Chicago Condo Price Slump Lingers

Downtown Chicago condo market sales continue to struggle with ever-decreasing value, as some properties are changing hands for substantially less than what they sold for more than 15 years ago.

The downtown slump is by all accounts an outlier to the rest of the Chicago-area’s robust housing market. Local real estate agents point to a combination of a slow return to office work from the pandemic and an increase in downtown criminal activity, as reported by Crain’s. The perception of downtown as a “prime, luxurious market” has dwindled, Coldwell Banker’s Chezi Rafaeli told the outlet, as buyers look beyond Streeterville and the Loop to the West Loop, Lincoln Park and beyond.

Recent sales recorded during the last few days showed losses in value in the millions, such as a three-bedroom condo in the tower at 900 North Michigan Avenue — called the Bloomington’s tower — that sold for $2.62 million. In 2009, the sellers of the property paid $5 million for it, or nearly twice the recent sale price. A condo in the St. Regis tower, at 363 East Wacker Drive, listed for $8 million last week, down $1.2 million from the seller’s purchase price in 2022, The Real Deal first reported.

Other recent deals showed significant devaluation but not quite in the millions, such as a Millennium Park-area two-bedroom condo at 6 North Michigan Avenue that sold for $200,000 less than it fetched in 2011, as well as a Trump Tower unit listed for $810,000, the same price it traded for in 2011 and $33,000 less than it sold for in 2009.

Other factors leading to the slump include a glut of inventory downtown added during the 2000s up until the housing crash. At that time, 20,000 condos were added downtown.

The flip side of the dropoff is that it presents an opportunity for downtown renters looking to buy or anyone considering a move downtown to invest now at the lower price points. There are also recent examples of similar condos sold for greater appreciation over their prior prices, such as a Westshore Drive condo near the St. Regis tower that sold for over 40 percent more than its original sale price in 2012.

Agent Nick Powers of Baird & Warner, who helped the downtown renters that purchased the aforementioned Millennium Park condo, said the discount his clients got on a two-bedroom unit isn’t necessarily a warning sign for downtown living, but might instead represent a course-correction in the market.

“Just because it was overpriced 16 years ago doesn’t mean it’s overpriced now,” Powers told the outlet.

— Eric Weilbacher