Downtown Chicago Housing Market Bouncing Back from Slump

Luxury housing markets in downtown Chicago are making a steady recovery after years of sluggish sales as buyers fled farther into the North Side and suburbs.

Neighborhoods like the Gold Coast, River North and Streeterville have had listing inventory drop for both single-family homes and condos throughout the spring season, agents who work in the neighborhoods said.

The shift is coming as competition reaches a fever pitch in North Side neighborhoods like Lincoln Park and Lakeview, where bidding wars have pushed closing prices on homes well over their posted asking prices, and left multiple buyers competing for the same scarce listings. Neighborhoods closer to downtown haven’t reached that intensity, but with inventory shrinking, the market is warming up, agents said.

“The amount of single family housing in the Gold Coast has diminished, and there is a demand now for that type of housing where, over the last five years, there wasn’t,” said Michael Rosenblum, an agent with Berkshire Hathaway HomeServices Chicago who sells luxury homes downtown. “There were all kinds of great deals. You could buy a home in the Gold Coast for cheap.”

Olivia Stohle, an agent with the Rubina Bokhari team at Jameson Sotheby’s International Realty, said the availability of single-family homes in the Gold Coast has shrunk in the last year. Supply of single-family homes listed in the Gold Coast — measured by the amount of time it would take to sell out all available inventory if the recent pace of deals keeps up — dropped to 5.5 months in January, down 60 percent from 13.7 months last January, Stohle said.

“It just feels stale,” Stohle said of the inventory. “And I’ve never been in that position. I’ve had buyers looking, even last year, and it was like, ‘Pick your poison. The world’s your oyster.’ And now it’s feeling a little bit more slim.”

Units downtown are starting to move faster, too. Downtown properties spent a median of 91 days on the market in February, a 3 percent drop from this time last year, according to Redfin data. The area covered by the data stretches from the Gold Coast and Near North Side in the north to the South Loop in the south, and is bounded by the Chicago River to the west.

That’s still slower than the city as a whole, where the median days on market in February was 69 days, according to redfin. The median time on the market for Lincoln Park was 56 days in February.

Renewed interest

While downtown and the North Side tend to attract different buyer pools, the strained inventory in Lincoln Park, Bucktown and nearby neighborhoods is driving more buyers to consider buying downtown. Matt Laricy, who leads the Laricy Team at Americorp, said some of downtown’s growth is driven by buyers who got exhausted after failing to close further north despite making offers well over asking prices.

“That’s one of the main reasons we’re seeing that market pick up a little bit more,” Laricy said. “We’re going to continue to see the resurgence of the downtown markets as people can’t afford the outskirts anymore.”

But the broader downtown recovery is also being driven by more traditional downtown buyers — people from out of state or who previously left downtown — coming back, Rosenblum said, as perceptions around the safety and vibrancy of the city are improving.

Shrinking inventory downtown means buyers are paying more for properties usually overlooked, Rosenblum said. Although renovated and updated units are still commanding a premium, older units are going up in value, as well.

Rosenblum pointed to recent apartment sales at Water Tower Place to illustrate the change. In December, he closed on a 3,320-square-foot, four-bedroom unit in the building, which had not been updated in 30 years, for $1.7 million. A similar apartment in the same building two years earlier would sell for $1.2 million, he said.

“It jumped $500,000,” he said. “Same crappy condition, meaning it hadn’t been touched in 30 years, so it needed a complete gut renovation.”

Still, the penalty for outdated properties is steep. In the same month, Rosenblum said he closed on a similar-sized condo at Water Tower Place that had been fully renovated recently and was in “impeccable condition” — that one sold for $3.3 million.

With demand coming back and buyers prioritizing turnkey appeal, success is about presentation as much as it is about price, Stohle said.

She recently took over a listing on Bellevue Place in the Gold Coast that had been on the market since 2023, and eventually went under contract for $3.6 million about a month after she brought it back up for sale.

Stohle said she spent a month decluttering the home and reworking its presentation. She brought in a designer to stage the layout with new furniture and shot new photos and video, she said.

Stohle said the staging process cost about $10,000. In January, she relisted the home at $3.85 million — a $50,000 cut from the asking price the home carried from April to November last year. The property quickly received showing requests after going live, she said.

“It really goes to show that it’s not necessarily about your price,” she said. “It’s the way you position and market and display the property, not only online but in person.”