Luxury home sales improve in 2013Date posted: 2/23/14 06:45:00 AM
There's growing concern from economists that the rich are getting too rich, and the middle-class might soon be squeezed into a lower economic tier. The sales rate of luxury homes in Chicago might confirm some of their concerns.
Chicagoland homes exceeding $1 million in value recorded a 33 percent increase in sales last year compared to 2012, with the number of luxury homes purchased totaling 2,038 in 2013, according to the RE/MAX Luxury Report on Chicago Real Estate.
Along with the city itself, the luxury buyers in the Chicago suburbs might have to reach into their basic savings account. The top five suburbs with the best luxury home sales in 2013 were Hinsdale, Winnetka, Lake Forest, Wilmette and Glencoe.
Hinsdale, a western suburb, had 142 luxury sales last year. Winnetka led the remaining four, which are all located on the north side, with 133 sales. Lake Forest had 104 sales, Wilmette had 83 and Glencoe 71.
Chicago's Lincoln Park neighborhood was the top performer for sales of luxury detached homes. Lincoln Park had 166 luxury sales in 2013, a 24 percent increase over 2012, according to the Chicago Business Journal. The median price of a luxury home in Lincoln Park was $1,530,313 in 2013.
Some other neighborhoods in Chicago with elevated sales in the luxury detached home market included West Town and North Center.
The amount of sales weren't the only improved statistic for luxury homes in the Windy City. The speed of home sales also improved in 2013. The average time it took a luxury home to sell in Chicagoland was 160 days in 2013, down from 223 days in 2012.
Other luxury markets joining the fun
Chicago isn't alone as other markets across the nation have shown a rise in luxury sales. In California, the luxury market heated up in 2013 after a mild year in 2012. Luxury home sales increased 45 percent to the highest level in six years when 42,506 luxury homes sold in 2007, according to the San Gabriel Valley Tribune.
Last year, 39,175 luxury homes were purchased in California. Comparatively, just 26,993 luxury homes changed hands in 2012.
Kimberly Ritter Martinez, an economist at the Kyser Center for Economic Research in Los Angeles, told the Valley Tribune that the return of wealth into the luxury market shows an improving economy.
"There is a lot of wealth out there, and people do need someplace to park it," Martinez said. "With the increase in California home prices, I think we'll see more people moving back into residential real estate."
DataQuick said that Malibu had the most expensive residential sale in 2013. An eight-bedroom, 14-bathroom beachfront property built in 1993 sold for $74.5 million last year. The Valley Tribune reported the property has a tennis court, infinity pool and sits on a 4.85-acre lot with a view of the ocean. Zillow estimated the monthly mortgage payment to be just below $290,000.
On the opposite coast
In the Northeast, the sales of homes priced between $1 million to $2.5 million jumped 28.8 percent from 2012 to 2013, according to Maryland-based multiple-listing service MRIS. MRIS data also revealed a 17.8 percent climb from 2012 to 2013 in new listings priced between $1 million and $2.5 million.
Corey Hart, senior product manager at RealEstate Business Intelligence, told the Washington Post that buyers are warming up the real estate landscape.
"The main thing is that everyone is just comfortable in the housing market given the consistent gains we've seen in the past 24 months," Hart said. "Buyers are gaining more confidence in the market and more homes in the luxury segment have more equity in them today."
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