RE/MAX Luxury Report

RE/MAX Luxury Report on Metro Chicago Real Estate: $1 Million-Plus Home Sales in 1st Quarter Reach New Heights, Prices Rebound

CHICAGO, April 30, 2018 /PRNewswire/ -- The market for Chicago-area homes selling at $1 million or more showed broad strength in the first quarter of 2018, according to the RE/MAX Luxury Report on Metro Chicago Real Estate, a quarterly analysis of market activity. First-quarter sales totaled 489 units, the most in that quarter since RE/MAX began tracking luxury sales in 2011 and an increase of +7.5% over the same quarter last year.

Perhaps of even greater significance was the +5.5% increase in the median sales price of $1-million-plus homes, which came in at $1.35 million. It was the second consecutive quarterly gain following four quarters in which the median price declined in comparison to the same period one year earlier.

A third encouraging result for the quarter was a continued reduction in the number of unsold homes listed for at least $1 million. Luxury listings fell -5.6% to 2,742 units, declining only -0.6% in the City of Chicago but falling -8.4% in the suburbs where the inventory had been especially high for the last few years. Even with that reduction, existing luxury listings in the suburbs still represent a 22.5-month supply of homes based on the pace of first-quarter sales. In comparison, there is an 11.8-month supply of luxury homes in Chicago.

"Demand for luxury homes is clearly on the upswing right now, but only time will tell if this is a temporary situation sparked by buyers eager to act before interest rates move higher, or if this reflects a longer-term trend that will help pare down the large number of luxury listings on the market," said Jeff LaGrange, Vice President, RE/MAX Northern Illinois Region. 

"Of particular interest going forward will be the trend in the median sales price. If it continues to advance, it will confirm that demand and supply are moving into better balance," he said. 

City of Chicago Luxury Sales

Chicago's luxury-attached-home market enjoyed an upbeat first quarter, with 140 luxury units changing hands, +16.7% more than the same period in 2017.  That compares to 120 luxury detached homes sold in the quarter, a decline of -1.6%, but still the second strongest first-quarter sales figure for luxury detached homes since RE/MAX began tracking that data in 2011.

The combined +7.4% increase in city luxury sales for the quarter came along with an uptick in average market time to 166 days, a 12-day increase. And while the inventory of luxury homes for sale in the city remained essentially stable, falling just -0.6%, that result masked an interesting split.  The inventory of luxury attached homes, spurred by new development, rose +12.9%, while the detached luxury inventory was down -14.7%, reflecting a recent slowing of new construction in that category. 

One noteworthy shift in the attached market was the emergence of the city's Near West Side as a major locus for luxury residences. During the first quarter, that area registered 25 luxury attached sales, trailing only the Near North Side, the traditional leader of the attached market, in unit volume. That is particularly striking because from 2011 through 2017, first quarter sales of luxury attached homes in the Near West Side totaled only eight units. In 2017, there were 12 luxury attached sales there during the first six months, then 33 sales in the July-December period. 

The median sales price for attached homes, which are primarily condominium apartments and townhouses, was $1.33 million during the first quarter, a gain of +4.7%. For detached homes, most of which are single-family houses, the median rose +3.9% to $1.39 million.

Suburban Luxury Sales

Suburban luxury sales, which almost exclusively involve detached homes, delivered generally positive results. Sales activity rose +7.5% to 229 units during the first quarter, and the median sales price climbed +2.4% to $1.3 million compared to the same period last year. Average market time, however, increased to 257 days from 228 days a year earlier. 

Hinsdale had the most active luxury market, with 29 sales completed, a +16% increase, while its traditional rival for the top spot, Winnetka, recorded 23 sales, a decline of -17.9%. 

Solid sales gains were seen in several other leading suburban luxury markets, including Wilmette, up +8.7% to 25 units; Lake Forest, up +84.6% to 24 units; Naperville, up +116.7% to 13 units and Glencoe, up +120% to 11 units.   

RE/MAX Northern Illinois has been the leader in the northern Illinois real estate market since 1989 providing a full range of residential and commercial services. With more than 2,200 sales associates and 106 offices throughout the area, RE/MAX Northern Illinois has helped thousands of families with their home buying and selling needs. For more information, visit illinoisproperty.com or download the Illinois Property mobile real estate app.