And all are additions to a market that is bursting with multimillion-dollar homes waiting for that very discriminating buyer with very deep pockets.
What’s interesting is that while the article discusses the upper bracket inventory in Lake Forest, where most people would assume it would be, it doesn’t address all the million dollar homes in neighborhoods and cities that rarely saw houses priced that high before the boom.
While no one is surprised at a $2 million home in Lincoln Park, maybe they should be about a $2 million home in West Bucktown.
In Lake Forest, for example, more than 50 homes are listed for sale for at least $3 million, not counting homes that are being privately marketed. In the past 12 months, 11 residences in that price range sold, and it took, even with significant discounts, an average of almost 500 days to sell those properties.
Move up to homes listed for at least $5 million and there are more than 20 Lake Forest properties for sale. In the past 12 months, one home in that price range sold, which means if the supply and market held steady at their current level, it would take 20 years to whittle that inventory.
The luxury home builders quoted in the article are sticking to their guns and show no regret about sinking millions into luxury spec homes.
Longtime homebuilder Don Ciaglia plowed ahead with the spec construction of one of his largest luxury homes, on a wooded hilltop in Barrington Hills, despite the industry’s darkening skies a year ago.
“We weren’t going to stop building,” he said.
Adds his wife, Ruth Ciaglia, an ERA Countrywood Realty agent who listed the home, “At the time, a house like this was really a good idea. There were houses like that that were selling. Who knew?”
Ciaglia has lowered the price by $50,000, to $5.39 million, but doesn’t plan any more reductions.
One builder who’s decided to see the glass as half full is Adel Tarakdjian, who in December started building a 23-room home in Glencoe that’s listed at $5.995 million.
Tarakdjian, who constructs a spec home every two to three years to use as a marketing tool, has no plans to drop the price of the home that is loaded with features, starting with the 1,200-pound, heated, steel front doors. In fact, in July, before he’d finished the project, he increased the price by $295,000.
“I believe in my product,” he said. “Of course there’s risk involved. There is risk involved in everything we do in our lives. If I cross the street, there is risk involved.
“I do sleep. I sleep well.”
Ultrahigh-end homes slow to sell in crowded market [Chicago Tribune, Mary Ellen Podmolik, Oct 18, 2009]
