Luxury sales volume slows down a bit

Chicago’s residential real estate market is beginning to show some cracks in the luxury sector.

The metro area notched six sales at or above $4 million this January, down from eight sales in the same range last year, according to publicly available listing data.

The sales cover both the city of Chicago and the surrounding suburbs and show how even the luxury sector — which is much less influenced by the fluctuations in the mortgage industry than the broader market — is still off to a slower start to the year.

To be sure, it will be hard to determine the performance of luxury sales until after the peak in the spring and summer months. Plus, despite fewer sales, the total value of the real estate in that price range sold during January in both 2022 and 2023 was similar. In 2022, the eight sales totaled $41.62 million, while this year the six added up to $38.35 million, boosted by the sale of one of Ken Griffin’s condos in Park Tower for $11.2 million.

Price continues to be a weak spot of the luxury market, both in the city and the suburbs. While Griffin’s sale was the priciest of the year so far, it came at a 25 percent haircut from the billionaire’s 2012 purchase price of $15 million.

Substantial price cuts preceding deals in the high-end market were commonplace throughout last year, as well. The trend continued Tuesday, when the second-priciest deal of the year so far closed for $6 million in Lake Forest. The home had been on and off the market for several years, and was originally listed at $6.9 million

Several listings that returned to the market this year did so with price chops that indicate sellers are eager to move on from properties that had previously lingered on the market. A mansion built for Pabst Brewing Company president and chairman Harris Perlstein in the 1930s is back on the market in Glencoe asking $12 million. And a massive Lincoln Park mansion spread across multiple lots and considered Chicago’s most expensive listing underwent a $15 million price cut this month to $30 million.

That’s a steep price cut for the homes, which had been previously listed, respectively, for $18 million and $45 million. The Pabst home has been on and off the market since early 2021. Early last year the home was cut to $16 million before it was removed from the market for the majority of last year.

The slight market slowdown picks up where last year left off.

For much of 2022, the city’s luxury market continued to perform well when measured by deal volume and compared to 2021’s frenetic pace, while many deals still took price cuts. Last year’s priciest deals, including the $20 million Trump Tower Chicago penthouse sale that was cut from a $30 million list price, underwent substantial shaves before closing.