High-end real estate market slows down
A Frank Lloyd Wright-inspired home on Wellington Drive in Long Grove by the well-known Orren Pickell Building Group has five bedrooms, eight bathrooms, an in-ground pool and a built-in spa. Price tag: $1.15 million.
An indoor sports court and three laundry areas are selling points for a custom Kildeer home on Tall Oaks Court with four fireplaces and six bedrooms. Price tag: $1.5 million.
And a French country-estate style home on Checker Drive in Long Grove has a turret, a pool and about two acres of manicured grounds backing up to a golf course. Price tag: $1.28 million.
These homes are stunning, but each has been for sale for two or more years, much longer than expected by the real estate agents listing them.
They reflect a suburban market where luxury homes take longer to sell than more moderately priced homes and, in some cases, are taking longer to sell now than a year ago.
Last year, 2,334 houses offered for $1 million-plus sold in the Chicago area, but that's compared to 3,476 that were listed, reports Midwest Real Estate Data in Lisle, the Chicago area multiple listing service.
Those that did sell were on the market 134 days, up slightly from 2014's 128 days, according to Midwest Real Estate Data.
Meanwhile, Realtor.com reported houses priced $1 million to $2 million were on the market longer in Lake County for the 12 months ending in April compared to the previous 12 months. Days on the market stayed the same for homes in that price range in Cook County, including Chicago, and dropped in DuPage County.
Real estate experts say forces at play range from fewer executive job transfers in some areas to reluctance to pay big mortgages or five-figure annual property taxes.
Expensive homes in more distant suburbs are at a disadvantage as more homebuyers show a preference for city life, one expert said.
"What's happening is that there's a disconnect between the baby boomers who are selling these luxury properties -- the supply -- and the millennials and Generation Xers -- the buyers -- who prefer to be in the city," said Dan Sarrett, adjunct professor of real estate at Harper College and president of Addison-based Real Estate Education Center.
Some real estate agents said the local housing market as a whole is lagging this spring, and that's magnified in high-priced homes. While some price levels are selling better than others, such as homes in the $400,000 to $600,000 range, the overall real estate market has slowed compared to a year ago, they say.
"We are not experiencing the typical spring market that we usually have here," said Susan Coveny of Re/Max Prestige in Long Grove, a real estate agent for 43 years. "People are disenchanted with the economy and taxes keep going up. I usually have 20 to 25 sales a month by now, but now I'm just getting five to 10 sales in a month. And this is all kinds of homes, all across the board."
Homes listed over $5 million have been particularly difficult to sell, with more homes available than buyers, real estate agents said.
A quick snapshot of luxury homes that recently won contracts showed those priced $5 million and more had been on the market an average 1,239 days, or more than three years, according to data provided by Coveny. Homes in the $1 million to $2 million range were on the market an average of 174 days, she said.
In that uber-rich $5 million-plus echelon in April, 35 homes were on the market in Cook County, 23 in Lake County, nine in DuPage County and one in McHenry County.
Some luxury properties stay on the market because owners don't want to hear that they might have to reduce a home's price or update it, or both, some real estate agents say.
Christie Baines, of Coldwell Banker in Barrington, said one of her listings for about $1.99 million was a foreclosure that had been bought by an investor for $1.15 million about four years ago. That investor rented the home for three years, waited until he thought the market was ready, and then did a complete renovation. The investor listed the home in August, and it's still listed now.
"A lot also has to do on how proactive the seller is, whether they listen to us and take our advice, whether they stage the home and price it right," Baines said.
Real estate agents point out the housing market has improved significantly since the 2007-09 recession, but what's in demand is still sorting itself out.
"Everything's changed and we're educating ourselves on what you have and not look for that pot of gold. It's a shelter for your family and a good place to live now," said Linda Feinstein, a real estate agent with Linda Feinstein Homes in Hinsdale.