One big reason is many of the homes listed were bought or built during the bubble. That means sellers are going to have to take a loss to sell at market price.
If you look at the listings on this site or on Redfin, you can see what they last sold for and when. At least in Highland Park (and I suspect most suburbs around here), the majority of the listings were last purchased or built between 2001-2007. Bubble. Bubble. Bubble.
Currently, selling prices seem to be around the 2003 level. Now add in 6% in agent fees. Other selling fees. And, uh, think about how many "owners" took out HELOC's, used 0% down or took out Option ARM loans that allowed them to pay less than the interest owned (while the loan balance increased).
These are not listing prices. These are prayers. The North Shore is full of sinking Titanics. The "owners" can't afford to lower their prices. It's not uncommon to see the most stubborn listing prices of this year become the short sales and foreclosures of next year.
I have heard-- off the record, of course-- a very surprising number of "owners" have paid NOTHING on their fine homes in YEARS and are still living in them. The industry person who confided this was not speaking of low-end homes, they were telling the dirty secret of the high end ones.
The banks are probably horrified of what will happen to all their the high-end loans if the market for luxury homes suddenly tanks. So they're not foreclosing. Taking a hit on a twenty $200k loans gone bad is one thing. Take a hit on forty six figure houses is another thing entirely. I've already seen newly built Sheridan Road luxury homes-- still empty-- go to foreclosure auction. The banks have to pace this out or their losses will be even greater.
Shall I go on? On November 19, Lake County published the list of homes to be auctioned for back taxes. The list was very long and high end north shore homes were well represented. Luxury homes in tax sales. That says it all.
If you are not familiar with what is predicted to happen to high end homes nationwide with the coming recasts and resets of Option ARM loans, I suggest you do some research. Until the prices shake out, I wouldn't touch a north shore house with a ten foot pole. We got here a couple of years ago with money to buy. 27% later, we're renting till things stabilize.
Warren Buffet said, "It's only when the tide goes out that you learn who's been swimming naked." As the Option ARM crisis unfolds, I suspect the shores of Lake Michigan will be known for nude beaches.