M2 Money Supply: A Driver of Luxury Home Prices

The M2 money supply, encompassing cash, checking deposits, and near-money assets, serves as a key indicator of economic liquidity. This milestone marks the 21st consecutive month of M2 growth. This liquidity influx directly influences asset prices, particularly in Chicago’s million-dollar single-family home market, where buyers leverage increased purchasing power to secure premium properties. This trend is particularly evident in Chicago’s suburbs, where the “Millioneum Allure Score” weights—a proprietary metric—rose across the board, reflecting sustained buyer interest in high-end properties.

Data from Million Dollar Homes Chicago illustrates a clear upward trajectory in the average sales price of million-dollar single-family homes in Chicago from 2013 to 2023:

• 2013: ~$1,000,000
• 2014: ~$1,050,000
• 2015: ~$1,100,000
• 2016: ~$1,150,000
• 2017: ~$1,200,000
• 2018: ~$1,250,000
• 2019: ~$1,300,000
• 2020: ~$1,350,000
• 2021: ~$1,450,000
• 2022: ~$1,600,000
• 2023: ~$1,700,000

This 70% price increase over the decade aligns closely with M2 growth, as evidenced by a correlation table from Million Dollar Homes Chicago, which shows a strong positive relationship between M2 money supply and the number of million-dollar single-family home sales. For instance, during periods of significant M2 growth, such as 2020-2021, sales of these homes surged, with 2021 marking a peak in transaction volume.

Surge in Million-Dollar Single-Family Home Sales

Chicago’s million-dollar single-family home market has demonstrated remarkable strength in 2025. Data from Crain’s Chicago Business reports a record 76 homes sold for $4 million or more in the first half of 2025, a 76.7% increase from the 43 sales in the same period of 2024. This growth far outpaces the broader market, where overall home sales grew by just 0.37% year-over-year. High-profile transactions, such as a $12 million lakefront mansion in Winnetka, highlight the market’s vigor, particularly in affluent suburbs like Winnetka, Wilmette, and Kenilworth, as well as urban enclaves like Lincoln Park.

The correlation between M2 money supply and sales volume is striking. The 2025 M2 peak of $22.02 trillion is expected to further accelerate purchases of million-dollar single-family homes, as affluent buyers capitalize on liquidity to invest in properties that offer both prestige and long-term value. Unlike broader market trends, where inventory constraints and rising interest rates pose challenges, the luxury segment remains insulated, driven by cash-heavy transactions and robust demand.

Decoupling from Treasury Yields

A notable feature of Chicago’s million-dollar single-family home market is its decoupling from traditional economic constraints, such as treasury yields. Despite a 90% to 200% increase in 10-year treasury yields between 2018-2019 and 2023, demand for these homes has not wavered. The correlation table from Million Dollar Homes Chicago underscores that M2 growth, rather than interest rates, is the primary driver of sales and price appreciation. This dynamic allows wealthy buyers to bypass borrowing costs, fueling competition for prime single-family properties.

Outlook for Chicago’s Million-Dollar Homes

The record-breaking M2 money supply of $22.02 trillion in June 2025 sets the stage for continued growth in Chicago’s million-dollar single-family home market. With liquidity enhancing buyer confidence, sales volumes and prices are likely to rise further, particularly in high-demand areas like the North Shore and select city neighborhoods.

However, risks such as global economic shifts or localized concerns could influence buyer sentiment. Despite these, the million-dollar single-family home market is well-positioned for 2025, with projections indicating a potential 6% price increase, driven by sustained demand and limited inventory of high-end properties. As M2 growth continues to shape economic dynamics, Chicago’s luxury single-family home market offers a compelling case for investors seeking stability and prestige in a liquid-rich environment.

Data Sources

• Federal Reserve M2 Money Supply Data: https://fred.stlouisfed.org/series/M2SL
• Million Dollar Homes Chicago (Price and Sales Data, Correlation Table): https://milliondollarhomeschicago.com/
• Crain’s Chicago Business (Luxury Home Sales): https://www.chicagobusiness.com/residential-real-estate/chicago-luxury-home-sales-2025

This article delves into the MILLIONEUM ALLURE SCORE℠, a unique metric that quantifies the attractiveness of an area based on sales of million-dollar single family homes. We’ll explore the rankings for various streets within Lincoln Park, analyzing data from 2018 to 2023. We’ll also incorporate the standard deviation of year-over-year changes in the MILLIONEUM ALLURE SCORE℠ to assess investment risk.

