1845 N. Orchard
The master bath at 1845 N. Orchard

I was interviewed recently by Chicago Agent magazine for their cover story on Chicago’s luxury residential real estate market. The piece discussed some interesting trends such as a shift towards smaller homes, younger buyers, and the demand for quality outdoor space.

The most significant shift I see among today’s luxury buyers is that they are looking for quality, not just a laundry list of expensive stuff dropped into a gigantic space. They expect their homes to be thoughtfully designed, meticulously constructed, and comprised of high quality (but not necessarily flashy) finishes. In terms of style, affluent buyers are embracing both traditional and contemporary finishes, provided they are well executed. Key “ingredients” include amenities that make people’s lives easier and more comfortable: smart home technology; functional, kid-friendly combination kitchen / family rooms; soothing, spa-like baths; elevators; plenty of storage; inviting outdoor space; snow melt systems; and parking for at least a couple of cars. There is also a keen interest in living on wider lots, a pushback against Chicago’s standard which is just 25 feet in width, lot line-to-lot line.

Given that there are fewer buyers in the market today, there is more pressure than ever for builders (and home renovators) to have a keen grasp of buyers’ needs and desires. Every once in a while, we are called to list a completed property where the builder completely missed the mark on this point. If the design and/or finishes in a home are “off,” the home is much harder to sell, and it may ultimately go for a lot less than expected – sometimes less than the builder’s investment. The better developers understand this and do their research before undertaking a new project. My real estate sales team and I prefer to get involved as early as possible so that we can offer input on everything from the floor plan to the selection of cabinets, appliances, light fixtures, paint colors, etc. Given that we sell 75+ properties a year with an average sale price in excess of $1 million, we are uniquely qualified to provide insight into what is and isn’t in demand.

1807 Honore
Environs Development‘s 1807 Honore

We offer the same consultative services for our clients who are selling their homes. While most people don’t renovate to sell, small improvements can yield big results. Conversely, buyers will discount the value of a home (and the price they are willing to pay) by the cost of what they believe needs to be done, and the discount is rarely dollar for dollar. One colleague of mine suggested that buyers will discount their offer by up to four times the actual cost of anticipated repairs/improvements – a pretty stiff penalty for not replacing that black toilet or taking down your once-favorite wallpaper.

If you’re thinking about buying or selling or are just plain curious about the luxury market, the Chicago Agent piece is worth a read.

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