Mirroring the overall housing market, luxury home sales in the second quarter posted a rebound from a dismal start of the year but continued a year-over-year decline.
Some 813 homes priced at $1 million or more sold in the Chicago area in the second quarter, an 11.3 percent drop year over year, according to a new report from luxury brokerage Re/Max Premier.
Yet that second quarter performance was actually an improvement over the first quarter, when sales dropped by 22.3 percent, according to the report. Only 380 luxury homes traded in the first quarter.
The second quarter marked the third straight quarter of year-over-year declines in luxury market sales.
The luxury market’s performance would be worse if not for the ultra-luxury market. Thanks to the popularity of Downtown condo towers like No 9 Walton, 29 units traded at $4 million or more in the second quarter, a year-over-year increase of 16 percent.
JDL Development’s No 9 Walton saw the priciest home sale of the second quarter, with a 4,700-square-foot unit selling for $6.5 million to Chicago Blackhawks star Patrick Kane, according to Re/Max. The Gold Coast condo tower also recorded the year’s priciest deal, the $11.3 million sale of a unit that closed in the first quarter.
The poor second quarter performance comes despite a decline in inventory that should benefit sellers, said Janice Corley, broker/owner of Re/Max Premier. Inventory was down by 2.3 percent overall, and was down by about the same amount both in the city and suburbs.
“We’re advising sellers that attracting buyers at this time will require aggressive pricing,” Corley said in a statement. “Buyers are quite conservative when it comes to luxury real estate right now. They do not want to overpay. At the same time, there is no shortage of luxury buyers testing the market, so sales in the second half of this year could surprise on the upside.”
There is some good news for sellers: The median price of a luxury home rose above $1.3 million in the second quarter, a year-over-year increase of 3 percent.
The suburban luxury market continues to lag the city, with sales falling 13.5 percent in the suburbs versus 9 percent in Chicago, according to Re/Max. The popularity of condos in new Downtown developments has pulled buyers from the suburbs, which already was dealing with elevated levels of inventory.
The luxury market is not much worse off than the overall housing market. Chicago-area home sales in June fell by 11.6 percent, the seventh straight month of year-over-year declines.