In most of the years since 2015 that Crain’s has been tracking home sales at $4 million-plus, the yearend number has landed somewhere between 50 and 60.
Agents who work the upper strata of Chicago-area real estate say there are several reasons for the high-end boom, including bargain prices relative to other cities and the same pandemic-driven desire for more space that motivates people buying at lower prices.
But the factor these agents mention most often is stock market wealth.
The stock market has been soaring since shortly after the pandemic began, and “it’s generated a lot of expendable income for people who are invested,” said Matt Farrell, managing partner at Corcoran Urban Real Estate. “Now they’re saying, ‘Let’s do something fun with it, honey.’ ”
Farrell represented the buyer of the 75th sale to top $4 million: the $7 million purchase on Oct. 29 of a four-bedroom condo on the 69th floor of the St. Regis Chicago, the undulating glass tower designed by Studio Gang and formerly known as Vista. Farrell declined to say whether those buyers used stock market gains on the condo, but he confirmed they made the choice to buy in July.
The date is significant because over the past several months, outbreaks of violent crime in downtown neighborhoods have prompted the question whether it would hamper the comeback from a lousy year of sales during COVID and social unrest in 2020.
There’s a lot on Crain’s list to disappoint Chicago-bashers. Of the 20 highest-priced sales so far this year, homes that went for between $6.5 million and $12.5 million, only three are outside the city. Two are in Hinsdale and the third is in Kenilworth. Eleven of the 17 city sales are condos in downtown neighborhoods. The rest are in Lincoln Park.
One reason: Affluent suburban empty nesters, who before the pandemic struggled to get their big suburban mansions sold, “can now sell them fast,” said Chezi Rafaeli, a Coldwell Banker agent who represented both sides of one of last week’s sales, a $5.1 million condo in a newly completed building at North Avenue and Clark Street.
“They’re selling their old homes at high prices and they want to move downtown,” Rafaeli said. Many of these buyers see that “they can buy at a good price in Chicago.”
The unit that Rafaeli’s buyer paid $5.1 million for on Oct. 25 was originally announced in 2018 with a price over $5.7 million. It then came on the market at $5.5 million. In all, the buyer paid at least 10% below what the developer originally wanted. Similarly, Farrell’s $7 million buyer paid about 10% less than the $7.8 million St. Regis’ developers wanted.
Delivery of condos at the 101-story St. Regis began in December. Eight of this year’s $4 million-plus sales are in that building. By comparison, in 2018, 24 of that year’s 73 sales were at a new building, No. 9 Walton. That is, St. Regis isn’t the only reason this …….