North Shore luxury market turns south

Prices fall by chunks as market falls from pandemic peaks

(top) 595 Longwood Ave in Glencoe, 255 N Green Bay Rd in Lake Forest; (bottom) David Kalt, Susan Kalt, Engel & Voelkers Chicago's Jennifer Ames (Google Maps, Getty, Linkedin, Engel & Voelkers Chicago)
(top) 595 Longwood Ave in Glencoe, 255 N Green Bay Rd in Lake Forest; (bottom) David Kalt, Susan Kalt, Engel & Voelkers Chicago's Jennifer Ames (Google Maps, Getty, Linkedin, Engel & Voelkers Chicago)

David and Susan Kalt initially sought to make $800,000 off their $13 million investment into 595 Longwood Avenue in Glencoe, a mansion along Lake Michigan’s shoreline that was listed for nearly $14 million last year.

When the couple didn’t draw any takers for the seven-bedroom, seven-bathroom layout across 8,700 square feet, they hired a new agent. They also lowered their asking price to $11.9 million, resigning themselves to a self-estimated loss of around $1 million on the manse they purchased in 2005 for $6 million and gave an extensive renovation.

Now, they’re set to lose a lot more than $1 million. After an offer that followed the initial reduction fell through, the Kalts and their agent, Laura Rubin Dresner of Baird & Warner, sliced the asking price another 19 percent yet again on Monday to $9.7 million.

The latest cut has compelled multiple prospective purchasers into calling to line up showings, Rubin Dresner said.

The overall 30 percent cut is among a wave of big-ticket price cuts hitting luxe North Shore pads both on and off the lakefront as Chicagoland’s high-end housing market — defined as properties of $4 million or more — shifts back from a sprint to the light jog that was standard before the pandemic housing boom. The number of sales at or above the luxury threshold through June this year was down by half from last year’s record figure.

“The smart sellers change with the market,” Rubin Dresner said of the Glencoe cut. “We want to be just under where the market is.”

To the south in Kenilworth, another mansion that started testing the market last year at $14 million had its ask chopped down to $9 million this week. And further north in Lake Forest, off the lakefront at 255 North Green Bay Road, the son-in-law of late former owners Roland and Arlene Casati recently agreed to a second price reduction to $7.9 million for the 1930s-built seven-bedroom, 11-bathroom design across 15,000 square feet. The offering is now down by about $2.2 million, or 20 percent from where it started at more than $10 million.

“Sellers always think, ‘Well, people will make an offer.’ Well, they don’t anymore,” the Kenilworth property’s listing agent, Nancy Nugent of Jameson Sotheby’s International Realty, told The Real Deal. “People are very value-conscious, they know with the internet they can look up anything, they compare and contrast. They have a lot more information than they used to.”

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Nugent tried a price chop to a little under $12 million on the Kenilworth property earlier during its marketing process, as well.

“We had a window of time that people were able to sell their homes for exceptionally high prices because there was this bizarre demand from people who lived downtown in high-end condo towers, and decided maybe it was maybe time to get away from the density during Covid,” said Jennifer Ames of Engel & Voelkers, the listing agent for the Lake Forest property.

Those owners are likely to be disappointed by the prices they would fetch if they tried to sell today, as purchasers are less willing to shell out premiums to get to the suburbs, she said.

“We do not have that emotional Covid exodus going on anymore,” Ames said. “The prices obtained during that weird bubble were not in line with the market before or after. Now you have some people who are hoping to ride on the tail of that market, but that’s not going to happen today.”

And the price cuts aren’t just happening in the suburbs. In the Gold Coast, Chicago’s traditional center of wealth and power, buyers are finding opportunities to grab the luxury lifestyle at a discount due to falling asking prices in the neighborhood.

Plus, sellers in both urban and suburban markets are finding that younger buyers often require the prompt of a price reduction to realize a seller is serious about making a deal, because many millennial and Gen Z buyers dislike making offers that significantly undercut listing prices for the risk of offending sellers.

“Younger buyers believe that negotiating is conflict. It’s a very strange generational shift,” Ames said. “They will wait until you price the house what they’re willing to pay, and would rather do that than make a low offer.”

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