Chicago’s share of home listings above $1 million has grown, even as the housing market trudges through a downturn and inventory at or above that benchmark in coastal cities disappears.
The Windy City’s total number of sellers seeking at least $1 million is much smaller in some of the cities where such listings have fallen. Still, the fact that such homes on the market have increased at all makes Chicago an outlier, with the share of listings above that point rising to 3 percent as of January from 2.7 percent in January 2022, according to Redfine data.
While the increase was small, it occurred as markets with a much larger market share of $1 million plus homes experienced a fallout of such listings. In places like New York and San Francisco — where $1 million homes are standard — the home segment priced at or above that shrank between six and three percentage points of market share over the same period.
In San Francisco, 80.3 percent of listings are over $1 million, down six percentage points from 86.3 percent last year. In New York, 29.5 percent of listings are at or above $1 million, down three percentage points from 32.5 percent in the same time period last year.
Chicago’s increase is likely due to tight inventory at and near the $1 million mark, giving sellers in the market confidence they can hit the price point because of the lack of other options, said Jeff Lowe, a Compass broker who led The Real Deal’s Chicago real estate broker ranking last year with $381 million in sales volume on 291 deals.
“I listed a house in Roscoe Village last week for $1.8 million and we had three offers over $1.9 million and it sold for $100,000 over list price, just because there’s a lack of inventory,” Lowe said. “These are small infill neighborhoods, whether it’s Bucktown or Wicker Park or Roscoe Village or Lincoln Park or Lakeview. They are just not large geographical areas. And not many people have listed their homes this year.”
People who could hypothetically sell are locked into low mortgage rates, putting further inventory pressure on the city’s market.
“We’re not necessarily raising our prices aggressively right now — but we’re certainly not lowering them either. So it’s not like we’re seeing things that were $1.5 million go to $950,000. If something $1.05 million goes to $1.075 million or $1.1 million,” Lowe said.
Meanwhile, Chicago’s higher end luxury homes — all priced at or above $4 million — are a more nuanced market.
Condos and co-ops in that area have much more inventory, and may not sell for as much or as quickly as single-family homes in the same high-end segment, which, Lowe added, has held strong when assets are priced right.
As the spring market gets underway, Lowe’s will be watching inventory, expecting it to continue shrinking through the second quarter, as well as time on market.
“I can’t imagine we’re going to see a flood of inventory because February, March, April and May are the biggest listing months of the year for us,” he said. “I have more products on the market, but it’s not like there’s enough for the buyer demand that’s out there.”