Elite lakefront real estate now a buyers' market

Along with so many other aspects of American life, Chicago’s lakefront real estate market is feeling the impact of the September 11th terrorist attacks. The main impact has been a rapid rise in the average time needed to sell a home along Chicago’s lakefront, according to the most recent Lakefront Market Survey, a quarterly analysis by Sudler, a Chicago real estate company.

The Lakefront Market Survey looks at all transactions reported by the Multiple Listing Service of Northern Illinois (MLSNI) involving single-family homes, condominiums and cooperatives in five Chicago neighborhoods: the Loop, Near North, Lincoln Park, Lake View and Uptown. The MLSNI data, however, does not include many new residential developments and is a more accurate gauge of the resale market.

Nancy Nagy, executive vice president of residential brokerage for Sudler, said, “Homes in the $250,000 to $300,000 range are still selling quickly thanks to low mortgage rates. However, in the higher-priced market we’re seeing a lot of hesitation from buyers and frustration on the part of sellers.”

During the third quarter of 2001, average market times increased markedly. The average number of days needed to sell a single-family home rose a whopping 192.3 percent to 76 days, from just 26 days in the third quarter of 2000. For condos and co-ops, average market time increased 89.2 percent to 53 days from 28 days during the same period last year.

“On a percentage basis, those are large increases in average market times, but you have to consider that last year’s market was an anomaly in terms of limited inventory, strong demand and fast sales,” said Nagy. “On the other hand, I think we’ll see even longer market times in the fourth quarter of this year as people continue to digest the new economic and political situation.”

Nagy believes that the housing marketplace is currently going through a transition, moving from a seller’s market to one in which buyers have the upper hand.

“We have a lot of great product on the market right now, which is wonderful for buyers, but less advantageous for sellers,” said Nagy. “Sellers, especially, are having a hard time adjusting to the new reality that values are going to be flat for a while, especially in the fourth quarter. On the other hand, we expect things will start getting back to normal by the early part of next year.”