Negative data has been rocking the Chicago real estate market—but there’s still plenty of opportunity for savvy buyers and sellers.
Chicago's volatile luxury real estate market still boasts some serious finds. (Photo by Joe Compean/VHT Studios)
Data from Illinois Realtors shows that Chicago home sales plunged this summer and are down year-over-year almost 9 percent, while home prices rose just 2.8 percent compared to 6.5 percent nationwide. Making it a perfect storm, Chicago’s home prices grew at the slowest annual rate out of the country’s 20 largest cities—just 2.8 percent compared to a national rate of 6.5 percent, according to the S&P CoreLogic Case-Shiller Indices report.
Why is the real estate market in such dire straits?
Jon Pizer: It’s not—it’s dynamic, like the stock market, and changes every minute. Sales were booming in the spring, and while inventory is low for single-family homes, condos and townhouses are becoming more plentiful and luxury is moving well. With lower prices, Chicago real estate is a great deal, especially at the luxury level.
Should demand make prices go up?
Kim Kerbis: Right now, Chicago’s supply of inventory is only at 3.8 months, well below the market-healthy five-month supply. This shortage is making the market faster and more competitive. Homes either sell very quickly or take forever. The former are usually turnkey or pretty close, and the latter aren’t priced right. They’re clearly too high.
JP: And demand doesn’t always equate to higher prices, especially if you need to sell. We just closed on a house in Lincoln Park (1865 N. Maud) that was on the market 81 days. It was priced at $2.65 million, which is what the couple bought it for in 2015. They were moving back to New York, understood the market and priced it realistically.
But if inventory is down, why aren’t prices going up?
JP: You can’t change our weather or our location, but then there are the political and fiscal problems between the city and the state, increasing property taxes and high sales taxes.
KK: And school and police issues seem to crop up daily. There’s much more uncertainty here than in other cities in other parts of the country, so people are keeping their hands on their pocketbooks.
What’s selling, and how fast?
KK: Luxury is moving. Sales for homes over a $1 million grew by 10 percent in the first half of this year compared to 2017. I’m seeing single-families in the right neighborhoods go the fastest. Good schools are imperative. I just sold a historic single-family in the Southport corridor (3449 N. Janssen) in two weeks for $1.9 million. And you can’t keep anything on the shelf in North Center or Lincoln Square as long as it’s priced right.
JP: We’re seeing turnkey condos sell in a flash. We sold a cool, modern two-bedroom condo at 3470 N. Lake Shore in two weeks for just below asking price ($945,000) and an elegant vintage three-bedroom at 3100 N. Sheridan for just below ask ($559,000) in 39 days.
What are you marketing that’s a particularly good value now?
KK: We just listed a historic, six-bed, four-bath row house in McCormick Seminary for $1.674 million that we don’t expect to last long. It’s a corner unit surrounded by green space and beautifully redone.
JP: We have a five-bed, 5.5-bath newer-construction home at 1036 W. Wellington going on for $1.795 million, and a historic six-bed, five-bath home at 530 W. Hawthorne on five lots that just had a $780,000 price drop to $3.795 million.