Readers of Crib Chatter already know how tough the market is for sellers of mansions and other luxury properties, including condos.
Crain’s reports on the stubborness of sellers in the $1 million to $2 million range in Northern Illinois:
“When there is a motivated seller in the luxury market, the average reduction is 20% to 30%,” says Doris Hamilton, an agent at Hamilton & Associates in Arlington Heights.
Single-family home prices in the Chicago area fell 14.3% last year, not as steep as in other big cities but enough to cause gnashing of teeth for sellers. Since the peak in September 2006, prices here have fallen 18.6%, leaving them comparable to what they were in December 2003.
Market time leapt nearly 28% from 2007 to 2008, rising to 156 days from 122.
“There are many properties that need to be adjusted downward in order to sell,” says Jim Merrion, regional director of Re/Max for northern Illinois.
He found only 27 price changes this year on more than 500 listings of $1 million to $2 million in northern Illinois.
“That’s very low,” he says. Unrealistic pricing “damages a property the most. Once the property sits and sits, buyers fear there is something wrong with it that they have missed.”
Crain’s highlighted three homeowners of luxury properties who are having difficulty selling, even after slashing their prices.
Even Lincoln Park properties are a tough sell, as we’ve chattered about frequently.
The cost of long-distance living helped push Jack and Martha Gruber to pare the price of their one-of-a-kind Lincoln Park home by 20%, to $1.9 million from $2.5 million, in December.
Mr. Gruber, 62, an executive with Tacoma, Wash.-based Russell Investments, was transferred there, and they were eager to sell.
“We thought if we drop the price dramatically, maybe it will spur something,” says Ms. Gruber, 57.
The Grubers bought the home for $1.3 million two years ago, sinking $500,000 into redecorating and remodeling. Built as a bakery in 1923 and later converted for residential use, it’s sandwiched into a mostly retail block of Webster Avenue. The four-bedroom, 5,200-square-foot space features an atrium topped by skylights, four fireplaces, elevator, wine tasting room and rooftop deck.
“I didn’t want to walk away from half a million dollars,” he says, “but I’m resigned to it.”
Meanwhile, south of Lincoln Park in River North, the glut of luxury condos in newer highrises like Trump Tower is making it difficult for owners of “older” condo units to compete.
Owen Deutsch had already knocked down the price of his Gold Coast penthouse twice in a year, dropping it from $4.2 million to $3.75 million. But when he hired a new broker last month, she refused to take the listing without slicing off a quarter-million more.
“I told him, ‘If we price it where we can sell it, I’m interested,’ ” says Katherine Chez, a broker at Coldwell Banker’s Gold Coast office.
Mr. Deutsch, whose 47th-floor property is in the Fordham, 25 E. Superior St., is chairman and CEO of Chicago-based Loft Development Corp., which buys, develops and leases office space.
He wrestled with the price drop for 10 days before conceding to his new agent’s suggestion, $3.495 (note the effort to come in just below $3.5 million).
Mr. Deutsch, 68, bought the 3,700-square-foot raw space five years ago and “spared no expense” finishing it, hiring an interior designer to create a bright, loft-like apartment. He enclosed one of the two terraces, creating a greenhouse-like dining room with sweeping views of the city and lake.
Watching the price drop has been frustrating for Mr. Deutsch, who thought his penthouse was so unique it would fetch close to the original asking price.
“I had an awakening,” he says. “I’m not going to get all my money out of it.”
Ms. Chez predicts traffic will increase this spring as her well-heeled clients drift back from winter retreats. The unit’s private, enclosed garage spaces, an unusual amenity, may tempt “a car nut,” she says.
Until then, Mr. Deutsch waits.
There have been many nights I did not have a good night’s sleep,” he says. “Hopefully, this drop will be the last.”
Sellers grudgingly accept sizable cuts [Crain’s Chicago Business, Laura Bianchi, Mar 23, 2009]
An awakening on price [Crain’s Chicago Business, Laura Bianchi, Mar 23, 2009]
One big slice to heat up interest [Crain’s Chicago Business, Laura Bianchi, Mar 23, 2009]
