Luxury Home Sales Accelerating
The quickening pace comes at a time when overall home sales took a dip.
CHICAGO—In September, overall home sales throughout much of the Chicago region took a nosedive, but one segment seems immune from that decline. Sales of $1-million-plus homes in the seven-county Chicago area rose 6.6% during the third quarter to 790 units, up from 741 units in the same period last year, according to a quarterly analysis from RE/MAX. The median sales price of luxury properties sold during the quarter rose slightly, gaining 0.8% to $1.32 million.
Through the first nine months of 2018, luxury sales in the Chicago area were up 4.4% to 2,198 units.
“As we see it, there are two especially encouraging factors in the current luxury report,” says Jeff LaGrange, vice president of the RE/MAX Northern Illinois Region. “One is the strength of demand in the city, with luxury sales setting a record for the third quarter. In fact, every quarter this year has set a record. The other is the continued decline in the inventory of suburban luxury properties. The suburban luxury market had 2,291 listings two years ago, but it now has 1,744, which is higher than we’d like but much more manageable.”
Janice Corley, the owner of RE/MAX Premier Properties in Chicago, tells GlobeSt.com that the luxury market in the city has two new sources of fuel, affluent millennials and older, empty nesters. And these groups are attracted to homes they can find in newer neighborhoods like the South Loop and West Loop, among others.
Empty nesters, especially, have the funds for luxury homes, she adds, and “want a place where their grandchildren can stay.” That means sticking close to their family, so they exchange a perhaps 10,000 square foot home in the suburbs for a 3,000 square foot home in the city. “But it’s at the same price point that they had in the suburbs. They’re a big addition to our luxury market, and we’re grateful for it.”
Average market time dipped to 141 days from 162 days a year ago, and the inventory of luxury homes for sale declined 10.3% to 2,874 units, which represents a 10.9-month supply based on the pace of third-quarter sales.
Luxury residential sales in Chicago turned in an especially strong performance during the third quarter, gaining 19.1% to 424 units, and the median sales price edged up 0.2% to $1.34 million. For the first nine months of the year, city luxury sales were up 10.5% to 1,141 units. Average market time in the third quarter was 108 days, four days less than in the same quarter last year, and the inventory of luxury listings fell 5.2% to 1,105 units.