In Sunday’s Chicago Tribune, real estate columnist Mary Umberger’s headline was “Near South Side homes selling, on average, for more than list price“. Mary reported Zip Realty’s finding that homes in the 60605 zip code had sold for an average of 106.4% of list price during the latest quarter!
This is certainly the kind of news that should make any homeowner in 60605 excited or is it?
Having represented buyers who bought a home in 60605 just this past quarter, I had an idea that Zip Realty’s findings had more to do with who is doing the selling than a sudden surge in demand for homes in the area. Running a few reports in the Midwest Real Estate Data (MRED) system confirmed my theory.
I looked just at condos since there are very few houses in 60605. In July, August and September of this year over half of the condos sold in 60605 were new construction. Compare this to 60657 (Lakeview) and 60622 (Bucktown/Wicker Park) where the percent of condos that were new homes were below 15%.
Even though buyers may be able to do some negotiating, new home final sale prices often end up above list price when parking spaces and customization are included. New home developers would rather kick in extras and upgrades than sell for less than list price. It helps them justify their prices to future customers.