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Is Luxury Housing Falling Behind in Chicago’s Market?

by Peter Thomas Ricci

Chicago’s luxury market may have done well in 2014 – indeed, according to the RE/MAX Luxury Report on Metro Chicago, sales of homes priced at $1 million or higher in Cook and the collar counties increased by 7 percent over 2013, while the median sales price rose 2 percent and time on market fell by 29 days – but competing analysis from Redfin has found that despite those gains, luxury in Chicago is actually trailing the overall marketplace.

Consider this statistic, for instance: among the top 5 percent of the city of Chicago’s listings, less than 1 percent sold above their list price, compared with 16 percent of the remaining listings in the city; that trend was also consistent in Aurora, Naperville, Elgin, and Joliet, where only a smidgen of luxury listings (Elgin, at 2 percent, was the highest) sold above list price, compared with a hefty share of remaining listings (18 percent for Aurora and Elgin, 13 percent for Joliet).

Such a divergence was not consistent nationwide, as some areas saw luxury housing pull away from the rest of the market. In Miami Beach, for instance, prices for luxury listings grew 66 percent, and in Sugar Land, Texas, prices grew 38 percent; both increases were more than double that of the remaining listings.

But again, here in Chicagoland, the luxury market seems to be growing in a more deliberate fashion, and that also extends to time on market – by that measurement, the rest of the housing market is pulling ahead.

Take a look at our graph below for a more detailed look at time on market, and how it differs between luxury housing and the rest of the market:

DaysOnMarket

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