The year just ended saw the residential real estate market along Chicago’s lakefront deliver more mixed results than in recent years. Even so, home prices continued to rise, again reaching record levels in the Loop and North Lakefront neighborhoods, according to the Lakefront Market Survey, a quarterly analysis by Sudler 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 sales at many new residential developments and is a more accurate gauge of the resale market.
Single-family homes:
A noticeable slowdown was seen in the market for single-family homes, where 415 homes were sold during the year, 9.4 percent less than the 2000 total of 458.
Nonetheless, the dollar volume of sales rose to $380 million, an increase of 1.9 percent compared to 2000. The average transaction price for a single-family home rose a robust 12.5 percent to $916,686 from $815,188 a year earlier. Since 1998, when the average single-family home sold for $616,000, the average price is up 48.8 percent.
The Lincoln Park submarket reached a milestone in 2001 when, for the first time, the average price of a single-family home there topped $1 million. The $1,126,742 average was 14.4 percent higher than in 2000. In each of the last four years, the average transaction price for a single-family home in Lincoln Park has risen by at least $100,000.
Condominiums and cooperatives:
The condominium and cooperative category outperformed the single-family market over the course of 2001 in several ways. Units sold increased 4.5 percent from 6,488 in 2000 to 6,778 in the year just completed. On the same basis, sales volume rose to $2.25 billion from $2.05 billion in 2000, a gain of 9.6 percent.
As a result, the average price of a condo or co-op climbed 4.9 percent to $332,842 from $317,366 in the prior year.
The time needed to sell a home increased for all residential properties last year. Average market time for single-family residences was 61 days, up 22 percent from the 51-day average recorded in 2000. In the condo/co-op market, average market time climbed just seven days (18 percent) from 39 days in 2000 to 46 days last year.
Among individual neighborhoods, Uptown was most noteworthy. The number of condo/co-op transactions there was up 28.3 percent, and the average transaction price rose 28.2 percent to $215,873 from $179,403 in 2000. Historically, the average condo/co-op price in Uptown has equaled 57 percent of the average price for all Lakefront Market condo/co-op transactions. In 2001, Uptown condos and co-ops closed that gap, averaging 65 percent of the Lakefront Market figure.
“These statistics suggest that buyers are attracted to Uptown as a result of its lower prices, but that the price advantage is slowly diminishing,” said Jeanine McShea, executive vice president for Sudler.
Fourth quarter activity:
The fourth quarter of the year saw a flurry of activity in the condo/co-op market when compared to recent years. Uptown recorded a remarkable 92.1 percent increase in transactions, while the gains in Lincoln Park and Lake View were 47.8 percent and 24.1 percent respectively.
For the Lakefront Market as a whole, condo/co-op sales volume for the quarter increased 19.5 percent to $594 million from $497 million in same quarter of 2000, while transaction volume climbed 25.25 percent to 1,721 from 1,375 in the prior year’s final quarter. Even the average market time managed to decline, falling 10.6 percent to 42 days for the quarter compared to 47 days in last quarter of 2000.
Surprisingly, the average price of a condo/co-op transaction fell one percent for the quarter, from $348,906 in 2000 to $345,441 in the final quarter of 2001.
In contrast, activity in the single-family market varied only slightly from the level of activity recorded during that last quarter of 2000. Sales volume climbed 6.5 percent to $93.5 million. Total transactions were down 6.7 percent to 98 homes and average market time dipped 3.6 percent to 53 days.
With sales volume up and the number of transactions down, the average price of a single-family residence rose sharply during the quarter, up 14 percent to $953,824, compared to $835,538 during the same quarter in the prior year.
“There has been a lot of talk about a sizable slowdown in the sales of higher priced properties, but the signs are limited when you look at these numbers,” said McShea. “The number of single-family transactions in the fourth quarter was down a bit from the prior year and declined about 22 percent when compared to the same quarter in 1998. However, that is not surprising when you consider how much the average transaction price increased over that period.
“Another indication of a slowdown was the one percent decline in the average price of a condominium or coopertive,” she said. “I think it reflects a shift in activity toward the lower end of the price spectrum that was caused as much by the appeal of low mortgage rates to first-time buyers as by a shortage of those shopping for the most expensive properties. Heading into 2002, I see the Lakefront Market poised for a solid first quarter, though I would not be shocked to see a slight decline in the number of properties sold when compared to the prior two or three years.”
Printable Version