Leaders of the Pack: Dayton and Burling Streets

Dayton Street reigns supreme, boasting a remarkable 2023 MILLIONEUM ALLURE SCORE℠ of 568.99. This signifies a staggering 96.19% increase compared to 2022, highlighting a meteoric rise in the desirability of million-dollar properties on this street. Burling Street also exhibits a noteworthy surge, with a 123.68% increase in its 2023 score compared to 2022. Here, the standard deviation of 1.1578 suggests a somewhat predictable upward trend, making it a potentially lucrative option for investors comfortable with moderate risk.

Shifting Tides: The Case of Fremont and Magnolia Streets

Fremont Street presents a contrasting narrative. While it held the top spot in 2022, its 2023 score reflects a significant 79.39% decrease. This could be attributed to a shift in buyer preferences or a temporary market correction. The high standard deviation of 1.4535 indicates a more volatile market on Fremont Street, suggesting a riskier investment compared to Burling. Magnolia Street also shows a decline, albeit less pronounced, with a standard deviation of 2.1739, signifying a market with higher uncertainty.

A Tale of Two Streets: Cleveland and Orchard

Cleveland Street maintains a relatively stable score across the years (standard deviation of 0.4161), indicating a consistent level of allure for million-dollar properties. This suggests a well-established luxury market on this street, potentially offering a safer investment with a more predictable return. Conversely, Orchard Street exhibits a significant 116.88% increase in its 2023 score. This dramatic rise, coupled with a high standard deviation of 27.4193, suggests an emerging hotspot for luxury buyers seeking value and potential for future appreciation. However, the high standard deviation also indicates a market with significant risk and potential for volatility.

Safest Streets for Investment Based on Standard Deviation

Based on the standard deviation analysis, here’s a breakdown of the streets in terms of investment risk:

• Safest: Cleveland Street (Standard Deviation: 0.4161) – Offers a stable market with predictable returns.
• Moderate Risk: Burling Street (Standard Deviation: 1.1578) – Offers potential for growth with some level of market volatility.
• Higher Risk: Fremont Street (Standard Deviation: 1.4535) and Magnolia Street (Standard Deviation: 2.1739) – More volatile markets with the potential for high returns or significant losses.
• Highest Risk: Orchard Street (Standard Deviation: 27.4193) – Emerging market with significant potential for growth but also carries the highest level of uncertainty.

A Call for Further Research

This analysis provides a glimpse into the dynamic nature of Lincoln Park’s luxury market. By combining MILLIONEUM ALLURE SCORE℠ data with in-depth market research and considering the standard deviation for risk assessment, investors and buyers can make informed decisions in this ever-evolving landscape.

Headline Numbers Don’t Tell the Whole Story

Data shows a decrease in MILLIONEUM ALLURE SCORES℠ for areas like Lincoln Park (60614), Lakeview (60657), and Ukrainian Village (60622) – all established luxury enclaves, plunging by up to 53% compared to the previous year. This might suggest a decline in luxury market vibrancy on the surface.

Million-Dollar Allure on the Rise

However, the story doesn’t end there. MILLIONEUM ALLURE SCORES℠ Weights, a separate metric, paint a different picture. These weights specifically measure the contribution of million-dollar and above single-family homes to a neighborhood’s attractiveness. Interestingly, the MILLIONEUM ALLURE SCORES℠ Weights for these same zip codes have increased to record highs in 2022- 2023. This suggests that while the volume of high-value home sales may have fluctuated, their impact on neighborhood desirability soared.

Analyzing the driving forces behind this shift uncovers a compelling insight: M2 money supply emerges as the primary catalyst, overshadowing the influence of high 10-year treasury yields. Interestingly, this surge in demand for million-dollar homes in Chicago comes despite a significant rise (90% to 200%) in 10-year treasury yield between 2018-2019 and 2022-2023. Traditionally, rising treasury yields can dampen demand for real estate. By studying historical M2 movement and analyzing the data, we found that the M2 money supply in 2023 is more representative of what we’d expect to see in years 2026-2027. This abundance of money appears to be a stronger influence on the luxury real estate market in Chicago than treasury yields at this time.

Consider the trajectory from 2010 to 2023: while fluctuations occurred, the overarching trend is unmistakable. Despite occasional dips and peaks, the dollar amount of million-dollar-plus single-family home sales steadily climbed, mirroring the trajectory of M2 money supply. This correlation highlights the symbiotic relationship between liquidity and luxury real estate transactions, where ample capital fuels demand and propels market resilience.

This analysis of Chicago’s luxury single-family home market reveals a complex interplay between headline statistics and underlying trends. While metrics like MILLIONEUM ALLURE SCORES℠ suggest a decline, a focus on their Weights paints a different picture. Furthermore, M2 money supply appears to be a more significant driver of demand than previously thought. These findings suggest a market with the potential to maintain its current position, if not experience a future uptick.

