The 2020s were bad for the downtown Chicago apartment market

Excessive demand for homes was a hallmark of the pandemic era, and the result was skyrocketing prices. The median price of homes sold in Chicago rose about 39% between January 2020, before any pandemic impact on the housing market, and April 2022, the most recent data available on Redfin, the online property market. For condominiums only, the increase is around 22%.

The numbers for downtown neighborhoods show a stark difference from the rest of the city.

The average price of apartments sold on the Gold Coast in the same 28-month period has decreased by 1%. It has risen, but only slightly compared to the city overall, in Streeterville (up 8.4%), River North (3.8%) and South Loop (up 7.8%). Loop data shows the average sale price is up 13.3%, a number likely to be tilted higher due to the multi-million dollar closings of the new St. Regis tower in Lakeshore East.

Compare these numbers to Hyde Park (median apartment sale price increased 58% in the period), Edgewater (30%), West Loop (24%) and Lincoln Square (23%).

“It’s sad to see,” says Christine Fara, who heads up Gold Coast Exclusive Real Estate. “You see a double-digit estimate in the suburbs, which is fine for them, but the downtown situation is completely different.”

Fara, Strauss, and other clients say crime is the biggest culprit. Although there is crime across the region and country, it has been even more exciting in and around downtown, with raucous crowds in North Avenue Beach and Millennium Park in recent weeks, as a Loop shooting caused producers to cancel a stage performance on Randolph Street A deadly shooting in Millennium Park.

Because of all this, “buyers are still worried about downtown living,” says Susan Meiner of Premier Relocation & Real Estate Sources, a downtown company, “particularly those who live in empty homes and who usually come to Downtown city ​​at this time in their lives.

Restaurant experts say they are feeling the effect of waning interest in downtown living. “Some customers in Streeterville have commented that they don’t feel comfortable going out at night and walking into a restaurant,” says Jack Weiss, who has two Coco Pazzo restaurants on Hubbard Street in River North and Ohio Street in Streeterville.

“It’s not as comfortable and secure as it has been for years,” Weiss said. With retail and crime vacancies, it has lost some of the patina it used to have.”

None of this means the downtown apartment market is dead. There have been big sales this year such as the $20 million Trump apartment, the $17 million sale at 9 Walton Street and three St. Regis apartments priced at $8 million or more, and four more that the developer identified as pending sales. Inventory is low compared to the worst part of the pandemic: Apartments for sale in downtown neighborhoods will feed about five months of sales, although that healthy number is nearly double the citywide figure of 2.6 months.

Gwen Hughes, a Berkshire Hathaway HomeServices Chicago agent, says some buyers see opportunity in the slow-growing downtown rates. At Water Tower Place, for example, sellers of a 71st-floor condo are asking for just under $1.1 million, about 21% of the $1.4 million they paid for it in 2005.

“If you’ve been a fan of the city long-term, you know it’s coming back, and buy now for the long-term,” says Hughes.