Chicago’s Affluent Suburbs See Million-Dollar Homes Drive Luxury Market Allure
The luxury real estate market in Chicago’s suburbs is experiencing a fascinating shift, with a significant rise in the importance of million-dollar and above homes for a neighborhood’s overall attractiveness. This trend is evident in the recently released MILLIONEUM ALLURE SCORE℠ Weights data, which highlights a growing preference for ultra-luxury properties in some communities.
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.