The MILLIONEUM ALLURE SCORE℠ Weight is a metric developed by Ivelina Stoyanova and Ivan Drenkarov to quantify the contribution of million-dollar and above single-family homes to a specific area’s allure for luxury buyers. It’s expressed as a percentage, offering a clear picture of how much these high-end residences influence a suburb’s overall desirability.

Suburbs Embrace Ultra-Luxury

The data reveals a notable rise in MILLIONEUM ALLURE SCORE℠ Weights across many Chicago suburbs from 2022 to 2023. Here are some of the most striking examples:

• Oak Brook: This affluent suburb witnessed a staggering 73.38% increase in its MILLIONEUM ALLURE SCORE℠ Weight, showcasing a dramatic shift towards ultra-luxury properties.
• Western Springs: Posting a 38.71% increase, Western Springs also demonstrates a growing focus on million-dollar homes within its luxury market.
• Clarendon Hills: With a 70.59% jump, Clarendon Hills exhibits a similar trend, indicating a potential transformation in its luxury home offerings.

Shifting Preferences and Niche Markets

While the rise in MILLIONEUM ALLURE SCORE℠ Weights is a prominent trend, some established luxury enclaves like Winnetka (6.60% increase) and Glencoe (11.82% increase) still show a significant, but more measured, growth in the importance of ultra-luxury homes. This suggests a continued focus on high-end properties while potentially catering to a more diverse luxury market.

M2 Money Supply, Not Treasury Yields, Drives the Market

Interestingly, this surge in demand for million-dollar homes in Chicago’s suburbs comes despite a significant rise (90% to 200%) in 10-year treasury yield between 2023 and 2018-2019 https://fred.stlouisfed.org/series/DGS10. Traditionally, rising treasury yields can dampen demand for real estate. However, in this case, the MILLIONEUM ALLURE SCORE℠ Weights went up across the board, suggesting a decoupling between treasury yields and the luxury single-family home market in Chicago.

Our analysis points towards a different driver: the M2 money supply. By studying historical M2 movement and analyzing the data, we found that the M2 money supply in 2023 is more representative of what we’d expect to see in years 2026-2027. This abundance of money appears to be a stronger influence on the luxury real estate market in Chicago’s suburbs than treasury yields at this time.

Looking Ahead

The evolving dynamics of Chicago’s affluent suburbs paint an intriguing picture. While some areas embrace ultra-luxury, others maintain a balance within their luxury markets. As this trend progresses, it will be interesting to see how these communities cater to the evolving desires of discerning luxury homebuyers. Furthermore, continued monitoring of M2 money supply and its impact on the market will be crucial.

While traditional styles reign supreme (425 sold in 2023), followed by colonials (233) and contemporaries (164), the data table reveals a more nuanced picture:

The trend towards modern designs is undeniable. Contemporary home sales surged 25% from 2020 to 2023, while traditional sales dipped 13%. This shift reflects a growing appetite for open floor plans, clean lines, and expansive windows. However, the “unspecified” category, encompassing a whopping 1,534 homes, casts a long shadow. This opaqueness impedes understanding buyer preferences and raises concerns about reporting standards in luxury real estate. Are these homes unique architectural gems or simply poorly documented listings? Without clear data, the market loses valuable insights.

For example, the table shows that in 2023, sales of French Provincial homes jumped 44% compared to 2020, while Tudor homes saw a 28% increase. Are these styles gaining popularity, or are they simply being better classified by realtors? Without knowing the full picture, it’s difficult to say.

For buyers, navigating this murky landscape can be tricky. While understanding popular styles like traditional and contemporary offers a starting point, crucial factors like location, amenities, and property condition must also be considered. Imagine searching for a mid-century modern masterpiece and wading through hundreds of “unspecified” listings – a frustrating and inefficient process.

Sellers, too, face challenges. While strategic pricing and targeted marketing are essential, those with less popular styles might struggle. Highlighting unique features and appealing to niche markets becomes crucial. But how can they effectively target buyers if the true architectural style preferences are unclear?

Ultimately, the dream million-dollar-single-family-plus home embodies the buyer’s individual aspirations. However, the prevalence of “unspecified” styles is a missed opportunity for both buyers and sellers. This lack of transparency hinders informed decision-making and weakens market efficiency. It’s time for the Chicago luxury real estate industry to embrace clarity and provide the detailed information discerning buyers and sellers deserve. Only then can this vibrant market reach its full potential.

