In a cooling residential real estate market, it's chillier at the upper end.
After watching home values soar the last few years, sellers continue to slap hefty price tags on their homes. Yet buyers, wary of overpaying at the top of the market, are balking at the high prices. The result: Houses priced above $1 million are taking longer to sell.
"On the sellers' end, they're still thinking that the market is up, up, up," says Patti Navilio, a Chicago broker. "When you reach a peak, everybody's got too high expectations."
While Chicago-area residential brokerages expect to close the books next month on a record sales year, they're already seeing signs of a slowdown, especially at the high end. Mortgage rates are rising, and talk of a housing bubble has given some buyers pause.
The real estate market tends to slow down in the late fall, but it's slower than usual for this time of year, says Maureen Mohling, manager of Coldwell Banker's Winnetka office. The number of buyer appointments in the office declined 10% in October from the same month last year.
Price-cutting has become more common. In May, Michael Welborn put his six-bedroom house in Wilmette on the market for $2.7 million. He paid about $1.8 million for the property in 2000 and spent close to $500,000 remodeling it.
"Nothing happened," he says. So he dropped the price to $2.5 million, and showings have picked up — but still no takers."Ordinarily, a house like this in a location like this would come and go in a month and a half," says Sue Hertzberg, the Coldwell Banker broker selling the property. "It's just an indicator of the market."
Sales of less expensive homes are holding up better. Single-family suburban home sales rose 2% in the third quarter over the prior-year period, according to the Chicago Assn. of Realtors. Houses sat on the market for an average of 70 days, vs. 71 in the year-ago period and 44 in third-quarter 2003.
Sales of single-family homes in the city fell 4% in the third quarter, and the average market time rose to 64 days from 62. In October, sales of all residential property types in the city were flat.