The luxury home market started heating up last year. Based on the Chicago area MLS (this does not include private sales and those not listed on the MLS), in 2013, there were 365 homes (including condos) that sold for over $1,500,000 in Chicago. That’s a 20% increase over 2012. In the surrounding suburbs there were 353 homes that sold for over $1,500,000 which was a 29% increase year over year.
I personally have seen an increase in appraisal requests for these high end properties as well. In 2013, I appraised 26 homes that were valued over $1,000,000 while in 2012 I only completed 17.
These homes are selling faster as well. Average marketing time for the suburbs was down over 30% and in Chicago was down around 18% (see chart below).
Lincoln Park was the Chicago neighborhood with the most homes sold over $1.5 million in 2013 with 105 and in the suburbs the leader was Winnetka with 69 followed closely by Hinsdale with 67 and Lake Forest with 43.
One of the reasons for this luxury market heating up (along with a recovering stock market and economy) is lower interest rates on jumbo loans. As noted in a blog post by Aaron Wise, over the last year jumbo mortgage rates (loans over $417,000) have decreased and their rates are almost as low as the rates on a conventional mortgage. This makes the effective cost of these higher priced homes more affordable and is pushing some buyers off the fence.
Take a look at the chart above which illustrates the supply of homes over $1.5 million in Chicago over the last 5 years. With inventory as low as it’s been in many years (and down 30% year over year), there are fewer choices out there for the high end buyer. If this trend continues and the economy continues to improve, expect to see prices continuing to go higher through 2014.
Click the video below to see a slideshow of some of the highest priced selling homes from 2013.
Stay tuned as I intend on breaking down and analyzing many of Chicago’s neighborhoods and suburbs to give you an idea of your area’s specific market conditions. If you me to write a brief post analyzing your Chicago neighborhood or suburb please let know and I would be happy to so in a future post. Also, if you have any questions, please don’t hesitate to call me at (847) 863-5776.Social tagging: Chicago appraiser > Chicago home appraisal > Chicago luxury home appraiser > Chicago luxury housing market > Chicago real estate appraiser