Residential: High-end home sales up in first 8 months
(Crain's) — Sales of high-end homes and condominiums in the city climbed in the first eight months of the year, thanks to sellers cutting prices and to the first closings at some new developments.
But even though the pace of high-end home sales has picked up, there's still a glut of product available that's likely to push prices even further down.
There were 452 single-family homes and 672 condos priced at $1 million or more on the market in Chicago as of Aug. 31, according to Baird & Warner Inc., which analyzed information from Midwest Real Estate Data LLC. Based on sales activity over the past year, that's an 18-month backlog of houses and a 21-month inventory of condos.
A balanced market would have a six- to eight-month supply, says James Kinney, vice-president of luxury sales at Chicago-based Baird.
“I think we're in for many months of wading through inventory,” Mr. Kinney says. “The supply is going to continue to build until we see a turn in the job market.”
The good news was that sales of high-end single-family homes in Chicago rose about 24% to 199 in the first eight months of the year, compared with 161 in the same period last year.
High-end condo sales, meanwhile, jumped about 85% to 253, compared with 137 in the first eight months of 2009. The surge can be explained in part by the first closings at upscale projects like the Elysian Hotel & Private Residences and Ten East Delaware, Mr. Kinney says.
Sales in the high-end market also have climbed because sellers have cut prices — something many were reluctant to do last year.
Even J. P. Morgan Chase & Co. CEO Jamie Dimon caved, recently lowering the price of his Gold Coast mansion on East Banks Street by more than 25% to $6.95 million, from $9.5 million.
The listing agent, Janet Owen, a residential broker at Chicago-based Sudler Sotheby's International Realty, declines to discuss Mr. Dimon's property. But she says sellers in general are becoming more realistic.
“They realize the market does pertain to their home, not just everyone else's,” Ms. Owen says. “That's why these properties are selling.”
