As the city's post-pandemic reopening accelerated, so did the downtown condo market.
In the month ended July 7, 120 condos sold in the lakefront neighborhoods between Division Street on the north and Randolph Street on the south, according to Crain's research in the records of Midwest Real Estate Data. That's up from about 85 sales in each of the prior two months and an average of about 57 a month in the previous year.
But something else has also accelerated alongside reopening: incidents of crime and disorder downtown—and, in particular, in and near that same strip of desirable lakefront where condos are clustered.
Among them are a carjacking in River North in May and two in Old Town in June, a shooting in the 1100 block of North Lake Shore Drive, an unruly crowd of teenagers in the Loop on July 4 that resulted in 60 arrests, and a man found keeping a rifle for no explained reason in a Streeterville hotel that overlooks Ohio Street Beach.
Will episodes like these harm the nascent recovery of the downtown condo market, which was already bruised from a year of pandemic and social unrest?
One real estate agent who lives and works in the affected area believes it could.
"There's a perception that there's no control in the city," says Kristine Farra, CEO of Gold Coast Exclusive Real Estate / Luxury Living International. "When people buy in the Gold Coast, it's about the Mag Mile lifestyle that comes with it, but if they're seeing all this news, they're not going to do it."
Many of the buyers of high-end downtown condos are suburban people either moving into the city as empty-nesters or buying weekend in-towns, and people from other parts of the Midwest who want a foothold in the dynamic city they love to visit. "If they keep seeing this news," Farra says, "they'll stay closer to home."
The violence certainly doesn't only threaten condo sales in pricey neighborhoods; it's undermining daily life throughout Chicago.
Efforts by Mayor Lori Lightfoot and the Chicago Police Department to get violence under control have had little effect, to the point that frustrated aldermen called a special City Council meeting in early July to push for better solutions to a frightening spate of shootings around the city. And the Illinois Retail Merchants Association wants more police patrols in the Loop to prevent violence from convincing downtown workers to stay home and work remotely.
It's too soon for any data that would indicate whether recent spasms of disorder downtown have led to a falloff in the area's condo sales.
The strongest sign yet that the appetite for downtown condos is back was the $11.25 million sale of a Lake Shore Drive penthouse last week. The sale price was the highest anyone has paid for a downtown condo since early 2019. That is, since long before the pandemic and episodes of social unrest punctured the downtown condo market.
she expects to see in the market is "people who didn't buy during the downturn trying to get in before the prices go back up."
Farra says she's hoping for the same thing, although she's surprised not to have seen more buyers flowing into the market when "the inventory is priced so aggressively" thanks to a giant backlog that built up during the two crises of 2020. And she attributes that, at least in part, to an overriding sense that downtown isn't as safe as it once was.
"We have to turn around the perception that there's no control," Farra says.
July 09, 2021
Crains Dennis Rodkin