Our analysis focuses on three distinct suburbs: Winnetka, South Barrington, and La Grange. Each boasts a unique ALLURE SCORE℠, reflecting its overall attractiveness to potential residents. But what happens when we isolate the contribution of million-dollar single-family homes? The results, as shown in the table below, reveal fascinating insights:

Winnetka: The undisputed king of allure, Winnetka’s million-dollar homes contribute a staggering 72.21% to its overall appeal. This suggests that for high-end buyers, the presence and quality of these luxury properties are a major draw. Imagine manicured lawns, palatial estates, and prestigious neighborhoods – all adding up to an allure that’s nearly 52 times greater than South Barrington’s MILLIONEUM ALLURE SCORE℠, and 75 times greater than La Grange’s.

South Barrington: In contrast, South Barrington paints a different picture. While its overall ALLURE SCORE℠ is respectable, million-dollar homes play a significantly smaller role, contributing just 34.95%. This suggests a wider appeal beyond luxury, attracting families seeking top-rated schools, vibrant community amenities, and a more affordable alternative to Winnetka’s exclusivity.

La Grange: La Grange further reinforces this notion. Boasting the lowest MILLIONEUM ALLURE SCORE℠ weight of 2.12%, its allure stems primarily from factors other than luxury housing: its close proximity to Chicago, its charming downtown, and its family-friendly atmosphere.

These findings offer valuable insights for both homebuyers and real estate professionals. For buyers, the ALLURE SCORE℠ provides a data-driven tool to understand the multifaceted appeal of different suburbs. Million-dollar homes may not be the sole driver of desirability, but their presence can significantly impact a town’s image and attract specific demographics.

For real estate professionals, the ALLURE SCORE℠(to be used with our written consent or referenced from our website) presents a powerful marketing tool. By highlighting the specific factors that contribute to a town’s allure, they can tailor their approach to target the right buyers. Whether it’s emphasizing prestigious million-dollar neighborhoods or showcasing vibrant community amenities, the ALLURE SCORE℠ empowers them to speak the language of desirability and attract the right clientele.

In conclusion, the ALLURE SCORE℠ is more than just a number. It’s a window into the soul of a town, revealing the intricate blend of factors that make it desirable. By understanding the role of million-dollar homes in shaping this allure, we gain a deeper understanding of the diverse forces that drive real estate decisions in the Chicago suburbs and beyond.

Chicagoland’s Luxury Real Estate: A Beacon of Resilience Amidst Economic Headwinds

In the face of a challenging economic climate, the luxury real estate market in Chicagoland stands as a testament to resilience, defying expectations and maintaining robust activity. Despite a 3.71% year-over-year decrease in M2 money supply* – a key economic indicator, the million-dollar single-family home segment remains vibrant, reflecting the region’s enduring allure for affluent homebuyers.

As of November 23, 2022, an impressive 3,437** single-family homes have been sold for over $1 million in Chicagoland. This figure, coupled with the year-to-date count of 3,221** single-family homes sold and under contract in the same price bracket, paints a picture of sustained demand within the luxury real estate sector.

These numbers offer a compelling narrative: high-net-worth individuals continue to view Chicagoland as a prime real estate destination, undeterred by concerns surrounding inflation and escalating interest rates. The region’s unwavering economic strength, coupled with its exceptional educational institutions and enticing amenities, reinforces its status as a highly desirable area for sophisticated homebuyers.

The Millioneum Allure Score℠: Revealing the Nuances of Desirability

The Millioneum Allure Score℠ emerges as a valuable metric in understanding luxury real estate demand dynamics. Some areas have seen their Millioneum Allure Scores℠ increase, while others have seen them decrease, signaling a nuanced shift in affluent homebuyers’ priorities towards specific amenities and community features when making substantial real estate investments.

A Landscape in Transition

In the dynamic world of million-dollar home sales, it’s essential to acknowledge that not all neighborhoods will maintain their appeal indefinitely. Some areas are teetering on the verge of falling below a Millioneum Allure Score℠ of 1, indicating a potential decline in their desirability. As we approach the end of the year, the evolving Millioneum Allure Scores℠ will shed light on the shifting landscape of preferred locations.

Looking Ahead: Continued Resilience in the Face of Economic Challenges

Looking forward, the Chicagoland luxury real estate market is poised to maintain its resilience into the coming year. While some moderation in sales may occur due to broader economic factors, the region’s strong fundamentals are expected to sustain the appeal for affluent homebuyers seeking an unrivaled living experience.

* M2 Board of Governors of the Federal Reserve System (US), M2 [M2SL], retrieved from FRED, Federal Reserve Bank of St. Louis;

https://fred.stlouisfed.org/series/M2SL, NOV 23, 2023.

