LINCOLN PARK — Real estate in the neighborhood is looking like a million bucks these days.
According to a DNAinfo.com survey, more than 130 homes sold in the area for $1 million or more in the first six months of 2014.
Indeed, home prices in the Lincoln Park area have reached previous pre-recession peak price levels observed during the housing boom, the only submarket in Cook County to do so, according to DePaul University researchers.
Paul Biasco looked into why the luxury home market is booming in Lincoln Park:
The vigor of the local real estate market reflects a nationwide trend which has seen luxury homes outpacing other types of homes in sales activity.
"The luxury market in 2014 has changed dramatically," said Ron Goldstein, a realtor with Berkshire Hathaway HomeServices, who said that in June, he closed the biggest deal of his 15-year career in the luxury market: a $3.795 million 4,000 square-foot penthouse unit at the Lincoln Park 2550 development.
According to the DNAinfo.com survey, five of the top 10 sales were at the 2550 development at 2550 N. Lakeview. Described as an oasis in the city, it's one of the tallest buildings in the neighborhood at 39 stories, topped with a mansard roof.
The building, which opened in 2011 and is located directly across from Lincoln Park, contains 218 condominiums, and nearly all have been sold. Some 20 units, at a total cost of $30 million, were sold during the second quarter of 2014.
The top home sale in the neighborhood during the first half of the year, according to the DNAinfo.com survey, was a unit in Lincoln Park 2550, sold to William Kozek, president of Navistar's North America Truck and Parts business, for $5.34 million.
The 2550 development includes a movie theater, health club and even a church. While the building is directly across from Lincoln Park and the North Pond lagoon, the development also has its own 1.5-acre private park to the west as well as a children's play area.
The success of Lincoln Park 2550 is an example of where the high end of the real estate market is in Chicago, according to John T. Murphy, the developer of the project.
"Generally speaking, it's going great," Murphy said. "The market continues to gain momentum and we are getting down to just a handful of remaining units."
Murphy said interest in the development "seemed to pick up tremendous momentum at the end of last year and the beginning of this year."
Buyers initially were local people from Lincoln Park and the neighboring communities, but that has shifted more recently to include people from the suburbs and even other parts of the country.
The attraction is buyers can get a condo with sweeping views of the lakefront and skyline, while remaining in a neighborhood setting with access to the parks, according to Goldstein.
On his $3.795 million deal made in June at the 2550 development, Goldstein said there were three other parties interested in the three-bedroom property.
"The expectations have been increased rather than lowered with affluent folks. It's becoming, on the luxury side, a true sellers market."
Goldstein said his clients, who have kids at neighboring Francis W. Parker School, loved that they could have everything in one place.
Besides the condominiums, the development also includes 19 custom home sites around the property, which have now all been sold. The last remaining single-family lot on Deming Place sold for $1.8 million in June.
Lincoln Park 2550 is representative of not only the local housing market conditions, but also the national conditions, which have seen the high-end market bounce back from the recession while middle-class property values remain greatly lower than their pre-recession peaks.
Nationwide, luxury $1 million home sales have outpaced less expensive homes, according to data from the National Association of Realtors.
In March, sales of $1 million homes rose 7.8 percent across the country compared to a year earlier, while at the same time sales of homes in the $100,000 to $250,000 range fell 9.9 percent, according to the association.
Cook County saw the largest year-over-year increase in single family home prices in the first quarter of 2014 since at least 1998, according to the Institute for Housing Studies at DePaul University.
Much of that was led by strong growth in Chicago, where year-over-year prices increased by nearly 20 percent, according to the Institute.
In the fourth quarter of 2013 — the most recent available data from the institute on price change on single family homes — found that the Lincoln Park/Lakeview submarket was the only submarket in Cook County to have returned to pre-recession peak levels during the housing boom.
"One of the things we have seen in Chicago, really, it's important to drill down to submarkets and neighborhoods and that’s really where a lot of the more interesting price dynamics are playing out," said Geoff Smith, executive director of the DePaul institute.
Smith said a major factor that has resulted in a return to pre-peak levels is the lack of supply of homes in Lincoln Park and Lakeview.
"Demand has gone up too," Smith said. "One of the reasons you are seeing price dynamics like we have seen, you have a limited supply of homes for sale and growing demand. In some of the weaker markets you don’t have that same sort of demand happening.”
Ron Goldstein,MBA
Certified Luxury Broker@Berkshire Hathaway Chicago & St. Petersburg
Principal, Silver Professionals
chicagoluxuryrealty.com stpeteluxuryrealty.com silverprofessionals.com
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