The market for luxury housing across Chicagoland remains strong despite low inventory, rising construction costs and interest rates still hovering above 6%.

“It has not taken a break,” said Justin Lucas, broker and team lead of the Justin Lucas Group with @properties Christie’s International Real Estate, who works largely in Chicago. “We may not see the same level of activity as the lower mid-market; there just aren’t as many buyers at that ultra-luxury price point. But properties are still moving.”

Lucas noted that he was scheduled to close on a transaction that would “set the record” for the highest home sale ever recorded in the 60657 ZIP code, at $6.5 million.

“I think there is a slight increase in luxury demand, and I think it’s going to continue,” Lucas said. “I think there’s just a drive toward quality in the luxury buyer. So, people, developers are tearing old properties down and building new, and they’re in. Prices are increasing because of it, and the demand for more luxury has continued to increase.”

Elizabeth Jakaitis, a global real estate advisor with Jameson Sotheby’s International Realty who covers Lake Forest and elsewhere on the North Shore, said limited inventory continues to support high prices at the luxury end of the market.

“The luxury buyers are still really active, but I do think they’re more intentional,” Jakaitis said. “They seem to take their time a bit more, but the basics are still there. They want to love where they live, but at the same time the basics are they still want to be smart with, you know, the price that they pay.”

Jakaitis noted that she has been negotiating a $6.5 million deal she wasn’t certain would come together because the buyer was becoming distracted with analyzing the number of days the property had been on the market.

“That is one of my biggest challenges right now,” Jakaitis said. “I think the properties that are priced for the market, the ones that are beautifully curated, are the ones that sell the fastest. We’re still seeing luxury properties selling on day one, but those are the ones that are ready to go and not requiring so much renovation or upgrading.”

Deidre Rudich, a Western Springs-based agent and broker with Compass, said the market in the western suburbs is so strong that it is common to have luxury homes sell for 20% above asking price and to receive six offers within 72 hours of a listing’s going live.

“It depends house to house, but typically that’s what’s happening, and we end up needing to cut off showings and call for highest and best,” Rudich said. “Actually, you can’t keep up with it. The last one I listed, the six offers that we received were all well over listing.”

Serving hot markets

In such a hot market, buyer attitudes are often marked by how long they have been looking and how many offers they have written, according to Rudich. Scarcity and the buyer’s needs drive how aggressive they want to be in finding a home.

“I’m still reaching out to sellers who I know have raised their kids who are going to the next step, and actively trying to get them to sell,” Rudich said. “I just got one under contract off market, a luxury one just south of $3 million, and I was working with this buyer for years. There are some buyers I’m literally working with for years in the high-end luxury market. It’s just such a tight market out here.”

With demand seeming higher than in previous years, Rudich has had sellers approach her with homes they don’t want to bring on the market but are interested in selling. They ask her to bring a buyer to them and are only willing to discuss a listing if she can’t find one.

“I’ve had three luxury properties close in the past 60 days that were not on the market, which is interesting,” Rudich said. “Not everybody wants to go to the market, but it worked out well for my buyers.”

Staying in front of her network has helped Rudich bring such transactions to fruition. Constantly communicating with her network and reaching out to people is key.

“There are some people that I work on for years to sell, and finally getting them because I found them an off-market place in a different town,” Rudich said. “They were looking for the next phase, like first-floor master. It’s just having that tenaciousness to stay in front of them, stay on top of it and not stop until the next product is found so I can keep properties moving.”

Lucas agreed that leveraging a private network of buyers is an effective way for agents to differentiate themselves in a seller’s market. He pairs his with the global marketing reach of his company and pricing strategies to serve his clients.

“A lot of luxury deals are happening off-market,” Lucas said. “A lot of times, affluent buyers will go to their agent to not only be the quarterback to manage the entire process from contract to close, but to be that source for knowledge and access to other information.”

Tech tools such as generative AI are also coming into their own for selling luxury properties, Lucas said, and most of the agents he has talked to are using ChatGPT in some capacity.

“Some of the higher-end and more skilled agents are leveraging it for design aid in the moment,” Lucas said. “When I’m touring with a buyer, if the property is vacant, I can take a picture of it and quickly load it into either ChatGPT, or I have another AI tool that I use called Collov, and I can quickly do a rendering with furniture in there to give the buyer an idea of what it would look like in the moment. We’re no longer having to wait weeks or months and pay thousands of dollars to interior designers to create those renderings.”

Jakaitis has found that serving as a one-stop source of knowledge in a market is beneficial. In past years, agents would brand themselves as being the best marketer or closing the most transactions. Now, however, buyers appreciate agents who act as advisors.

“I [recently had] a call from an architect that I’ve worked for in the past,” she said. “Out of the blue, he called me and said, ‘I have this person I’m designing a house for in East Lake Forest, and I really want them to talk to you because you know the luxury market, and they’re wondering if should they proceed with this because the neighbors are giving them a hard time.’ It truly goes back to being a real advisor and having the broader knowledge of the market, whether that means you’re going to help them buy a certain home today or in the next six months.”

What luxury buyers want

According to Jakaitis, luxury buyers in her area are drawn to new construction.

“In today’s market, when [buyers] start to look at the price of the new construction and it’s not to the very east or even the lakefront, they think, ‘Wait a minute, this makes sense. Should we even look at a historic estate on the lake?’” Jakaitis said. “Then they do that, and it’s like, ‘Holy cow. Look what we need to do to make this work.’ I think people arrive at the decision that the newer construction is just easier if they can afford the price point.”

Jakaitis said prices on the North Shore are trending upward, with new construction pushing them higher. Despite that, families are finding ways to buy into the market.

“It’s very difficult on the North Shore to have what you would call entry-level buyer price points,” she said. “But we are seeing that families and relatives and whatnot are helping, giving those first-time homebuyers money so they can actually get in the market. I would say everything probably under $1.8 million flies off the shelf if it’s ready to go. We hardly have anything listed under $700,000 nowadays.”

Lucas noted that many luxury buyers own multiple properties. Depending on where their real estate portfolio is and where they are located, they may try to look for something different here.

“Lakefront properties are always a pull,” Lucas said. “They’re not creating any more lakefront land, so that’s always in high demand. Definitely penthouses. Luxury buyers don’t want people above them, and they do want more space — outdoor space — and they want privacy. So if there is outdoor space, they want tall fences or natural privacy walls with mature trees.”

Rudich said the market for luxury, single-family homes in Western Springs, Hinsdale and La Grange is booming, in large part due to the area’s proximity to the city, location between two airports and “phenomenal” schools. Most buyers looking in Western Springs give her a tight, six-block radius to search.

“You’re really paying for the community out here,” Rudich said. “A lot of my clients grew up here and they want to come back here. Or they’re here now and they just need a bigger space. Maybe when they bought they had two kids and now they have four, or they both went to work and now they’re both working from home … They’re in a different financial place than they were four years ago.”

EXPERT SOURCES

Elizabeth Jakaitis
Jameson Sotheby’s International Realty

Justin Lucas
@properties Christie’s International Real Estate

Deidre Rudich
Compass