Mary Umberger
July 13, 2008
Here’s a nugget of good news about the real estate market, though it may warm only the hearts of those who need to hear it the least: the rich.
Sales are up for some of the most expensive real estate in Chicago, according to a couple of area agents who watch that sector.
Bob Untch, a Coldwell Banker agent in Barrington, says that moneyed suburb has seen a “surge” in sales of homes priced at $2 million and up.
“Through June, we’ve had 12 properties sell over $2 million, and all of last year we had four, so we’re 200 percent over 2007 sales,” he said. “With all the gloom and doom, this is a huge surge.”
Untch says the pace also is picking up between $1 million and $2 million. “In all of 2007, there was a grand total of 71 sales closed over $1 million, and this year, we have already gotten 52,” he said.
Hearing this, I rang up Jim Kinney, president of Rubloff Residential Properties in Chicago, who said the numbers are improving at the highest end in the city too.
Kinney said Chicago has had 103 closings in the $2-million-plus bracket in Chicago since the beginning of the year; up from 89 a year earlier. And in the next rung down—$1 million to $2 million—there were 372 closings in the first six months of 2008, up from 309 in the year-ago period.
Untch theorizes that pricey purchases have picked up because consumers lying in wait have decided it’s time to move.
“I sold a $3.5 million property, and the buyer flat-out told me, ‘Oh, yeah, we’ve been watching it since September,’ ” Untch said. When the price dropped $200,000 recently, the buyer pounced, he said.
Upper-bracket buyers are rarely intimidated by the aches and pains of the general market, Untch said.
“People with money don’t really have a lot of issues. The mortgage situation doesn’t really scare them off,” he said. “They just want a good deal.”
So if, as F. Scott Fitzgerald so famously observed, the rich are different from you and me, what possible difference could it make that more contracts are being signed on mansions these days?
Because it might—just might—mean something for the rest of us.
“The high end comes back first,” Kinney said. “It’s the last to turn down and the first to pick back up. They go to the sidelines when they feel things are going to tumble. They can afford to buy but don’t want to catch a falling knife.”
Neither Kinney nor Untch are doing handsprings, however, because there remains the nagging little issue of a bumper crop of homes still for sale.
“Inventory is up, but at least we’re making a dent in it,” Untch said.
Kinney said top-quality resale properties have held their own in the city, but new construction “is deathly.”
He said the city has 13,000 new units in the pipeline, yet just 200 purchase contracts were signed in the first quarter.
Though he sees the upper-bracket sales as encouraging, they don’t herald a turnaround, he said.
“There is no tsunami coming,” Kinney said. “It’s more like a tidal pool.”
Hear Mary Umberger at 12:49 and 11:15 p.m. Tuesday and Thursday and at 10:30 a.m. Saturday and Sunday on WGN-AM 720. Write to her at Real Estate, Chicago Tribune, 435 N. Michigan Ave., 4th Floor, Chicago, IL 60611 or send e-mail to housing news@comcast.net.
