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hicago's luxury real estate market has been declining since 2021, with billionaire Citadel CEO Ken Griffin selling a portion of his penthouse at a 44% loss of $15 million last month. The decline in the Midwest city's luxury condos has hit hard, with wealthy sellers like Griffin citing failed political leadership in Illinois as the reason for rising crime and declining real-estate values.
Griffin paid over $34 million for the entire 37th and 38th floors of the condo tower No.9 Walton in 2017 but sold them last month for $9 million and $10 million respectively. He blamed Democratic Governor JB Pritzker for the city's rising crime and declining real-estate values, saying it was a loss borne by the people of Illinois.
The median sale price of Chicago's condos above $1 million dropped 9.1% in the third quarter of 2024 from the same period in 2021, according to a report by brokerage @properties. In contrast, prices for high-end single-family homes above the $1 million mark rose 14% in the same time frame.
Real-estate agents say the beginnings of the downward spiral stem from 2020, when protests related to the murder of George Floyd led to clashes between protestors and police, mass lootings, and a general sense of unrest in the city. Although murders have declined by 26%, overall crime has climbed 36% year-to-date compared with the same period in 2020.
As interest rates soar and crime continues to rise, the high-end downtown luxury market has taken a big hit, said Nancy Tasson of Jameson Sotheby's International Realty. The alarming crime rates have also deterred businesses like Citadel, which moved from Chicago to Miami in 2022 due to concerns about safety.
Empty nesters who used to sell their suburban homes and buy apartments in the city are now skipping the downtown part, said Compass real-estate agent Jeff Lowe. This has led to a decline in demand for luxury condos, with many high-end buildings resorting to slashing asking prices to draw people in.
However, real-estate insiders say crime can't be the sole blame for the market's decline. They point out that Griffin overpaid for his penthouse and that Chicago doesn't attract international buyers like those found in cities like New York or Miami. The city's market is also not flashy, said Jennifer Ames of Engel & Völkers Chicago.
Despite the challenges, hope has emerged as sales have begun to pick up in the last few months. Letchinger sold 18 units at One Chicago in the last four months and believes prices have come down enough that people are seeing real value.
