After years of plunging prices and a flight to the outskirts, Chicago’s downtown condo market may be poised for a revival.
The downtown condo market has languished over the last few years. Luxury penthouse owners have slashed prices by millions to find buyers, and many condos have traded for far less than what they sold for years ago, with some even dropping to values from the 1990s or earlier.
The slump in sales has been brought on by a combination of factors: Work-from-home norms during the pandemic meant wealthy city workers could move out to the suburbs or North Side neighborhoods, where demand has skyrocketed. Concerns about crime downtown kept out-of-town buyers out of the market, and Chicago was seen as less desirable in general.
But brokers who work in the downtown luxury condo market say buyers are showing more interest in downtown condos and the sector may be on the way to a recovery.
“I feel like the market’s pretty much since the pandemic hit its rock bottom,” said Rafael Murillo, a broker with Compass who sells luxury condos downtown. “And each year you’re seeing little improvements.”
As other markets continue to climb, buyers are taking the opportunity to get downtown at a discount, Chezi Rafaeli, a Coldwell Banker broker who specializes in Chicago luxury condos, said.
“A lot of people are trying to secure properties, especially downtown, where the market is really interesting,” Rafaeli said. “Pricing is really attractive to a lot of buyers.”
When Rafaeli spoke with The Real Deal on Sept. 25, he said he had 17 showings that day, where he would usually have fewer than 10 showings a day in the past. A lot of the activity he’s seeing is in the $500,000 to $3 million price range, he said.
Buyers are starting to see downtown Chicago as a desirable place to live as safety concerns are starting to ease and people find value in the perks of living downtown, brokers said.
“There’s a nice little resurgence in how people are feeling about Chicago,” said Carrie McCormick, an @properties agent who works in the luxury market. “We are a world-class city and I think that there’s a shift in people’s thought process.”
While competition is starting to tick up, buyers are still being choosy. They want high-quality units, McCormick said, describing the buyer sentiment as a “flight to quality.”
Interest is especially high in newer buildings like the St. Regis and One Chicago, as well as newly-converted buildings like the Tribune Tower, brokers said.
Those buildings aren’t selling for the prices the developers asked for and expected in 2022, though, and many recently sold condos still took price cuts from their initial asking price. Murillo said units will move quickly if they’re priced to reflect the new market realities, but if sellers expect more they’ll have a hard time finding buyers.
The St. Regis skyscraper, at 363 East Wacker Drive, has been the site of some high-dollar deals this year, showing signs of improvement from a financial struggle for its developers since new ownership took over the property’s unsold units. The 79th-floor penthouse sold for $7.5 million in August, likely the second-most expensive sale this year at the building based on property records.
The unit was part of a bulk investment in unsold condos in the building made in 2024 by an offshoot of Grupo Denim, a Mexican clothing company. At least five condos from that bulk purchase have sold for more than $5 million this year, based on property records. An 82nd-floor penthouse that was listed on the residence’s website in May at $10.5 million is no longer listed for sale, but, so far, there has been no sale of that condo documented in Cook County property records.
While the recovery may not have amplified yet, brokers said they think downtown condo prices are going to start trending upward in the next year. Inventory surplus that has long plagued the sector is easing as buyers are snatching up what’s available and create more competition for desirable properties.
The median days on the market for downtown condos has fallen every month this year, according to year-over-year Redfin data.
“When someone’s looking for a high-end property, we just don’t have that many here on the market,” McCormick said. “So once one does come on and there’s a buying opportunity, people are just taking advantage of it.”
Aside from a few new buildings like One Chicago and the St. Regis, there aren’t many new high-end condos coming online in the near future, Rafaeli said. As availability in those buildings dries up, he said he expects prices to trend upward for lower priced luxury condos, especially if mortgage rates continue to come down.
“Anything that is in the luxury sector, which typically runs between $500 to $750 a square foot, we will see prices rising,” Rafaeli said. “Because we don’t have any new inventory coming on the market.”