High End Homes Sale are Down

The Wall Street Journal discussed the lack of sales of high end homes today and compares Schaumburg and Kenilworth (and the north shore.)

While it doesn’t mention Chicago’s high end home market, I think it’s relevant enough to quote here.

In the article, one seller in Northfield cut her price by a million dollars and then the only offer she received (and rejected) was for under her 1999 purchase price. The seller ended up renting it out instead.

Will Homedelete be right? Will we go back to 1999 prices?

Sales were up 41% in June in Schaumburg where there was a median income in 2007 of $65,000. Bidding wars have broken out.

“I can’t even tell you how many I’ve been in over the last two months,” says Joe Stacy, a local real estate agent.

But in Kenilworth, with a median income of $230,000, just 13 homes have sold this year leaving 65 more on the market.

“We’re extremely oversupplied,” says Sherry Molitor, a local real estate agent. “Sellers are struggling to realize that we’re back to 2001-2002 prices.”

In another example in the article, a Kenilworth owner bought a 5-bedroom Dutch colonial 5 years ago for $1.3 million using a 25% down payment obtained from selling two prior homes. The husband lost his job in December and took a lower paying one causing the owners to miss one mortgage payment in the spring.

They are now current but local real estate agents told the sellers they would be lucky to sell the house for $960,000, the amount owed on the jumbo adjustable mortgage.

“We’re considered either rich people who don’t deserve help or deadbeats who bought too much house,” says Kelli Kaborl, a 42-year old substitute high school teacher.”I don’t see Washington prepared to deal with us.”

High End Homes Frozen Out of Budding Housing Rebound [Wall Street Journal, Nick Timiraos and James R. Hagerty, August 3, 2009] [subscription required]