** https://connectmls.mredllc.com/

Deciphering Areas with Declining High Millioneum Allure Scores℠:

Areas with declining high Millioneum Allure Scores℠ offer a unique proposition. These locales have traditionally been the crown jewels of the city’s luxury real estate. Despite experiencing a drop in their Millioneum Allure Scores℠, their intrinsic charm and appeal endure. Stability remains their hallmark, reassuring investors that the allure persists, albeit in a subtler manner. What sets these neighborhoods apart is the potential for favorable price negotiation. Sellers, recognizing the shifting landscape, may exhibit a heightened willingness to engage in fruitful negotiations. Savvy investors can seize the moment and secure million-dollar properties at relatively advantageous costs.

Exploring Areas with Increasing Low Millioneum Allure Scores℠:

The real magic unfolds in areas with increasing low Millioneum Allure Scores℠. These gems are akin to hidden treasures waiting to be uncovered. While their Millioneum Allure Scores℠ may commence from a lower base, what makes them intriguing is the upward trajectory. The rising scores are harbingers of growth and evolving desirability. Investing in such neighborhoods is akin to being an early adopter. If the upward trend continues, the value of your million-dollar property may have a compelling case for long-term appreciation.

Crafting Your Investment Strategy:

Ultimately, the path you choose should be a reflection of your unique investment objectives. Consider these key factors:

Investment Horizon: Determine whether your sights are set on short-term gains or the allure of long-term appreciation.

Purpose of Investment: Clarify whether the property will serve as your luxurious residence, a source of steady rental income, or a cornerstone of your expansive investment portfolio.

Due Diligence: Embrace the power of thorough market research. Investigate the reasons behind the Allure score fluctuations, delve into the intricacies of local economic conditions, unearth future development plans, and track property market trends.

Risk Management: Assess the role of diversification in your investment strategy, mitigating potential risks through a thoughtfully balanced portfolio.

This private estate offers panoramic views of Lake Michigan, carefully embraced by large windows in almost every room. The design of the residence ensures that the beauty of the lake becomes an integral part of the living experience, allowing residents to revel in the natural splendor.

2. Exquisite Chef’s Kitchen:

The heart of this luxury home, the chef’s kitchen, is a testament to both efficiency and aesthetic appeal. The exposed brick, expansive islands, recessed ceiling, high-end stainless appliances, and unique lighting fixtures create an inviting ambiance for culinary enthusiasts, blending beauty with functionality.

3. Lavish Master Suite:

The generously proportioned master suite on the first floor exudes elegance with its vaulted ceiling, a handsome fireplace, and expansive windows offering abundant natural light and breathtaking lake views. The attached spa-like bath, adorned with a whirlpool, over-sized steam shower, and granite dual vanities, epitomizes luxury and relaxation.

4. Indoor Lap Pool and More:

The property boasts a remarkable 38-foot indoor lap pool, providing a perfect oasis for health and fitness enthusiasts. Additionally, six fireplaces, a second master suite upstairs, and a finished English lower level further enhance the appeal of this stunning residence.

The Overpriced Conundrum: Is It Justified?

While the property presents an exceptional living experience replete with opulent amenities and breathtaking lake views, its market valuation raises eyebrows. The hefty price tag is justified by the rare lakefront setting, extensive renovations, and a plethora of luxurious features. However, in comparison to similar high-end properties, some prospective buyers argue that it might be overpriced.

Market dynamics, buyer preferences, and economic fluctuations can influence the perceived value of a property. Despite its remarkable features, the market’s perception of the property’s cost may present a challenging barrier for some potential buyers.

The Hidden Gem: Unveiling the True Value

Beyond the perceived overpricing, the property embodies a hidden value that often goes unnoticed. Its unique location, luxurious amenities, and thoughtful design create an exclusive haven for those seeking the epitome of luxury living. Moreover, the potential for future appreciation and the unrivaled experience of living by Lake Michigan add an intrinsic value that transcends mere financial considerations.

The property’s allure lies not only in its lavish features but also in the lifestyle it offers—a blend of comfort, tranquility, and sophistication. For those yearning for a life where every day feels like a vacation, this estate stands as a testament to living and vacationing in one’s own abode.

Conclusion: The Dual Nature of Valuation

The property at this coveted North Shore location is a fascinating blend of luxury and perceived market value. While its opulent features and prime lakefront location justify its price, the market’s perception may differ. In the end, the true worth of this residence lies in the eyes of the beholder—a prospective homeowner seeking an unparalleled living experience amidst the charms of Lake Michigan and the luxury that this estate undeniably offers.